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TPG (TPG) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Financials· May 1, 2026

Source: earnings call transcript

Executive summary

TPG Q1 FY26 — Strong Growth Across Platforms, FRE Exceeds $1 Billion LTM

TPG delivered a strong Q1 FY26, marked by significant growth in fee-related earnings and AUM, driven by robust capital formation and deployment across its diverse platforms. The firm's resilient business model and strategic investments in areas like AI and private credit are positioning it for continued growth, despite a complex macro environment. Management remains confident in achieving its full-year fundraising and FRE margin targets, emphasizing strategic partnerships and organic innovation.

Highlights

5

  • Fee-related earnings (FRE) grew 36% year-over-year to $247 million, exceeding $1 billion on an LTM basis for the first time.

  • After-tax distributable earnings per share grew 46% year-over-year to $0.70.

  • Total AUM grew 22% year-over-year to $306 billion, with fee-earning AUM up 23% to $175 billion.

  • Capital formation increased 75% year-over-year to over $10 billion, and deployment nearly doubled to over $14 billion.

  • Realizations nearly doubled year-over-year to almost $9 billion, exceeding guidance of $50 million with $68 million in realized performance allocations.

Concerns

3

  • GAAP net loss attributable to TPG Inc. was $123 million for the quarter.

  • Private equity portfolio value declined 1% in the quarter, primarily due to broad-based valuation multiple reductions in line with public markets.

  • Interest expense increased to $26 million due to revolver funding for a $500 million investment in Jackson common stock.

Guidance & targets

CategoryTargetConfidence
Full-year capital raising
exceed $50 billion
high materiality
High
Full-year FRE margin
47%
high materiality
High
Effective corporate income tax rate
high single digits to low double digits
medium materiality
Medium
Realized performance allocations
exceeded $50 million
medium materiality
High
Credit multi-strategy interval fund launch
plan to launch next year
medium materiality
High
TPOP international distribution partner contribution
begin contributing capital in June
low materiality
High
Tika inaugural fundraise completion
over the summer
low materiality
High
Net lease business fundraising completion
complete fundraising in the second quarter
low materiality
High
Sixth Asia real estate fund launch
expect to launch in June
low materiality
High
TPG Capital 10 and Healthcare Partners 3 campaigns completion
by the end of the year
medium materiality
High
TRC 2 and Global South initiative final closes
expect to complete our campaign in the third quarter
medium materiality
High

TPG operating KPIs by quarter

TPG operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Assets under management (AUM)
$306B Our after-tax distributable earnings per share grew 46% compared to the first quarter of last year, and total AUM grew 22% to $306 billion. Source: earnings call transcript
$327B We ended the quarter with $327 billion of total assets under management up 25% year-over-year and have continued to set new records for capital raising and deployment on an LTM basis, which I'll highlight now. Source: earnings call transcript
+6.9%
Assets under management (AUM) TPOP
$2.1B Across the TPOP strategy, monthly subscriptions increased throughout the first quarter, driving $545 million of inflows and bringing total AUM to $2.1 billion at the end of March, just 10 months after our initial launch. Source: earnings call transcript
$2.9B Inflows across the T-POP strategy were approximately $450 million in the quarter, bringing total AUM to $2.9 billion at the end of June. Source: earnings call transcript
+38.1%
Assets under management (AUM) Fee-earning
$175B Our fee-earning AUM grew 23% to $175 billion at the end of March. Source: earnings call transcript
$181B Fee-earning AUM increased 24% year-over-year to $181 billion. Source: earnings call transcript
+3.4%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Jackson Financial Long-term strategic partnership, including an initial $2 billion commitment into asset-based finance and a rated note feature in middle-market direct lending. $500 million investment in Jackson common stock

TPG used its revolver to fund a $500 million investment in Jackson common stock in connection with the closing of the strategic partnership in February. Subsequently issued $500 million of senior notes to pay down the revolver. The partnership includes initial commitments to TPG's asset-based finance business and a rated note feature in middle-market direct lending.

Xerox Joint venture to manage and unlock value from certain IP assets, financed by TPG's Credit Solutions team. $450 million financing

TPG's Credit Solutions team led a $450 million financing for a new joint venture with Xerox to manage and unlock value from certain IP assets. This deal highlights TPG's capability in providing customized capital solutions.

Syncora Sale of One Oncology.

One Oncology, a TPG Capital investment, was sold to Syncora. This was a key monetization in Q1 2026.

Google Sale of Intersect's digital power business.

Intersect's digital power business, a Rise Climate investment, was sold to Google. This was a key monetization in Q1 2026.

Curium Pharma GP-led secondary continuation vehicle for Curium Pharma, a global leader in nuclear medicine and diagnostics. $3.8 billion

TPG's GB secondaries business, in partnership with Life Sciences funds, closed a $3.8 billion continuation vehicle for Curium Pharma. The deal was sourced and completed through collaboration across four platforms and three geographies.

Sabre Industries Acquisition of Sabre Industries, a leading infrastructure provider for power utilities, data centers, and telecom.

Rise Climate announced the acquisition of Sabre Industries, which provides mission-critical solutions for energy infrastructure.

Learfield Acquisition of Learfield, a leading media and technology company powering college athletics.

TPG Sports recently announced its first investment to acquire Learfield.

Risks & headwinds

Complex macro backdrop current

AI disruption, private credit stress, geopolitical conflict

Mitigation:Business intentionally built to be resilient through cycles; long-duration capital base provides earnings stability and embedded growth; view current environment as an opportunity.

Market uncertainty and volatility current

May impact the timing of realizations across the industry

Mitigation:Maintain an active pipeline of liquidity prospects across each strategy; expect to continue generating strong DPI for fund investors.

Private credit stress current

Some retail-oriented credit vehicles experiencing elevated redemptions

Mitigation:TPG's credit portfolios are healthy; strong conviction in long-term growth; differentiated strategies resonating with clients; de minimis software exposure in credit; Twin Brook's rigorous underwriting and lender protections.

Valuation multiple compression Q1 FY26

Private equity portfolio value declined 1% in Q1 FY26 due to lower average valuation multiples

Mitigation:Offset by strong underlying earnings growth in portfolio companies; valuations reflect public market resets; management confident in portfolio's performance and strategic exits at premiums to marks.

What to watch in Q2 FY26

Full-year capital raising progress

Next quarter and H2 FY26
Current Over $10 billion raised in Q1 FY26
Target On track to exceed $50 billion for FY26, with back-half weighting

Why it matters

Capital raising is a primary driver of AUM growth and future fee-related earnings for an alternative asset manager.

Overall, we remain on track to raise more than $50 billion this year, supported by the strength and stability of our institutional client relationships drives a wider dispersion of performance across the industry we believe we're well positioned to continue taking market share given the differentiated returns we've delivered for our clients.

Find out whether TPG delivers this. Inve re-checks your case every morning.

Q&A highlights

How broad were the PE valuation markdowns in Q1, particularly for 2020 and prior vintages, and how does TPG feel about the exit environment for that portfolio now?

The 1% PE valuation decline was broad-based, driven by taking down valuation multiples consistent with public markets as of March 31, offset by strong earnings growth. For TPG Capital, earnings growth added $1.2 billion, while multiple reductions subtracted $2.4 billion. For Growth, earnings added $600 million, while multiples subtracted $1.1 billion. Management feels good about the portfolio and noted two strategic exits in Q1 at premiums to marks.

“overall, I would characterize it as a broad-based decision to reflect market changes during the quarter, which as of March 31, we don't refresh that during the month of April because we value as of the end of the month. Obviously, things have bounced back a bit during the month of April. But we did take multiples down broadly and it was offset by very strong earnings growth.”

asked by Glenn Schorr · answered by Jack Weingart

3 min read 7 chapters

Detailed narrative

AI Transformation and Investment Strategy

TPG views AI as both a disruption and an opportunity, particularly in software. The firm has evaluated its software portfolio using an offensive opportunity and defensive risk framework, concluding that most companies are well-positioned to benefit from AI. The software portfolio is relatively young, with an average hold period of three years, and TPG is investing significant capital and resources to leverage AI opportunities. Aggregate bookings in TPG Capital and TPG Growth software portfolios grew over 20% year-over-year in Q1, reflecting strong momentum.

Private Credit Health and Growth Outlook

Despite heightened scrutiny on private credit, TPG's portfolios are healthy, and the firm sees strong long-term growth. Institutional demand for enhanced yield is increasing, and TPG's credit strategies outperformed benchmarks in Q1. Twin Brook, their direct lending business, focuses on the lower middle market with strong lender protections and low loss ratios. The firm plans to launch a multi-strategy credit interval fund next year and has $19 billion of credit dry powder for deployment.

Capital Formation and Fundraising Momentum

TPG raised over $10 billion in Q1, a 75% increase year-over-year, and remains on track to raise over $50 billion for the full year. This includes $4.4 billion in credit and $4.9 billion in private equity, with significant contributions from the Jackson Financial partnership and Impact funds. The firm is actively raising for new real estate funds and seeing strong inflows into private wealth products like TPOP, which saw monthly subscriptions increase throughout Q1, driving $545 million of inflows.

Deployment Activity and Strategic Investments

Deployment nearly doubled year-over-year to over $14 billion in Q1. Credit deployment was $5.7 billion, including $2.5 billion in asset-based finance and $1.8 billion in middle-market direct lending. Private equity deployed nearly $7 billion, with a focus on corporate partnerships and carve-outs offering downside protection. Real estate deployed $1.8 billion across various strategies, including senior housing, grocery-anchored retail, and office assets in Japan, capitalizing on market dislocations.

Realizations and Value Creation

TPG realized nearly $9 billion in Q1, doubling year-over-year, anchored by strategic sales like One Oncology and Intersect Power's digital power business. These exits occurred less than four years after initial investment, generating attractive returns. The firm maintains an active pipeline of liquidity prospects across strategies, aiming for strong DPI for fund investors. The private equity portfolio saw strong LTM revenue and EBITDA growth in the mid-to-high teens, despite a 1% valuation decline due to multiple compression.

New Business Launches and Organic Innovation

TPG continues to scale new businesses, having raised approximately $13 billion across new and emerging strategies over the past three years. Highlights include TPG Sports, which raised $1.1 billion and made its first investment in Learfield; Advantage Direct Lending, which deployed nearly $600 million; and Tika, their Asia growth equity strategy, nearing completion of its inaugural fundraise. These initiatives demonstrate TPG's partnership approach and focus on next-generation investment opportunities.

Real Estate Market Opportunity

TPG is bullish on real estate, seeing renewed institutional interest and significant opportunities from market dislocations. The firm has been active in deploying capital into needs-based sectors like senior housing and grocery-anchored retail, and capitalizing on differentiated dynamics in Asia. They expect a multi-year major fundraising cycle for their real estate platform, with strong reception anticipated for opportunistic, Asia, and net lease funds.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.