Special report: TPG goes into real estate

TPG, formerly known as the Texas Pacific Group, is making a push into real estate using its latest private equity funds – TPG Partners V and the gargantuan TPG Partners VI, which raised $18.8 billion in 2008.

TPG Capital, the Fort Worth, Texas-based private equity firm, is making a push into real estate though its mainstream buyout funds.

The firm – one of the giants of the private equity industry – is investing in the asset class out of TPG Partners V and more recently TPG Partners VI, which raised a mammoth $18.8 billion in 2008.

The September issue of PERE magazine takes a look at the firm – which in June announced a €900 million joint venture with Dublin's Green Property to invest in UK and Irish real estate – and how it is making its presence felt in the industry.

Cynics suggest TPG is only making inroads into the asset class because of the slow deal flow in its main leverage buyout space.

However, TPG has a record of investing in distressed real estate deals of the early 1990s.

It also has experienced real estate professionals in its senior ranks, most notably, partner and head of North America buyouts Kelvin Davis, who co-founded Colony Capital with chairman Thomas Barrack in 1991 and helped lead Colony for 10 years as chief operating officer.

One former TPG employee said: “Cynics might say this (real estate push) is indicative of the fact that there’s not a lot of opportunity to put an $18.8 billion fund to work, but if you look at the details, it shouldn’t seem so troubling to investors.”

See this month’s issue of PERE for the full report.