Bank of America 2026 Financial Services Conference: TPG Growth Strategy, Earnings, & Sector Outlook

Key Takeaways

TL;DR: TPG posted a breakout 2025: $51B fundraising (+70% YoY), strong FRE margin expansion, and record Q4 momentum. Growth now more diversified across asset classes (credit, RE, infra) vs. historical PE reliance. 2026E targets: >$50B fundraising, 47% FRE margin. RE and private wealth (T-POP) emerging as underappreciated growth drivers. Jackson Financial partnership marks a major, balance sheet-light push into insurance AM. Credit quality remains high, especially in Twin Brook’s lower MM direct lending. Management expects continued robust fundraising, margin expansion, and further product/channel innovation.

1. 2025 Financial Performance & Fundraising

• Breakout Year: 2025 called a "breakout year" w/ $51B capital raised (up from $30B in 2024, +70% YoY), beating internal targets.
  • Deployment: >$50B deployed in 2025.
  • FRE: 2025 FRE hit ~$950M (up from ~$300M at 2022 IPO).
  • FRE Margin: 2025 FRE margin at 45%; management guides to 47% in 2026E.
  • Momentum: Q4 2025 was strongest Q, w/ accelerating momentum.
• Diversification:
  • At IPO (2022), 80% of AUM in PE; now ~50% due to rapid growth in credit, RE, infra.
  • Credit fundraising: >$20B in 2025, driven by TPG Angelo Gordon.
  • Product Breadth: 25 products in market in 2025, expanding to 35 in 2026E, reducing flagship reliance.

2. 2026E Outlook & Strat Priorities

• Fundraising Target: Mgmt expects >$50B again in 2026E, maintaining new baseline.
• FRE Margin Target: 2026E FRE margin guided to ~47% (from 45% in 2025), w/ continued operating leverage despite ongoing team/capability investments.
• Growth Pillars:
  • Scale existing biz & complete current fundraising (e.g., TPG Capital 10, Healthcare Partners 3).
  • Expand new biz (organic/inorganic), esp. in credit, RE, infra.
  • Channel growth: Focus on insurance & private wealth.
  • Inorganic opps considered as appropriate.

3. Asset Class & Segment Highlights

• PE: Still a core driver, but now a smaller AUM share due to faster growth elsewhere.
• Credit:
  • Angelo Gordon acquisition. transformative; only 10% LP overlap, enabling significant cross-sell.
  • Twin Brook (Direct Lending): Focused on lower MM ($0–25M EBITDA), lower leverage (3.5–4x), high credit quality.
  • New Initiatives: Launching TPG Advantage Direct Lending (targeting cos outgrowing Twin Brook) & expanding into IG asset-backed finance (w/ insurance partners like Jackson).
• RE:
  • Emerging as key growth area; at least 4 funds in market in 2026E.
  • Management sees strong LP demand; expects RE fundraising to be a major contributor.
• Private Wealth (T-POP):
  • T-POP launched Jun 2025; raised $1.5B by Jan 2026 w/ limited distribution.
  • Strategy: Single access point for individuals to invest across TPG PE; plans to expand distribution (especially international) & add new products (credit interval fund, non-traded REIT).
  • Quote: “By end of Jan, we raised about $1.5B, which is quite a strong start.”
• Insurance Channel:
  • Jackson Financial partnership: LT IM agreement, starting at $12B, scalable to $20B.
  • Approach: Balance sheet-light, focused on direct lending & IG asset-backed finance.
  • Quote: “It gives us LT visibility into guaranteed FAUM.”

4. Realizations & Portfolio Management

• Consistent Realizations: Averaged ~$25B/yr over past 5 yrs; not as exposed to recent industry-wide realization headwinds.
  • 2021: Sold all software cos in Fund 7 at market peak.
  • 2026E: Expects some pickup in realizations if IPO/M&A markets improve, but less pronounced due to already consistent activity.
  • Quote: “We hear all the time from our LPs that we’re one of the most consistent generators of DPI for them.”