Talk to just about anyone who’s worked at TPG Inc. over the past three decades and they’ve got a David Bonderman story.
There was the time he spent weeks holed up on a superyacht off the coast of Australia while authorities tried to question him over a $700 million tax bill. Or when executives rented a private island in the Caribbean to celebrate the wildly lucrative buyout of Continental Airlines.
There was that incident when Bonderman resigned from Uber Technologies Inc.’s board after making a sexist remark in response to board member Arianna Huffington. And, in events that now have added significance, Bonderman twice snubbed the Obama administration and flew to Vladimir Putin’s investment conferences in St. Petersburg after Russia invaded Crimea.
Within TPG there’s long been unease over some of his antics, but there was never any doubt he'd forged TPG’s identity and helped make it one of the world’s most successful investment firms. Risky bets were part of its DNA. The Russia trips, partying and his superyacht escapade, related by people close to TPG, are part of the complex legacy David “Bondo” Bonderman is leaving behind.
At 79, Bonderman has fully, finally handed off TPG -- part of the great, generational shift now afoot in the $6 trillion private-equity business. He and co-founder Jim Coulter have passed the reins to Jon Winkelried, a one-time high-flyer at Goldman Sachs Group Inc. After years of rumor and speculation, TPG went public in January, belatedly following rivals Blackstone Inc. and Carlyle Group Inc. onto the stock market.
It now falls to Winkelried, known as Winks, to lead TPG into its next era. He must show the world, or at least shareholders, that TPG can deliver quarter upon quarter — and that Bondo’s freewheeling private domain has grown into a proper public company.
On Monday, the firm reported earnings for the first time, disclosing that assets rose to $113.6 billion at the end of 2021 — a 27% increase over the previous year fueled in part by fundraising for its climate strategy and investment performance. Net income in the fourth quarter though slipped to $41 million, an 8% decline from the prior-year period.
Among Winkelried’s immediate challenges: Playing catch up in the credit business, which has exploded into a major money-maker for others in private equity. He’s hunting for an acquisition, according to people familiar with the matter, after Alan Waxman left in 2020 -- and took TPG’s $33 billion debt business, Sixth Street Partners, with him.
Winkelried will also have to rake in assets that can generate a reliable stream of fees, not just hunt big-game deals. TPG’s stock price will depend in no small part on what have become three crucial words in this business: assets under management. The question is whether TPG can hold on to the old Bondo magic as it grows and matures.
“Transitioning from a private partnership to a public company is a major undertaking, and it's not easy," said Hank Paulson, former U.S. Treasury Secretary, a long-time mentor to Winkelried at Goldman Sachs and now an executive director of TPG’s climate fund. "Jon has done it before and he's up to the task."