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TPG Inc. (NASDAQ: TPG), a leading global alternative asset management firm, announced on Monday that it had acquired Angelo Gordon, a $73 billion alternative investment firm focused on credit and real estate investing.
The acquisition was valued at approximately $2.7 billion, based on TPG Inc.’s share price as of May 12, including an estimated $970 million in cash and up to 62.5 million common units of the TPG Operating Group and restricted stock units of TPG, in each case, subject to certain adjustments.
The transaction also includes an earnout based on Angelo Gordon’s future financial performance, valued at up to $400 million.
The transaction, unanimously approved by the TPG Board of Directors, is expected to close in Q4 2023.
“This strategic transaction meaningfully expands our investing capabilities and broadens our product offering,” said Jon Winkelried, CEO of TPG, in a statement. “The addition of Angelo Gordon also underscores our continued focus on growing and scaling through diversification, while driving long-term value for our shareholders.
“Following more than a year of building relationships between the leadership teams of both organizations, we are confident the combination represents a strong strategic and cultural fit and will create additional opportunities for employees of both firms. We look forward to welcoming the Angelo Gordon team as we execute on our shared vision.”
Founded in 1988, Angelo Gordon is a fully integrated and scaled multi-strategy platform with more than 650 employees across 12 offices in the U.S., Europe, and Asia. Angelo Gordon’s $55 billion credit platform offers scaled and diversified capabilities across the credit investing spectrum, including corporate credit, direct lending, and structured credit, and its $18 billion real estate platform manages dedicated value-add real estate strategies with significant reach in the U.S., Europe, and Asia, as well as a net lease strategy.
TPG is based in Fort Worth and San Francisco.
TPG and Angelo Gordon had a combined assets under management of $208 billion as of December 31. Upon the close of the transaction, TPG will manage assets across a broadly diversified set of investment strategies, including private equity, impact, credit, real estate, and market solutions. The addition of Angelo Gordon marks a significant expansion into credit investing for TPG, establishing additional levers to drive organic growth and further expanding the breadth, diversification, and reach of the TPG platform. The transaction will enable TPG and Angelo Gordon to be an even stronger partner to LPs, providing investment opportunities across a broader range of asset classes and return profiles.
“This is a terrific partnership that provides Angelo Gordon with the scale to capitalize on the growing opportunity set we see in the credit and real estate markets, the diversification to create new solutions for our clients across the risk spectrum in all market conditions, and the opportunity to share our collective expertise, insights, and knowledge,” said Josh Baumgarten, Angelo Gordon co-CEO and head of credit.
Ardea Partners LP acted as lead financial advisor to TPG and provided a fairness opinion to TPG’s Board of Directors. J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC also acted as financial advisors to TPG.
Weil, Gotshal & Manges LLP served as TPG’s lead transaction counsel. Davis Polk & Wardwell LLP, Shearman & Sterling LLP, and Cleary Gottlieb Steen & Hamilton LLP advised TPG with respect to tax, executive compensation, and investment fund matters, respectively. Goldman, Sachs & Co. LLC and Piper Sandler acted as financial advisor to Angelo Gordon and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel.