Private equity firm TPG Inc. said Wednesday its after-tax distributable earnings fell more than 60% due to a plunge in asset sales across its private equity, growth, real estate, and impact businesses.
The Fort Worth, Texas-based firm said after-tax distributable earnings, which represents the cash used to pay dividends to shareholders, fell to $113 million from $283 million a year ago, below an average analyst forecast of $154 million, according to Refinitiv data.
TPG generated just $5 million from asset divestments during the quarter, a significant drop from $141 million a year earlier, as the firm held off from sales amid the financial market volatility caused by higher interest rates and geopolitical tensions.
Blackstone Inc., Carlyle Group Inc., KKR & Co Inc., and Apollo Global Management Inc. also reported a decline in earnings owing to slower asset divestments and capital markets activity. "We were a significant seller in much better market conditions for sellers. Our bias is to moderate our sales in this environment and focus on growing our companies," TPG Chief Financial Officer Jack Weingart said. During the quarter, TPG said its private equity funds appreciated by 2.3%, growth funds rose by 3.8% and impact funds were up 2.9%, though its real estate funds depreciated by 0.4%.
Under generally accepted accounting principles, TPG reported net income of $53.2 million, down 74% from $205.1 million driven by a sharp drop in investment gains. "Our posture is still the same, which is we think this is still an interesting environment with the right opportunities for investing," TPG Chief Executive Jon Winkelried said. TPG said it raised $8.2 billion of new capital, spent $2.5 billion on new acquisitions, generated fee-related earnings of $121 million, retained $46.4 billion of unspent capital, and declared a dividend of 26 cents per share.
Total assets under management stood at $135.1 billion, up 7% from the prior quarter, driven by strong fundraising.
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