TPG scales back buyouts in Europe as it ramps up in Asia - report

The Financial Times reported that two European buyout executives, European Co-Chairman Philippe Costeletos and London-based Matthias Calice, will depart their roles by the year's end. The circumstance parallels the ongoing sovereign debt crisis in Europe, which paints a grim picture for both investing and fundraising on the continent.

An unnamed source close to TPG told the FT that the fund's decision to pull back on its European buyout activities indicates a possible reallocation of buyout capital to Asia and other emerging regions. Others suggest that TPG will remain active in Europe, but will bolster its focus on distressed investing as opposed to buyouts.

Last month, news surfaced that TPG is looking to raise the largest Asia-focused fund since the onset of the global economic crisis, targeting $4-5 billion. The vehicle follows the TPG Capital Partners V fund - the $4 billion regional vehicle through which TPG currently invests in Asia - which is approximately 75% deployed. That fund is also among the largest Asia-focused funds ever raised.

Speaking at the AVCJ Investment Summit last week in Hong Kong, TPG's Founding Partner James Coulter (pictured) contrasted the debt-backed financial arbitrage deals of the 1990s with the current global predilection for transactions based on bringing operational value add. He said the environment would prompt funds to strengthen their emphasis on diversification, which he feels has been neglected in recent fund analysis. "There will be a movement back toward understanding the power of diversification," he said.

He further emphasized opportunitities in markets such as China, nothing the potential of buying loan portfolios from regional banks in the US and targeting Chinese savings. "This industry will come up with products that are interesting to these [Chinese] savers," he said, noting that 67% of individual savings in the country are still held in cash.

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• Topics
• Buyouts
• Fundraising
• TPG Capital
• buyout
• Fundraising