TPG seen interested in sale to investors
NEW YORK --TPG Inc., the buyout shop led by corporate turnaround specialists David Bonderman and James Coulter, may sell a stake in the firm as a prelude to an initial public offering, according to a published report on Tuesday.
The firm -- formerly known as Texas Pacific Group -- was considering a sale of a 20 percent stake to pension funds, according to the Wall Street Journal. Discussions were said to be at a preliminary stage, and no decisions had been made.
TPG is the latest name reported to be mulling some kind of public offering. Others, such as Apollo Management LP and Carlyle Group, are said to be eyeing similar transactions after Blackstone Group LP announced in March plans to raise $4 billion in a public offering.
"There's a lot of very big money out there, and that huge pool of capital is looking to buy a chunk of a p/e firm before it goes public," said Robert Profusek, head of private equity at law firm Jones Day. "Every private equity firm is engaged in some kind of discussion about selling shares and taking on outside investors."
The Forth Worth, Texas-based firm has an estimated $30 billion in capital under management. It has been responsible for a string of big deals, including the $45 billion takeover of energy provider TXU Corp.
Owen Blicksilver, a spokesman for TPG, declined to comment.
Selling to a private investor, or even going public, has become a trend among Wall Street's big buyout firms. TPG's sale could raise billions of dollars, and was seen as a possible first step before an eventual IPO.
The firm's biggest investor, the California Public Employees' Retirement Systems, is seen among the most likely investors if TPG sells a stake in the firm. Calpers already has committed about $1.48 billion in investments to TPG-managed funds, according to the pension fund's Web site.
Clark McKinley, a spokesman for Calpers, declined to comment about any interest in buying a stake in TPG. However, he pointed out that the pension fund has made similar deals in the past -- including taking a 5.5 percent stake in Carlyle Group for just under $200 million.
Buying into TPG would give Calpers, or other investors, access to one of America's most prolific buyout shops.
Bonderman and Coulter, who both lead TPG, formed the firm in 1992 with financier William Price. Their first deal was a $65 million investment in bankrupt Continental Airlines, and the firm now helps manage a $30 billion portfolio that includes companies such as Neiman Marcus Group and Metro-Goldwyn-Mayer.
