Austin, Texas-based buyout major TPG Capital has reportedly asked for an additional year to allocate its $19bn flagship fund TPG VI, which still has around $3bn of undeployed capital.
The firm is 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, said the FT.
TPG said in a handout last week that the extension would enable it to focus on performance and there would be “no need to begin raising TPG VII prematurely.”
LPs have until August 9 to decide whether to grant the extension request, which requires the approval of two thirds of investors to go through.
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.
Data provided to investors showed that the S&P 500 has outperformed the fund in the year to date, while TPG’s rivals such as Blackstone posted much better returns than public markets.
The report quoted the head of investor relations at one of TPG’s rivals, who said that LPs “want returns, they want to see their money put to work for them. How can you raise a new fund if you can’t invest all the money in your prior fund?”
Back in June it was reported that TPG’s latest Asia fundraise was set to come in $500m under its $4bn target.
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