Private equity updates

Sign up to myFT Daily Digest to be the first to know about Private equity news.

TPG has appointed Goldman Sachs and JPMorgan Chase to work on an initial public offering, inching closer to a stock market listing that the private equity firm has contemplated for much of the past decade.

The group could file IPO documents with US regulators as early as September, according to people familiar with its plans.

Executives at the buyout firm had for several months been evaluating a merger with a special purpose acquisition company, but ultimately opted for the traditional route of a stock market listing, the people said.

If the transaction goes ahead it would set David Bonderman’s firm on a path blazed more than a decade ago by rivals such as Blackstone, KKR and Apollo Global Management.

Those firms, founded by Bonderman’s peers before he set up TPG, once collaborated on buyouts of huge targets, a strategy that led to high-profile failures including the bankruptcies of the energy group TXU and the casino operator Caesars Entertainment.

But more than a decade after the end of the “club deal” craze, TPG has fallen far behind its former collaborators. The firm today counts $96bn in assets under management, compared with $684bn for industry leader Blackstone.

The gap means that TPG is unlikely to attain a valuation matching the biggest listed private capital groups, although Bonderman’s firm could still benefit from a surge in share prices across the financial sector.

Blackstone, KKR, Carlyle, Apollo and Ares together command a market value of about $252bn, more than three times higher than their March 2020 low of $80bn.

The rise reflects a nascent economic recovery, rising stock markets that erased paper losses sustained early in the pandemic, and buoyant fee income as pension funds and other asset allocators increase their investments in private capital.

TPG’s top executive concluded that investors would take a traditional IPO more seriously than listing through a Spac.

Listed black cheque companies, which boomed at the height of the pandemic, have recently been engulfed in a series of scandals and controversy that has dented investor appetite.

JPMorgan and Goldman Sachs declined to comment on their appointment, which was first reported by The Wall Street Journal.

TPG said: “We continue to evaluate strategic alternatives and have nothing to announce at this time.”

Unhedged — Markets, finance and strong opinion

Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here to get the newsletter sent straight to your inbox every weekday