It now falls to Winkelried, known as the Winks, to lead TPG into its next era. He needs to show the world, or at least shareholders, that TPG can deliver quarter after quarter – and that Bondo’s freewheeling private estate has become a truly public company.
Assets under management
The company reported earnings for the first time on Monday, revealing that assets had reached $113.6 billion at the end of 2021 – a 27% increase from the previous year, fueled in part by inflows. funds for its climate strategy and investment performance.
Among Winkelried’s immediate challenges: catching up in the credit business, which has exploded into a major moneymaker for others in private equity. He is looking for an acquisition, according to people familiar with the matter, after Alan Waxman left in 2020 – and took with him TPG’s $33 billion debt business, Sixth Street Partners.
Winkelried will also need to harvest assets that can generate a reliable stream of fees, not just hunt for big game deals. TPG’s share price will largely depend on what have become three crucial words in this business: assets under management. The question is whether TPG can retain the old Bondo magic as it grows and matures.
“Moving from a private partnership to a public company is a major undertaking, and it’s not easy,” said Hank Paulson, a former U.S. Treasury secretary, Winkelried’s longtime mentor at Goldman Sachs and now chief executive of the TPG climate fund. “Jon has done it before and he is up to the task.”
Bonderman, Coulter and Winkelried declined to comment for this story.
Even now, Bonderman casts a seemingly indelible shadow. Run out of San Francisco and Dallas-Fort Worth, TPG has long urged employees to think of themselves as the “Sir Mick Jagger” of private equity. The message: be yourself, no matter the fame or the money.
And for three decades, no one has cultivated this mystique like Bondo.
“TPG culture starts with Bondo,” said Bennett Goodman, a longtime leveraged finance titan who has done business with TPG. “He’s an iconic businessman – he used to get on a plane more than 200 days a year flying around the world seeking business and meeting management teams.”
Coulter, Bondo’s frenetic, risk-loving, methodical yin and yang engineering spirit, worked mostly from the office, mentoring young employees, putting out fires and keeping the business running. Together they oversaw some stellar successes: the turnaround of Continental Airlines, TPG’s early investments in Uber and Airbnb, and the creation of one of the world’s largest impact investing firms, with the backing of the legend bono rock.
There were also the epic blunders, including TXU Corp and Washington Mutual, where the company lost billions in the wake of the global financial crisis.
The TPG philosophy has been mythologized in internal presentations for years. “Bondo And The Firm Are Weapons” is an entry in a collection of slides obtained by Bloomberg News. “Not Wall Street: encourage independent, non-consensual thinking and casual style,” reads another. “No assholes – even tempted,” says a third.
A personal cool
Among the documents are photos of the Asia investment team dressed as Elvis Presley in Las Vegas, Bondo lighting the torch at TPG’s ‘Olympic’ ceremonies and a pile of an employee’s dogs at a football tournament of summer.
Other buyout barons got rich. Blackstone’s Stephen Schwarzman, for example, is worth $36.8 billion today, more than eight times as much as Bonderman, with a net worth of $4.1 billion, according to the Bloomberg Billionaires Index.
But the lanky, hyperkinetic Bonderman, a former adviser to Texan billionaire Robert Bass, always seemed to exude a personal composure the New York titans couldn’t quite match. He phoned from Timbuktu, snowboarded in the Rockies, booked Tom Petty for an investor meeting (the Rolling Stones played for his 60th birthday, Paul McCartney for his 70th). He joked that his Falcon jet was once a house of disrepute – it first came to him with a red carpet and a French boudoir.
This attitude sometimes seeped into the way he ran TPG.
He spent weeks on the superyacht Helios 2 off the Australian coast in 2009, not daring to set foot in the country or anywhere else in the Commonwealth, when tax authorities wanted to question him about taxes TPG might owe on a lucrative deal involving a major department store chain. The Australians had even tried to freeze the firm’s accounts, but the money was already flowing to the Cayman Islands and Luxembourg. (Australia never received the money and later lost in litigation.)
Former CIA director Leon Panetta warned David Bonderman not to attend Vladimir Putin’s version of Davos in 2014 and 2015, but he went anyway. PA
And then there is Russia. TPG had moved to invest in the country even as most private equity rivals held back. Bonderman met Putin in 2009 and joined VTB’s supervisory board after investing in the public bank. TPG took stakes in supermarket chain Lenta, a deal that quickly turned violent after a disagreement with a shareholder over management and transport company Fesco.
The company’s Moscow office at one time employed Alexander Vinokurov, who was recently added to the European Union sanctions list and is the son-in-law of Russian Foreign Minister Sergei Lavrov.
When Putin hosted his version of Davos in 2014 and 2015, Bonderman was there, even after former CIA director Leon Panetta asked him not to go.
TPG is now out of Russia with no active employees or direct investments, according to a company spokesperson. TPG left the Lenta investment in 2019 when it sold its stake to Russian billionaire Alexey Mordashov, liquidated its Fesco position the following year and recently closed the Moscow office.
Winkelried arrived just months after the 2015 Russia conference. He had spent three decades at Goldman Sachs, much of that time with Paulson, as the bank transformed from Wall Street’s last major private partnership into a public company. . He then stunned Wall Street by abruptly retiring at the height of his career, aged 49, and heading west to his ranch in Colorado.
Make way for a new generation
Once there, Winkelried developed near-pro level skills in horse cutting, a rodeo sport in which the rider separates a calf from a herd of cattle. He is also said to be an accomplished bow hunter – a sport, his colleagues say, that suits his incisive style.
Waxman, another Goldman veteran, lured Winkelried to TPG as an adviser. Winkelried was named co-CEO of Coulter in 2015 and since then has focused on areas including healthcare and digital media. He also found new sources of capital for TPG — 30% of investor commitments to current funds come from relationships developed over the past five years, according to filings.
While Bonderman, Schwarzman, Leon Black and Henry Kravis sometimes reluctantly give way to a new generation, private equity is evolving into a new corporate version of itself. It may still be bloody capitalism. But public shareholders demand discipline and accountability in addition to profits.
TPG’s share price held up against a frantic run in the stock market. TPG has a market value of $9.1 billion, although a fraction of Blackstone’s $146 billion.
However, the brass of TPG made a fortune. Winkelried now shares a 51% economic interest in TPG, along with Bonderman, Coulter and other top executives, a stake worth billions.
While Coulter, as executive chairman, will primarily focus on key investors and impact initiatives from here, Bonderman has already taken a step back.
His $4.5 billion family office, Wildcat Capital Management, has investments ranging from fertility clinics to car washes. But so much of his wealth was tied to TPG that the company’s IPO freed him up, making it easier for him to sell his shares whenever he wants.
And Bondo – the rock ‘n’ roll fan who despises taxes so much he kept his official residence in Texas for years, where he spent virtually no time – got one last mic drop. . Thanks to a loophole in the tax code, TPG’s IPO allows the company to reduce taxes on its assets in the future. Filings show he plans to give around 85% of those savings, or around $1.4 billion, to the owners of the company before the IPO, i.e. people like Bondo. .
Bloomberg Heritage
Comments are closed.