U.S. private equity firm TPG Capital has offered concessions to its clients, some of whom are strapped to fund about $20 billion of commitments raised earlier this year, the Wall Street Journal said.
The buyout giant will allow clients to reduce their pledges by as much as 10 percent, or a total of $2 billion, as markets continue to worsen, the paper reported.
According to the paper TPG, which has more than $50 billion under management, will also cut annual management fees by about 10 percent.
TPG could not immediately be reached for comment.
Global market declines have placed significant stress on many of the firm’s limited partners, the paper said, citing a letter from TPG to its investors, which include the California Public Employees’ Retirement System (Calpers), General Electric Co.’s (GE.N) pension fund and the government of Singapore.
TPG will also not call on more than 30 percent of an investor’s total commitment in 2009, unless approved by the firm’s advisory committee, the paper said.
Firms like TPG typically have long-term investors, with up to 10-year lock-up periods. It lost $1.35 billion earlier this year when the banking assets of Washington Mutual Inc were closed and sold to JP Morgan Chase & Co.
(Reporting by Eric Yep in Bangalore; editing by John Stonestreet)