TPG executives highlighted their most recent credit fund close as they released the firm’s second-quarter results on Tuesday.
TPG Twin Brook closed with $3.9 billion in commitments for its fifth direct lending fund. The fund is managed by Trevor Clark, who joined Angelo Gordon in 2014 to launch its middle market direct lending business, Twin Brook Capital Partners, and is now head of Middle Market Direct Lending at TPG Angelo Gordon (TPG AG) after the firms completed a $2.7 billion merger.
The TPG Twin Brook V close exceeded the team’s original fund target and is 13% larger than its predecessor, TPG CEO Jon Winkelried observed during the firm’s earnings call on Tuesday.
“This successful outcome was driven by Twin Brook’s strong investment track record and differentiated focus on sponsor-backed, lower middle market companies, as investors seek to complement and diversify their exposure to the U.S. direct lending market,” Winkelried added.
Twin Brook saw support from existing clients, but also expanded its investor base globally, particularly in Asia, as well as among sovereign wealth funds and multinational insurance companies in Europe and Japan. “This campaign is a strong indicator of the power of our platform and the cross-selling opportunity in front of us,” Winkelried went on.
Overall growth
TPG offers more than 30 distinct strategies across private equity, credit and real estate segments, and Winkelried said over the past year the firm drove a “step-function change” in its growth profile and earnings power as a result of both organic and inorganic activity.
The inorganic gains came through the AG acquisition that has brought good and bad news for TPG since the transaction closed in November 2023.
The bad: The acquisition led to an increase in fee-related expenses, which were up 60% year-over-year (YOY) through June 30 to $258 million — and that’s an improvement from the previous quarter, when expenses were up 62% YOY.
The good: The acquisition sent TPG’s total assets under management soaring 65% YOY to $229 billion, while fee-earning AUM climbed even higher — 74% — to $137 billion. And TPG AG Credit easily led other TPG platforms in capital raised as well as realizations in Q2. Overall TPG AG Credit gains totaled 6.2% for the first half of 2024.
