TPG Capital - Wikipedia, the free encyclopedia Page 1 of 6 TPG Capital From Wikipedia, the free encyclopedia TPG Capital (formerly Texas Pacific Group) is one of the largest private equity TPG Capital investment firms globally, focused on leveraged buyout, growth capital and leveraged recapitalization investments in distressed companies and turnaround situations. TPG also manages investment funds specializing in growth capital, venture capital, public equity, and debt investments. The firm invests in a broad range of industries including consumer/retail, media and telecommunications, industrials, technology, travel/leisure and health care. Type Private The firm was founded in 1992 by David Bonderman, James Coulter and William S. Industry Private equity Price III. Since inception, the firm has raised more than $50 billion of investor Predecessor Texas Pacific Group commitments across more than 18 private equity funds.[1] (s) Founded 1992 TPG is headquartered in Fort Worth, Texas and San Francisco, California.[2] The company has additional offices in Europe, Asia, Australia and North America. Founder(s) David Bonderman James Coulter William S. Price III Contents Headquarters Fort Worth, Texas San Francisco, California, U.S. ◾ 1 Private equity funds Products Leveraged buyouts, Growth capital, ◾ 2 History and notable Investments Venture capital ◾ 2.1 Founding Total assets $48 billion ◾ 2.2 Texas Pacific Group in the late 1990s ◾ 2.3 Texas Pacific Group in the early 2000s Website www.tpg.com ◾ 2.4 TPG and 2006-2007 Buyout Boom (http://www.tpg.com) ◾ 2.5 TPG and the Credit Crisis ◾ 2.6 Post Recession Activity ◾ 3 Newbridge Capital ◾ 4 Recognition ◾ 5 Notable employees ◾ 6 References ◾ 7 External links Private equity funds TPG has historically relied primarily on private equity funds, pools of committed capital from pension funds, insurance companies, endowments, fund of funds, high net worth individuals, sovereign wealth funds, and from other institutional investors. As of the end of 2008, TPG had completed fundraising for over 20 funds with total investor commitments of over $50 billion. The firm manages investment funds in a number of distinct strategies including: ◾ TPG's flagship leveraged buyout funds ◾ Venture capital funds, particularly focused on biotechnology investments ◾ Distressed debt and other credit strategies invested through a series of funds raised in 2007[3] ◾ Asian and Latin American funds, including the firm's Newbridge and TPG Asia fund family ◾ Other private equity funds. This includes TPG's T3 Partners funds, which invest in technology focused deals alongside the firm's main buyout funds.[4][5] TPG Star has a broad investment mandate including buyouts, venture capital and growth capital, however all of its investments are at the smaller end of the range, compared to TPG's traditional investments.[6] Vintage Committed Fund Year Capital ($m) TPG's Flagship Leveraged Buyout Funds Texas Pacific Group Partners 1994 $721 Texas Pacific Group Partners II 1997 $2,500 Texas Pacific Group Partners III 2000 $3,414 Texas Pacific Group Partners IV 2003 $5,300 Texas Pacific Group Partners V 2006 $15,000 TPG Partners VI 2008 $19,800 Venture capital funds TPG Ventures 2001 $339 TPG Biotechnology Partners 2002 $70 TPG Biotechnology Partners II 2006 $402 http://en.wikipedia.org/wiki/TPG_Capital 2/01/2014 TPG Capital - Wikipedia, the free encyclopedia Page 2 of 6 TPG Biotechnology Partners III 2008 $550 Distressed debt funds TPG Credit Management I 2007 $1,000 TPG Credit Strategies 2007 $443 Newbridge and TPG Asia funds Newbridge Investment Partners 1995 $120 Newbridge Latin America 1995 $300 Newbridge Andean Partners 1996 $150 Newbridge Asia II 1998 $392 Newbridge Asia III 2001 $724 Newbridge Asia IV 2005 $1,500 TPG Asia V 2008 $4,250 Other private equity funds T3 Partners 1999 $1,000 T3 Partners II 2001 $378 TPG Star 2007 $1,500 Source: Preqin [1] History and notable Investments Founding History of private equity and venture capital The Texas Pacific Group, as it was originally known, was founded in 1992 by David Bonderman, James Coulter and William S. Price III. Prior to founding TPG, Bonderman and Coulter had worked for Robert M. Bass making leveraged buyout investments during the 1980s. In 1993, Coulter and Bonderman partnered with William S. Price III, who was Vice President of Strategic Planning and Business Development for GE Capital, to complete the buyout of Continental Airlines.[7] At the time, TPG was virtually alone in its conviction that there was an investment opportunity with the airline. The plan included bringing in a new management team, improving aircraft utilization and focusing on lucrative routes. By 1998, TPG had generated an annual internal rate of return of 55% on its investment. Early history Texas Pacific Group in the late 1990s (Origins of modern private equity) • The 1980s In 1997, TPG completed fundraising for its second private equity fund, with over $2.5 (Leveraged buyout boom) billion of investor commitments. In June 1996, TPG acquired the AT&T Paradyne unit, a • multimedia communications business, from Lucent Technologies for $175 million.[8] Also The 1990s in 1996, TPG invested in Beringer Wine, Ducati Motorcycles and Del Monte Foods. (Leveraged buyout and the venture capital bubble) • The 2000s TPG's most notable 1997 investment was its takeover of J. Crew. TPG acquired an 88% (Dot-com bubble to the credit crunch) stake in the retailer for approximately $500 million,[9] however the investment struggled due to the relatively high purchase price paid relative to the company's earnings.[10] The company was able to complete a turnaround beginning in 2002 and complete an initial public offering in 2006.[11] The following year, in 1998, TPG led an investor group in a minority investment in Oxford Health Plans. TPG and its co-investors invested $350 million in a convertible preferred stock that can be converted into 22.1% of Oxford.[12] The company completed a buyback of the TPG's PIPE convertible in 2000 and would ultimately be acquired by UnitedHealth Group in 2004.[13] As the decade came to a close, TPG was once again fundraising, for its third private equity fund. This time, however TPG was raising not only a new buyout fund, but also a new fund, T3 Partners that would invest alongside the main fund in technology oriented investments. In 1999, TPG invested in Piaggio S.p.A, Bally International (including Bally Shoe), and ON Semiconductor. TPG has also become recognized for its dedicated operations group that has become a major part of the process from investment to sale in many of their portfolio companies. The group is led by Dick Boyce and involves itself in tricky turnaround situations, operations improvement and other tasks that help create value in the company. Other major private equity firms have begun to develop operations group as well, attempting to recreate the model at TPG but most have had trouble creating as expansive a program. Texas Pacific Group in the early 2000s In 2000, TPG and Leonard Green & Partners invested $200 million to acquire Petco, the pet supplies retailer as part of a $600 million buyout.[14] Within two years they sold most of it in a public offering that valued the company at $1 billion. Petco’s market value more than doubled by the end of 2004 and the firms would ultimately realize a gain of $1.2 billion. Then, in 2006, the private equity firms took Petco private again for $1.68 billion.[15] http://en.wikipedia.org/wiki/TPG_Capital 2/01/2014 TPG Capital - Wikipedia, the free encyclopedia Page 3 of 6 That same year, in 2000, TPG completed the controversial acquisition of Gemplus SA, one of the leading smart card manufacturers. TPG won a struggle with the company's founder, Marc Lassus, for control of the company.[16] Also in 2000, TPG completed an investment in Seagate Technology. In 2001, TPG acquired Telenor Media, a Norwegian phone-directory company, for $660m, and shortly thereafter acquired a controlling interest in the third largest silicon-wafer maker MEMC Electronic Materials.[17] In July 2002, TPG, together with Bain Capital and Goldman Sachs Capital Partners, announced the high profile $2.3 billion leveraged buyout of Burger King from Diageo.[18] However, in November the original transaction collapsed, when Burger King failed to meet certain performance targets. In December 2002, TPG and its co-investors agreed on a reduced $1.5 billion purchase price for the investment.[19] The TPG consortium had support from Burger King's franchisees, who controlled approximately 92% of Burger King restaurants at the time of the transaction. Under its new owners, Burger King underwent a major brand overhaul including the use of The Burger King character in advertising. In February 2006, Burger King announced plans for an initial public offering.[20] In November 2003, TPG provided a proposal to buy Portland General Electric from Enron. However, concerns about debt and local politics led to Oregon's Public Utilities Commission regulators to deny permission for the purchase March 10, 2005.Oregon Public Utility Commission (March 10, 2005). "ORDER NO. 05- 114" (http://apps.puc.state.or.us/orders/2005ords/05%2D114.pdf) (PDF). Retrieved 2008-02-01. TPG ventured into the film business in late 2004 in the major leveraged buyout of Metro-Goldwyn-Mayer. A consortium led by TPG and Sony completed the $4.81 billion buyout of the film studio. The consortium also included media-focused firms Providence Equity Partners and Quadrangle Group as well as DLJ Merchant Banking Partners.[21] The transaction, which was announced in September 2004, was completed in early 2005. Also in 2005, TPG was one of seven private equity firms involved in the buyout of SunGard in a transaction valued at $11.3 billion. TPG's partners in the acquisition were Silver Lake Partners, Bain Capital, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and Blackstone Group.