TPG's Q3 2025 Earnings Call: Contradictions Emerge in Fundraising Momentum, Private Wealth Expansion, and AUM Growth Strategies

Date of Call: November 4, 2025

Financials Results

• Revenue: Fee-related revenue $509M; management fees $461M; fee-related earnings $225M (FRE margin 44%)
• EPS: After-tax distributable earnings $214M ($0.53 per Class A share) per initial remarks; CFO later reported distributable earnings $230M in the quarter (included $30M of realized performance allocations); GAAP net income $67M

Guidance:

• Exit 2025 FRE margin expected in the mid-40s (44% reported in Q3).
• Expect continued FRE margin expansion over the next several years while investing in wealth, capital markets and product builds (no timing given for 50%).
• Q4 2025 expected to be active for fundraising; 2026 expected to be another robust fundraising year across credit, private equity and real estate.
• Record dry powder and increasing deployment; anticipate continued deployment acceleration into Q4 and 2026.
• Declared dividend $0.45 per Class A share payable Dec 1, 2025.

Business Commentary:

* Capital Formation and Fundraising Success: - TPG raised a near record $18 billion across various asset classes in Q3 2025, representing a 60% increase from Q2 and 75% year-over-year. - The fundraising growth was driven by strong capital formation in private equity and structured credit, particularly with the successful first close of TPG Capital X and Healthcare Partners III funds, and increased support from existing clients.

• Credit Platform Growth:
• TPG's credit platform saw a record deployment of $8.3 billion in Q3, more than doubling year-over-year, with a focus on structured credit and middle market direct lending.

• This growth was attributed to a step function increase in fundraising, particularly in the middle market direct lending and structured credit sectors, and strong engagement with strategic partners.

• Private Wealth Channel Expansion:

• TPG raised over $1 billion in the private wealth channel in Q3, with half of this coming from evergreen solutions.

• The expansion was driven by the launch of T-POP, a perpetually offered private equity product, and increased distribution on leading international private bank platforms, enhancing access to diverse investor segments.

• Strategic Investments and Portfolio Performance:

• TPG's private equity investments, particularly in structured partnerships and carve-out transactions, performed well, with companies showing EBITDA growth of 20%.
• The strong performance was due to strategic investments in thematic areas, disciplined underwriting, and effective value creation through earnings growth across portfolio companies.

Sentiment Analysis:

Overall Tone: Positive

• Management described 'strong results' with total AUM up 20% and fee-related earnings up 18% YoY; raised near-record $18B in Q3 (up 75% YoY) and YTD >$35B; CFO highlighted record $73B dry powder and FRE margin of 44% — all signaling growth momentum and constructive outlook.

Q&A:

• Question from Glenn Schorr (Evercore ISI Institutional Equities): I appreciate the color you gave us on the relationship between monetizations and PRE and some monetizations early in funds life. What's interesting is 69% of your net accrued performance is now in funds at 5 years are older. So I'm just curious, really good monetization backdrop according to the banks, brokers, you guys. So just how does that inform us about the realization pipeline that you're looking at given the age, timing and all the other comments?
  Response: Management said the vintage labels overstate underlying investment age (many deals are newer), remain aggressive on monetizations, are constructive on liquidity, and have multiple exit pathways (strategics, IPOs, put-call arrangements) that should drive upcoming realizations.

• Question from Craig Siegenthaler (BofA Securities): We also have a question on realizations, but aggregate realizations, not PRE. For the first time since you IPO-ed almost 4 years ago, it is once again raining IPO and M&A announcements. If this continues, can you help us frame the level of realization potential out of your PE and growth capital businesses over the next year? And the reason I'm asking TPG this is the last time we had this backdrop in 2021, TPG was arguably the most active in the industry of monetizing. And it sounds like your commentary today is constructive, but maybe not super bullish.
  Response: They won't forecast realizations/PRE timing; accrued unrealized PRE ~$1.2B and monetization typically occurs over a multi-year (3–4 year) cycle; they'll monetize when value creation and fund waterfalls make it right, and current portfolio performance supports exits.

• Question from Kenneth Worthington (JPMorgan Chase & Co): We're seeing far more concern about AI disrupting certain parts of the software technology and business services area. Two parts here. One, as you think about your investment portfolio, do you see any risks in the investment as that theme plays out? And then maybe hopefully more interesting, how do you feel about being on the winning side of this technological shift either through Peppertree or elsewhere in your various business verticals?
  Response: TPG has been an early AI investor, built an AI center of excellence and integrated AI into underwriting and operations; management views AI as an opportunity across portfolio companies and evaluates impacts company-by-company, leaning into vertical software, fintech and cybersecurity while being cautious on broad horizontal infrastructure.

• Question from Alexander Blostein (Goldman Sachs): I wanted to spend a minute on credit. It feels like momentum in that business is finally starting to take off. We saw it with fundraising for the last couple of quarters, but it looks like deployment is also starting to catch up. So maybe spend a minute on how you see the growth evolving from here, where the incremental benefits on fundraising are coming from. And I think one of the items you highlighted also launch of new products when it comes to credit into 2026. And I was hoping you could expand on that as well.
  Response: Credit is entering a multiyear growth phase: capital formation and deployment are ramping, dry powder up, and firm is expanding channels (insurance, wealth), launching new credit strategies and extending lending into larger 'graduating' companies to drive fee-earning AUM growth.

• Question from Steven Chubak (Wolfe Research): I wanted to ask on FRE margin lever. It came in above expectations in 3Q, 69% incremental margin, certainly a market improvement versus a 51% in 2Q. So while you reaffirmed the mid-40s FRE margin exiting the year, thinking about this longer term, just given prior comments supporting meaningful upside to FRE margins as the business scales, whether that higher mid-60s incremental margin is, in fact, a sustainable run rate, even with all the investments you had spoken of and how it informs your outlook for the FRE margin trajectory next year and beyond?
  Response: They reiterated exit-2025 FRE mid-40s guidance but expect continued margin expansion over the next few years; sustainable higher incremental margins are possible, though expansion will be balanced against ongoing investments (wealth distribution, product builds).

• Question from Brian Bedell (Deutsche Bank): Maybe just to go back to your comments on fundraising outlook. Great to see the really strong momentum here. I think, Jack, you mentioned '26, you obviously expect to be a robust year similar to '25. Just in terms of the new funds that you're bringing to market, just wanted to -- it seems like '26 should be even stronger than '25. I just wanted to make sure if I understand that correctly. And the reason I'm asking is because I think you've got Asia coming. Real estate, obviously, is a large stem function of Rise IV is coming to the market. You still have capital in the market and then probably continued growth in credit and wealth. So I just wanted to understand if that's the case. And if I could just throw in a question on the deployment and the transition infrastructure fund with Kinetic. Is that continuing to increase that deployment capability in terms of how you're seeing that form for fundraising for the Rise Climate segment of funds?
  Response: They expect 2026 to be another robust fundraising year but with timing/amounts varying by strategy (some large closes already done this year); real estate flagship timing pushes some capital later, and transition infrastructure (e.g., Kinetic) is actively deploying and fundraising alongside those investments.

• Question from Michael Cyprys (Morgan Stanley): I wanted to ask about M&A. You guys have done a number of inorganic transactions already over the last couple of years. So just curious, as you look at the platform today, what's left to fill in to accelerate one scale or presence? Where might inorganic activity be helpful? I'm just curious what you're seeing on that front. And how do the recent transactions inform your approach as you look forward?
  Response: M&A will remain a selective, strategic tool to fill product or geographic gaps; TPG has prioritized disciplined integrations, is receiving proprietary inbound opportunities, and is open to tuck-ins (credit, Europe, infra/secondaries) but will be picky.

• Question from William Katz (TD Cowen): I appreciate all the guidance and discussion so far. Maybe just 2 areas of growth seems still being the wealth and the capital markets areas. So I wondering if you can maybe update us on maybe where you see the incremental spend. And then on the wealth side, in particular, just sort of curious, you mentioned a number of times, new products, new geographies, maybe unpack that a little bit in terms of where you see the greatest opportunity in the near term.
  Response: Wealth is a multiyear build: T-POP has ~$900M AUM and distribution expansion is top priority; near-term product roadmap includes a multi-strategy credit interval fund and a real estate product for wealth channels; capital markets will scale with firm growth and greater integration across platforms.

Contradiction Point 1

Fundraising Momentum and Strategy

It involves changes in fundraising strategy and expectations regarding the ability to raise funds, which is crucial for the firm's growth and investor confidence.

Will fundraising momentum continue into 2026, and what are the new fund targets? - Brian Bedell (Deutsche Bank AG, Research Division)

2025Q3: We are expecting to have a very robust fundraising year in 2026. - [Jack Weingart](CFO)

Okay, let's see. The user wants me to simplify the question from a conference call. The original question is "Update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies." First, I need to make it concise without changing the meaning. The key elements here are the fundraising pipeline and the three strategies mentioned. The word "update" is important because it's a request for the latest information.I should check if "fundraising pipeline" is the correct term. In finance, "fundraising pipeline" is commonly used to refer to the process of raising capital. The strategies listed are RISE, climate franchise, and Tangen. I need to keep all three as they are specific names. The original question is already pretty straightforward, but maybe "fundraising pipeline" can be shortened to "fundraising progress" or "pipeline status." However, "pipeline" is more precise in this context. Also, the user mentioned to ensure it's in American English. The original uses "fundraising pipeline," which is correct. No need to change that. The main task is to remove any unnecessary words. The original question doesn't have many fluff words, but maybe "on the" can be omitted. Changing it to "Update on fundraising pipeline for..." but that's the same. Wait, the user said to ensure the output is a question ending with a question mark. The original ends with a period, but the user wants a question mark. So I need to adjust that. Putting it all together: "Update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies?" becomes "Update on fundraising pipeline for RISE, climate franchise, and Tangen strategies?" But wait, the original question is a statement, not a question. The user wants it converted into a question. So maybe rephrase it as "What is the update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies?" Wait, the original is phrased as a request for an update. In the context of a conference call, participants might phrase questions as statements. But the user wants it to be a proper question. So converting "Update on..." into a question like "Can you provide an update on..." or "What is the update on..." But the user's example might not require that. Let me check the instructions again. The user says "the problem is that the questions are phrased in a way that is more like a statement." So they need to be turned into actual questions. So the original is a statement: "Update on the fundraising pipeline..." and needs to be rephrased as a question. So the correct form would be "Can you provide an update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies?" But the user's example might not require the "Can you provide" part. Maybe they just want to make it a question by adding a question mark. However, the original is a statement, so to make it a question, it's better to use a question structure. But the user's instruction says "the problem is that the questions are phrased in a way that is more like a statement." So perhaps the original is a statement, but in the context of a Q&A, it's a question. Therefore, adding a question mark at the end would suffice. So the simplified question would be "Update on fundraising pipeline for RISE, climate franchise, and Tangen strategies?" But that's a statement with a question mark. Maybe the user expects a more interrogative structure. For example, "What is the update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies?" But the user's example might prefer the shortest form. Let me check the example given in the user's message. The original question is "Update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies." The user wants it simplified, so maybe removing "on the" and making it a question with a question mark. So the answer would be "Update on fundraising pipeline for RISE, climate franchise, and Tangen strategies?" But in standard English, that's a statement. To make it a question, it should be rephrased. However, in the context of a conference call, participants might phrase their questions as statements followed by a question mark. So perhaps the user is okay with that. Given the user's example, they might accept "Update on fundraising pipeline for RISE, climate franchise, and Tangen strategies?" as the simplified question. I need to ensure that the output is a question. So the correct form would be "What is the update on the fundraising pipeline for RISE, climate franchise, and Tangen strategies?" But the user wants it concise. Maybe "Update on fundraising pipeline for RISE, climate franchise, and Tangen strategies?" is acceptable as a question in this context. I'll - Brian Bedell (Deutsche Bank)

2025Q2: Just to clarify that we're very active in the market. We expect that our pace of fundraising won't be as robust as this year's pace. - [James Coulter](Executive Chairman)

Contradiction Point 2

Private Wealth Expansion Strategy

It involves the direction and pace of the company's expansion into the private wealth channel, which is crucial for its growth strategy and financial performance.

Will fundraising momentum continue into 2026, and what are the new fund targets? - Brian Bedell (Deutsche Bank AG, Research Division)

2025Q3: We've remained laser-focused on building out our private wealth channel, which continues to be a significant priority for us. We raised $2.4 billion last year, $525 million in Q1. - [Jack Weingart](CFO)

Can you elaborate on the expected flow contribution or trajectory from T-POP and TCAP over the next year? Are there plans to launch interval funds with third-party private credit managers? - Craig Siegenthaler (Bank of America)

2025Q1: Increasing private wealth business is a priority, with $2.4 billion raised last year and $525 million in Q1. - [Jack Weingart](CFO)

Contradiction Point 3

AUM Growth Expectations

It involves differing expectations regarding the timeline and drivers for AUM growth, which are critical indicators for investors.

How do you view AI's impact on the software and business services sectors, and how is your company positioned to leverage AI? - Kenneth Worthington(JPMorgan Chase & Co)

2025Q3: We are confident that our portfolio has the potential to deliver significant asset growth as we continue to execute on our growth strategy. - [Jon Winkelried](CEO)

How do you see the potential for doubling AUM over the next few years, and what are the key drivers—organic versus inorganic? - Michael Cyprys(Morgan Stanley)

2024Q4: We see AUM doubling within several years through a combination of organic growth, including fundraising and strategic partnerships, and inorganic opportunities. We estimate that without inorganic growth, we can reach $250 billion to $400 billion. - [Jon Winkelried](CEO)

Contradiction Point 4

Capital Markets Capabilities and Growth

It addresses the capabilities and growth plans for the capital markets segment, which plays a critical role in the company's overall financial performance.

What inorganic opportunities for further platform scaling exist, and how do recent transactions shape your strategy? - Michael Cyprys (Morgan Stanley, Research Division)

2025Q3: Capital markets will continue to grow as transactional opportunities increase across platforms. TPG is embedding capital markets capabilities into its platforms, enhancing its ability to distribute and source opportunities. - [Jon Winkelried](CEO)

Are transaction and other fee capabilities fully or largely built out? What drove the increase in 1Q '25 fees? - Ken Worthington (JPMorgan)

2025Q1: Capital markets capabilities are nearly 3/4 built out, with more room for growth. The Q1 increase was not solely due to onetime events but from broader integration and activity across platforms. Expect further growth in the back half of 2025. - [Jack Weingart](CFO)