Private equity firms selling Cushman stakes

TPG, PAG Asia Capital own more than 11% of common stock

Private Equity Firms Selling Cushman Stakes

From left: TPG CEO Jon Winkelried; Cushman & Wakefield CEO Michelle MacKay; PAG CEO Chris Gradel (Getty, TPG, Cushman & Wakefield, PAG)

Cushman & Wakefield is trying to navigate a tumultuous time for the company, and will soon be doing so without two of the three firms that took ownership of the commercial brokerage nearly a decade ago.

Private equity firm TPG and investment manager PAG Asia Capital intend to sell their 26.5 million shares in the company, Bisnow reported. Cushman disclosed the firms’ decisions to exit their investment on Monday in an offering prospectus with the Securities and Exchange Commission.

Both companies have been pulling back on their investment. Last February, TPG had 37.8 million shares, or 16.9 percent of the common stock. Since then, the private equity firm has rid itself of more than half of those shares and has 17 million remaining. 

When TPG sold its largest block of shares last year while the price was bottoming out, it left some with the impression it had lost belief in its investment. TPG sold 10 million of its C&W shares in November at $7.63, approximately the lowest the stock’s been since the company went public.

PAG accounts for more than 9 million shares. Combined, the two firms own 11.6 percent of the brokerage’s common stock. Based on the company’s closing price last week, a sale of the stock would be worth $310 million altogether.

Cushman isn’t getting its hands on those proceeds, though; JP Morgan Securities is underwriting the offering.

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TPG and PAG entered the fold in May 2015, when DTZ merged with Cushman in a $2 billion deal. TPG and PAG had acquired DTZ a year earlier. The Ontario Teachers’ Pension Plan, which invested in the same venture as TPG and PAG, is keeping its Cushman shares.

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Cushman in crisis: $3B in debt, leadership carousel

Since going public in 2018 and raising $765 million at a $3.1 billion valuation, the stock has fallen 38 percent, closing on Friday at $11.72 per share. The stock was up 7.6 percent year-to-date on Friday, though the stock is trading at $10.94 as of late Tuesday afternoon on the heels of a selloff before Monday morning’s opening bell.

Cushman recorded a net loss of $29 million in the first quarter, narrowing its losses from a year earlier. It was one of two major commercial brokerages to record losses in the first quarter. The other, Newmark, has made a habit of poaching employees from its rival.

Cushman has also been dealing with a revolving door of company leadership and a handful of decisions gone wrong that have put the 100-year-old firm under the microscope.

Holden Walter-Warner