TPG enters retail RE space

TPG Capital and Caruso Capital Partners have formed a joint venture that will invest as much as $750m of debt and equity in retail centers and mixed-use properties in the western US.

Fort Worth-based private equity investment giant TPG Capital Partners has teamed up with Caruso Capital Partners to form a joint venture targeting underperforming retail and mixed-use properties in mature markets. The newly formed entity, Caruso-TPG Partners, will invest up to $750 million of debt and equity in opportunistic investments in retail centers and mixed-use properties in the western US.

TPG is best known as among the largest private equity firms in the world, with approximately $48 billion of assets under management. Previous retail and consumer private equity deals have included Neiman Marcus, Burger King and J.Crew.

“We found an ideal partner in TPG with its global investment experience and background in real estate,” said Rick Caruso, president and chief executive officer of Caruso Capital, in a statement. Caruso will act as CEO of the newly formed company, while Stephen Rader, president of Caruso Capital, will be continuing his post as president of the new venture.

While TPG co-founders David Bonderman and James Coulter haven’t focused on real estate specifically while building TPG, both have experience buying bank assets from government agency the Resolution Trust Corporation, which sold loans and property of failed lenders during savings and loan crisis of the 1990s.

In October 2009, TPG acquired a $4.5 billion portfolio of construction development loans and REO assets in partnership with the FDIC and a group of investors.

Caruso-TPG marks the first opportunity for investors to invest with Caruso in retail real estate. Caruso Affiliated’s portfolio includes California retail centers The Grove in Los Angeles, The Lakes at Thousand Oaks and The Commons at Calabasas.