TPG Is Said to Seek $1.5 Billion to Bet on Firms Staying Private

(Bloomberg) -- TPG, the buyout firm co-founded by Jim Coulter, is seeking $1.5 billion for a debut fund to wager on the growing number of technology companies that are delaying public offerings.

TPG Tech Adjacencies LP will offer liquidity to employees, founders and early investors by purchasing their equity as part of the strategy, according to people familiar with the matter. TPG will focus on technology, media and telecommunications companies.

The $82 billion private equity firm is trying to capitalize on the trend of young companies staying private. Uber Technologies Inc. and Airbnb Inc., for instance, have taken in billions of dollars without going public.

“We might be entering a new era of the private markets,” Coulter said in a Bloomberg interview in November. “In particular, the new technology companies we watch closely at TPG are increasingly choosing to stay in the private markets longer.”

The number of public companies has been on the decline in the U.S., with stock exchange listings falling by more than half over the last two decades. As of last year, only 15 percent of venture-capital exits came from initial public offerings, according to data from the National Venture Capital Association.

Coulter pointed to comments from James Freeman, Blue Bottle Coffee Inc.’s founder, to support his view on private markets. Freeman, who sold a majority stake in his company to Nestle SA, told the New York Times last year that going public “seems like a way of living in hell without dying.”

But a stronger IPO market could lead more companies to go public this year. Technology companies, including Spotify Technology SA and Dropbox Inc., made their market debut this year. Both stocks have surged more than 20 percent since the IPOs.

TPG, which is led by Coulter and Jon Winkelried and based in Fort Worth and San Francisco, manages money across a number of businesses, including buyouts, growth, real estate and credit. A TPG spokesman declined to comment.

To contact the reporter on this story: Sabrina Willmer in Boston at swillmer2@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Vincent Bielski, Josh Friedman

©2018 Bloomberg L.P.