TPG Sixth Street Seeks $2 Billion to Invest in Growth Companies

(Bloomberg) -- TPG Sixth Street Partners, a credit platform that’s part of buyout giant TPG, is seeking $2 billion for a fund focused on growth companies.

The fund, TSSP Capital Solutions, will invest across assets -- from structured and preferred equity to debt deals -- in late-stage growth companies, according to meeting documents from pensions. A spokesman for TPG Sixth Street, which has more than $29 billion in assets, declined to comment.

TPG Sixth Street is gathering capital in a hot fundraising market as investors search for greater yield. Private capital funds raised a record $857 billion last year, including across equity, debt and real estate strategies, according to data compiled by Bloomberg.

The fund has an investment from the San Luis Obispo County Pension Trust in California, a document shows. The Washington State Investment Board is considering a $200 million commitment, subject to full board approval this week, according to a document. WSIB spokesman Chris Phillips confirmed the contents of the document, as did Carl Nelson, chief investment officer for the San Luis Obispo pension, who said the system is broadening its existing relationship with TPG Sixth Street with the new fund investment.

The TPG platform, led by former Goldman Sachs Group Inc. partner Alan Waxman, is targeting more deals with growing companies that need additional financing or liquidity, after completing more than 20 such transactions. These deals generated a gross internal rate of return of 23.7 percent from the group’s inception in 2009 through the end of March, according to the San Luis Obispo document.

Mike McGinn, a former co-head of the private-capital investing team at Goldman Sachs, was hired last year to help run the group’s capital solutions business with Bo Stanley.

As part of the strategy, the platform previously helped music-streaming service Spotify Technology SA raise $1 billion in convertible debt. Any new deals will be done within the fund, the pension document showed.

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