BERLIN--TPG is "contemplating" going public like rival global
buyout firms but isn't fixated on a timetable, said David
Bonderman, the private-equity firm's co-founder.
"'Contemplating" is the right word for us," Mr. Bonderman said
on Tuesday at the SuperReturn International private-equity
conference in Berlin. "We're thinking about it, but not too
hard."
Blackstone Group LP, KKR & Co., Apollo Global Management LLC
and Carlyle Group LP have all started selling shares on public
exchanges in recent years. These private-equity firms have for the
most part enjoyed rising stock prices, increased profits and
outsize dividend payouts to their founders.
Mr. Bonderman likened the development to a previous wave among
Wall Street banks, noting Goldman Sachs Group Inc. was the last of
those financial firms to become a publicly traded company.
"At the end of the day, everybody will go public," Mr. Bonderman
said of large private-equity firms such as TPG.
Fund investors initially expressed concern about buyout firms
having conflicting duties to them and public shareholders, Mr.
Bonderman said. But giant pension funds, university endowments and
the ultra-wealthy--the so-called limited partners of private-equity
firms--have continued giving money to publicly traded firms as they
did before, he said.
"The LPs have not put their money where there mouth is," Mr.
Bonderman said.
The furious pace of private-equity selling, meanwhile, won't
continue unabated, he said. Buyout firms have been selling
companies they own outright and taking them public to sell shares
they hold amid a booming stock market, especially over the past
year.
Mr. Bonderman referred to a comment Apollo co-founder Leon Black
made last year that Apollo was selling everything that wasn't
"nailed down."
TPG in January reached a deal to sell pharmaceutical company
Aptalis Holdings Inc. to Forest Laboratories Inc. for $3 billion
and last year reached an agreement to sell luxury retailer Neiman
Marcus Inc. to an investor consortium for about $6 billion. TPG has
also taken other companies public and has some others on deck for
initial public offerings.
"Is it sustainable? The answer is no," Mr. Bonderman said.
"These years are relatively few and far between."
He noted buyout firms are returning money to investors through
these sales, allowing them to raise new funds for a fresh round of
deals. TPG returned $10 billion to investors last year, he said.
The firm is preparing to raise a new fund but has been biding time
while previous funds appreciate before launching the official
fundraising effort.
"The LPs...have more cash than they know what to do with," he
said.
Mr. Bonderman repeatedly referred to the cyclical nature of the
private-equity industry and said, while markets are pushing prices
for companies higher, they are "not out of sight." He said it was a
"truism" in the private-equity industry that returns are higher
when fundraising is difficult and lower when gathering new cash is
easier.
Asked for a remedy to that cycle, Mr. Bonderman said: "Whiskey
and soda!"
Another change affecting buyout firms is that sovereign-wealth
funds are increasingly co-investing in deals even as they
contribute cash to private-equity firms' funds. GIC Private Ltd., a
sovereign-wealth fund owned by the Singapore government, recently
teamed with Blackstone to invest in human-resources company Kronos
Inc.
"It's more complicated. It's something we'll all end up living
with," Mr. Bonderman said.
He cautioned against overthinking or aggrandizing investing.
TPG must be careful investing pensioners' money, Mr. Bonderman
said, but "candidly, what we're doing is not rocket science. We're
not doing brain surgery, we're not curing cancer. We're trying to
figure out what the right bond return is. Come on."
Write to Mike Spector at mike.spector@wsj.com
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