TPG(US:TPG)2023-05-15 23:33Financial Data and Key Metrics Changes - The company reported GAAP net income attributable to TPG Inc. of $25 million and after-tax distributable earnings of $88 million or $0.24 per share of Class A common stock [39] - Total assets under management (AUM) increased by 14% year-over-year to $137 billion, driven by $27 billion of capital raised and value creation of $3 billion, partially offset by $13 billion of realizations [48] - Fee-earning AUM increased by 23% year-over-year to $79 billion at the end of Q1 [49] - Last twelve months (LTM) FRE of $461 million grew by 31% compared to the pro-forma last 12 months ended Q1 '22 [51] - The first quarter FRE margin was 37%, impacted by lower capital markets revenue and a step-down in Asia, with a run-rate FRE margin of 42% over the last 12 months [51] Business Line Data and Key Metrics Changes - The company deployed $2 billion in the first quarter and $14 billion over the last 12 months, with a significant pickup in deal pipelines recently [28] - The impact platform continues to deploy capital at a healthy pace, with investments in companies like Palmetto Clean Technology [30] - The company reported a 3% appreciation in aggregate portfolio company revenue growth across all platforms in the first quarter [47] Market Data and Key Metrics Changes - The company noted that fundraising and deal activity were impacted by market volatility and increased macro uncertainty, but they remain optimistic about long-term growth [26] - The company raised $27 billion of capital over the last 12 months, representing a 9% increase compared to the previous year, while industry fundraising was down 11% [41] Company Strategy and Development Direction - The acquisition of Angelo Gordon is expected to enhance TPG's position as a diversified global alternative asset manager, with a focus on strategic diversification since the IPO [24][66] - The transaction is anticipated to be mid to high single-digit accretive on an FRE and after-tax DE per share basis in 2024, before any revenue or cost synergies [67] - The company aims to expand its product set and client relationships significantly, increasing institutional client relationships by over 60% [71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current economic environment, highlighting opportunities arising from capital structure re-balancing and refinancing [12] - The company is cautious about the overall environment but feels well-positioned due to its long-term, patient investment approach [43] - Management acknowledged the challenges in near-term fundraising but emphasized strong engagement with both new and existing limited partners [53] Other Important Information - The company announced a quarterly cash dividend of $0.20 per share of Class A common stock, representing 85% of after-tax distributable earnings [62] - Non-core expenses related to the acquisition of Angelo Gordon totaled approximately $11 million, impacting distributable earnings for the quarter [50] Q&A Session Summary Question: What was FRE? What was DE? What multiple do you feel you're paying for this business you bought? - Management provided a framework for calculating FRE but did not disclose an acquisition multiple, stating they feel good about the buy-in price [143] Question: Can you give a rough breakdown of Angelo Gordon's credit business? - The $55 billion in credit is broadly divided into corporate credit and multi-strategy, with significant components in Credit Solutions and performing loans [131] Question: What is the expected FRE margin for Angelo Gordon? - Angelo Gordon's FRE margin is expected to be in the mid to high 20s, with opportunities for margin expansion post-closing [110][149] Question: How will the transaction structure ensure alignment of interests? - The structure includes significant equity consideration for non-founding partners, ensuring alignment with TPG's growth objectives [116][118]