Buyout Firm TPG Prices IPO Within Range at $29.50 a Share

(Bloomberg) -- Private equity firm TPG Inc. and one of its investors raised $1 billion in 2022’s first big U.S. initial public offering, pricing the shares within a marketed range.

TPG and an existing strategic investor sold almost 34 million shares Wednesday for $29.50 each, according to a statement confirming an earlier report by Bloomberg News. TPG and China Life Insurance Group Co. had offered the shares for $28 to $31.

At the IPO price, TPG has a market value of $9 billion based on the outstanding shares listed in its filings with the U.S. Securities and Exchange Commission.

TPG, based in Fort Worth, Texas, is one of the last big private equity firms to join the stock market, following firms including Blackstone Inc., KKR & Co., Apollo Global Management Inc., Ares Management Corp. and Carlyle Group Inc.

Modest Debuts

As with many of the companies they take public, the private equity firms themselves have tended to experience smaller trading-debut gains than startups backed by venture capital. Blackstone gained 13% on its first day of trading, before finishing its first year 41% below its offer price. Carlyle rose less than 1% in its 2011 debut, but finished its first year up more than 45%.

After a decade or more of modest gains and sometimes losses, shares of the publicly traded buyout firms surged beginning in 2020. Blackstone, for example gained 84% from its 2007 through 2019. In the two years since, the shares have jumped 117%.

Founded as Texas Pacific Group in 1992 by Jim Coulter and David Bonderman, TPG’s willingness to take massive bets on unloved or risky companies has often paid off. It was an early investor in businesses such as Spotify Technology SA, Uber Technologies Inc. and Airbnb Inc.

Traditionally, private equity funds have been almost exclusively made accessible to institutional investors and high-net worth individuals. TPG’s move to go public could capture the attention of retail investors who want to play a hand in early stage companies and startups.

TPG had $109 billion of assets under management as of Sept. 30, according to its prospectus, an increase from $60 billion in 2016. TPG, which also invests in real estate and hedge funds, has its own SPAC platform.

With 912 employees, TPG has more than 280 portfolio companies based in more than 30 countries, according to its filings.

Founders’ Block

Coulter owns almost 3.5 million Class A shares, with Bonderman owning about 780,000. Together with Chief Executive Officer Jon Winkelried, they own all of the company’s nearly 230 million Class B shares. At the IPO price, that block is worth about $6.8 billion and will also give them more than 97% of the shareholder voting power in the company, according to TPG’s filings.

The offering is being led by JPMorgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley, TPG Capital and Bank of America Corp. The firm’s shares are expected to begin trading Thursday on the Nasdaq Global Select Market under the symbol TPG.

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