TPG Q4 Earnings Call Highlights

Core Insights - TPG reported significant growth in fee-related earnings (FRE) and revenue, with FRE reaching $326 million in Q4 and $953 million for the full year, marking a 25% increase from 2024 [1]. - The firm achieved record fundraising of $51 billion in 2025, a 71% increase year-over-year, and total assets under management (AUM) grew to $303 billion, up 23% from the previous year [9][7]. - TPG's fourth-quarter transaction and monitoring fees surged to $122 million, more than tripling year-over-year, contributing to a full-year total of $249 million, reflecting a nearly 70% increase [2]. Financial Performance - Full-year fee-related revenue totaled $2.1 billion, with Q4 revenue at $628 million, representing a 36% year-over-year increase [3][8]. - The fourth-quarter management fees were $475 million, an 18% increase from the prior year, driven by growth in fee-earning assets and increased credit deployment [3]. - After-tax distributable earnings for Q4 were $304 million, equating to $0.71 per Class A share, with a dividend of $0.61 per share declared [4][8]. Fundraising and Deployment - TPG raised a record $21 billion in credit capital in 2025, a 67% increase from 2024, and launched TPG Advantage Direct Lending with an initial close of $875 million [6][11]. - The firm deployed a total of $52 billion in 2025, with Q4 investment activity reaching a record $19 billion, an 88% increase year-over-year [10][9]. - TPG's private equity fundraising grew over 80% to $28 billion, despite a decline in overall industry fundraising [13]. Strategic Initiatives - TPG is expanding its credit platform and has been selective in private equity exposure to software, considering potential disruptions from AI [6][15]. - The firm plans to invest $500 million in Jackson Financial, which is expected to close soon, increasing net debt to an anticipated $2.1 billion [21]. - Management is also working on expanding the private wealth product suite, including a multi-strategy credit interval fund and a non-traded REIT [22]. Market Outlook - TPG anticipates aggregate fundraising in 2026 to exceed $50 billion, with expectations for a major real estate fundraising cycle [19]. - The firm guided for a full-year 2026 FRE margin of approximately 47%, up from 45% in 2025 [20]. - Management highlighted the importance of diversification and a larger fundraising team in sustaining growth beyond 2025's record [19].