TPG is pitching a Rise Climate Infrastructure fund to LPs, chief financial officer Jack Weingart said on the firm’s year-end results call this week. This would be the fifth product in the firm’s impact series, and marks the Rise strategy’s first foray outside private equity. It comes amid a PE fundraising environment beset with challenges that chief executive Jon Winkelried acknowledged TPG is “not immune to”.
Speakers on the call did not disclose a target for the infrastructure fund.
TPG is also raising Rise III, which has a $3 billion target and reached a first close in August on $1.55 billion. The firm expects to keep Rise III open throughout 2023, as well as other private equity funds, “given ongoing challenges in the fundraising market”, said Weingart.
“It’s too early to tell whether we’ll hit all of our targets” for Rise III and other funds currently in market, said Winkelried, “[but] we have very strong engagement with LPs… and we feel very good about the progress we’re making.” As fundraising conditions start to improve with the new year, TPG expects more LP commitments in Q2 and Q3, while Q1 will be “relatively light”, said Winkelried, “given the time it takes for LPs to complete their diligence”.
This would not be the first bout of turbulence for TPG’s impact fund series. Rise I, one of the first and biggest private equity impact funds, closed above target on $2 billion in 2017. Rise II’s target was revised down from $3 billion to $2.5 billion following the indictment of the fund’s co-founder Bill McGlashan in the 2019 college admissions scandal, affiliate publication Private Equity International previously reported. The fund ultimately closed on $2.17 billion, PEI Group’s database shows.
Meanwhile, the first Rise Climate fund, a growth strategy that closed on $7.3 billion last year, “remains a hit on its pace of deployment”, buoyed by increased attention to energy security and deglobalisation efforts, said Winkelried.