TPG Real Estate, a unit of the TPG Capital private-equity firm founded by David Bonderman and James Coulter, received a pledge of $350 million from New Jersey’s pension to make investments in the U.S. and Western Europe.
The state will pay management fees of 0.95 percent on invested capital in the TPG/NJ Partnership LP fund and receive 80 percent of any profits after an 8 percent hurdle rate has been achieved, according to documents prepared for a New Jersey State Investment Council meeting today.
“TPG is highly focused on growing the TPG RE platform,” Timothy Walsh, director of the New Jersey Division of Investment, wrote in an Oct. 5 memorandum prepared for today’s meeting. The division oversees the state’s $70.1 billion pension fund.
TPG Real Estate has invested about $1 billion of equity in five transactions so far, according to the memo. Before forming TPG Real Estate in 2011, the private-equity firm pursued “numerous” corporate buyouts with real estate components, Walsh wrote.
The fund will invest in real estate debt and equity, according to the New Jersey documents.
Owen Blicksilver, a spokesman for TPG with Owen Blicksilver Public Relations Inc., declined to comment.
TPG Capital, trailing rivals that struck partnerships with large U.S. public pensions, has been seeking to secure a large investor as it plans to start raising its next buyout fund, two people with knowledge of the matter said in July.
TPG is seeking to join other buyout firms in securing more permanent capital from a large backer as buyout funds are shrinking for the first time in the industry’s history. Blackstone Group LP, Carlyle Group LP, KKR & Co. and Apollo Global Management LLC have all paired up with at least one major U.S. pension, drawing commitments as large as $3 billion.
In such deals, investors write big checks and back multiple strategies at one firm in exchange for better terms such as lower fees. Last December, New Jersey’s pension system committed to invest more than $1 billion in Blackstone funds.