TPG Targets $11 Billion for Next Main Buyout Fund

Updated on
  • Firm also aiming to raise $2.5 billion for health-care sidecar
  • Current pool’s performance makes top quartile, data show

TPG is targeting $11 billion for its eighth flagship buyout fund and launching a supplementary health-care pool at the same time, according to people familiar with the matter.

The target for the health-care fund, known as a sidecar, is $2.5 billion, said the people, asking not to be identified because the details are private. That pool is likely to split the main fund’s health-care deals on a 50-50 basis, one of the people said.

A representative for TPG declined to comment. Buyouts Insider earlier reported the firm’s fundraising plans.

TPG, whose main offices are in San Francisco and Fort Worth, Texas, closed on $10.5 billion for its seventh main pool in May 2016. That fund was generating a 15.7 percent return net of fees at year-end, according to a report from the Minnesota State Board of Investment, putting the pool in the top quartile of comparable funds, data compiled by Bloomberg show.

Having a fund to complement the main pool can help accommodate TPG’s substantial -- and successful -- activity in health care. The firm is bidding for Mednax Inc., a U.S. provider of physician-management services, according to people familiar with the matter, months after announcing plans to buy Kindred Healthcare Inc. for $4.1 billion, including debt, alongside Humana Inc. and another private equity firm.

TPG also sold Par Pharmaceutical Holdings Inc. to Endo International Plc for $8 billion in 2015. Last year it offloaded its stake in Surgical Care Affiliates Inc. as part of UnitedHealth Group Inc.’s $2.3 billion purchase of the company, among other deals.

With more than $79 billion of assets under management across private equity, credit, real estate and hedge funds, TPG invests in industries including technology, health care, financial services, retail and energy.

(Updates with details on TPG’s seventh fund starting in fourth paragraph.)
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