Reuters – TPG Capital Shuffles Asia Management

TPG Capital has shuffled its Asia senior management team as the global powerhouse with $48 billion in assets fights for investor dollars in the region with private equity rivals KKR, Carlyle and RRJ Capital, Reuters reported Wednesday. TPG has made the changes ahead of wrapping up a new, roughly $5 billion Asia purse, its sixth regional fund. Sources with direct knowledge of the matter say Stephen Peel, a managing partner who came to Asia in 2008 to run TPG’s regional operations, has narrowed his focus to the key growth markets of China and India, while Ben Gray, who formerly managed just the Australia operations, has moved to Singapore with a focus on Southeast Asia and a more targeted approach to the big buyout markets of Australia and Japan, Reuters wrote.

(Reuters) – TPG Capital has shuffled its Asia senior management team as the global powerhouse with $48 billion in assets fights for investor dollars in the region with private equity rivals KKR, Carlyle and RRJ Capital.

 

TPG has made the changes ahead of wrapping up a new, roughly $5 billion Asia purse, its sixth regional fund.

 

Sources with direct knowledge of the matter say Stephen Peel, a managing partner who came to Asia in 2008 to run TPG’s regional operations, has narrowed his focus to the key growth markets of China and India, while Ben Gray, who formerly managed just the Australia operations, has moved to Singapore with a focus on Southeast Asia and a more targeted approach to the big buyout markets of Australia and Japan.

 

Gray, the Harvard-educated son of former Tasmanian Liberal Premier Robin Gray, is an adept politician himself, TPG insiders say. His move up from Melbourne comes with a bigger portfolio – keeping Australia, taking over Southeast Asia from Peel, and adding Japan and South Korea.

 

His title – Group Head of Australia, Japan, Korea and Southeast Asia – reflects the rise of the former Credit Suisse banker, and a step back into South Korea for TPG, where it has formed a partnership with local fund Vogo.

 

Peel, a towering former British Olympic rower, member of TPG’s leadership team and trusted confidante of founders David Bondermann and Jim Coulter, has guided the firm through several shifts in his four years in Asia.

 

TPG lost top China dealmakers Weijian Shan and Mary Ma – among a wave of executives who moved out of international firms to raise capital at local funds. For its China team, TPG poached Jingsheng Huang from Bain Capital and Steve Sun from Goldman Sachs.

 

TPG’s regional team has grown to over 70 from 50 on Peel’s watch, and the firm has invested around $1 billion a year over the past two years, up from around $650 million during the downturn in 2009, said one of the sources, who declined to be named because of the sensitivity of the matter.

 

Thirty-five percent of TPG’s last fund has been invested in China, and the firm has targeted 30 percent of its new $5 billion Asia fund for investments in the region’s biggest economy.

 

TPG declined to comment for this article.

 

GAP

 

Gray’s move to cover Southeast Asia plugs a gap that emerged when TPG deepened a long-standing relationship with homegrown Indonesian private equity fund, Northstar. TPG has been working with Northstar since 2005 and last year the two swapped stakes in a deal that also saw TPG’s Southeast Asia dealmaker Ashish Shastry move to Northstar.

 

Gray has stepped into Shastry’s role to maintain a focus on Southeast Asia, but his move also reflects an opportunistic approach to Australia’s $23 billion buyouts market.

 

TPG has been embroiled in a dispute with the Australian Taxation Office since November 2009, when it was hit with a A$628 million tax bill on the A$1.4 billion profit it made from selling department store chain Myer. The dispute resulted in a new tax ruling, raising costs for foreign private equity firms in Australia.

 

Gray will also work with Sing Wang, co-chairman for TPG Greater China and head of TPG’s Growth North Asia unit, a core part of its China strategy.

 

A member of the Hong Kong Stock Exchange listing committee, Wang’s mandate can take him outside China, including Southeast Asia where China’s state-owned firms are scouting for opportunities. Politically-connected Wang is a former Goldman banker who joined TPG in 2006 from TOM Group , part of Li Ka-Shing’s Cheung Kong Holdings.

 

In his new role, Gray will take a cautious step back into South Korea. It’s seven years since TPG shuttered its Seoul office after exiting its investment in Korea First Bank as sentiment on foreign investors soured there.

 

The global firm has established a pact with South Korea’s Vogo, a mid-market buyout firm, whose founding partners include BM Park, formerly TPG’s local country manager. There are no economic ties between the two, as TPG prefers to keep its staff, and capital, offshore.

 

“It’s an arrangement of convenience. TPG gets eyes and ears on the ground in Korea, and Vogo gets capital for bigger deals when it’s needed,” one of the sources said. (By Stephen Aldred and Michael Flaherty)