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TPG explores tender offer on Asian funds – exclusive

The firm is to offer an exit to LPs in its 2008- and 2013-vintage Asia vehicles, Secondaries Investor has learned.

TPG is exploring options to offer liquidity to limited partners in two of its Asian funds, Secondaries Investor has learned.

The Forth Worth-headquartered firm will propose a tender offer on the 2008-vintage TPG Asia Partners V and the 2013-vintage TPG Asia Partners VI, according to two sources familiar with the matter.

It is understood the process is in the early stages and that Lazard is advising TPG.

It is also expected that the backer or backers of the tender offer will make a stapled commitment to TPG Asia Partners VII, according to two other sources.

TPG declined to comment. Lazard declined to comment.

Blue chip managers are increasingly using the secondaries market for their existing funds. On Monday Secondaries Investor reported Providence Equity Partners was the latest firm to use a stapled secondaries deal to help it reach the $5 billion target of its latest buyout fund in a deal worth as much as $1.35 billion.

Asia Partners Fund VII has been in market since December 2016 and is seeking $4 billion, according to PEI data.

Asia Partners V held its final close in January 2008 on $3.84 billion, with Pennsylvania Public School Employees’ Retirement System, Canada Pension Plan Investment Board and the California State Teachers’ Retirement System among its investors, according to PEI data.

Asia Partners V delivered a net internal rate of return of 6.7 percent and a multiple of 1.4x as of 31 December, according to performance data published by the California Public Employees’ Retirement System.

TPG Asia Partners VI raised $3.6 billion by final close in 2014. Its LPs include AP Fonden 2, CPPIB and the University of Washington endowment, according to PEI data.

It is not clear which assets are left in each fund.

In June TPG used its balance sheet to acquire a large minority stake in NewQuest Capital Partners, an Asian direct secondaries specialist.

Deal volume of Asia-focused funds nearly doubled to 14 percent of total funds sold in the first half of the year, according to Greenhill Cogent’s Secondary Market Trends & Outlook, July 2018, published on Tuesday.

– Adam Le contributed to this report.