Slide 1: TPG Reports Second Quarter 2023 Financial Results
TPG Reports Second Quarter 2023 Financial Results Quarter Ended June 30, 2023
Slide 2: TPG Reports Second Quarter 2023 Financial Results
TPG Reports Second Quarter 2023 Financial Results ▪ Total assets under management of $139 billion as of June 30, 2023, an increase of 9% compared to $127 billion as of June 30, 2022 ▪ GAAP net income attributable to TPG Inc. of $27 million for the second quarter ended June 30, 2023, with basic net i
Slide 3: About TPG and Forward Looking Statements
TPG Reports Second Quarter 2023 Financial Results About TPG TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $139 billion of assets under management and investment and operational teams around the world. TPG invests across five multi-strategy platform
Slide 4: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results
Slide 5: GAAP Statements of Operations (Unaudited)
GAAP Statements of Operations (Unaudited) ▪ Net income of $40 million for 2Q'23, compared to 1Q'23 net income of $36 million, and 2Q'22 net loss of $262 million ▪ Net income attributable to TPG Inc. of $27 million for 2Q'23, compared to net income of $25 million in 1Q'23 and net loss of $10 million
Slide 6: Second Quarter and Last Twelve Months Highlights
Second Quarter and Last Twelve Months Highlights ▪ 2Q'23 FRR of $286 million increased 12% versus 2Q'22, with 2Q'23 FRE of $125 million and 2Q'23 After- tax DE of $96 million Non-GAAP 2Q'22 2Q'23 2Q'22 YTD 2Q'23 YTD Financial Fee-Related Revenues ("FRR") $256 $286 $496 $551 Measures Fee-Related Earn
Slide 7: Non-GAAP Financial Measures
Non-GAAP Financial Measures ▪ FRE increased 23% from $102 million in 2Q'22 to $125 million in 2Q'23; FRE margin increased to 44% in 2Q'23 compared to 40% in 2Q'22 ▪ FRE of $125 million in 2Q'23 increased 26% from $99 million in 1Q'23; FRE margin increased from 37% in 1Q'23 to 44% in 2Q'23 ▪ After-ta
Slide 8: Fee-Related Earnings
Fee-Related Earnings ▪ 2Q'23 FRR increased 8% over 1Q'23 primarily driven by an increase in capital markets fees, and increased 12% over 2Q'22 due to an increase in management fees resulting from FAUM growth of 17% in the last twelve months ▪ Fee-Related Expenses in 2Q'23 decreased 4% when compared
Slide 9: Distributable Earnings
Distributable Earnings ▪ After-tax DE increased by 10% from $88 million in 1Q'23 to $96 million in 2Q'23, mainly due to a 26% increase in FRE ▪ After-tax DE decreased from $162 million in 2Q'22 to $96 million for 2Q'23 primarily due to a decrease in realized performance allocations, net After-Tax DE
Slide 10: Realized Performance Allocations, Net
Realized Performance Allocations, Net ▪ Realized performance allocations, net were $7 million in 2Q'23, driven by TPG VIII in the Capital platform and TREP III in the Real Estate platform ▪ Realized performance allocations, net for 2Q'23 YTD were $12 million driven by TPG VIII in the Capital platfor
Slide 11: Net Accrued Performance Allocations
Net Accrued Performance Allocations Net Accrued Performance Allocations 2Q'23 Net Accrued Performance Allocations 1Q'23 2Q'23 by Fund Vintage ($M) ($M) $39 2017 & Prior $310 $327 $24 2018 49 47 $86 2019 223 241 Total 2020 70 82 $760 $434 2021 55 60 $176 2022 2 3 Total $709 $760 Capital Growth Impact
Slide 12: GAAP Balance Sheet (Unaudited)
GAAP Balance Sheet (Unaudited) ▪ Our investments increased $465 million, or 9%, from 4Q'22 to 2Q'23, mainly driven by a 6% increase in the value of our portfolio companies for 2Q'23 YTD ▪ Cash decreased to $894 million in 2Q'23 primarily due to the distribution of proceeds received ($ in thousands)
Slide 13: Non-GAAP Balance Sheet
Non-GAAP Balance Sheet ▪ Cash and cash equivalents of $578 million at the end of 2Q'23 ▪ At the end of 2Q'23, our net cash(1) was $128 million, and we had an undrawn $700 million credit facility ▪ Our borrowings include securitized notes with a principal amount of $250 million, which are backed by $
Slide 14: Operating Metrics
Operating Metrics
Slide 15: Assets Under Management and Fee Earning AUM
Assets Under Management and Fee Earning AUM ▪ 2Q'23 AUM rose 9% over 2Q'22 to $138.6 billion, driven by value creation of 9% for the last twelve months and capital raised of $15.3 billion over the same period, which included $3.7 billion in Asia VIII and $2.7 billion in TPG IX within the Capital pla
Slide 16: AUM and FAUM Duration
Assets Under Management and Fee Earning AUM Duration ▪ At the end of 2Q'23, approximately 90% of our AUM and 90% of our FAUM was in perpetual or long-dated funds with a duration(1) of 10 or more years (prior to any extensions) ▪ At the end of 2Q'23, approximately 83% of our FAUM had a remaining life
Slide 17: AUM Subject to Fee Earning Growth
AUM Subject to Fee Earning Growth ▪ AUM Subject to Fee Earning Growth totaled $11.0 billion at the end of 2Q'23 and represents capital commitments that, once deployed, generate new management fees (AUM Not Yet Earning Fees) or generate a higher rate of management fees (FAUM Subject to Step-Up) ▪ At
Slide 18: AUM Rollforward
AUM Rollforward ▪ AUM increased 1% over 2Q'23, and $11.9 billion, or 9%, in the last twelve months ▪ AUM activity in 2Q'23 was driven by capital raised of $1.5 billion and changes in investment value of $1.3 billion, offset by realizations of $1.3 billion ▪ AUM growth for the last twelve months was
Slide 19: FAUM Rollforward
FAUM Rollforward ▪ FAUM remained flat in 2Q'23 and increased $11.5 billion, or 17%, in the last twelve months ▪ Activity in 2Q'23 primarily consisted of fee earning capital raised totaling $1.1 billion, offset by a reduction in fee base of $1.3 billion ▪ In the last twelve months, increases were dri
Slide 20: Other Operating Metrics
Other Operating Metrics ▪ At the end of 2Q'23, we had $40.6 billion of capital available for deployment; we have invested approximately $5.1 billion over the first half of the year (All tables in $M) 2Q'22 2Q'23 Capital Raised 2Q'22 2Q'23 Available Capital 2Q'22 2Q'23 YTD YTD Capital $ 8,202 $ 622 $
Slide 21: Supplemental Details
Supplemental Details
Slide 22: 2Q'23 GAAP and Non-GAAP Performance Allocations
2Q'23 GAAP and Non-GAAP Performance Allocations Three Months Ended June 30, 2023 GAAP Less: GAAP GAAP Less: Non-GAAP Non-GAAP ($ in thousands) Total Unrealized Realized Adjustments(2) Realized Capital TPG VIII $ 104,805 $ 74,562 $ 30,242 $ 23,875 $ 6,367 Asia VII 31,453 31,453 — — — THP I 13,663 13,
Slide 23: 2Q'23 YTD GAAP and Non-GAAP Performance Allocations
2Q'23 YTD GAAP and Non-GAAP Performance Allocations Six Months Ended June 30, 2023 GAAP Less: GAAP GAAP Less: Non-GAAP Non-GAAP ($ in thousands) Total Unrealized Realized Adjustments(2) Realized Capital TPG VIII $ 223,843 $ 193,602 $ 30,242 $ 23,875 $ 6,367 TPG VII 60,777 60,777 — — — THP I 48,048 4
Slide 24: GAAP and Non-GAAP Accrued Performance Allocations
GAAP and Non-GAAP Accrued Performance Allocations As of March 31, 2023 Real Market ($ in millions) Capital Growth Impact Estate Solutions Total GAAP Total $ 2,747 $ 1,380 $ 408 $ 192 $ 113 $ 4,840 Less: Excluded Assets(1) 58 323 — 64 — 445 Less: Non-GAAP Adjustments(2) 2,283 893 328 102 80 3,686 Non
Slide 25: After-Tax DE and Dividends Per Class A Common Stock
After-Tax DE and Dividends Per Class A Common Stock ▪ After-tax DE attributable to TPG Inc. of $0.26 per share for 2Q'23, and $0.50 per share for 2Q'23 YTD ▪ Declared dividend of $0.22 per share for 2Q'23 on August 8, 2023, with a record date of August 18, 2023 and payable date of September 1, 2023;
Slide 26: Fee-Related Earnings Per Class A Common Stock
Fee-Related Earnings Per Class A Common Stock ▪ FRE attributable to TPG Inc. of $0.41 per share for 2Q'23 and $0.72 per share for 2Q'23 YTD ($ in thousands, except share and per share amounts) 1Q'23 2Q'23 Share Reconciliation Class A common stock from IPO 79,070,565 79,070,565 (1) Vested restricted
Slide 27: Distributable Earnings Participating Shares Outstanding
Distributable Earnings Participating Shares Outstanding (shares) 1Q'23 2Q'23 TPG Inc. Diluted Shares Outstanding Class A common stock outstanding 80,492,727 80,511,475 Common Units exchangeable into Class A common stock 228,652,641 228,652,641 Diluted Class A common stock outstanding 309,145,368 309
Slide 28: Equity-Based Compensation Summary
Equity-Based Compensation Summary ▪ Equity-based compensation related to TPG Inc. ordinary service-based RSUs totaled $10.6 million in 2Q'23; the total unrecognized compensation expense related to these RSUs amounted to $120.0 million at the end of 2Q'23, and is expected to be recognized over the ne
Slide 29: Fund Performance Metrics
Fund Performance Metrics ($ in millions, as of 6/30/23) Vintage Capital Capital Realized Unrealized Total Gross Gross Net Investor Fund Year(1) Committed(2) Invested(3) Value(4) Value(5) Value(6) IRR(7) MoM(7) IRR(8) Net MoM(9) Platform: Capital Capital Funds Air Partners 1993 $ 64 $ 64 $ 697 $ — $
Slide 30: Fund Performance Metrics (Cont'd)
Fund Performance Metrics (Cont’d) ($ in millions, as of 6/30/23) Vintage Capital Capital Realized Unrealized Total Gross Gross Net Investor Fund Year(1) Committed(2) Invested(3) Value(4) Value(5) Value(6) IRR(7) MoM(7) IRR(8) Net MoM(9) Platform: Growth Growth Funds STAR 2007 $ 1,264 $ 1,259 $ 1,862
Slide 31: Fund Performance Metrics (Cont'd)
Fund Performance Metrics (Cont’d) ($ in millions, as of 6/30/23) Vintage Capital Capital Realized Unrealized Total Gross Gross Net Investor Fund Year(1) Committed(2) Invested(3) Value(4) Value(5) Value(6) IRR(7) MoM(7) IRR(8) Net MoM(9) Platform: Real Estate TPG Real Estate Partners DASA RE 2012 $ 1
Slide 32: Fund Performance Metrics Notes
Fund Performance Metrics Notes 1) Vintage Year, with respect to an investment or group of investments, as applicable, represents the year such investment, or the first investment in such a group, was initially consummated by the fund. For follow-on investments, Vintage Year represents the year that
Slide 33: Fund Performance Metrics Notes (Cont'd)
Fund Performance Metrics Notes (Cont’d) 8) Net IRR represents the compound annualized return rate (i.e., the implied discount rate) of a fund, which is calculated using investor cash flows in the fund, including cash received from capital called from investors, cash distributed to investors and the
Slide 34: Fund Performance Metrics Notes (Cont'd)
Fund Performance Metrics Notes (Cont’d) 13) As of June 30, 2023, TPEP Long/Short had estimated inception-to-date gross returns of 169% and net returns of 123%. These performance estimates represent the composite performance of TPG Public Equity Partners, LP and TPG Public Equity Partners Master Fund
Slide 35: GAAP Statements of Operations Expanded (Unaudited)
GAAP Statements of Operations Expanded (Unaudited) ($ in thousands) 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 2Q'23 YTD 2Q'23 LTM Revenues Fees and other $ 289,955 $ 333,496 $ 350,179 $ 311,471 $ 327,103 $ 638,574 $ 1,322,249 Capital allocation-based income (398,237) 227,628 89,156 331,674 276,171 607,845 924,6
Slide 36: Non-GAAP Financial Measures Expanded
Non-GAAP Financial Measures Expanded ($ in thousands) 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 2Q'23 YTD 2Q'23 LTM Fee-Related Revenues Management Fees $ 222,686 $ 254,510 $ 249,933 $ 247,998 $ 256,612 $ 504,610 $ 1,009,053 Transaction, monitoring and other fees, net 21,168 14,909 46,245 4,672 16,864 21,536 82
Slide 37: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 38: GAAP to Non-GAAP Financial Measures Reconciliation
GAAP to Non-GAAP Financial Measures Reconciliation ($ in thousands) 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 2Q'23 YTD 2Q'23 LTM GAAP Revenue $ (108,282) $ 561,124 $ 439,335 $ 643,145 $ 603,274 $ 1,246,419 $ 2,246,878 Capital-allocation Income 398,237 (227,628) (89,156) (331,674) (276,171) (607,845) (924,629)
Slide 39: GAAP to Non-GAAP Balance Sheet Reconciliation
GAAP to Non-GAAP Balance Sheet Reconciliation ($ in thousands) 4Q'22 2Q'23 ($ in thousands) 4Q'22 2Q'23 Total GAAP Assets $ 7,941,738 $ 7,770,187 Total GAAP Liabilities $ 4,202,232 $ 4,381,284 Impact of consolidated Public SPACs Impact of consolidated Public SPACs Cash and cash equivalents (5,097) (
Slide 40: Additional Information
Additional Information Dividend Policy Our current intention is to pay holders of our Class A common stock and nonvoting Class A common stock a quarterly dividend representing at least 85% of TPG Inc.’s share of distributable earnings attributable to the TPG Operating Group, subject to adjustment as
Slide 41: Definitions
Definitions After-tax Distributable Earnings (“After-tax DE”) is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to our Class A common stock holders and Co
Slide 42: Definitions (Cont'd)
Definitions (Cont’d) Distributable Earnings (“DE”) is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable GAAP measure of net income. DE differs from GAAP net income comp
Slide 43: Definitions (Cont'd)
Definitions (Cont’d) Non-GAAP Financial Measures represent financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America. These non-GAAP financial measures should be considered