Texas Pacific Group Sets Up European Base

In line with its plans to increase its European exposure, Texas Pacific Group (TPG), opened a London office in March. This office will form the group’s European headquarters, through which it will source deals throughout the continent, with a particular focus on Germany.

Three TPG partners will work on European investments at the outset. Jeremy Ferris and Abel Halpern have moved from the group’s San Francisco office. They have been joined by Stephen Peel, formerly a vice president in charge of German investments at Goldman Sachs.

TPG is also debating whether to open a Moscow office. The group is meeting teams that source deals in Russia in a quest for potential partners with which it feels comfortable, partner Jamie Gates said, emphasising that TPG has still to reach a decision. However, if TPG does open a Russian office, it is likely to have a purely national focus, rather than covering the broader Eastern European region.

Funding for TPG’s Western European investments will come from TPG Partners II, which raised $2.5 billion (ecu 2.3 billion) last year and has a 20% allocation for investment in international deals. However, this allocation is restricted to investments in developed markets. Jamie Gates did not say how TPG intends to fund possible Russian deals, but said the firm is not planning to raise a separate fund for Russia.

TPG has to date invested in four European deals, backing Virgin Cinemas, Virgin Rail, the 1996 buyout of Ducati Motorcycles and, most recently, a $130 million buyout of Landis & Gyr Communications’ smart card and payphone activities (story, page 29).