TPG banks $14.2 bln in final close of flagship PE, healthcare funds

TPG Capital raised $14.2 billion in the final close of its eighth flagship fund and a sidecar vehicle focused on healthcare investing, two people with knowledge of the matter told Buyouts.

The private equity firm, based in Fort Worth, Texas, and San Francisco, recently wrapped up TPG Partners VIII at $11.5 billion, the people said, ahead of a reported target of $11 billion. The fund is roughly 10 percent larger than its predecessor, which secured $10.5 billion in 2016.

In addition, TPG Healthcare Partners, a first-time dedicated healthcare pool, raised $2.7 billion, the sources said, exceeding a reported target of $2.5 billion. TPG has been increasingly active in the healthcare space in the past four years, investing more than $3.9 billion.

The funds were substantially completed earlier this year, the sources said, with a July SEC filing showing a combined interim total of below $13.8 billion. The official close awaited a handful of limited partners that were processing legal and regulatory issues, they said.

Investors in one or both TPG pools included California Public Employees’ Retirement System, California State Teachers’ Retirement System, Canada Pension Plan Investment Board, Employees’ Retirement System of Texas, Oregon Investment Council, State of Michigan Investment Board, State of Wisconsin Investment Board and Washington State Investment Board.

A spokesperson for TPG declined to comment on its fundraising activity.

TPG Capital is led by Co-Managing Partners Todd Sisitsky and Jack Weingart. Sisitsky, who co-heads the firm’s healthcare activity, joined in 2003 after serving with Forstmann Little & Co and Oak Hill Capital Partners. Weingart, who until 2017 was a managing partner of TPG’s fundraising and capital markets group, came onboard in 2006 from Goldman, Sachs.

Fund VIII is expected to mirror the strategy of Fund VII, targeting opportunities in business services and industrials, consumer and retail, energy, healthcare, internet and digital media, software and enterprise tech, and other sectors. Deal flow is expected to be sourced mostly in North America and Europe. The healthcare pool will be overseen by the same team and make investments alongside the flagship fund.

TPG is already investing the funds, the people said, signing or closing five deals. They likely include two investments announced in September: Convey Health Solutions, a Fort Lauderdale-based provider of tech-enabled and advisory solutions for health plans, acquired from New Mountain Capital; and CollabNet VersionOne, an Atlanta-based enterprise-focused DevOps platform, to be acquired from Vector Capital.

With the close of Fund VIII and the sidecar vehicle, TPG accounted for the third-largest fundraising this year, according to Buyouts data. It is surpassed only by Blackstone Capital Partners VIII, which secured $26 billion—the largest PE fund on record—and Advent International GPE IX, which secured $17.5 billion.

Large fund formations have greatly intensified buyout and mezzanine fundraising activity in 2019, Buyouts reported earlier this month, with $245.6 billion amassed to date, an amount that already eclipses 2018’s year-end total.

TPG was founded in 1992 by Chairman David Bonderman and Co-CEO Jim Coulter. The pair, former colleagues at Bass Family Office, opened a first office in Mill Valley, California.

Action Item: See TPG Capital’s ADV filings here.