TPG VII ‘agnostic’ on deal size after string of middle-market acquisitions

  • Firm closes Fund VII at $10.5 bln hard cap
  • Six Fund VII deals average $350 mln each
  • Exec mum on any IPO plans

TPG executive Todd Sisitsky said the buyout firm’s $10.5 billion TPG Partners VII fund will be “agnostic” on deal size after closing six platform acquisitions from the fund at an average equity investment of about $350 million each.

While Sisitsky didn’t rule out megadeals in the $10 billion range for Fund VII, the firm has been putting money to work well below that level with a total of $2.1 billion invested in six portfolio companies: Cirque du Soleil, Cushman & Wakefield, Ellucian, EnLink, Life Time Fitness, and Poundworld.

“We’ll do smaller or larger. It comes down to how much conviction around the space, the management team, and how much can we bend the curve with what can we do differently,” Sisitsky said in an phone interview.

TPG Capital has a healthy pipeline of deals that it’s considering, he said.

TPG wrapped up Fund VII after about two years, including time to raise a 2014 bridge fund. The firm held a first close for Fund VII early in 2015 with about $6.5 billion in commitments.

Meanwhile, it made some key personnel changes. Sisitsky, managing partner at the firm, was named head of North America private equity last April after working for more than a decade at TPG and heading up healthcare deals such as Biomet.

Meanwhile, Jon Winkelried, co-CEO of TPG, was named to his post last year after moving over from Goldman Sachs. Another key executive is Jonathan Coslet, chief investment officer of TPG.

Sisitsky said the personnel changes at TPG were part of the firm’s evolution. One of his priorities has been playing up TPG’s entrepreneurial approach to finding and growing businesses. Meanwhile, Winkelried brings experience dealing with complex organizations, he said.

TPG co-founders David Bonderman and James Coulter, co-CEO of the firm with Winkelried, remain active with Fund VII but also work on the firm as a whole.

Sisitksy declined to comment on any plans by TPG to float an initial public offering of common stock. TPG executives have said that going public is a possibility.

Sisitsky didn’t comment on a management fee discount reportedly offered by the firm to woo investors. But overall, Fund VII terms are “consistent with the industry, and we’ve never felt we had to take terms we weren’t comfortable with,” he said.

Action Item:  TPG portfolio companies, http://bit.ly/1q9Gqly

TPG logo from company materials