TPG(TPG) - 2024 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) This section presents TPG Inc.'s unaudited condensed consolidated financial statements, including the statements of financial condition, operations, changes in equity, and cash flows, along with detailed notes explaining the company's accounting policies, acquisitions, investments, debt obligations, income taxes, related party transactions, equity-based compensation, and other financial disclosures for the periods ended June 30, 2024, and December 31, 2023 Condensed Consolidated Statements of Financial Condition (unaudited) This section presents the company's assets, liabilities, and equity at specific balance sheet dates Condensed Consolidated Statements of Financial Condition (unaudited) (dollars in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $1,121,009 | $665,188 | | Investments | $6,938,373 | $6,724,112 | | Total assets | $10,071,258 | $9,369,672 | | Liabilities & Equity | | | | Total liabilities | $6,765,042 | $6,008,538 | | Total equity | $3,306,216 | $3,361,134 | | Total liabilities and equity | $10,071,258 | $9,369,672 | - Total assets increased by $701.586 million from December 31, 2023, to June 30, 2024, primarily driven by an increase in cash and cash equivalents and investments[20] Condensed Consolidated Statements of Operations (unaudited) This section details the company's revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations (unaudited) (dollars in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $744,194 | $603,274 | $1,568,265 | $1,246,419 | | Total expenses | $776,546 | $564,729 | $1,612,943 | $1,184,846 | | Net (loss) income | $(57,578) | $40,011 | $(66,584) | $75,685 | | Net (loss) income attributable to TPG Inc. | $(13,977) | $27,195 | $1,542 | $52,250 | | Basic EPS | $(0.15) | $0.32 | $(0.08) | $0.59 | | Diluted EPS | $(0.19) | $0.02 | $(0.29) | $0.01 | - For the three months ended June 30, 2024, TPG Inc. reported a net loss of $57.578 million, a significant decrease from the net income of $40.011 million in the same period last year. Total revenues increased by 23.37% YoY, while total expenses increased by 37.51% YoY[23] - For the six months ended June 30, 2024, TPG Inc. reported a net loss of $66.584 million, compared to a net income of $75.685 million in the prior year period. Total revenues increased by 25.83% YoY, while total expenses increased by 36.13% YoY[23] Condensed Consolidated Statements of Changes in Equity (unaudited) This section outlines changes in the company's equity, including net income, distributions, and capital transactions Condensed Consolidated Statements of Changes in Equity (unaudited) (dollars in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Total TPG Inc. Equity | $714,225 | $579,157 | | Other NonControlling Interests | $2,591,991 | $2,781,977 | | Total Equity | $3,306,216 | $3,361,134 | - Total TPG Inc. equity increased from $579.157 million at December 31, 2023, to $714.225 million at June 30, 2024, primarily due to additional paid-in capital and equity-based compensation, partially offset by net loss and dividends/distributions[24][25][27] - Other non-controlling interests decreased from $2,781.977 million to $2,591.991 million during the six months ended June 30, 2024, mainly due to net loss and dividends/distributions, partially offset by equity-based compensation and capital contributions[24][25][27] Condensed Consolidated Statements of Cash Flows (unaudited) This section reports the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (unaudited) (dollars in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $651,288 | $540,302 | | Net cash used in investing activities | $(32,449) | $(4,954) | | Net cash used in financing activities | $(163,017) | $(749,256) | | Net change in cash, cash equivalents and restricted cash | $455,822 | $(213,908) | | Cash, cash equivalents and restricted cash, end of period | $1,134,193 | $906,742 | - Net cash provided by operating activities increased by $110.986 million YoY for the six months ended June 30, 2024, primarily due to higher proceeds from investments[29] - Net cash used in investing activities significantly increased by $27.495 million YoY, mainly due to the acquisition of Angelo Gordon[29] - Net cash used in financing activities decreased by $586.239 million YoY, driven by proceeds from debt obligations, partially offset by repayments and dividends/distributions[29] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1. Organization This note describes TPG Inc.'s corporate structure, consolidation policies, and ownership interests - TPG Inc. is a global alternative asset manager, consolidating accounts of management companies, general partners of pooled investment entities, and variable interest entities where it is the primary beneficiary[31] - As of June 30, 2024, TPG Inc. held approximately 28% of the outstanding Common Units of the TPG Operating Group[31] Note 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements - The financial statements are prepared in accordance with U.S. GAAP, reflecting all normal recurring adjustments. All dollar amounts are in thousands unless otherwise indicated, and intercompany transactions are eliminated[31] - TPG consolidates subsidiaries, management companies, general partners of funds, and variable interest entities (VIEs) where it is the primary beneficiary. Public SPACs are consolidated, but related management fees and other amounts are eliminated[32][33] Revenues (in thousands) | Revenue Stream | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Management fees | $413,344 | $258,499 | $820,761 | $508,499 | | Monitoring fees | $5,117 | $2,434 | $11,225 | $5,190 | | Transaction fees | $37,112 | $14,802 | $73,298 | $17,275 | | Incentive fees | $4,485 | $0 | $8,360 | $0 | | Expense reimbursements and other | $62,742 | $51,368 | $121,451 | $107,610 | | Total fees and other | $522,800 | $327,103 | $1,035,095 | $638,574 | | Performance allocations | $200,877 | $262,346 | $490,520 | $578,053 | | Capital interests | $20,517 | $13,825 | $42,650 | $29,792 | | Total capital allocation-based income | $221,394 | $276,171 | $533,170 | $607,845 | | Total revenues | $744,194 | $603,274 | $1,568,265 | $1,246,419 | - Management fees increased by 60% for the three months ended June 30, 2024, and 61% for the six months ended June 30, 2024, primarily due to the acquisition of TPG Angelo Gordon[53] - Performance allocations decreased by 23% for the three months ended June 30, 2024, and 15% for the six months ended June 30, 2024, compared to the prior year periods[53] Note 3. Acquisitions This note details the acquisition of Angelo Gordon, including purchase price allocation and acquired assets - On November 1, 2023, TPG completed the acquisition of Angelo, Gordon & Co., L.P. and its affiliated entities ('Angelo Gordon'), an alternative investment firm focused on credit and real estate investing, expanding TPG's platform diversity[114] - The acquisition was accounted for as a business combination, with a total Purchase Price of $1,143.4 million, comprising cash, vested Common Units, and contingent consideration (Aggregate Annual Cash Holdback Amount and Earnout Payment)[115][117] Summary of Angelo Gordon Acquisition (in thousands) | Metric | Amount | | :----- | :----- | | Total Purchase Price | $1,143,404 | | Total identifiable assets acquired | $2,334,277 | | Total liabilities assumed | $1,392,586 | | Goodwill recognized | $205,885 | Fair Value and Estimated Useful Lives of Acquired Intangible Assets (in thousands) | Intangible Asset | Fair Value | Estimated Average Useful Life (in years) | | :--------------- | :--------- | :--------------------------------------- | | Investment management agreements | $287,000 | 5-12.5 | | Acquired carried interest | $199,000 | 6.5 | | Technology | $46,000 | 4 | | Trade name | $15,500 | 5.5 | | Total | $547,500 | | Note 4. Investments This note provides a breakdown of the company's investment portfolio and related gains or losses Investments (in thousands) | Investment Type | June 30, 2024 | December 31, 2023 | | :-------------- | :------------ | :---------------- | | Equity method - performance allocations | $5,822,109 | $5,664,550 | | Equity method - capital interests | $963,378 | $923,440 | | Investments held to maturity, at amortized cost | $81,855 | $83,512 | | Investments held for sale - fair value option | $40,169 | $0 | | Equity method - fair value option | $17,611 | $36,171 | | Equity method - other | $11,327 | $11,761 | | Equity investments | $1,924 | $4,678 | | Total investments | $6,938,373 | $6,724,112 | Net Gains (Losses) from Investment Activities (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net gains of investments held for sale, fair value option | $408 | $0 | $408 | $0 | | Net (losses) gains of equity method investments, fair value option | $(13,076) | $2,918 | $(18,560) | $20,293 | | Net losses of equity method investments - other | $(828) | $(538) | $(944) | $(809) | | Net losses from equity investments | $(3,156) | $(1,534) | $(2,754) | $(3,822) | | Total net (losses) gains from investment activities | $(16,652) | $846 | $(21,850) | $15,662 | - Total investments increased by $214.261 million from December 31, 2023, to June 30, 2024, primarily driven by increases in equity method performance allocations[125] - The company reported a net loss from investment activities of $16.652 million for the three months ended June 30, 2024, compared to a gain of $0.846 million in the prior year, largely due to losses from equity method investments[127] Note 5. Fair Value Measurement This note explains the fair value hierarchy and measurement techniques for financial instruments Fair Value Hierarchy of Financial Assets and Liabilities (in thousands) as of June 30, 2024 | Asset/Liability | Level I | Level II | Level III | Total | | :-------------- | :------ | :------- | :-------- | :---- | | Assets | | | | | | Investments held for sale, fair value option | $0 | $0 | $40,169 | $40,169 | | Equity method investments, fair value option | $17,611 | $0 | $0 | $17,611 | | Equity investments | $1,924 | $0 | $0 | $1,924 | | Total assets | $19,535 | $0 | $40,169 | $59,704 | | Liabilities | | | | | | Aggregate Annual Cash Holdback Amount | $0 | $0 | $132,211 | $132,211 | | Earnout Payment | $0 | $0 | $27,096 | $27,096 | | Total liabilities | $0 | $0 | $159,307 | $159,307 | - The company's Level III financial instruments, which require significant judgment and estimation for fair value determination, primarily include investments held for sale and contingent consideration liabilities related to the Angelo Gordon acquisition[133][135] Changes in Fair Value of Level III Financial Instruments (in thousands) for Six Months Ended June 30, 2024 | Metric | Investments held for sale, fair value option | Financial liabilities | | :----- | :------------------------------------------- | :-------------------- | | Balance, beginning of period | $0 | $156,299 | | Purchases | $39,761 | $0 | | Unrealized gains (losses), net | $408 | $3,008 | | Balance, end of period | $40,169 | $159,307 | Note 6. Intangible Assets and Goodwill This note presents the carrying values and amortization of intangible assets and goodwill Carrying Values of Intangible Assets (in thousands) | Intangible Asset | June 30, 2024 Net Carrying Value | December 31, 2023 Net Carrying Value | | :--------------- | :------------------------------- | :----------------------------------- | | Contractual performance fee allocations | $251,173 | $276,893 | | Management contracts | $267,576 | $286,447 | | Technology | $38,333 | $44,083 | | Investor relationships | $18,750 | $19,792 | | Trade name | $13,621 | $15,000 | | Other intangible assets | $4,947 | $7,293 | | Total intangible assets | $594,400 | $649,508 | - Total intangible assets decreased from $649.508 million at December 31, 2023, to $594.400 million at June 30, 2024, primarily due to amortization[142] Intangible Asset Amortization Expense (in thousands) | Period | Amortization Expense | | :----- | :------------------- | | Three Months Ended June 30, 2024 | $27,600 | | Six Months Ended June 30, 2024 | $55,100 | | Three Months Ended June 30, 2023 | $7,100 | | Six Months Ended June 30, 2023 | $14,200 | - The carrying value of goodwill remained constant at $436.1 million as of June 30, 2024, and December 31, 2023, with no impairment losses recorded[146] Note 7. Variable Interest Entities This note discusses the company's involvement with and consolidation of Variable Interest Entities - TPG consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, but does not provide performance guarantees or financial obligations beyond its capital commitments[147] Assets and Liabilities Related to Non-Consolidated VIEs (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Investments | $941,879 | $903,119 | | Due from affiliates | $165,892 | $293,233 | | Potential clawback obligation | $1,947,842 | $1,910,247 | | Due to affiliates | $47,669 | $56,262 | | Maximum exposure to loss | $3,103,282 | $3,162,861 | - The company has securitization vehicles, considered VIEs, which issued $250.0 million in privately placed securitization notes. The carrying amount of these secured notes was $245.7 million at June 30, 2024[151] Note 8. Debt Obligations This note details the company's outstanding debt, recent financing activities, and interest expense - In March 2024, TPG's Notes Issuer issued $600.0 million in Senior Notes due 2034 (5.875% interest) and $400.0 million in Fixed-Rate Junior Subordinated Notes due 2064 (6.950% interest)[152][153] - Proceeds from these offerings were used to repay outstanding borrowings under the Senior Unsecured Revolving Credit Facility and Senior Unsecured Term Loan[154] Debt Obligations (in thousands) | Debt Type | June 30, 2024 Carrying Value | December 31, 2023 Carrying Value | | :-------- | :----------------------------- | :------------------------------- | | Senior Unsecured Revolving Credit Facility | $0 | $501,000 | | Senior Notes | $593,727 | $0 | | Subordinated Notes | $389,931 | $0 | | Senior Unsecured Term Loan | $0 | $198,485 | | Secured Borrowings - Tranche A | $196,558 | $196,434 | | Secured Borrowings - Tranche B | $49,163 | $49,133 | | 364-Day Revolving Credit Facility | $0 | $0 | | Subordinated Credit Facility | $0 | $0 | | Total debt obligations | $1,229,379 | $945,052 | - Total debt obligations increased by $284.327 million from December 31, 2023, to June 30, 2024[154] Interest Expense (in thousands) | Period | Interest Expense | | :----- | :--------------- | | Three Months Ended June 30, 2024 | $19,500 | | Six Months Ended June 30, 2024 | $36,600 | | Three Months Ended June 30, 2023 | $7,100 | | Six Months Ended June 30, 2023 | $13,200 | Note 9. Income Taxes This note explains the company's income tax treatment, deferred tax assets, and effective tax rates - TPG Inc. is treated as a corporation for U.S. federal and state income tax purposes, subject to taxes on its allocable share of taxable income from the TPG Operating Group[161] Deferred Tax Assets and Valuation Allowance (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Net deferred tax assets before valuation allowance | $333,400 | $109,300 | | Valuation allowance | $98,300 | $92,600 | | Tax Receivable Agreement liability | $234,400 | $24,600 | Effective Tax Rate | Period | Effective Tax Rate | | :----- | :----------------- | | Three Months Ended June 30, 2024 | (63.6)% | | Three Months Ended June 30, 2023 | 24.8% | | Six Months Ended June 30, 2024 | (67.3)% | | Six Months Ended June 30, 2023 | 25.0% | - The effective tax rate for the three and six months ended June 30, 2024, was negative, primarily due to a portion of income/losses allocated to non-controlling interests and certain non-tax-deductible compensation expenses[166] Note 10. Related Party Transactions This note describes transactions and balances with affiliated entities and related parties Due From and Due To Affiliates (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Due from affiliates | $314,953 | $418,977 | | Due to affiliates | $344,841 | $143,175 | - Due to affiliates increased significantly by $201.666 million, primarily due to a $211.9 million Tax Receivable Agreement liability from Common Unit exchanges[171][172] - Investment professionals and other individuals made $59.1 million in investments in TPG funds during the six months ended June 30, 2024[173] Fee Income from Affiliates (in thousands) | Revenue Source | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | RemainCo administrative fees | $4,300 | $8,600 | $4,500 | $9,100 | | Former affiliate services | $2,900 | $10,900 | $6,800 | $14,100 | Note 11. Operating Leases This note provides information on the company's operating lease arrangements and associated costs Components of Lease Expense (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $11,828 | $6,708 | $23,939 | $13,339 | | Short-term lease costs | $274 | $180 | $489 | $313 | | Variable lease cost | $2,596 | $1,800 | $5,570 | $3,591 | | Sublease income | $(364) | $(852) | $(1,292) | $(1,668) | | Total lease cost | $14,334 | $7,836 | $28,706 | $15,575 | | Weighted-average remaining lease term (years) | | | 6.3 | 6.6 | | Weighted-average discount rate | | | 5.11% | 4.15% | - Total lease cost increased by $6.498 million (82.9%) for the three months ended June 30, 2024, and by $13.131 million (84.3%) for the six months ended June 30, 2024, primarily due to higher operating and variable lease costs[180] Undiscounted Operating Lease Liabilities (in thousands) as of June 30, 2024 | Year Due | Lease Amount | | :------- | :----------- | | Remainder of 2024 | $21,097 | | 2025 | $39,316 | | 2026 | $37,622 | | 2027 | $38,271 | | 2028 | $37,132 | | 2029 and Thereafter | $88,270 | | Total future undiscounted operating lease payments | $261,708 | | Less: imputed interest | $(36,530) | | Present value of operating lease liabilities | $225,178 | Note 12. Commitments and Contingencies This note discloses the company's unfunded commitments, potential clawback obligations, and legal proceedings Guarantees Outstanding (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Maximum obligations guaranteed | $2,605,133 | $1,789,300 | | Amounts outstanding related to guarantees | $1,101,300 | $807,600 | - The TPG Operating Group had unfunded investment commitments of $536.5 million to investment funds and other strategic investments as of June 30, 2024[184] - A clawback provision exists for TPG funds, potentially requiring the general partner to return amounts to the fund. As of June 30, 2024, a clawback of $58.3 million (net of tax) was recorded for STAR, and if all remaining investments were deemed worthless, the potential clawback would be $1,947.8 million[185][186] - The company is involved in legal proceedings, including lawsuits related to a 2006 refinancing of TIM Hellas and an SEC investigation into business-related electronic communications, for which a contingent liability has been recorded[191][193][195] Note 13. Net Income (Loss) Per Class A Common Share This note presents the calculation of basic and diluted net income or loss per Class A common share Net Income (Loss) Per Share of Class A Common Stock | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income attributable to TPG Inc. | $(13,977) | $27,195 | $1,542 | $52,250 | | Basic EPS | $(0.15) | $0.32 | $(0.08) | $0.59 | | Diluted EPS | $(0.19) | $0.02 | $(0.29) | $0.01 | | Weighted-average shares of Class A common stock outstanding (Basic) | 101,690,961 | 80,540,569 | 95,402,371 | 80,022,820 | | Weighted-average shares of Class A common stock outstanding (Diluted) | 364,765,098 | 309,193,210 | 364,558,007 | 309,167,174 | - Basic and diluted EPS for Class A common stock were negative for both the three and six months ended June 30, 2024, indicating a net loss attributable to TPG Inc. shareholders, a reversal from positive EPS in the prior year[200] - The weighted-average shares of Class A common stock outstanding (basic and diluted) increased significantly year-over-year, impacting per-share calculations[200] Note 14. Equity-Based Compensation This note details the company's equity incentive plans, award grants, and compensation expenses - TPG Inc. grants equity awards under its 2021 Omnibus Equity Incentive Plan, including restricted stock units, Service Awards, Performance Condition Awards, and Market Condition Awards[202][203] Restricted Stock Unit Compensation Expense (in millions) | Award Type | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :--------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Special Purpose Awards: Service Awards | $33.5 | $67.8 | $13.1 | $29.2 | | Special Purpose Awards: Market Condition Awards | $7.8 | $13.0 | $1.3 | $2.6 | | Ordinary Awards: Service Awards | $21.4 | $42.3 | $10.6 | $20.5 | | Ordinary Awards: Performance Condition Awards | $0 | $(1.7) | $0.3 | $0.5 | | Total Restricted Stock Units | $62.7 | $121.4 | $25.3 | $52.8 | - Total restricted stock unit compensation expense increased significantly, from $25.3 million to $62.7 million for the three months ended June 30, 2024, and from $52.8 million to $121.4 million for the six months ended June 30, 2024, largely due to the Angelo Gordon acquisition and new grants[204] - As of June 30, 2024, total estimated unrecognized compensation expense related to unvested Service Awards was approximately $621.0 million, with a weighted average remaining service period of 3.3 years[207] - In conjunction with the Angelo Gordon acquisition, 43.8 million unvested Common Units were granted to former Angelo Gordon partners, considered compensatory under ASC 718, with $12.8 million and $21.9 million compensation expense recognized for the three and six months ended June 30, 2024, respectively[217][225] Note 15. Equity This note describes the company's capital structure, common stock classes, and dividend policies - TPG Inc. has three classes of common stock: Class A common stock (one vote per share, traded on Nasdaq), nonvoting Class A common stock, and Class B common stock (ten votes per share, no economic rights)[229] - As of June 30, 2024, there were 96,207,373 shares of Class A common stock, 6,605,963 shares of nonvoting Class A common stock, and 261,954,046 shares of Class B common stock outstanding[229] Quarterly Dividends on Class A Common Stock | Declaration Date | Record Date | Payment Date | Dividend per Class A Common Share | | :--------------- | :---------- | :----------- | :-------------------------------- | | May 15, 2023 | May 25, 2023 | June 5, 2023 | $0.20 | | August 8, 2023 | August 18, 2023 | September 1, 2023 | $0.22 | | November 7, 2023 | November 17, 2023 | December 1, 2023 | $0.48 | | February 13, 2024 | February 23, 2024 | March 8, 2024 | $0.44 | | May 8, 2024 | May 20, 2024 | June 3, 2024 | $0.41 | | August 6, 2024 | August 16, 2024 | August 30, 2024 | $0.42 | - During the six months ended June 30, 2024, 19,703,580 Common Units were exchanged for an equal number of Class A Common Stock shares, leading to the cancellation of Class B common stock[233][234] Note 16. Subsequent Events This note reports on significant events occurring after the balance sheet date - No additional events requiring recognition or disclosure have occurred since June 30, 2024, other than those noted in Note 15 to the Condensed Consolidated Financial Statements[235] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a comprehensive discussion and analysis of TPG Inc.'s financial condition and results of operations, including an overview of its business, investment platforms, key financial and operating measures, and a comparison of financial performance for the three and six months ended June 30, 2024, versus 2023. It also covers non-GAAP financial measures, operating metrics, liquidity, capital resources, and critical accounting estimates Overview This section provides a high-level summary of the company's business, strategy, and investment platforms - TPG is a leading global alternative asset manager with $229.0 billion in Assets Under Management (AUM) as of June 30, 2024, offering diverse investment strategies across private equity, credit, and real estate[238][239] - The firm's operating model emphasizes collaboration and shared investment themes across its six multi-strategy investment platforms: Capital, Growth, Impact, TPG Angelo Gordon, Real Estate, and Market Solutions[241] Company Profile and Strategy This section outlines TPG's business objectives, growth strategy, and operational ecosystem - TPG aims for highly profitable, sustainable growth through successful innovation, diversified investment platforms, and strategic inorganic growth, notably the acquisition of Angelo Gordon[239] - The company's ecosystem fosters insight, engagement, and collaboration across its platforms, managing over 300 active portfolio companies, 300+ real estate properties, and 5,000+ credit positions across 30+ countries[240] Investment Platforms and Products This section describes TPG's diverse investment platforms and their respective product offerings and AUM AUM by Platform as of June 30, 2024 (in billions) | Platform | AUM | | :------- | :---- | | Capital | $71.8 | | Growth | $26.7 | | Impact | $19.4 | | TPG Angelo Gordon | $67.5 | | Real Estate | $17.3 | | Market Solutions | $8.1 | | Total | $229.0 | Capital Platform The Capital platform focuses on large-scale private equity investments, with $71.8 billion in AUM - The Capital platform focuses on large-scale, control-oriented private equity investments across geographies and specialized sectors, with $71.8 billion in AUM as of June 30, 2024[244] - Key products include TPG Capital (North America/Europe focused, $42.6 billion AUM), TPG Asia (Asia-Pacific focused, $21.9 billion AUM), TPG Healthcare Partners, and Continuation Vehicles[245][247][248][249] Growth Platform The Growth platform invests in growth equity and middle market companies, with $26.7 billion in AUM - The Growth platform is dedicated to growth equity and middle market investing, providing flexible capital for earlier-stage or smaller companies, with $26.7 billion in AUM as of June 30, 2024[250][252] - Products include TPG Growth ($17.6 billion AUM), TPG Tech Adjacencies ($6.5 billion AUM), TPG Digital Media, and TPG Life Sciences Innovation (launched in 2023)[250][251][253] Impact Platform The Impact platform seeks competitive financial returns and societal benefits, with $19.4 billion in AUM - The Impact platform pursues competitive financial returns and measurable societal benefits, leveraging Y Analytics, the TPG Rise Global Advisory Board, and the TPG Rise Climate Coalition, with $19.4 billion in AUM as of June 30, 2024[254][255] - Key products are The Rise Funds ($9.0 billion AUM), TPG Rise Climate (focused on climate solutions, $7.3 billion total commitments), and TPG NEXT (supports diverse alternative asset managers)[255][256][257] TPG Angelo Gordon Platform The TPG Angelo Gordon platform specializes in credit and real estate investing, with $67.5 billion in AUM - The TPG Angelo Gordon platform, acquired in November 2023, focuses on credit and real estate investing, with a total AUM of $67.5 billion as of June 30, 2024[259] TPG AG Credit TPG AG Credit offers diverse alternative credit products, managing $67.5 billion in AUM - TPG AG Credit offers alternative credit products spanning private and tradable credit across corporate and asset-backed markets, with $67.5 billion in AUM as of June 30, 2024[260] - Products include TPG AG Credit Solutions ($14.9 billion AUM), TPG AG Structured Credit & Specialty Finance ($17.6 billion AUM), TPG AG Middle Market Direct Lending ($24.3 billion AUM), TPG AG CLOs ($8.4 billion AUM), and TPG AG Multi-Strategy ($2.2 billion AUM)[260][261][262][263][264] TPG AG Real Estate TPG AG Real Estate focuses on acquiring underperforming assets, with $18.2 billion in AUM - TPG AG Real Estate products focus on acquiring underperforming and undervalued assets in the United States, Asia, and Europe, and single-tenant commercial real estate via net lease, with $18.2 billion in AUM as of June 30, 2024[265][268] - Products include TPG AG U.S. Real Estate ($6.5 billion AUM), TPG AG Asia Real Estate ($5.1 billion AUM), TPG AG Europe Real Estate ($4.5 billion AUM), and TPG AG Net Lease ($2.2 billion AUM)[265][266][267][269] Real Estate Platform The Real Estate platform systematically pursues large-scale real estate investments, with $17.3 billion in AUM - The Real Estate platform, established in 2009, systematically pursues real estate investments at scale, with $17.3 billion in AUM as of June 30, 2024[270] - Products include TPG Real Estate Partners (TREP, $11.2 billion AUM), TPG Real Estate Thematic Advantage Core-Plus (TAC+, $1.8 billion AUM), TPG RE Finance Trust, Inc. (TRTX), and TPG Real Estate Credit Opportunities (TRECO, established in 2023)[270][271][272][273] Market Solutions Platform The Market Solutions platform creates differentiated products leveraging the TPG ecosystem, with $8.1 billion in AUM - The Market Solutions platform leverages the TPG ecosystem to create differentiated products addressing specific market opportunities, with $8.1 billion in AUM as of June 30, 2024[275][276] - Products include TPG Public Equities (TPEP, manages long/short and long-only funds totaling $3.0 billion AUM), Capital Markets (generates underwriting, placement, arrangement, structuring, and advisory fees), and Private Markets Solutions (NewQuest Capital Partners and TPG GP Solutions)[276][277][278][279][281] Capital Markets Transaction Revenue (in millions) | Period | Transaction Revenue | | :----- | :------------------ | | Three Months Ended June 30, 2024 | $46.7 | | Six Months Ended June 30, 2024 | $92.9 | | Three Months Ended June 30, 2023 | $17.2 | | Six Months Ended June 30, 2023 | $22.5 | Trends Affecting our Business This section discusses macroeconomic and market trends influencing the company's business environment - The U.S. market environment was constructive and relatively stable in Q2 2024, with continued economic growth and easing inflationary pressures, though inflation remains above the Federal Reserve's 2.0% target[282][283][284] - U.S. employment remained strong, with 532,000 net payrolls added in Q2 2024, and unemployment slightly rising to 4.1%. The Federal Reserve held rates steady, while the European Central Bank reduced its key interest rate[283][284] - Corporate credit markets (U.S. and European high yield, leveraged loans) generated positive performance in Q2 2024, with muted U.S. default activity[286] - Major U.S. equity indices were mixed in Q2 2024, with the S&P 500 and Nasdaq gaining (3.9% and 8.3% respectively) driven by mega-cap tech, while the Dow Jones fell (1.7%) and small-cap stocks lagged[287][288] Organization This section describes TPG Inc.'s holding company structure and control over the TPG Operating Group - TPG Inc. operates as a holding company, owning entities that serve as the general partner of the TPG Operating Group partnerships. Its primary assets are Common Units (approximately 28% outstanding) and interests in intermediate holding companies[289] - TPG Inc. indirectly controls all business and affairs of the TPG Operating Group through its ownership of the general partner entities[289] Acquisition of Angelo Gordon This section provides details on the strategic acquisition of Angelo Gordon and its financial implications - On November 1, 2023, TPG acquired Angelo Gordon for a total Purchase Price of $1,143.4 million, consisting of $740.7 million cash at closing, $16.3 million in post-close adjustments, 9.2 million vested Common Units, and contingent payments[290] - The acquisition included 43.8 million unvested Common Units deemed compensatory under U.S. GAAP, and an earnout payment of up to $400.0 million contingent on fee-related revenue targets in 2026[290] Operating Segments This section explains the company's single operating segment structure and resource allocation approach - TPG operates its business as a single operating and reportable segment, aligning with how its CEO, the chief operating decision maker, reviews financial performance and allocates resources[291] - The company emphasizes a collaborative approach across its platforms with a unified expense pool[291] Basis of Accounting This section outlines the consolidation principles and accounting basis used for financial reporting - TPG consolidates the financial results of TPG Inc., TPG Operating Group, its subsidiaries, management companies, general partners of funds, and Variable Interest Entities (VIEs) where it is the primary beneficiary[292] - Consolidation impacts financial statement presentation by reflecting accounts on a gross basis with intercompany eliminations, while third-party allocations are shown as non-controlling interests[293] - Most investment funds are not consolidated as TPG does not have a more than insignificant variable interest, though Public SPACs are consolidated in relevant periods[294] Key Financial Measures This section defines the primary financial metrics used to evaluate the company's operational and investment performance - Revenues consist of Fees and Other (management, monitoring, transaction, incentive fees, and expense reimbursements) and Capital Allocation-Based Income (performance allocations and general partner's capital interests)[297][298] - Expenses include Cash-Based Compensation and Benefits, Equity-Based Compensation, Performance Allocation Compensation, General, Administrative and Other, Depreciation and Amortization, Interest Expense, and Expenses of Consolidated Public SPACs[299][300][301] - Investment Income comprises Net Gains (Losses) from Investment Activities (realized and unrealized) and Interest, Dividends and Other, with fluctuations driven by fair value changes and dispositions[302][303] - Income Tax Expense reflects TPG Inc.'s corporate tax treatment on its allocable share of TPG Operating Group's taxable income, while Non-Controlling Interests represent the portion of income/loss and equity allocated to third-party owners in consolidated entities[304][305] Key Components of our Results of Operations This section covers key components of our results of operations Key Components of Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $744,194 | $603,274 | $1,568,265 | $1,246,419 | | Total expenses | $776,546 | $564,729 | $1,612,943 | $1,184,846 | | Total investment (loss) income | $(2,836) | $14,630 | $4,870 | $39,379 | | Net (loss) income attributable to TPG Inc. | $(13,977) | $27,195 | $1,542 | $52,250 | Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023 This section compares the company's financial performance for the three months ended June 30, 2024, against the prior year period Revenue Changes (Three Months Ended June 30, 2024 vs. 2023) (in thousands) | Revenue Stream | 2024 | 2023 | Change | % Change | | :------------- | :--- | :--- | :----- | :------- | | Management fees | $413,344 | $258,499 | $154,845 | 60% | | Transaction, monitoring and other fees, net | $46,714 | $17,236 | $29,478 | 171% | | Expense reimbursements and other | $62,742 | $51,368 | $11,374 | 22% | | Total fees and other | $522,800 | $327,103 | $195,697 | 60% | | Performance allocations | $200,877 | $262,346 | $(61,469) | (23)% | | Capital interests | $20,517 | $13,825 | $6,692 | 48% | | Total capital allocation-based income | $221,394 | $276,171 | $(54,777) | (20)% | | Total revenues | $744,194 | $603,274 | $140,920 | 23% | - Management fees increased by $154.8 million (60%) primarily due to the Angelo Gordon acquisition ($134.7 million from TPG Angelo Gordon)[310][311] - Performance allocations decreased by $61.5 million (23%) due to lower allocations from Capital and Market Solutions platforms, partially offset by $60.7 million from TPG Angelo Gordon[315][318] Expense Changes (Three Months Ended June 30, 2024 vs. 2023) (in thousands) | Expense Type | 2024 | 2023 | Change | % Change | | :----------- | :--- | :--- | :----- | :------- | | Cash-based compensation and benefits | $191,486 | $115,667 | $75,819 | 66% | | Equity-based compensation | $227,542 | $155,166 | $72,376 | 47% | | Performance allocation compensation | $133,753 | $172,077 | $(38,324) | (22)% | | General, administrative and other | $170,184 | $104,544 | $65,640 | 63% | | Depreciation and amortization | $32,079 | $8,304 | $23,775 | 286% | | Interest expense | $21,502 | $8,518 | $12,984 | 152% | - Cash-based compensation and benefits increased by $75.8 million (66%) due to increased headcount from the Angelo Gordon acquisition[325] - Depreciation and amortization increased by $23.8 million due to amortization of intangible assets from the Angelo Gordon acquisition[328] Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023 This section compares the company's financial performance for the six months ended June 30, 2024, against the prior year period Revenue Changes (Six Months Ended June 30, 2024 vs. 2023) (in thousands) | Revenue Stream | 2024 | 2023 | Change | % Change | | :------------- | :--- | :--- | :----- | :------- | | Management fees | $820,761 | $508,499 | $312,262 | 61% | | Transaction, monitoring and other fees, net | $92,883 | $22,465 | $70,418 | 313% | | Expense reimbursements and other | $121,451 | $107,610 | $13,841 | 13% | | Total fees and other | $1,035,095 | $638,574 | $396,521 | 62% | | Performance allocations | $490,520 | $578,053 | $(87,533) | (15)% | | Capital interests | $42,650 | $29,792 | $12,858 | 43% | | Total capital allocation-based income | $533,170 | $607,845 | $(74,675) | (12)% | | Total revenues | $1,568,265 | $1,246,419 | $321,846 | 26% | - Management fees increased by $312.3 million (61%) primarily due to $276.1 million from TPG Angelo Gordon[333] - Performance allocations decreased by $87.5 million (15%) due to lower allocations from Capital, Impact, and Market Solutions, partially offset by $140.5 million from TPG Angelo Gordon[338][340] Expense Changes (Six Months Ended June 30, 2024 vs. 2023) (in thousands) | Expense Type | 2024 | 2023 | Change | % Change | | :----------- | :--- | :--- | :----- | :------- | | Cash-based compensation and benefits | $397,822 | $236,118 | $161,704 | 68% | | Equity-based compensation | $455,450 | $312,459 | $142,991 | 46% | | Performance allocation compensation | $330,187 | $393,418 | $(63,231) | (16)% | | General, administrative and other | $321,816 | $209,417 | $112,399 | 54% | | Depreciation and amortization | $65,044 | $16,526 | $48,518 | 294% | | Interest expense | $42,624 | $15,936 | $26,688 | 168% | - Cash-based compensation and benefits increased by $161.7 million (68%) due to headcount growth from the Angelo Gordon acquisition[348] - Depreciation and amortization increased by $48.5 million due to amortization of intangible assets from the Angelo Gordon acquisition[350] Unaudited Condensed Consolidated Statements of Financial Condition (U.S. GAAP basis) This section presents the company's unaudited consolidated balance sheet under U.S. GAAP Unaudited Condensed Consolidated Statements of Financial Condition (U.S. GAAP basis) (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Cash and cash equivalents | $1,121,009 | $665,188 | | Investments | $6,938,373 | $6,724,112 | | Total assets | $10,071,258 | $9,369,672 | | Debt obligations | $1,229,379 | $945,052 | | Due to affiliates | $344,841 | $143,175 | | Accrued performance allocation compensation | $4,172,369 | $4,096,052 | | Total liabilities | $6,765,042 | $6,008,538 | | Total equity | $3,306,216 | $3,361,134 | - Cash and cash equivalents increased by $455.8 million, primarily from Senior Notes and Subordinated Notes offerings, net of debt repayments and dividend payments[357] - Investments increased by $214.3 million due to net capital allocation-based income and purchases, partially offset by proceeds[358] - Debt obligations increased by $284.3 million due to new note offerings, offset by repayments of existing credit facilities[358] - Due to affiliates increased by $201.7 million, mainly from a $211.9 million Tax Receivable Agreement liability related to Common Unit exchanges[359] Non-GAAP Financial Measures This section provides definitions and reconciliations of non-GAAP financial measures used to assess performance - Distributable Earnings (DE) is a non-GAAP measure assessing performance and potential distributions, excluding unrealized performance allocations, unrealized investment income, equity-based compensation, and non-controlling interests[361] - After-tax Distributable Earnings (After-tax DE) reflects DE after income taxes, adjusted to include current tax expense and Tax Receivable Agreement payments, providing a clearer view of distributable earnings[363] - Fee-Related Earnings (FRE) evaluates the business's ability to cover compensation and operating expenses from fee revenues, excluding realized performance allocations, investment income, net interest, depreciation, and amortization[364] Non-GAAP Financial Measures (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fee-Related Revenues | $458,996 | $285,733 | $910,204 | $551,186 | | Fee-Related Expenses | $257,732 | $160,303 | $526,569 | $326,472 | | Fee-Related Earnings | $201,264 | $125,430 | $383,635 | $224,714 | | Distributable Earnings | $220,759 | $108,901 | $409,765 | $205,871 | | After-Tax Distributable Earnings | $206,639 | $96,240 | $387,264 | $184,082 | Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023 This section compares the company's financial performance for the three months ended June 30, 2024, against the prior year period - Fee-related revenues increased by $173.3 million (61%) due to higher management fees ($156.7 million) and transaction, monitoring, and other fees ($17.3 million), largely from the Angelo Gordon acquisition[369][372][377] - Fee-related expenses increased by $97.4 million (61%) due to higher cash-based compensation and benefits ($68.9 million) and operating expenses ($26.3 million), driven by the Angelo Gordon acquisition[379][381][383] - Distributable Earnings increased significantly, primarily due to higher Fee-Related Earnings and realized performance allocations[391] Realized Performance Allocations, Net (in thousands) | Platform | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :------- | :------------------------------- | :------------------------------- | | Capital | $0 | $6,367 | | Growth | $2,905 | $0 | | Impact | $4,278 | $0 | | TPG Angelo Gordon: TPG AG Credit | $13,854 | $0 | | TPG Angelo Gordon: TPG AG Real Estate | $4,041 | $0 | | Real Estate | $901 | $263 | | Total | $25,979 | $6,630 | Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023 This section compares the company's financial performance for the six months ended June 30, 2024, against the prior year period - Fee-related revenues increased by $359.0 million (65%) due to higher management fees ($311.3 million) and transaction, monitoring, and other fees ($46.8 million), largely from the Angelo Gordon acquisition[392][394][399] - Fee-related expenses increased by $200.1 million (61%) due to higher cash-based compensation and benefits ($150.4 million) and operating expenses ($45.5 million), driven by the Angelo Gordon acquisition[401][403][405] - Distributable Earnings increased, primarily due to higher Fee-Related Earnings and realized performance allocations[412] Realized Performance Allocations, Net (in thousands) | Platform | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------- | :----------------------------- | :----------------------------- | | Capital | $18,273 | $6,367 | | Growth | $2,905 | $1,097 | | Impact | $15,896 | $116 | | TPG Angelo Gordon: TPG AG Credit | $15,470 | $0 | | TPG Angelo Gordon: TPG AG Real Estate | $4,086 | $0 | | Real Estate | $901 | $4,076 | | Total | $57,531 | $11,655 | Unaudited Non-GAAP Balance Sheet Measures This section presents non-GAAP balance sheet metrics used to evaluate the company's underlying asset values - Book assets, book liabilities, and net book value are non-GAAP measures used to assess the unrealized value of TPG Operating Group's assets on a deconsolidated basis, including tax assets and liabilities of TPG Inc[414] Non-GAAP Book Assets, Book Liabilities, and Net Book Value (in thousands) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Total Book Assets | $3,932,126 | $3,562,274 | | Total Book Liabilities | $1,689,209 | $1,241,199 | | Net Book Value | $2,242,917 | $2,321,075 | - Net book value decreased during the six months ended June 30, 2024, primarily due to tax payments, RSU dividend equivalent payments, amortization of intangibles, and accretion of the contingent earnout from the Angelo Gordon acquisition[415] Reconciliation to U.S. GAAP Measures This section reconciles non-GAAP financial measures to their most directly comparable U.S. GAAP equivalents Reconciliation of GAAP Revenue to Fee-Related Revenues (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP Revenue | $744,194 | $603,274 | $1,568,265 | $1,246,419 | | Capital-allocation based income | $(221,394) | $(276,171) | $(533,170) | $(607,845) | | Expense reimbursements | $(50,227) | $(40,105) | $(95,894) | $(84,354) | | Investment income and other | $(13,577) | $(1,265) | $(28,997) | $(3,034) | | Fee-Related Revenues | $458,996 | $285,733 | $910,204 | $551,186 | Reconciliation of GAAP Expenses to Fee-Related Expenses (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP Expenses | $776,546 | $564,729 | $1,612,943 | $1,184,846 | | Depreciation and amortization expense | $(32,079) | $(8,304) | $(65,044) | $(16,526) | | Interest expense | $(21,502) | $(8,518) | $(42,624) | $(15,936) | | Performance allocation compensation | $(133,753) | $(172,077) | $(330,187) | $(393,418) | | Equity-based compensation | $(227,542) | $(155,166) | $(455,450) | $(312,459) | | Fee-Related Expenses | $257,732 | $160,303 | $526,569 | $326,472 | Reconciliation of Net Income to After-tax Distributable Earnings (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(57,578) | $40,011 | $(66,584) | $75,685 | | After-tax Distributable Earnings | $206,639 | $96,240 | $387,264 | $184,082 | | Distributable Earnings | $220,759 | $108,901 | $409,765 | $205,871 | | Fee-Related Earnings | $201,264 | $125,430 | $383,635 | $224,714 | Operating Metrics This section presents key operational metrics used to track the company's business growth and activity - TPG monitors key operating metrics common to the alternative asset management industry, including Assets Under Management (AUM), Fee Earning AUM (FAUM), Net Accrued Performance, AUM Subject to Fee Earning Growth, Capital Raised, Available Capital, Capital Invested, and Realizations[423] Assets Under Management This section details the company's total Assets Under Management (AUM) and its composition by platform Assets Under Management (AUM) by Platform as of June 30, 2024 (in millions) | Platform | June 30, 2024 | June 30, 2023 | | :------- | :------------ | :------------ | | Capital | $71,758 | $68,906 | | Growth | $26,670 | $24,179 | | Impact | $19,350 | $17,683 | | TPG Angelo Gordon: TPG AG Credit | $67,486 | $0 | | TPG Angelo Gordon: TPG AG Real Estate | $18,250 | $0 | | Real Estate | $17,322 | $18,959 | | Market Solutions | $8,138 | $8,905 | | AUM as of end of period | $228,974 | $138,632 | - Total AUM increased by $90.342 billion (65.17%) from June 30, 2023, to June 30, 2024, primarily due to the acquisition of TPG Angelo Gordon[425] AUM Rollforward (in millions) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Balance as of Beginning of Period | $223,593 | $137,142 | $221,623 | $135,034 | | Capital Raised | $6,299 | $1,456 | $10,959 | $3,481 | | Realizations | $(5,363) | $(923) | $(10,248) | $(3,058) | | Changes in Investment Value and Other | $5,089 | $1,025 | $7,732 | $3,385 | | AUM as of end of period | $228,974 | $138,632 | $228,974 | $138,632 | - AUM increased by $5.4 billion in Q2 2024, driven by $6.3 billion in capital raised and $5.1 billion in investment value increases, partially offset by $5.4 billion in realizations[428] Fee Earning Assets Under Management This section outlines the portion of AUM that generates management fees for the company - Fee Earning AUM (FAUM) represents AUM from which TPG earns management fees, differing from total AUM by excluding non-fee-paying assets and using different calculation methodologies for certain funds[430] Fee Earning AUM (FAUM) by Platform (in millions) | Platform | June 30, 2024 | June 30, 2023 | | :------- | :------------ | :------------ | | Capital | $38,200 | $36,090 | | Growth | $12,364 | $11,233 | | Impact | $13,586 | $13,283 | | TPG Angelo Gordon: TPG AG Credit | $41,099 | $0 | | TPG Angelo Gordon: TPG AG Real Estate | $14,317 | $0 | | Real Estate | $11,744 | $12,029 | | Market Solutions | $5,677 | $5,985 | | FAUM as of end of period | $136,987 | $78,620 | - Total FAUM increased by $58.367 billion (74.24%) from June 30, 2023, to June 30, 2024, largely due to the Angelo Gordon acquisition[432] - For the six months ended June 30, 2024, the annualized weighted average management fees as a percentage of FAUM were 1.21%[434] Net Accrued Performance This section reports the unrealized and undistributed performance allocations from investment funds - Net accrued performance includes unrealized and undistributed performance allocations and fee-related performance revenues from general partner interests in investment funds[435] Net Accrued Performance (in millions) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | By Fund Vintage: 2018 & Prior | $444 | $440 | | By Platform: Capital | $419 | $404 | | By Platform: Growth | $212 | $185 | | By Platform: Impact | $103 | $107 | | By Platform: TPG Angelo Gordon (Credit & Real Estate) | $165 | $156 | | Total Net Accrued Performance | $929 | $891 | - Performance Generating AUM totaled $158.3 billion as of June 30, 2024, and Performance Eligible AUM totaled $198.0 billion[439] AUM Subject to Fee Earning Growth This section identifies AUM poised to generate future management fees upon investment or fee rate step-up - AUM Subject to Fee Earning Growth includes 'AUM Not Yet Earning Fees' (capital commitments not yet invested) and 'FAUM Subject to Step-Up' (capital where management fee rates will increase upon investment or reaching a certain fund life stage)[440] AUM Subject to Fee Earning Growth (in millions) | Metric | June 30, 2024 | December 31, 2023 | | :----- | :------------ | :---------------- | | Total AUM Not Yet Earning Fees | $16,440 | $14,052 | | Total FAUM Subject to Step-Up | $9,005 | $10,343 | | Total AUM Subject to Fee Earning Growth | $25,445 | $24,395 | - As of June 30, 2024, AUM Not Yet Earning Fees was $16.4 billion, and FAUM Subject to Step-Up was $9.0 billion, indicating future fee growth potential[441][442] Capital Raised This section details the aggregate capital commitments secured by the company's investment funds - Capital raised measures the aggregate subscriptions and capital raised by investment funds, co-investment vehicles, CLOs, and perpetual vehicles, indicating TPG's access to capital and ability to grow its management fee base[443] Capital Raised by Platform (in millions) | Platform | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Capital | $888 | $622 | $2,191 | $1,645 | | Gr