Deals

TPG launches $2bn RE fund

The Fort Worth-based firm is said to have launched TPG Real Estate II with a target as high as $2 billion for its first ‘multi-investor’ property fund

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TPG Capital, the Fort Worth-based private equity firm, has reportedly launched its first commingled property fund with a $2 billion target.

The company, formerly known as Texas Pacific Group, has launched TPG Real Estate II (TPGRE II) and has assembled a 60-page presentation to potential investors, according to a report by Bloomberg.

The launch of a commingled fund comes around four years after the company first decided to get into real estate by forming a dedicated team. As PERE revealed in an exclusive interview with TPG last July, it decided to put real estate among its top three investment strategies in the wake of the Global Financial Crisis.

Though the firm has not commented previously on fundraising activities, it has been busy deploying and raising capital for its first effort, TPG Real Estate I, which was understood not to be structured as a traditional fund but as an investment program comprising TPG private equity funds and capital from third parties such as Canada’s Ivanhoé Cambridge and New Jersey State Investment Council.

Kelvin Davies is the head of real estate and he has overseen several deals since forming the team such as stakes in US homebuilder Taylor Morrison Home and Catellus Development, plus the takeover of industrial group Parkway Properties in Europe.

According to an interview with Davis last year, the company decided to get into real estate when it took part in the auction of a $4.5 billion non-performing loan and real estate owned portfolio of the failed Corus Bank from the Federal Deposit Insurance Corporation (FDIC).

Since then, the firm, co-founded by David Bonderman and Jim Coulter, has been growing a dedicated real estate group which today has 15 professionals.

Davis, who in 2000 left Colony Capital to join his former Bass Group colleagues, Bonderman and Coulter at TPG, said that when the real estate market began “heaving in 2008”, the opportunity to enter suddenly became much more interesting. Anand Tejani, Avi Banyasz, and Robert Weaver are other key members of the real estate team.