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TPG Capital confirms up to $2bn target for ‘bridge’ fund

30 Jan 2014

James Coulter TPGUS private equity major TPG Capital has revealed it is raising up to $2bn for a bridge fund while it attempts to finish deploying its last mammoth flagship vehicle.

Reports of the bridge vehicle began to surface earlier this month, and have been solidified after TPG told backer the Oregon Investment Council it was looking for between $1.6bn and $2bn for the fund.

Oregon agreed to invest $700m in the TPG Strategic Partnership Interim Fund, which will be rolled into the new TPG Partners VII flagship fund when it begins raising according to Reuters.

The firm has been a strongly-performing business since it was founded in 1992, although returns from its last two vehicles have not matched its previous success.

TPG co-founder James Coulter, pictured, told the meeting, “You will, from time to time, make mistakes. The important thing is to learn from them.”

Oregon State Treasurer Ted Wheeler added, “Fund VII is ‘make or break’ for these guys.”

Last August it emerged TPG had asked LPs for an additional year to allocate its $19bn flagship TPG VI vehicle, which still had around $3bn of undeployed capital at that point.

The firm was looking to secure an extension to the fund’s investment period to February 2015 in exchange for waving management fees and other charges that could amount to tens of millions of dollars, the FT said.

TPG reportedly said in a handout that the extension would enable it to focus on performance and there would be “no need to begin raising TPG VII prematurely.”

The sixth fund was closed just before the onset of the global financial crisis, which has made it more difficult for private equity firms to find good deals.

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