Global alternative asset manager TPG (NASDAQ: TPG) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 12% year on year to $512.1 million. Its GAAP profit of $0.20 per share increased from $0.04 in the same quarter last year.

Is now the time to buy TPG? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

TPG reported third quarter results that exceeded Wall Street’s revenue expectations, but the market responded negatively, likely due to a miss on adjusted operating income. Management attributed the quarter’s revenue growth to robust fundraising across private equity and credit, as well as record capital deployment. CEO Jon Winkelried pointed out that TPG’s capital formation was driven by strong client demand and differentiated performance, stating, “We raised a near record $18 billion of capital, up 60% from the second quarter.” Despite these positives, concerns about margin sustainability and the timing of performance-related earnings weighed on investor sentiment.

Looking ahead, TPG’s outlook is anchored by its expanding product lineup and continued focus on scaling its private wealth and credit platforms. Management expects to maintain strong fundraising momentum by broadening distribution, launching new products in credit and real estate, and deepening relationships with insurance and wealth clients. CFO Jack Weingart emphasized, “We expect continued FRE margin expansion in the next couple of years,” but cautioned that ongoing investments in distribution and product development could temper near-term profitability. The company is also monitoring risks tied to market volatility and sector-specific headwinds in structured credit and private equity exits.

Key Insights from Management’s Remarks

Management credited the third quarter’s topline growth to capital formation strength and active investment deployment, but acknowledged that increased operating investments and shifting revenue recognition timing affected profitability.

• Fundraising acceleration: TPG saw near-record fundraising, raising $18 billion in the quarter, with private equity and credit strategies leading the inflows. This included a strong first close for flagship buyout funds and a $3 billion continuation vehicle in direct lending.

• Private wealth channel expansion: The company made notable progress in private wealth distribution, launching T-POP (a perpetual private equity product) and expanding partnerships with international and U.S. wealth platforms, resulting in $1 billion in new capital from this channel.

• Deployment diversification: Record capital deployment of $15 billion was spread across credit, private equity, and real estate, with notable investments in structured credit, minority stakes in AI developers, and acquisitions in health and climate infrastructure sectors.

• Credit platform growth: TPG’s credit segment had a breakout year, raising nearly $12 billion year-to-date and building significant “dry powder” (capital available for investment), with management highlighting growing insurance client participation and new credit fund launches.

• Margin pressures: Despite revenue growth, adjusted operating income missed expectations due to elevated investments in new product development and distribution expansion, as well as the timing of profit allocation in early-stage funds.

Drivers of Future Performance

TPG expects growth in 2025 to be driven by continued product launches, capital formation, and expansion into new distribution channels, while monitoring margin headwinds.

• Broader product rollout: Management plans to introduce new credit and real estate products, such as a multi-strategy credit interval fund and a non-traded REIT, aiming to attract additional wealth and institutional assets over the next year.

• Distribution and channel expansion: The company is prioritizing deeper penetration into insurance and private wealth channels, with ongoing investments in global distribution partnerships and tailored product offerings to diversify revenue streams.

• Margin management and investment: While TPG expects fee-related earnings (FRE) margins to expand as the business scales, ongoing spend on distribution, product innovation, and platform integration could limit near-term margin improvements, especially as new business lines require upfront investment.

Catalysts in Upcoming Quarters

As we look to upcoming quarters, our analysts will be watching (1) evidence of sustained fundraising momentum and product adoption in the private wealth and insurance channels, (2) deployment of accumulated dry powder across credit and private equity, and (3) trends in fee-related earnings margin as investments in new products and distribution scale. The pace and quality of exits from existing funds will also serve as a key indicator of TPG’s ability to convert accrued performance into realized earnings.

TPG currently trades at $52.40, down from $54.85 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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