TPG Reportedly Seeks $2.5 Bln for Distressed Fund III: UPDATED

TPG Capital may need more time to invest its last buyout fund, but the firm is expected to kick off fundraising for its next distressed pool.

TPG is seeking roughly $2.5 billion for TPG Opportunities Partners III LP, Bloomberg News reported Wednesday. TPG is preparing to start formally marketing for Opportunities III and has yet to set an official target for the fund, the story says.

TOP, which stands for TPG Opportunities Partners, was formed in 2009 to invest in deals after the financial crisis. Alan Waxman, the former co-head of Goldman Sachs Americas Special Situations Group, runs TOP.

The prior fund, TPG Opportunities Partners II, collected $2.5 billion, Bloomberg said. Fund II had a $1.5 billion target, according to a 2011 memo from New Jersey State Investment Council Fund Review. TPG’s second opportunities fund targets special situations and distressed investments across the credit cycle in corporate and asset special situations, the memo said. UPDATE: TPG’s prior opportunities fund closed at $2.1 billion in 2012, a source says.

One placement said it seems very soon for TPG to be out marketing for the second opportunities fund. “[Fund II] was 38% invested in March and a number of GPs are complaining that there is still very little deal flow at the large end of the distressed debt market,” the source says.

News of the fundraising comes after TPG recently asked for an extension of the investment period for its last buyout fund. TPG Partners VI LP collected $19 billion in 2008 and reportedly has $3 billion left to invest. TPG requested an extension of the investment period by 12 months to February 2015, Reuters reported. Fund IVVI’s LPs agreed to the extension, Reuters said.

Officials for TPG declined comment.

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