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China Life Eyes Windfall Gain from TPG’s US Flotation

About 40% of that would go to owners of TPG who plan to cash out, including insurer China Life, which plans to sell 5.6 million shares


James Coulter co-founder of private equity firm TPG Capital, originally known as the Texas Pacific Group, speaks at a 2018 forum. Photo: Reuters.

 

US private equity firm TPG is aiming for a $9.5 billion valuation in its initial public offering (IPO), as it presses on with a stock market flotation later this month.

TPG would raise about $877.6 million at the top end of its indicated price range.

About 40% of that would go to owners of TPG who plan to cash out, including insurer China Life, which plans to sell roughly 5.6 million shares, and excluding its founders, who plan to keep their holdings for now.

The underperformance of its peers’ shares over much of the last decade gave TPG pause in pursuing a public listing, sources previously said.

The firm was also trying to recover from a string of poor investments in the 2000s and diversify its private equity platform into growth and social impact investing.

With interest rates at record lows and the global economic recovery from the Covid-19 pandemic turbocharging the buyout industry’s profits and driving a rally in the shares of its peers, TPG decided to pull the IPO trigger.

 

Funding Growth Initiatives

The Fort Worth, Texas-based firm, an investor in Airbnb, Uber Technologies and Spotify Technology, said it planned to sell about 28.3 million shares priced between $28 and $31 apiece in the offering.

Some of the proceeds would be used for expenses and funding TPG’s business, including growth initiatives, the firm said.

Founded as Texas Pacific Group in 1992 by David Bonderman and James Coulter, TPG made its first investment in 1993 in then-bankrupt Continental Airlines.

It now has about $109 billion in assets under management in sectors from retail to healthcare.

The firm made huge bets two decades ago that went sour on companies such as Texas power utility Energy Future Holdings Corp, casino operator Caesars Entertainment Corp and floundering bank Washington Mutual Inc.

During the 2008 financial crisis, federal regulators seized Washington Mutual and reached a deal to sell most of its operations to JPMorgan Chase & Co.

 

  • Reuters with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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