Global alternative asset management firm TPG is buying smaller peer Angelo Gordon for $2.7bn (€2.4bn), in a deal that would create a $38bn diversified real estate platform with multiple strategies.
TPG, which manages $137bn of assets and investments across its capital, growth, impact, real estate and market solutions platforms said it has agreed to buy its $73bn rival investment firm focused on credit and real estate investing, in a cash and equity transaction.
TPG has a $19bn real estate platform comprising multiple strategies including private equity, core-plus, and residential and commercial debt.
Founded in 1988, Angelo Gordon’s multi-strategy platform comprises a $55bn credit platform and an $18bn real estate platform managing value-add estate strategies in the US, Europe, and Asia, as well as a net lease strategy.
The deal further expands TPG’s geographic reach in Europe and Asia, broadens sourcing capabilities, and adds additional strategies, including a net lease strategy.
The transaction will give TPG a 57 ranking position in the most recent IPE Real Assets Top 150 Real Estate Investment Managers report, after Canada Life Asset Management, IGIS Asset Management, Generali Real Estate, USAA Real Estate Co, each of which manages real estate assets of around the $38bn mark.
The 57th position is currently held by BlackRock with $33.7bn real estate assets under management. Angelo Gordon currently holds the 76th position in the ranking.
At the close of the deal, expected in the fourth quarter of the year, Angelo Gordon’s co-CEOs Josh Baumgarten and Adam Schwartz will become co-managing partners of the Angelo Gordon platform within TPG.
Jon Winkelried, chief executive officer of TPG, said the strategic transaction meaningfully expands the firm’s investing capabilities and broadens its product offering.
Winkelried added: “The addition of Angelo Gordon also underscores our continued focus on growing and scaling through diversification, while driving long-term value for our shareholders.
“Following more than a year of building relationships between the leadership teams of both organisations, we are confident the combination represents a strong strategic and cultural fit and will create additional opportunities for employees of both firms.”
Baumgarten said: “This is a terrific partnership that provides Angelo Gordon with the scale to capitalise on the growing opportunity set we see in the credit and real estate markets, the diversification to create new solutions for our clients across the risk spectrum in all market conditions, and the opportunity to share our collective expertise, insights, and knowledge.”
Schwartz said: “This transaction is a testament to the team and business that we have built over nearly 35 years, and we are excited about the new and expanded opportunities ahead for our employees and limited partners.”
Jim Coulter, TPG’s co-founder and executive chairman, said: “Both firms have grown organically over the past three decades, from private founder-led businesses into seasoned firms with next-generation executive leadership poised to accelerate further growth as part of a diversified platform.
“There is a clear alignment of interests, values, and culture with a focus on entrepreneurship, innovation, and investment excellence.”
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