TPG is using the secondaries market to hold on to a top-performing asset, Secondaries Investor has learned.
The San Francisco-headquartered buyout shop has been in talks with buyers about lifting Creative Artists Agency out of 2008-vintage TPG Partners VI into a new vehicle backed by fresh capital, according to three sources familiar with the matter. PJT Park Hill is understood to be managing the process.
TPG bought a minority stake in CAA in 2010, which was increased to 53 percent in 2014. The firm’s stake is worth just over $1 billion, according to one of the sources.
CAA is the second largest talent agency in the world with more than 3,000 clients, including Cate Blanchett, Al Pacino and Jennifer Lopez, according to the company’s Instagram account.
The sports business alone made $300 million in revenue in 2017, Forbes reported in October 2018.
Sister publication Buyouts first reported TPG was running a secondaries process on CAA.
TPG Partners VI raised $18.87 billion against a target of $18 billion by final close in September 2008, according to PEI data. Investors included California Public Employees’ Retirement System, which committed $825 million, Canada Pension Plan Investment Board, which committed $750 million, and New Jersey Division of Investment, which committed $360 million.
The fund had made a net internal rate of return of 10.2 percent and a 1.5x multiple as of 30 June 2019, according to data from CalPERS.
In 2013, TPG received consent from LPs to extend the investment period on TPG VI by one year, sister publication Private Funds CFO reported. The fund had struggled to find good investment opportunities in the wake of the global financial crisis.
This is the fourth GP-led process TPG has embarked upon. In late 2018, limited partners in the 2008-vintage TPG Asia V and the 2013-vintage TPG Asia VI were given the option to sell their stakes to a syndicate of buyers led by Lexington Partners, Secondaries Investor reported.
In July 2019 Secondaries Investor revealed that Canada Pension Plan Investment Board was to lead a tender offer on TPG’s 2011-vintage, $2.04 billion TPG Growth II.
TPG declined to comment. PJT Park Hill did not respond to a request for comment.