TPG, a US asset management giant, was officially listed on Nasdaq on Jan. 13, and the IPO was priced at $29.50. based on this price, TPG reached $9 billion, the largest IPO valuation in 2022, which became the "first big test" for the US stock market in the new year.
According to the public relations draft released by TPG, the IPO brings together as many as 23 investment banks and securities firms, including Morgan Stanley, Goldman Sachs Group, Citigroup Inc and Wells Fargo & Co, as joint bookrunners and co-managers.
On its first day of trading, TPG closed up 15.25% at $34, with a market capitalization of $10.436 billion.
Investors said they would closely monitor TPG's IPO on Thursday to judge the "health" of the IPO market in 2022, according to the Wall Street Journal.
Although the IPO size of the 2021 US stock market reached an all-time high, newly listed companies generally performed poorly in the final weeks of last year.
Last year, companies raised more than $150 billion in the U. S. market through IPO, according to Dealogic. In the final weeks of 2021, however, growth stocks fell short of expectations as higher interest rate expectations were hinted by central banks, leading to a massive sell-off by investors. According to FactSet, as of Dec. 29, about 2/3 of listed upstarts were currently trading below their IPO prices.
Since the beginning of 2022, the volatility of the US stock market has continued to increase and the overall performance has been poor, which is naturally not friendly to the IPO market. As a result, companies, including Justworks, postponed IPO, which was scheduled for Thursday, citing market conditions. Therefore, as the first large-scale IPO,TPG in the US stock market in 2022, it can help investment institutions and companies to be listed to measure the activity of the IPO market this year.
Today, TPG manages about $109 billion in assets and has successfully invested in a number of well-known companies, including Spotify, UBER TECHNOLOGIES INC and Airbnb. The prospectus also revealed that the company had employed 912 people as of Sept. 30, 2001; after the initial public offering, TPG will have 97.9% of the voting rights, with direct and indirect economic benefits estimated at 78.8%.
Since the United States gradually emerged from the economic haze caused by the epidemic, private equity firms have seen their share prices soar thanks to low borrowing costs under low interest rates. As a result, many of TPG's listed competitors, including Blackstone, Apollo and KKR, have profited handsomely from the soaring share prices. Among them, the share price of Blackstone Group Inc, the industry leader, doubled only last year, and its total market capitalization has soared to nearly $150 billion.
It will also be joined through IPO,TPG. However, the company's current valuation is relatively low compared with its competitors.
At present, about 80 per cent of TPG's income, which is deeply cultivated in traditional private equity, still comes from the performance of its investments. By contrast, companies such as Blackstone, Apollo and KKR have greatly reduced their reliance on such high-yielding but unstable income and turned to more stable credit, insurance and real estate investments.
Founded in 1992, TPG, formerly known as Texas Pacific Investment, invests in non-traditional and complex asset classes such as private equity, real estate and public market strategies, and currently includes private equity, growth investments, impact investments, real estate and market solutions.
In the first nine months of 2021, its revenue was $3.997 billion, compared with $56.4 billion in the same period last year, an increase of 608.69% year-on-year net profit of $3.822 billion, compared with $295 million in the same period last year, an increase of 1,195.60%.
TPG is known for its leveraged buyouts. It is reported to have participated in three of the seven largest and most famous leveraged buyouts in the world's history, and Bond Man, one of the founders, has been hailed as a "buy-out artist". In addition, TPG is also the leader of alternative asset management and the forerunner of influential investment, and has frequently made efforts in the secondary market of private equity and ESG investment in recent years.
As mentioned above, TPG's investment platform currently covers five asset classes: private equity (Capital), growth investment (Growth), influence investment (Impact), real estate (Real Estate) and market solutions (Market Solutions). As of September 30, 2021, the scale of management of these platforms was $52.6 billion, $22.1 billion, $12.6 billion, $11.5 billion and $10.3 billion, respectively. Total assets under management are $109 billion (about 700 billion yuan).
Of this total, TPG's private equity fund has invested US $79 billion, with an IRR of 23%; growth investment funds have invested nearly US $14 billion, with an IRR of 23%; impact investment funds have invested US $3 billion, with an IRR of 30%; and real estate platforms have invested US $6 billion, with an IRR of 27%. Since its inception, TPG has generated a return of $94.4 billion in value for LP.
The relationship between TPG and China is very profound.
According to the official website, as early as 1994, the third year of its establishment, TPG established Xinqiao Capital jointly with Blum Capital and ACON Investment, officially entered the Asian investment market, and opened its first China office in Shanghai in the same year, becoming one of the first global private equity institutions to enter China.
Over the past decade, TPG has made pioneering investments in China for a number of companies in different sectors, including financial services, health care, consumer retail, technology, media and information services, as well as social impact investments.
According to the information on the official website, TPG has a wide range of investment fields, and the invested enterprises design all aspects of Chinese society, which has had a profound impact on the process of Chinese society, such as Li Ning Co. Ltd., The UnitedFamilyHealth Medical, Tinker Bell Express, Lenovo, China International Capital Corporation, Postal savings Bank of China, Shenzhen Development Bank, Beijing Novotel Sanyuan Hotel, Ibis Beijing Sanyuanqiao Hotel, Wumart, mobike and so on.
Take TPG's most famous influence Investment (Impact) fund, for example. TPG established the Shangshan Ruisi Fund (The Rise Fund) in 2006, focusing on the social influence investment of "both righteousness and benefit", with a wide range of investments all over the world. The fund made its first investment in China in 2018, according to its website. The first project is Baidu, Inc. Finance, which is now called Lesser Fullness of Grain Finance. In addition to Lesser Fullness of Grain, the fund has invested in three other projects: Zhonghe Nongxin, Green Hakka Alliance and Fine Arts Bao, and is looking for more opportunities in climate change, inclusive health care, inclusive finance and other areas.
In addition, according to 21 Finance, TPG has also made frequent efforts in the medical field in China in recent years. It has invested in Baixinan, Zhaoke Ophthalmology, Kangji Medical, Aike Baifa and other enterprises. Its latest investment in the health care industry is Tinker Bell Express, which has submitted an application for Hong Kong stock IPO, which was completed in June this year with a financing amount of US $220 million, led by TPG Asia Fund, followed by Auber Capital, Hongwei Capital and so on.
According to media reports, the fund is currently the largest private equity fund focused on social influence launched by the private sector.
It is worth noting that TPG has also been investing in ESG influence since last year. The climate fund of Shangshan Ruisi Fund completed its first round of fund-raising in July 2021. As of Sept. 30, it had raised US $6 billion, with plans to raise no more than US $7 billion. The fund is subscribed by large institutional investors around the world, including HasterCard, Axa, TheHartford, Ontario Teachers Retirement Fund (OTPP), Saudi Public Investment Fund (PIF) and so on.
It is reported that the fund will focus on the five major industries most related to climate change: clean energy, low-carbon solutions, low-carbon transport, green industry, agriculture and nature-based solutions. In addition, the fund is managed by Jim Coulter and executive chairman of former US Treasury Secretary Henry Hank Paulson.
The listing of TPG, one of the largest private equity firms in the world, second only to the Big three, has undoubtedly added another fire to this craze.
In addition, the giants seem to have reached a consensus on "heavy positions in China".
Su Shimin, founder of Blackstone Group Inc, said in public more than once: the best investment opportunity is in China. Blackstone Group Inc has been sweeping goods in the Chinese market in recent years. While KKR has been pursuing a "heavy position in Asia" strategy in recent years, Ji Zhen, managing director of KKR, also said that China is one of the most important markets in Asia.
