TPG Q2 Earnings Call Highlights

Key Points

• TPG reported strong second-quarter growth: fee-related revenue rose 27% year over year to $628 million, fee-related earnings increased 43% to $315 million, and after-tax distributable earnings reached $280 million, or $0.69 per Class A share. The company declared a $0.59 dividend.
• Fundraising, assets and deployment expanded: total assets under management increased 25% to $327 billion, while TPG raised $16 billion and deployed approximately $14 billion during the quarter. Management reaffirmed its goal of raising more than $50 billion in 2026.
• TPG expects stronger realizations ahead but maintained its margin outlook: the firm generated $5 billion in second-quarter realizations and anticipates increased performance allocations late this year and into 2027 if markets normalize. It retained its full-year fee-related earnings margin guidance of 47% and expects third-quarter transaction and monitoring fees to decline.

TPG NASDAQ: TPG reported second-quarter results marked by higher fee-related revenue, fundraising, deployment and assets under management, while management said it expects continued management-fee growth and a stronger pace of realizations toward the end of 2026 and into 2027.

The alternative asset manager reported GAAP net income attributable to TPG Inc. of $93 million and after-tax distributable earnings of $280 million, or $0.69 per Class A share. The company declared a $0.59-per-share Class A dividend payable Aug. 28 to shareholders of record as of Aug. 14.

Fee-related revenue increased 27% from a year earlier to $628 million, while fee-related earnings rose 43% to $315 million. The resulting fee-related earnings margin was 50%. Management fees increased 15% year over year and 9% sequentially, according to outgoing Chief Financial Officer Jack Weingart.

“TPG delivered strong results in the second quarter, capping off a record first half for the firm,” Chief Executive Officer John Winkelried said. He said the firm believes it is positioned to gain share as changes involving artificial intelligence, private credit, monetary policy and geopolitics create greater dispersion in investment performance across the industry.

Fundraising and Assets Under Management

TPG ended June with $327 billion in total assets under management, up 25% from a year earlier. Fee-earning assets under management increased 24% to $181 billion. The company said $52 billion of AUM was subject to fee-earning growth, including $39 billion not yet earning fees, representing an estimated annualized revenue opportunity of about $290 million.

The firm raised $16 billion during the second quarter and more than $26 billion in the first half. Management reaffirmed its expectation to raise more than $50 billion in 2026.

• Private equity strategies raised $8 billion in the second quarter, including $1.3 billion for TPG Capital X and Healthcare Partners III.
• Credit raised $5.6 billion, including $2.5 billion of new multiyear commitments through TPG’s partnership with Jackson Financial.
• Peppertree, TPG’s telecom-tower infrastructure manager, held a $1 billion first close for its 11th fund.
• TPG said it is in market with its U.S. and Asia real estate equity funds and expects first closes in coming quarters.

In private wealth, TPG’s perpetual private-equity strategy, TPOP, generated approximately $450 million of inflows during the quarter and ended June with $2.9 billion in AUM. Winkelried said the strategy’s annualized inception-to-date return was 34%. The company also reported $193 million of gross inflows for TCAP, its non-traded business development company, while redemption requests equaled 2.1% of total shares outstanding.

Deployment, AI and Credit Activity

TPG deployed approximately $14 billion during the second quarter, a 33% increase from a year earlier, bringing trailing-12-month deployment to a record $62 billion. Private-equity strategies deployed $7.2 billion, up 60% year over year, while credit deployed $4.4 billion and real estate deployed $2.3 billion.

Management highlighted AI-related investments and operational initiatives as a growing part of its investment approach. TPG has invested directly in large-language-model companies including OpenAI and Anthropic, Winkelried said.

The firm also committed more than $4 billion alongside OpenAI and other investment firms to form DeployCo, an AI transformation and services platform intended to address implementation challenges at large enterprises. TPG said DeployCo has begun working with Conservice, a TPG Capital portfolio company, to automate utility-bill intake, exception resolution and quality-control processes.

In TPG Growth, the firm recently completed the acquisition of Smith + Howard, a top-50 CPA firm serving the Southeastern U.S. TPG said its investment thesis includes AI-enabled lead generation and workflow automation.

Within credit, TwinBrook generated $2.3 billion of gross originations in the quarter, including more than 40% from add-on activity among existing borrowers. TPG also deployed more than $1 billion in asset-based finance and more than $1 billion in credit solutions. The company cited financing commitments for the carve-out of BMC Helix from BMC Software and a £900 million second-lien facility supporting Bally’s Intralot’s proposed acquisition of evoke.

Margins, Realizations and Portfolio Performance

Weingart said the second-quarter result benefited from transaction closes that had been expected in the third quarter. TPG expects transaction and monitoring fees to decline in the third quarter and maintained its full-year fee-related earnings margin outlook of 47%.

“What would cause us to increase our margin guidance for the year is if we start to have visibility on a more robust capital markets fee growth in the back half of the year,” Weingart said during the question-and-answer session.

TPG generated $5 billion of realizations in the second quarter and nearly $14 billion in the first half, up 28% from the prior-year first half. The company generated $35 million in realized performance allocations during the quarter, primarily from its Growth and Credit platforms. Management said market volatility and geopolitical uncertainty have delayed some exits across the industry, but it expects realized performance allocations to increase late this year and into 2027 if markets normalize.

Portfolio values rose about 6% in private equity, 3% in credit and 3% in real estate during the quarter. TPG’s net accrued carry balance increased 15% to $1.4 billion at the end of June. Weingart said private-equity portfolio companies across the Capital, Growth and Impact platforms recorded mid-to-high-teens trailing-12-month revenue and EBITDA growth.

Leadership Transition and Wealth Expansion

Axel André joined TPG as chief financial officer in July, succeeding Weingart, who is transitioning fully to his role as CEO of Global Wealth Solutions. André most recently served as CFO of Reinsurance Group of America.

Winkelried said André’s insurance-industry experience complements TPG’s partnership-based approach with insurers, including Jackson Financial. The Jackson relationship has produced $4.5 billion in commitments since February and has helped expand TPG’s origination and distribution capabilities, according to management.

Weingart said TPG plans to broaden both product offerings and distribution in wealth management. The firm expects to launch an untraded REIT next year spanning its equity credit and net-lease real estate strategies, and is developing a multi-strategy credit interval fund. Management also said it is expanding TPOP distribution through international private banks and the U.S. registered investment adviser channel.

About TPG (NASDAQ:TPG)

TPG Inc NASDAQ: TPG is a global alternative asset management firm that invests across a range of strategies including private equity, growth equity, real assets, credit and hedge funds. Founded in 1992 as Texas Pacific Group, the firm has expanded its product set to serve a broad set of institutional and individual investors through commingled funds, separately managed accounts and other customized investment vehicles.

TPG operates investment platforms that target buyouts, growth-stage companies, real estate and credit opportunities, and it has developed dedicated thematic and impact vehicles such as the TPG Rise Fund to pursue social and environmental outcomes alongside financial returns.

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