Slide 1: TPG Reports First Quarter 2023 Financial Results
TPG Reports First Quarter 2023 Financial Results Quarter Ended March 31, 2023
Slide 2: TPG Reports First Quarter 2023 Financial Results
TPG Reports First Quarter 2023 Financial Results ▪ Total assets under management of $137 billion as of March 31, 2023, an increase of 14% compared to $120 billion as of March 31, 2022 ▪ GAAP net income attributable to TPG Inc. of $25 million for the first quarter ended March 31, 2023, with basic net
Slide 3: About TPG and Forward Looking Statements
TPG Reports First Quarter 2023 Financial Results About TPG TPG is a leading global alternative asset management firm, founded in San Francisco in 1992, with $137 billion of assets under management and investment and operational teams around the world. TPG invests across five multi-strategy platforms
Slide 4: Comparability Statement and Pro Forma Financial Information
Comparability Statement and Pro Forma Financial Information Prior to and in connection with our initial public offering (“IPO”), we completed certain transactions as part of a corporate reorganization (the “Reorganization”), which concluded with NASDAQ listing our Class A common stock on January 13,
Slide 5: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results
Slide 6: GAAP Statements of Operations (Unaudited)
GAAP Statements of Operations (Unaudited) ▪ Net income of $36 million for 1Q'23, compared to 4Q'22 net loss of $10 million, and 1Q'22 net income of $163 million ▪ Net income attributable to TPG Inc. of $25 million for 1Q'23, compared to $24 million in 4Q'22, and $41 million in 1Q'22 ($ in thousands,
Slide 7: First Quarter and Last Twelve Months Highlights
First Quarter and Last Twelve Months Highlights ▪ 1Q'23 FRR of $265 million increased 10% versus 1Q'22, with 1Q'23 FRE of $99 million and 1Q'23 After-tax DE of $88 million Non-GAAP Actual Actual Actual Pro Forma Actual Financial 1Q'22 1Q'23 1Q'22 LTM 1Q'22 LTM 1Q'23 LTM Measures Fee-Related Revenues
Slide 8: Non-GAAP Financial Measures
Non-GAAP Financial Measures ▪ FRE increased 8% from $92 million in 1Q'22 to $99 million in 1Q'23; FRE margin decreased to 37% in 1Q'23 compared to 38% in 1Q'22 ▪ FRE of $99 million in 1Q'23 decreased 28% from $139 million in 4Q'22; FRE margin decreased from 45% in 4Q'22 to 37% in 1Q'23 ▪ After-tax D
Slide 9: Fee-Related Earnings
Fee-Related Earnings ▪ 1Q'23 FRR decreased 14% over 4Q'22 primarily driven by lower capital markets fees, and increased 10% over 1Q'22 due to an increase in management fees stemming from FAUM growth of 23% in the last twelve months ▪ Fee-Related Expenses in 1Q'23 remained flat when compared to 4Q’22
Slide 10: Distributable Earnings
Distributable Earnings ▪ After-tax DE decreased by 61% from $227 million in 4Q'22 to $88 million in 1Q'23, mainly due to a decline in realized performance allocations, net and a 28% decrease in FRE ▪ After-tax DE decreased from $199 million in 1Q'22 to $88 million for 1Q'23 primarily due to a decrea
Slide 11: Realized Performance Allocations, Net
Realized Performance Allocations, Net ▪ Realized performance allocations, net were $5 million in 1Q'23, driven by TREP III in the Real Estate platform and TTAD I in the Growth platform ▪ Realized performance allocations, net for 1Q'23 LTM were $165 million driven by TPG VII, TPG VIII, Asia VII, and
Slide 12: Net Accrued Performance Allocations
Net Accrued Performance Allocations Net Accrued Performance Allocations 1Q'23 Net Accrued Performance Allocations 4Q'22 1Q'23 by Fund Vintage ($M) ($M) $33 2017 & Prior $298 $310 $26 2018 54 49 $80 2019 193 223 Total 2020 62 70 $709 $406 2021 35 55 $164 2022 1 2 Total $643 $709 Capital Growth Impact
Slide 13: GAAP Balance Sheet (Unaudited)
GAAP Balance Sheet (Unaudited) ▪ Our investments increased $201 million, or 4%, from 4Q'22 to 1Q'23, mainly driven by a 3% increase in the value of our portfolio companies for 1Q'23 ▪ Cash decreased to $932 million in 1Q'23 primarily due to the distribution of proceeds received ($ in thousands) 4Q'2
Slide 14: Non-GAAP Balance Sheet
Non-GAAP Balance Sheet ▪ Cash and cash equivalents of $619 million at the end of 1Q'23 ▪ At the end of 1Q'23, our net cash(1) was $169 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 15: Operating Metrics
Operating Metrics
Slide 16: Assets Under Management and Fee Earning AUM
Assets Under Management and Fee Earning AUM ▪ 1Q'23 AUM rose 14% over 1Q'22 to $137.1 billion, driven by value creation of 4% for the last twelve months and capital raised of $26.6 billion over the same period, which included $9.3 billion in TPG IX and $3.4 billion in Asia VIII within the Capital pl
Slide 17: AUM and Fee Earning AUM Duration
Assets Under Management and Fee Earning AUM Duration ▪ At the end of 1Q'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 1Q'23, approximately 85% of our FAUM had a remaining life
Slide 18: AUM Subject to Fee Earning Growth
AUM Subject to Fee Earning Growth ▪ AUM Subject to Fee Earning Growth totaled $12.8 billion at the end of 1Q'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 19: AUM Rollforward
AUM Rollforward ▪ AUM increased 2% over 1Q'23, and $16.7 billion, or 14%, in the last twelve months ▪ AUM activity in 1Q'23 was driven by capital raised of $2.0 billion and changes in investment value of $2.4 billion, offset by realizations of $2.3 billion ▪ AUM growth for the last twelve months was
Slide 20: FAUM Rollforward
FAUM Rollforward ▪ FAUM increased $0.9 billion in 1Q'23 and increased $14.6 billion in the last twelve months, an increase of 1% and 23%, respectively ▪ Increases in 1Q'23 were primarily driven by fee earning capital raised ▪ In the last twelve months, increases were driven by fee earning capital ra
Slide 21: Other Operating Metrics
Other Operating Metrics ▪ Increased fundraising in 1Q'23 LTM over 1Q’22 LTM, particularly in the Capital platform; at the end of 1Q'23, we had $42.7 billion of capital available for deployment (All tables in $M) 1Q'22 1Q'23 Capital Raised 1Q'22 1Q'23 Available Capital 1Q'22 1Q'23 LTM LTM Capital $ 2
Slide 22: Supplemental Details
Supplemental Details
Slide 23: 1Q'23 GAAP and Non-GAAP Performance Allocations
1Q'23 GAAP and Non-GAAP Performance Allocations Three Months Ended March 31, 2023 GAAP Less: GAAP GAAP Less: Non-GAAP Non-GAAP ($ in thousands) Total Unrealized Realized Adjustments(2) Realized Capital TPG VIII $ 119,038 $ 119,038 $ — $ — $ — TPG VII 49,259 49,259 — — — THP I 34,385 34,385 — — — AAF
Slide 24: 1Q'23 LTM GAAP and Non-GAAP Performance Allocations
1Q'23 LTM GAAP and Non-GAAP Performance Allocations Last Twelve Months Ended March 31, 2023 GAAP Less: GAAP GAAP Less: Non-GAAP Non-GAAP ($ in thousands) Total Unrealized Realized Adjustments(2) Realized Capital TPG VIII $ 376,757 $ 253,569 $ 123,188 $ 97,254 $ 25,934 AAF 136,785 136,785 — — — THP I
Slide 25: GAAP and Non-GAAP Accrued Performance Allocations
GAAP and Non-GAAP Accrued Performance Allocations As of December 31, 2022 Real Market ($ in millions) Capital Growth Impact Estate Solutions Total GAAP Total $ 2,689 $ 1,351 $ 316 $ 220 $ 100 $ 4,677 Less: Excluded Assets(1) 234 311 — 69 — 614 Less: Non-GAAP Adjustments(2) 2,094 878 254 121 73 3,421
Slide 26: 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 $0.24 per share for 1Q'23, and $1.60 per share for 1Q'23 LTM ▪ Declared dividend of $0.20 per share for 1Q'23 on May 15, 2023, with a record date of May 25, 2023 and payable date of June 5, 2023; dividends
Slide 27: Fee-Related Earnings Per Class A Common Stock
Fee-Related Earnings Per Class A Common Stock ▪ FRE attributable to TPG Inc. of $0.32 per share for 1Q'23 and $1.49 per share for 1Q'23 LTM ($ in thousands, except share and per share amounts) 4Q'22 1Q'23 Share Reconciliation Class A common stock from IPO 79,070,565 79,070,565 (1) Vested restricted
Slide 28: Distributable Earnings Participating Shares Outstanding
Distributable Earnings Participating Shares Outstanding (shares) 4Q'22 1Q'23 TPG Inc. Diluted Shares Outstanding Class A common stock outstanding 79,240,058 80,492,727 Common Units exchangeable into Class A common stock 229,652,641 228,652,641 Diluted Class A common stock outstanding 308,892,699 309
Slide 29: Equity-Based Compensation Summary
Equity-Based Compensation Summary ▪ Equity-based compensation related to TPG Inc. ordinary service-based RSUs totaled $10.0 million in 1Q'23; the total unrecognized compensation expense related to these RSUs amounted to $132.3 million at the end of 1Q'23, and is expected to be recognized over the ne
Slide 30: Fund Performance Metrics
Fund Performance Metrics ($ in millions, as of 3/31/23) 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 31: Fund Performance Metrics (Cont'd)
Fund Performance Metrics (Cont’d) ($ in millions, as of 3/31/23) 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 32: Fund Performance Metrics (Cont'd)
Fund Performance Metrics (Cont’d) ($ in millions, as of 3/31/23) 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 33: 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 34: 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 35: Fund Performance Metrics Notes (Cont'd)
Fund Performance Metrics Notes (Cont’d) 13) As of March 31, 2023, TPEP Long/Short had estimated inception-to-date gross returns of 153% and net returns of 113%. These performance estimates represent the composite performance of TPG Public Equity Partners, LP and TPG Public Equity Partners Master Fun
Slide 36: GAAP Statements of Operations Expanded (Unaudited)
GAAP Statements of Operations Expanded (Unaudited) ($ in thousands) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 Revenues Fees and other $ 273,005 $ 289,955 $ 333,496 $ 350,179 $ 311,471 Capital allocation-based income 837,705 (398,237) 227,628 89,156 331,674 Total revenues 1,110,710 (108,282) 561,124 439,335 643,
Slide 37: Non-GAAP Financial Measures Expanded
Non-GAAP Financial Measures Expanded ($ in thousands) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 1Q'23 LTM Fee-Related Revenues Management Fees $ 202,731 $ 222,686 $ 254,510 $ 249,933 $ 247,998 $ 975,127 Transaction, monitoring and other fees, net 26,756 21,168 14,909 46,245 4,672 86,994 Other Income 11,045 12,0
Slide 38: Reconciliations and Disclosures
Reconciliations and Disclosures
Slide 39: 1Q'22 LTM Pro Forma Non-GAAP Financial Measures Walk
1Q'22 LTM Pro Forma Non-GAAP Financial Measures Walk ($ in thousands) Actual Non-GAAP 1Q'22 LTM Pro Forma Adjustments Pro Forma Non-GAAP 1Q'22 LTM Fee-Related Revenues Management Fees $ 766,867 $ — $ 766,867 Transaction, monitoring and other fees, net 102,675 — 102,675 Other Income 45,117 5,852 50,9
Slide 40: GAAP to Non-GAAP Financial Measures Reconciliation
GAAP to Non-GAAP Financial Measures Reconciliation ($ in thousands) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 1Q'23 LTM GAAP Revenue $ 1,110,710 $ (108,282) $ 561,124 $ 439,335 $ 643,145 $ 1,535,322 Capital-allocation Income (837,705) 398,237 (227,628) (89,156) (331,674) (250,221) Expense Reimbursements (32,677
Slide 41: GAAP to Non-GAAP Balance Sheet Reconciliation
GAAP to Non-GAAP Balance Sheet Reconciliation ($ in thousands) 4Q'22 1Q'23 ($ in thousands) 4Q'22 1Q'23 Total GAAP Assets $ 7,941,738 $ 7,967,322 Total GAAP Liabilities $ 4,202,232 $ 4,309,531 Impact of consolidated Public SPACs Impact of consolidated Public SPACs Cash and cash equivalents (5,097) (
Slide 42: 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 43: 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 44: Definitions (Cont'd)
Definitions (Cont’d) FAUM Subject to Step-Up represents capital raised within certain funds where the management fee rate increases once capital is invested. Subject to certain limitations, limited partners in these funds pay a lower fee on committed and undrawn capital. As capital is drawn down for