TPG acquires Angelo Gordon in $2.7B deal

Private equity giant TPG is acquiring Angelo Gordon, an investment firm focused on the credit and real estate markets, for $2.7 billion.

The companies announced the deal early Monday morning, a week after reports emerged that TPG was in talks to purchase Angelo Gordon. The acquisition will include approximately $970 million in cash and up to 62.5 million units of the TPG Operating Group and restricted stock units of TPG.

The move brings TPG CEO Jon Winkelreid back into the credit investing world, something the firm moved away from in 2020 after it split from Sixth Street. The company has since been looking for a way back in.

Angelo Gordon will be that way back in. The New York-based company has roughly $53 billion in assets under management, a majority of which are in credit or real estate. Once the deal closes, TPG will be scaling up with $38 billion in assets under management in real estate alone.

As of the end of last year, the had a combined $208 billion in assets under management.

TPG’s move comes as private equity firms have been ramping up direct lending businesses as regional banks have either failed or pulled back on activity. While diversifying its business, the acquisition could lead to more direct lending.

Both companies have acted as sellers in the commercial real estate world since the early days of the pandemic. 

In May 2020, TPG RE Finance sold $1 billion in commercial real estate debt to raise cash and meet obligations. More recently, Angelo Gordon sold half its stake in Brookfield DTLA Fund Office Trust Investor, the public entity that owns Brookfield’s portfolio in Downtown Los Angeles.

Angelo Gordon has 650 employees across 12 offices on three continents. It will become an investing platform within TPG, according to the press release. Co-CEOs Adam Schwartz and Josh Baumgarten will become co-managing partners of the platform and report to Winkelreid.

The acquisition is expected to close in the fourth quarter.