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    TPG
    Earnings call· Jun 2026(Q2 FY26)

    TPG Q2 FY26 earnings call TPG

    Aug 4, 2026 Source

    Executive summary

    TPG Q2 FY26 — Strong FRE Growth and Capital Raising Momentum

    TPG delivered robust Q2 FY26 results, marked by significant fee-related earnings growth and strong capital raising momentum, positioning the firm to exceed its full-year fundraising target. The firm is actively integrating AI into its investment strategy and expanding its private wealth channel, despite broader market volatility impacting transaction fees and realizations. Management anticipates continued management fee growth and an acceleration in realizations in the latter half of the year and into 2027.

    Highlights

    5

    • Fee-related revenue grew 27% year-over-year to $628 million.

    • Fee-related earnings (FRE) increased 43% year-over-year to $315 million, achieving a 50% FRE margin.

    • Total assets under management (AUM) rose 25% year-over-year to $327 billion.

    • The firm raised $16 billion in Q2, bringing the year-to-date total to over $26 billion, on track to exceed $50 billion for FY26.

    • Net accrued carry balance increased 15% to $1.4 billion at the end of June.

    Concerns

    3

    • Transaction and monitoring fees are expected to step down in Q3 FY26 due to a pull-forward of certain closes into Q2.

    • Realized performance allocations were $35 million in Q2, with expectations for a step-up towards year-end 2026 and into 2027, implying current period was lower.

    • Private equity activity declined during the quarter as buyers and sellers recalibrated for geopolitical uncertainty, changing interest rate expectations, and AI-driven disruption.

    Guidance & targets

    15
    CategoryTargetConfidence
    Capital Raising
    meet or exceed our target of raising more than $50 billion
    high materiality
    High
    Management Fee Growth
    continued robust Management Fee growth
    high materiality
    High
    Transaction and Monitoring Fees
    step down
    medium materiality
    High
    FRE Margin
    47%
    high materiality
    High
    Realized Performance Allocations
    step up
    high materiality
    Medium
    Effective Corporate Income Tax Rate
    high single digits
    medium materiality
    High
    Effective Corporate Income Tax Rate
    step up
    medium materiality
    High
    Non-traded REIT Launch
    launch
    medium materiality
    Medium
    Multi-strategy Credit Fund
    developing
    low materiality
    Medium
    Captive Advisory Mandates
    pursuing
    low materiality
    Medium
    Flagship Evergreen Products
    create a flagship evergreen product in each asset class
    medium materiality
    High
    T-POP Inflows
    continue to accelerate
    medium materiality
    High
    Peppertree Fund Size
    grow our fund size by 25%
    medium materiality
    High
    Realizations Cadence
    accelerate
    high materiality
    Medium
    Deployment Pace
    maintain a robust deployment pace
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Private Equity
    Robust value creation driven by strong underlying financial and operating performance, outperforming the broader market. AI initiatives are actively implemented, resulting in tangible improvements to earnings growth, particularly in the software portfolio.
    Portfolio appreciation: 6% in Q2LTM revenue and EBITDA growth: mid- to high teensSoftware bookings growth: mid-teens YoY in H1AI-activated recurring revenue (Boomi): >$100M, expected to double by year-end
    		————
    Credit
    Healthy credit metrics across the business with no notable changes. Strong performance in Credit Solutions, middle market Direct Lending, and asset-based finance, demonstrating active portfolio monitoring and robust risk management.
    Portfolio appreciation: 3% in Q2Credit Solutions Fund 3 time-weighted net returns: 7.5% in Q2Credit Solutions Fund 3 inception-to-date net IRR: nearly 40%Twin Brook average interest coverage ratio: 2.4xTwin Brook nonaccrual rate: 1.4%Twin Brook annualized loss ratio since inception: 2 bpsABC Fund 1 net IRR since inception: 12%Mortgage Value Partners Fund net returns: 3.4% YTD
    		————
    Real Estate
    Portfolio appreciation driven by continued strength in data center, industrial, residential, and office assets. Activity is accelerating across the platform.
    Portfolio appreciation: 3% in Q2
    		————

    Operational metrics

    33
    Fee-related revenue
    $628Mup 27% YoY
    Q2 FY26

    Driven by a step-up in management fees and strong transaction and monitoring fees.

    Fee-related earnings (FRE)
    $315Mup 43% YoY
    Q2 FY26

    Resulted from strong top-line growth and increasing operating leverage.

    FRE margin
    50%
    Q2 FY26

    Elevated in the quarter due to strong transaction and monitoring fees.

    LTM FRE growth
    31%annualized rate
    LTM

    Reflects growth since becoming a public company 4.5 years ago.

    LTM FRE margin expansion
    >1,000
    LTM

    Reflects margin expansion since becoming a public company 4.5 years ago.

    Management Fees
    15%YoY
    Q2 FY26

    Also grew 9% sequentially, benefiting from strong fundraising and consistent deployment.

    LTM transaction and monitoring fees growth
    31%annualized rate
    LTM

    Reflects growth since going public 4.5 years ago, driven by scaled deployment and integrated broker-dealer capabilities. (Transcription note: Original transcript stated '$0.31 annualized rate', corrected to 31% based on context and similar prior statement for FRE growth.)

    Realized performance allocations
    $35M
    Q2 FY26

    Driven by realizations in growth and credit platforms.

    Effective corporate income tax rate
    8%
    Q2 FY26

    Remained low due to tax deductions from annual RSU vesting.

    After-tax distributable earnings
    $280M
    Q2 FY26

    Equivalent to $0.69 per share of Class A common stock.

    Dividend per share
    $0.59
    Q2 FY26

    Declared for Class A common stock, payable August 28, 2026.

    Net accrued carry balance
    $1.4Bincreased 15%
    End of June

    Doubled over the past 4 years, setting up for meaningful PRE in the future.

    Total AUM
    $327Bup 25% YoY
    End of Q2 FY26

    Driven by $61B capital raised and $26B value creation, partially offset by $26B realizations over the last 12 months.

    Capital raised
    $16B
    Q2 FY26

    Firm is on track to meet or exceed its target of raising over $50 billion in 2026.

    Private Equity capital raised
    $8Bup 39% YoY
    Q2 FY26

    Includes $1.3B for TPG Capital X and Healthcare Partners III, bringing total for these funds to over $14B.

    Credit capital raised
    $5.6B
    Q2 FY26

    Includes $2.5B in new multiyear commitments from Jackson Financial.

    T-POP inflows
    ~$450M
    Q2 FY26

    Bringing total AUM for T-POP to $2.9B at the end of June.

    TCAP gross inflows
    $193M
    Q2 FY26

    Consistent with Q1, reflecting durability of the strategy.

    TCAP redemption requests
    2.1%
    Q2 FY26

    Of total shares outstanding, well below the industry average.

    TCAP 1-year total net return
    9.9%
    1-year

    Among the highest for non-traded BDCs, representing ~420 bps of outperformance relative to the leveraged loan market.

    Capital deployed
    $14Bup 33% YoY
    Q2 FY26

    Investment activity continues to be very strong.

    Private Equity capital deployed
    $7.2Bincreased 60% YoY
    Q2 FY26

    Includes investments behind the AI evolution and the formation of DeployCo.

    Credit capital deployed
    $4.4B
    Q2 FY26

    Across various credit strategies, including middle market direct lending, asset-based finance, and Credit Solutions.

    Twin Brook gross originations
    $2.3B
    Q2 FY26

    Pacing ahead of expectations, with add-on activity accounting for over 40% of quarterly volume.

    Real Estate capital deployed
    $2.3Bup 47% YoY
    Q2 FY26

    Activity accelerating across the real estate platform.

    Realizations
    $5B
    Q2 FY26

    Healthy pipeline of exit opportunities, expected to accelerate towards year-end and into 2027.

    Fee-earning AUM
    $181Bincreased 24% YoY
    End of Q2 FY26

    Represents AUM currently earning fees.

    AUM not yet earning fees
    $39B
    End of Q2 FY26

    Represents a revenue opportunity of approximately $290 million on an annualized basis.

    Annualized revenue opportunity from AUM not yet earning fees
    ~$290M
    Annualized

    Derived from $39 billion of AUM not yet earning fees.

    Jackson Financial new commitments
    $2.5B
    Q2 FY26

    New multiyear commitments as part of the strategic partnership.

    Peppertree fund first close
    $1B
    Q2 FY26

    For the 11th Peppertree fund, with nearly 1/3 of commitments from legacy TPG relationships.

    TPG Capital X and Healthcare Partners III total capital raised
    >$14B
    YTD

    Includes commitments that are signed but not yet closed, working towards final close.

    Private Equity software exposure in 'mitigate' category
    5%
    Current

    No new companies added to this category since last disclosure, representing businesses challenged by AI impact.

    Industry KPIs

    4
    MetricValueDetails
    Fundraising inflows$16BUSD
    Performance revenue$35MUSD
    Fee related earnings$315MUSD
    Deployment realizations$14B deployed, $5B realizedUSD

    Product announcements

    4
    ProductTypeDetails
    T-POPmilestone
    Non-traded REITroadmap
    Multi-strategy Credit Fundroadmap
    Captive Advisory Mandatesroadmap

    Deals & partnerships

    8
    Jackson FinancialStrategic partnership for multiyear commitments$2.5B new commitments in Q2, total $4.5B since Februarymultiyear

    Received $2.5 billion in new multiyear commitments during the quarter, bringing total commitments to $4.5 billion since the partnership began in February.

    OpenAI and a group of leading investment firmsLead founding partner of OpenAI Deployment Company (DeployCo)>$4B initial capital

    TPG is the lead founding partner of DeployCo, a new AI transformation and services platform, committing over $4 billion of initial capital. This leverages TPG's extensive track record in technology and structuring corporate partnerships.

    Smith + HowardAcquisition of a top 50 CPA firm

    TPG Growth closed the acquisition of Smith + Howard, a top 50 CPA firm serving clients across the Southeast, just last week.

    BMC SoftwareLeading financing for the carve-out of BMC Helix

    TPG agreed to lead a financing for the carve-out of BMC Helix from BMC Software, designing a bespoke solution with strong covenants and downside protection.

    Bally's Intralot / EvokeStructured GBP 900 million second lien facility for acquisition financingGBP 900M

    TPG's European team structured a GBP 900 million second lien facility to help Bally's Intralot's proposed GBP 2.2 billion acquisition of Evoke.

    ECHO RealtyAcquired control of a scaled grocery-anchored retail platform

    TAC+, TPG's Core Plus real estate strategy, acquired control of ECHO Realty after taking an initial minority stake earlier this year.

    DanoneSale of Made Group, a food and beverage platform

    TPG Capital Asia recently announced the sale of Made Group, a leading better-for-you food and beverage platform based in Australia, to strategic buyer Danone.

    Undisclosed buyerSale of large-scale luxury hotel property in Central Tokyo

    TPG agreed to sell a large-scale luxury hotel property in Central Tokyo from its Asia Real Estate business just last week.

    Risks & headwinds

    4
    Market volatility impacting realizationsQ2 FY26, potentially ongoing

    Private equity activity declined; realized performance allocations were $35M in Q2.

    Mitigation: Focus on building value across the portfolio, selectively monetizing investments at attractive valuations, strong monetization pipeline, unique portfolio construction, and corporate partnerships providing enhanced visibility into exits.

    Transaction and monitoring fees step-downQ3 FY26

    Expected to step down in Q3 FY26.

    Mitigation: This is primarily a timing issue due to a pull-forward of certain transaction closes into Q2; the Capital Markets business is expected to remain a meaningful driver of top-line growth and margin expansion over time.

    Private credit concerns impacting retail flowsRecent past, potentially ongoing

    Broader industry recently faced a deceleration in net flows across retail-oriented products.

    Mitigation: TPG's momentum in the wealth channel continues to accelerate, with TCAP redemption requests at just 2.1% of total shares outstanding (well below industry average), and T-POP inflows accelerating.

    AI disruption risksOngoing

    Market largely focused on AI disruption risks.

    Mitigation: TPG is actively identifying new opportunities created by AI, investing directly in leading LLMs (OpenAI, Anthropic), and forming DeployCo to address AI implementation bottlenecks. AI-enabled revenue and cost initiatives are being implemented across the portfolio.

    What to watch in Q3 FY26

    5

    Capital Raising

    H2 FY26
    Current$26B YTD
    TargetOn track to exceed $50B for FY26

    Why it matters

    This is a key indicator of the firm's growth trajectory and future fee-related earnings.

    Given our strong progress in the first half of the year, combined with our robust pipeline for the second half, we remain confident that we will meet or exceed our target of raising more than $50 billion in 2026.

    Q&A highlights

    7

    How does Axel Andre's background fit into TPG's vision for its insurance channel, particularly regarding the Jackson partnership?

    Jon Winkelried explained that TPG's insurance strategy remains consistent, focusing on developing partnerships with insurers. The Jackson partnership is performing exceptionally well, creating a 'flywheel effect' for origination and broader product distribution. Axel's deep familiarity with the insurance industry is highly complementary to the existing leadership team and expanding franchise, aligning with TPG's FRE-centric, balance sheet-light approach.

    “The Jackson partnership, I will say, by the way, continues to go extremely well in all respects, not only just the productivity but also the relationship that we've established between the organizations at Jackson at their asset management business at PPM.”

    asked by Alexander Blostein · answered by Jon Winkelried

    3 min read7 chapters

    Detailed Narrative

    01

    Macro Environment and TPG's Positioning

    The first half of 2026 has been characterized by significant inflections across AI, private credit, monetary policy, and geopolitics, reshaping the macro backdrop and investing landscape. TPG believes it is well-positioned to gain market share amidst this environment, leveraging its proven track record and differentiated investment capabilities. The firm is actively capitalizing on an expanding opportunity set, with clients seeking deeper engagement across its franchise.

    02

    Capital Markets Business Strength

    TPG's Capital Markets business continues to be a powerful revenue driver, with the second quarter marking its second-highest quarter ever for transaction and monitoring fees. This growth is attributed to the firm's success in scaling deployment and integrating its broker-dealer capabilities across various asset classes and geographies. The Capital Markets revenue in Q2 was driven by over 20 transactions across 14 strategies, including a growing contribution from the credit platform, reinforcing its role in top-line growth and margin expansion.

    03

    AI Integration and DeployCo Initiative

    TPG is actively investing behind the AI evolution, holding direct positions in leading LLMs like OpenAI and Anthropic, which provide unique insights into emerging technology trends. A significant initiative is the formation of DeployCo, an AI transformation and services platform, where TPG is a lead founding partner with over $4 billion of initial capital committed. DeployCo aims to address AI implementation bottlenecks for large enterprises, combining OpenAI's talent with TPG's operational expertise, as demonstrated by its work with Conservice to automate processes and improve efficiency.

    04

    Private Wealth Channel Momentum

    Despite a broader industry deceleration in net flows for retail-oriented products, TPG's momentum in the private wealth channel is accelerating. The firm expects to gain market share, viewing this as a crucial long-term growth driver. T-POP, TPG's perpetual private equity product, celebrated its one-year anniversary with approximately $450 million in Q2 inflows, reaching $2.9 billion in AUM. TPG is expanding its global distribution footprint and developing new products, including a non-traded REIT and a multi-strategy credit fund.

    05

    Credit Platform Deployment and Performance

    TPG's Credit business maintained strong activity, deploying $4.4 billion in Q2. Twin Brook generated $2.3 billion in gross originations, pacing ahead of expectations, with add-on activity accounting for over 40% of quarterly volume. The platform's integrated approach, combining scaled capital and flexible structuring, allows it to deliver tailored solutions where traditional lenders often cannot, as evidenced by leading financing for the BMC Helix carve-out and structuring a GBP 900 million facility for Bally's Intralot.

    06

    Real Estate Market Opportunity

    The firm sees attractive opportunities in real estate due to reset valuations, increased replacement costs, limited supply growth, and improving fundamentals. Activity is accelerating across the real estate platform, with $2.3 billion deployed in Q2. TPG's Core Plus strategy, TAC+, acquired control of ECHO Realty, a grocery-anchored retail platform, and continues to expand into lower cost of capital real estate, representing a significant growth opportunity.

    07

    Leadership Transition

    TPG announced a leadership transition with Axel Andre joining as the new Chief Financial Officer. Jack Weingart, who served as CFO since the IPO, is fully transitioning into his role as CEO of Global Wealth Solutions, a strategic growth area for the firm. Axel Andre brings deep public company CFO experience and familiarity with the insurance industry, aligning with TPG's strategic priorities and FRE-centric approach.

    AI-generated summary of the company’s earnings call. Not investment advice.