TPG at Morgan Stanley Conference: Strategic Growth and M&A Insights

On Wednesday, 11 June 2025, TPG Inc (NASDAQ:TPG) showcased its strategic vision at the Morgan Stanley US Financials Conference 2025. TPG’s President, Todd Sisitsky, highlighted the firm’s robust performance amidst economic volatility, with a focus on investment excellence and collaboration. While TPG reported strong growth metrics, it also acknowledged challenges in market navigation and the strategic importance of future M&A opportunities.

Key Takeaways

• TPG reported an 18% revenue growth in private equity, surpassing the S&P 500’s 5%.
• The firm’s EBITDA rose by 24%, outperforming the S&P 500’s 10% increase.
• TPG has already raised over 60% of its climate fund target.
• The company is actively exploring M&A and strategic insurance relationships.
• TPG’s differentiated sourcing strategy insulates it from market volatility.

Financial Results

• Private Equity Revenue Growth: 18% in Q1, outpacing the S&P 500’s 5%.
• Private Equity EBITDA Growth: 24% in Q1, surpassing the S&P 500’s 10%.
• Twinbrook Coverage Ratio: Maintained a two times coverage ratio.
• Twinbrook Loan to Value (LTV): Consistently around 43%.
• Growth Equity Exits: Achieved $1 billion in exits in H1, exceeding last year’s total.
• Climate Fund: Over 60% of the target has been raised.

Operational Updates

• Differentiated Sourcing: 70% of U.S. Flagship fund deals are proprietary or structured.
• Focus on Secular Growth: Prioritizes technology, healthcare, and climate investments.
• Collaboration: Enhanced collaboration led to opportunities like DIRECTV DISH transactions.
• Angelo Gordon Integration: Over 200 introductions between TPG and Angelo Gordon teams.
• Geographic Focus: Increased interest in Europe, Australia, India, Southeast Asia, Korea, and Japan, with reduced activity in China.
• Essential Housing: $20 billion in project value with 16 homebuilders involved.

Future Outlook

• Fundraising Guidance: Aims to raise significantly more capital in 2024 and 2025.
• Climate Fund Momentum: Strong start with continued interest outside the U.S.
• Credit Fundraising: Plans to raise more in 2025 compared to 2024.
• Cross-Sell Opportunities: Ongoing dialogues for large SMAs with Angelo Gordon.
• M&A Strategy: Actively seeking platform acquisitions and geographic expansion.
• Insurance Relationships: Open to strategic partnerships with flexibility for collaboration.
• Asia Focus: Interest in real estate in Australia, India, Southeast Asia, Korea, and Japan.

Q&A Highlights

• Exit Strategy Rigor: Emphasizes rigorous exit dialogues to prioritize fund and LP interests.
• Exit Activity: Sold twice as much in 2021 as invested; a net seller in recent years.
• IPO Activity: Successful IPOs in India despite market challenges.
• Strategic Exits: 60% of private equity exits have been to strategic buyers.

In conclusion, TPG’s presentation at the Morgan Stanley US Financials Conference 2025 emphasized its strategic growth and adaptability. For more details, refer to the full transcript below.

Full transcript - Morgan Stanley US Financials Conference 2025:

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Before we get started, for important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. Note that taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. With that out of the way, good afternoon everyone and thanks for sticking with us here on day two of the Morgan Stanley Financials Conference. I’m Mike Cyprys, Equity Analyst covering brokers, asset managers and exchanges for Morgan Stanley Research.

And welcome to our fireside chat with TPG and we’re excited to have with us here today Todd Csisiski, the President of TPG. As many of you know, TPG is a leading global alternative asset manager with over $250,000,000,000 of assets under management. Todd, thank you for joining us today, making the trip out here. Thank you for having me. Great.

Well, look, you’ve been President of TPG since its inception and have led co led the healthcare investing practice. Can you talk a bit about how your role has evolved over the years, how you’re allocating your time today? And as you reflect on the journey of TPG over the years, what lessons learned stand out as you’ve built a $250,000,000,000 leading alternative asset manager with global footprint? Absolutely.

Todd Sisitsky, President, TPG: Again, you for having me. I’m excited to be here. I have been at CPG now. I’m in my twenty third years. I’ve been there twenty two years, longer than the furniture.

Really, really have grown up at the firm and grown up, as you said, the private equity side, the only continuous job I’ve had that entire period is investing in health care. But the role has evolved quite a bit over time. I became President of the firm right ahead of our IPO. I was the President, even that role has evolved. In context of my firm wide responsibilities, I’ve co run the management committee and the partnership committee.

I’ve been involved in leading some of our really important initiatives, including the Angelo Gordon acquisition, which I led with our CEO. And then I’m focused on some of the areas that we’re trying to really develop strategic growth plans, including places like Europe and then some of the businesses that are growing nicely like our secondaries business where I support the team. So I’ve had a number of firm wide responsibilities, but maintained a lot of focus on investing. I think actually when I was asked to be President, one of the primary reasons was not just my historical experience as an investor and hopefully credibility as an investor, but also my ongoing passion for investing. And ultimately, the job as President in all of our jobs is just focusing on investing excellence.

And I would say one thing that is interesting about TPG, think it’s been a real positive, is that nobody retires into middle management. We’re all on the front lines. That’s part of how we think about ourselves. It’s how we evaluate one another. And that has certainly, persisted for me.

I can tell you also that my credibility as an investor allows me to do things as President that I think to your question about reflections on what has been the core part of our DNA, I’m able to sort of continue to push these things that I think are already strengths of the firm. One is this continued and singular focus on performance and making sure that you are distinguishing yourself in every asset class which you’re involved, focusing on the areas where you have competitive advantage, always thinking about your strategy and pushing strategy in the same way that you’re pushing your investments, the portfolio companies that you invest in to think about their strategy. And I think that, that’s the only thing that gives you a right to grow as an asset manager is really what you’re delivering for your partners. The thing that I think is even perhaps more distinctive to us is this focus on collaboration. That’s been really an exciting part of TPG.

We’ve had some of our greatest success in the seams between sector teams, in the collaboration between businesses. As we’ve added Angela Gordon, as we added our credit businesses, expanded our real estate business, we found some incredible opportunities to essentially to unlock investments that would otherwise not be available to us in either business units by working together. The DIRECTV DISH transactions, there were actually a series of opportunities there. We’re a great example of that. That as an investor, as a deal guy, that gets me really excited.

And I think of a big part of my responsibility is trying to continue to encourage and support that type of collaboration because I think it’s distinctive and has created some of our most important practice areas and investments and to continue to grow from that base. And then finally, it’s a very distinctive culture. There’s a lot of support. It’s a very flat organization. Our investment committee dialogues are open to every professional and everyone’s encouraged to participate.

It’s an entrepreneurial place. We focus on things that we think are really interesting as opportunities. We stick to our lanes where you have competitive advantage. Those cultural dynamics are also important to reinforce. I would tell you from a cultural perspective, more things have stayed similar than have changed over my two plus decades at the firm.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Maybe shifting gears over to the broader macro environment through the lens of your portfolio companies, curious to get your take on the state of the global economy, health of the consumer, path of inflation here just given some of uncertainty and volatility and how your portfolio companies are performing today?

Todd Sisitsky, President, TPG: Well, has certainly been a remarkable couple of quarters for all of us. And I think even some of the statistics, I think it was the worst ever start, seventy five days to a year. And then it was the strongest rebound after a 20% drop in since World War II at least. So it’s a pretty dramatic moment in some respects. I would say that as long term investors, we’re not as caught up in the day to day, but certainly that macro environment very important to us.

And I would also say that during moments like this, we’re always focused on a portfolio. But to your question about performance, we’re particularly focused on trailing results, on forward indicators, on operating metrics and we stay very, very close to the portfolio. That’s sort of the nature of our investment style across all of our asset classes. I can tell you about I’m not that I’m not perpetually focused and anxious. That’s sort of my nature for even beyond my job.

But I’ve been really pleased and encouraged by the performance and the persistence of growth that we’ve seen in our portfolio. So if you focus on the private equity side for a moment, I think we reported at the first quarter earnings call that our revenue growth across all of private equity was about 18%, which was relative to I think 5% for the S and P. And actually the EBITDA growth was stronger at 24% relative to I think 10%. And we’ve qualitatively continued to see that strength. I think that strength is a reflection of both the macro resilience in the economy, which we’re seeing across geographies and which I think reflects the starting point of a pretty good macro environment and economy going into some of the turbulence we’ve seen more recently.

I think it also reflects our strategy. We try to be very focused on areas that are secularly growing. We outlawed FOMO a long time ago. We don’t worry about how the people are making seeking to make their money. But we’re looking for areas of secular growth and areas in which we can bring what is a very broad set of operational capabilities to inflect the performance of our underlying businesses.

And I think that’s what you see coming through in the numbers. We’ve actually been cautious about the macro for some time. So we in fact have underwritten multiple compression into our centering cases really for a fun cycle and a half, which puts a lot of pressure on that focus on growth. So I think part of the reason that we’re seeing this consistently strong growth is the neighborhood and the impact that we’re having on our companies. But that’s I think that’s certainly part of what’s flowing through.

I’d say elsewhere in our business, which is of course very important on credit and real estate, we’re also seeing strength. We actually get questions because I think folks are particularly focused on the leveraged finance world on our direct lending business, which is Twinbrook. It focuses on the lower middle market, which is an interesting place, has an excellent market share and it’s been steady. I mean we have two times coverage ratio and consistently LTV of about 43% loan to value about 43% and we’ve seen good growth in the underlying portfolio of two ninety companies. Like the private equity side, I think that reflects both the resilience of the macro, but also the way we go about doing things in terms of the selection of companies.

100% of these companies have covenants. We sit at the table, I think 98%, it’s senior secured, we’re in the revolver. So I think the way we do things is another part of the reason that we’re seeing such strength in the portfolio. So I’m not at all complacent. It’s an interesting market and interesting moment we’re living through, but I can tell you that we’ve been very pleased with the performance so far.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Great. Turning to capital markets, can you talk about the pipeline and opportunity set that you see in the current backdrop? How volatility has impacted that pipeline of deals that were arguably slated to get done? How has that sort of transpired? And how is it looking now in terms of the outlook for the remainder

Todd Sisitsky, President, TPG: of the year? Absolutely. I think that I mean I sit on a number of our investment committees and sort of aware of what’s happening across the firm. We’re still very busy and active. I would have said going into the year, it might have been robust, maybe even more than we can handle.

So I do think volatility in some cases causes folks to hunker down a bit, but it’s still very active. And we’re still, I think, quite pleased with our pace of investment. I think that there’s a reason that we’ve continued to see the level of activity. There’s in my mind, you think about the private capital market, there’s sort of a flow side of the business where things are usually intermediated and they come out with a chaperone you have a chaperone dinner with name your investment bank and the management team, very high probability that that’s an actionable opportunity because it’s for sale. On the source side of the world, which is where we participate for the most part, it’s less certain that there’ll be a transaction but you’re usually coming with a proprietary idea or strategic or some other partners coming with an IDDU.

And that has been a very healthy portion. In fact, it’s 70% of our latest U. S. Flagship fund in the private equity side is either structured relationships with corporate, a carve out or some combination thereof. So I think that side of the market is a little less volatile, a little less tied to overall deal market.

And so that’s, I think, been part of the reason. And if you look at Asian Growth, the majority of those deals are also proprietary and there’s a very healthy set of those deals that are also corporate partnerships. In fact, we’ve also had partnerships with universities and not for profits. So very unusual sort of deal sourcing stories, which I think result in a portfolio for us to look a little bit different than others. On the credit side, volatility is sometimes your friend, I think, in terms of opportunities.

On the Twinbrook, we have a very active pipeline. We’re sort of the incumbent in those two ninety or 300 companies in that they in these periods, they sometimes do add on acquisitions with even greater frequency and we’re the lender. Credit Solutions, really interesting capital structure opportunities. So good companies with challenging capital structures. I think the pipeline in that business is robust at this moment as it’s ever been.

And that’s sort of again a very creative capital type of approach. And then structured credit, which is non EBITDA based, asset based lending, the opportunity set is extraordinary. And frankly, the opportunity set significantly exceeds the capital base we have built there, although of course over time we’re going to and address that. That is a business that’s been driven from a number of different angles, including LPs, particularly insurance companies increasingly wanting to be in that space. And in some cases, including with our insurance partners, we’ve worked together to get into new areas and to innovate.

Investment grade asset based financing is an example. So there’s a lot of activity. And then on the real estate side, I would tell you that we’re getting access to some assets that either lenders or sometimes REITs, some owners that are feeling some form of distress are selling. And these assets are not assets that we would usually get access to. So some really interesting high quality assets, a lot of defensive space.

We’re not overly burdened by U. S. Office exposure. And so we’ve been able to play offenses. There have been some opportunities.

We’ve looked at some really interesting take privates. Again, opportunities that wouldn’t necessarily be available in other markets. So there’s no question that volatility often causes people to slow down. But I think in part because of the way that we source opportunities, we’ve continued to be very active.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: So it sounds like a little bit of a differentiated sourcing funnel maybe versus others. But maybe along those lines, as you’re thinking about this sort of backdrop, anything stand out in terms of the most compelling areas for deploying capital leaning into over the next twelve months?

Todd Sisitsky, President, TPG: I think are I think there’s a lot of interesting pockets. Again, we try to be super selective in terms of the areas we’re focusing in and it’s a competitive market. We want to make sure we’re focusing in areas where we have real competitive advantage. If I think about geographically, we actually feel like there’s a lot of interesting opportunity in Europe right now. I look at Europe and I think about the areas that are compelling to me.

Areas like this on the sector side, technology and software, healthcare, climate investing, the deal type, some of the secondary opportunities there are there GP led secondaries. I feel like a lot of the real estate opportunities on industrial side, logistics side, student housing, I actually feel like the interesting opportunities in Europe are very well lined up with our authentic global strengths as a firm, the place that’s the spots that we’ve picked. And so we’ve been busy and I feel like that’s an opportunity there’s an opportunity to continue. As I mentioned, spend a lot of time in Europe. We have an excellent group of folks across the platform and likewise on the credit side in Europe.

So I think that’s interesting. In Asia we continue to be busy. In Asia for us we’ve leaned into places like Australia and India, Southeast Asia, Korea, Japan particularly on real estate side. And so we’ve been a little less active in China. We have a team there but it’s less than 2% of our AUM.

It’s harder for us because I think the rules of engagement are not quite as clear. So it’s a good time I think frankly to be a global firm and I think there is some overall dialogue around global diversification and I feel really well positioned as far as that goes. On the individual businesses, structured credit as I said, super busy. So one of the things we try to do in all of our businesses is not only participate in the spaces we are in but figure out where the opportunities are going to arise. We’ve been almost in some respects a mover in areas like HELOCs which is in a world where people have equity in their homes but they also have lower interest rate mortgages that they don’t want to refinance.

That’s a really interesting place and we’ve found some strategic partnerships in the space to allow us to participate there. And I think there’s a lot more opportunity to explore. Essential housing, I mentioned a really strong pipeline. There’s another place, my partner Ryan talks about going into the lab. The team created an essential housing business and that’s essentially working with builders who are both reacting to the macro inadequacy of perpetual inadequacy of housing and also the desire of those homebuilders to become more capital efficient and more thoughtful about their balance sheets.

And so this is a company that or this is a business for us. It’s on its I think fund. Dollars 20,000,000,000 of project value, 16 different homebuilders that they’ve worked with. So again, these are places where we’re not following but we’re really trying to lead, and we see a lot of opportunity there. So just a few examples.

I could I know we only have seventeen minutes, so I’ll stop now.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Fair enough. Why don’t we shift gears and talk about the exit backdrop? I think there’s a lot of excitement coming into this year, but given some of the volatility, maybe expectations have tempered a little bit. So I guess how do you see the outlook for exit activity from here? And how much of the portfolio would you say is exit ready?

Todd Sisitsky, President, TPG: Well, exits is a place we spend a particular amount of time thinking about. I feel like this is a very important topic for our partners. It’s a very important topic for us. Before I get into sort of the numbers, process wise, whatever your strategy is, everybody spends a lot of time on the investing decision going in. There’s always everyone has investment committees.

I think ours is particularly robust and we have a particularly tight strategy, but this is something that is part of the core job of private equity. I think one of the things we do a little differently is we try to bring the exact same level of rigor to the exit dialogue. And that’s something that’s evolved really over the last ten or fifteen years. We’ve gotten tighter and tighter. And it’s a very engaged dialogue.

I mean, I’m a I think myself as an investor deal guy. We do sometimes fall in love with our businesses. So I think it actually really matters that we come together as a partner group and figure out not necessarily what’s best for the business, what’s best for the fund and for the LPs. That has led to some very interesting patterns for us. So if you look at TPG Capital, we were net sellers in 2020, 2021, 2022 not 2023 and then 2024.

And in ’21 where everyone was really leaning in, we sold and we were actually busy on the origination side but we sold twice as much in TPG Capital as what we invested at that time. And I think that that’s put us in a really good place relative to our partners. DPI has been important for us. We’ve demonstrated our focus on exits. We’ve continued to see a lot of activity.

Actually about 60% of our private equity exits have been to strategics, which is also a little insulated from the more open and shut IPO market. But in markets like India, I think we took two companies public last quarter and we’ve had 11 in total in the last three years. We’ve continued to see good liquidity even into the choppiness of this year. I think on the growth side, we have three portfolio company exits, full exits that are out there, some of which I’m not sure we’ve disclosed the details of. We just finished our sell down of Viking Cruise on the capital side.

Rise Climate, fully exited Tata Technologies and had some other important liquidity recently. Growth is already I think growth is as I mentioned three full company exits. I think they’re already at $1,000,000,000 of exits, which is more than they had last year combined and we’re only in June. So I think the overall picture for us on liquidity is has been good, none of which to say that it’s easy because I do think in moments of volatility, people tend to hunker down a bit, but we’ve been able to find a way.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Were any of those second quarter events? Yes.

Todd Sisitsky, President, TPG: Viking was I think the last ten days.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Okay. And then those three on the horizon, that’s Yes, sort

Todd Sisitsky, President, TPG: of some announced, some a little less so. Okay.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Maybe turning to fundraising. We’re seeing some headlines around some challenges around institutional asset owners potentially coming into the allocating to the asset class, whether it’s in endowments or China LPs. And then in the context, we still have the DPI challenges across the industry. So it seems like a little bit of a tougher backdrop for private equity fundraising. You’re in the market with several flagship funds.

Maybe just talk a little bit about your expectations, timing around that, magnitude pace of those campaigns in the context of what has been strong performance and strong VPIs from TPG.

Todd Sisitsky, President, TPG: Yes. And thank you. I do think it’s an interesting market because as is often the case, different parts of your partner base are experiencing the world somewhat differently right now. We reiterated our guidance at the in the first quarter conference call that we were going to hope to raise expect to raise significantly more capital 2025 and 2024. And we continue to feel confident and comfortable with that guidance.

On the PE side, where I think we get a lot of questions around the appetite for commitments, I do think it’s a story of having differentiated ourselves in a positive way. DPI is important as you mentioned. That’s something we’ve been focused on a long time, well before we started hearing phrases like DPI is the new IRR, which I’ve heard a few times today already. But that’s been a positive. But I think the other thing that’s positive is just the level of differentiation in the portfolios that we are looking at, the structured relationships, these carve outs.

I think people really appreciate that and they appreciate the consistency between the strategy that we’re articulating and the discipline around that strategy and what we’re going to what we’re doing and the execution. So I think that that’s been important. We are as you say in the market with our U. S. And European flagships which will be TPG ten and Healthcare Partners three and looking for a sizable close in around the middle of the year and of course in heavy dialogue since we’re approaching the middle of the year with a lot of our cornerstone LPs and continuing to feel like there’s real progress along that front.

Climate is another important fundraise for us. That is an area of the world where there is noise in The U. S. I think it’s great to be a global asset manager at this moment, as I said earlier. I think it’s great to have resources, investing resources and capital formation resources around the globe.

We had have had a strong start in the climate fundraise, so over 60% of our target. And I would say that despite The U. S.-centric noise, we continue to see an enormous amount of appetite both from a capital formation and a deal flow perspective outside The U. S. So in Europe, we’ve talked about our Global South initiative publicly.

That’s another interesting sort of dimension where one of our good partners globally said we want to not only participate in this investment strategy, we want to have some of the capital deployed in the global South. That’s something I think we’re going to continue to see. There’s real momentum around that business. So Asia, The Middle East, Europe, really active, not at all candidly affected by some of the noise. And then just from the underlying belief that we have that this is a bit of a generational opportunity.

If you look at just energy transition as one subset of the climate opportunity, the needs for energy are growing so dramatically in The U. S. And elsewhere, data systems, there’s data centers and the like that you see it. And then in Europe, see blackouts, right, which speaks to sort of the aging infrastructure and clean energy is becoming increasingly competitive on a cost basis. And I think increasingly relevant as you think about addressing some of these macro needs.

So in any event, climate is global for us and I do think we’re seeing there and elsewhere to some degree a little bit more of a barbell in terms of close versus later closes as people want to see the performance. But again, we continue to feel really excited about the trajectory. And stepping back from any one campaign, I think you’ll continue to see a little bit more of this barbell in terms of the fund closes. On the credit side, we’ve said that we’re going to raise more credit in 2025 than 2024. I think the thing I would want to highlight here is that we’re feeling increasingly enthusiastic about the cross sell opportunity.

I think there’ve been over 200 introductions involving senior members of our team on the legacy TPG side and engaging with the senior team on the legacy Angela Gordon side. We’re all just one firm now. But the traction is only increasing there. It’s beyond what we’ve closed year to date just the dialogue around SMAs. We announced on our last earnings call, I think it was a $4,000,000,000 sort of special cross platform relationship.

We did not announce the name. We have 10 plus dialogues going on around those type of conversations now. And these things sometimes take a little bit of time but it does feel to me like the flywheel is spinning and I think that’s really exciting to see and I think reinforces the reason for leaning into this combination, which has been a really successful one for us.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Why don’t we dig in a little bit on credit, newer area for you guys at TPG, both the Angelo Gordon acquisition. First quarter fundraising was I think a little bit lighter, but you guys reiterated your expectations to raise more, this year for AG credit versus last year. So maybe just update us on the fundraising on the credit front, how the pipeline is shaping up and where you’re seeing some of the most demand?

Todd Sisitsky, President, TPG: Yes. I mean, I think we feel good to sort of continue with a little bit of what I was saying before about that cross sell opportunity and feeling like we’re having real traction and these sort of chunkier opportunities. I think we talked about $3,000,000,000 of discrete credit mandates that were closed or expected to be closed. That number has grown since our earnings call. And we’re seeing clients that are continuing to broaden their relationship with us.

We’ve had a really successful close in our middle market lending business, Twinbrook, and we’re starting the dialogue and already engaged with LPs around the graduated product, which is again another interesting opportunity. I’ve mentioned before structured credit is really interesting and exciting. A huge amount of opportunity, a lot of engagement around how to expand that into investment grade, I mentioned earlier and other avenues, but great uptake. And if you look at the insurance part of our overall LP base in AUM, it’s up by a plus since we closed the Angelo Gordon deal. So that speaks really well to credit and particularly to the structured credit world.

So we’re seeing a lot of traction, and I think we’re feeling really good about that momentum. So many things come immediately when you close a transaction. But the sense of cross sell and probably at least as important, the sense of TPG as the world of LPs focuses on an ever smaller number of GP partners with whom they want to have broader and deeper relationships across asset classes, I think we feel really well positioned for that and we’re seeing that in the nature and type and level of engagement around these larger opportunities. So you spoke to some

Mike Cyprys, Equity Analyst, Morgan Stanley Research: of the benefits, the synergies of, TPG coming together with Angela Borden. Have there been any sort of challenges that you’ve had to overcome as you brought two firms together kind of looking back any sort of surprises or interesting learnings?

Todd Sisitsky, President, TPG: I think the headline is definitely one of feeling really excited about it. I mean as I told you, I spent years of my life on it and we started with a number that was probably 50 or 60 folks, but spent the vast, vast majority of time with this group and getting to know one another. The reality when you’re executing these acquisitions, you’re really just merging two partnerships together, right? So one of the things we wanted to make sure of is that we were not engaging with someone who’s just trying to sell their business, but that instead they were looking to partner and throw in with us and really become one firm. And that they wanted to find opportunities for collaboration on individual deals across asset classes to build new asset classes like our hybrid solutions that we’ve come together.

And across all of those dimensions, I would tell you it is I think really been exceeding our expectations. The challenges side, we have put a lot of energy against the integration. I think it’s gone very well. It is the case that if you think about particularly a fund that’s in mid fundraise when these deals come together, it’s natural and we experience LPs saying, let me make sure, see how this plays out. Let me take a pause.

Let me see is everyone sort of in their seat? Is this a partnership where people are going to keep growing? Are the incentives well aligned? Is the organ going to work? And so I think that that’s the reality of it.

I don’t know that it was a particularly a negative surprise so much. It’s just a reality of businesses that are driven by people. But as we see now the traction and the flywheel spinning, we’re excited and I think it speaks again to the logic of the underlying transaction. The thing I would tell you I’m the most encouraged about from my presidency to someone who grew up in one culture has been the way in which the cultures have come together and the sense of valuing the same things, the collaboration, the intense focus on excellence and making sure that we always have earned the right to grow, as our job in the morning and the last job at night. All of that feels excellent and it’s been just really encouraging for someone who’s been around as long as I have.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: And with the AG deal under your belt, how are you thinking about M and A at this point? Where could it be most additive? And how are those conversations progressing?

Todd Sisitsky, President, TPG: Well, I’d say I’d start off by saying we’ve created a lot of value over time organically. So if you exclude Angela Gordon and now we’ve recently announced PepperTree, I’ll come to that in a minute. We’ve created very accretive growth by launching products not with a blank sheet of paper thinking, here we could add an asset class, by following our strengths and the IP and ecosystems we have and partnering with our long term LPs into natural adjacencies. That continues to be a really important opportunity for us. But having said that, the inorganic side is also important.

And I think we look at Angela Gordon as a really good proof point that we can do this, we can execute, we can integrate. That was a platform transaction. It was a really important one for us for all the reasons we just talked about. And I think it is encouraging. The Peppertree transaction, which we announced, we are also very excited about.

That is a little bit of a different type in that it’s an excellent team and excellent track record in digital infrastructure, which is an area where we have adjacencies already. But this gives us a really strong footprint from which to build further. And I think that we will continue to look at things that feel a little bit more platform like, but also a little bit more like we’re filling in the blank. And we might also filling in sort of holes in existing set of capabilities, which you might call tuck ins, but they’re more important than that name implies. I think we might also find opportunities to sort of strengthen ourselves in geographies.

I mentioned Europe. We have great businesses in these places but even more critical mass might help us. So we continue to be very active on the business development front and I think we have a really clear sense of the areas that are logical and where we feel like additional resources would not only be additive from a growth perspective but would make our existing businesses better and that’s really the primary criteria. So I think there’s a lot of opportunities out there.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Maybe just somewhat related to that theme around M and A, just curious how the dialogue is progressing around strategic insurance relationships and how you’re thinking about capital light, capital heavy or some middle ground of a hybrid in between?

Todd Sisitsky, President, TPG: Sure. Well I think just to start, our broad firm wide relationships with insurance have been great and growing and I think it’s yet another benefit to having credit in house because I think that’s really one of the key unlocks there. I mentioned that those LP relationships have grown by more than a since we started, which is excellent. But I do think there’s a symbiotic relationship in the industry, not talking about us now, with these more strategic relationships. The stronger returns on the asset management side help insurers be more competitive in their market.

And of course, from a capital formation and an FRE standpoint, there’s a lot of benefits that revert back. What I would tell you is that much like we were a couple of years into thinking about credit, we’re much more sophisticated and understand that market even better than we did when we started. And I do think it’s something that could be quite interesting. We don’t have actually a really preconceived set of ideas that it has to look like X, Y or Z. We have criteria.

We want a distinctive business that is differentiated in what is also a competitive market of insurance. We want a team that understands their business and wants to throw in what isn’t trying to sell, but is trying to build. And we want flexibility to sort of build together and figure out again how to create synergy between the two. As to your specific question about asset light, asset heavy, what I would tell you is that we are open minded and we can envision different states of the world that would be compelling. What I think is unlikely for you to see from us is something that looks like us shifting and converting our business into an insurance business with an asset management arm.

That’s unlikely. So we want to stay in the core business that we’re in. We do think that there’s a possibility if it’s the right team, it’s the right culture and it’s the right structure for insurance capability, retention capability to really to help us with our long term plans. But we’re going to be selective and only do it if it makes sense and only do it if we’re convinced as we were in the case of Angel Gordon that it’s going to be a great cultural fit.

Mike Cyprys, Equity Analyst, Morgan Stanley Research: Great. I’m afraid Ralph will leave it there.

Todd Sisitsky, President, TPG: Thank you

Mike Cyprys, Equity Analyst, Morgan Stanley Research: very much, Chuck.

Todd Sisitsky, President, TPG: Thank you.

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