TPG Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Blostein - Goldman Sachs - Analyst : Hey. Good morning, guys. Thank you for the question. So maybe just starting with management fees -- just starting with management fees, I heard your guidance for Q4. Obviously, there's a couple of things that are happening with the catchups and the step down in the funds. But as you look out into 2025 and Jack, at the end of there, you kind of mentioned a host of different funds that you guys are going to be launching in fundraising for. How do you think about management fee growth outlook into 2025? No one will you guys know about the business so far?

Question: Alex Blostein - Goldman Sachs - Analyst : All right. Thanks.

Question: Glenn Schorr - Evercore ISI - Analyst : Thank you. And sorry if this is kind of the same question in a different way. So lots of growth drivers in there. So I wanted to see if you could provide bigger than a breadbox type of guidance on what you think the 2025 over the next two or three years of FRE growth could be in the range up. And with that, I'm just curious on the expenses on, you called out two noncore expenses. They seem kind of regular cost of doing business. So if you could help us, think through the why and the impact on FRE. Thank you so much.

Question: Glenn Schorr - Evercore ISI - Analyst : All right. Thank you.

Question: Craig Siegenthaler - BofA Global Research - Analyst : Thanks. Good morning, everyone. So I have an AUM reconciliation question. So if I look at the AUM roll for it, I see credit inflows were very strong at $2.9 billion but in the steering AUM roll forward, they were only $100 million. Now, I know the credit business is very sensitive to deployments, but credit deployments were also very strong. at $3.9 billion. So my question is, why is this fee earning AUM inflow in the quarter so small relative to the AUM inflow and also the actual credit deployments.

Question: Craig Siegenthaler - BofA Global Research - Analyst : Jack. So I guess in the earning roll forward, you focus on both the net change in investment activity and the earning capital raised, although that isn't exactly related to what we're seeing in the AUM roll forward. Is that right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 4:00PM, TPG.OQ - Q3 2024 TPG Inc Earnings Call

Question: Craig Siegenthaler - BofA Global Research - Analyst : That makes sense. Thank you, guys.

Question: Ken Worthington - JPMorgan - Analyst : Hi. Good morning. On the DISH transaction, can you talk about the impact of the transaction on fee-related revenue sort of next quarter and coming quarters. And I know this is a clearly unusual, very bespoke transaction. But you have now the capabilities with Angelo Gordon. You've demonstrated the expertise we're an improving sort of market for transactions and deals. What is sort of reasonable to expect in terms of more similar type of deals looking forward? Could you -- would you -- is it reasonable to expect like one type of this type of transaction a year? Is that outside the realm of reason? What are your thoughts there?

Question: Ken Worthington - JPMorgan - Analyst : Great. Thanks for all the color.

Question: Michael Cyprys - Morgan Stanley - Analyst : Hi. Good morning. Thanks for taking the question. I was hoping you could elaborate a bit on your initiatives to expand reach in the private wealth channel maybe where does the Twin Brook offering stand today just in terms of placements on the platform? How do you see that evolving over the next 12 months? And then you alluded to the new private equity product coming into the retail private wealth channel. So if you could elaborate on that as well as other potential products you may have in the pipeline to bring out to the marketplace? And maybe talk about a bit how these products you expect it to differentiate from others that are already in the marketplace.

Question: Michael Cyprys - Morgan Stanley - Analyst : Great. Thanks so much.

Question: Brennan Hawken - UBS Equities - Analyst : Good morning. Thanks for taking my question. Just wanted to confirm when we think about the near term, is it right that fourth quarter would be a seasonally larger one for fee-related performance revenues? And then on tactically, could you remind us of the rate sensitivity in those FRPs base rates?

Question: Brennan Hawken - UBS Equities - Analyst : Okay. And I mean go ahead. Go ahead. I was just go to add (multiple speakers) --

Question: Brennan Hawken - UBS Equities - Analyst : Yes. Got it. To be clear, I wasn't -- I didn't -- I probably worried it poorly. The fourth quarter question was around the seasonality. The rate sensitivity wasn't really truly around the 50 basis points more or like thinking about next year. And if we continue to see rates coming down, how should we be modeling out the puts and takes there?

Question: Brennan Hawken - UBS Equities - Analyst : Okay. Thanks for taking my question.

Question: Kyle Voigt - Keefe, Bruyette & Woods North America - Analyst : Hi. Good morning. Maybe just a question on your insurance strategy you've been evaluating the best path forward there or and potential for strategic partnerships. Just wondering if you could update on your thoughts on control versus capital-light insurance partnerships. And when you're evaluating potential insurance partners, can you just remind us of some of the most important aspects of those potential partnerships to TPG, whether that's a certain size partner or a specific underlying growth characteristics that you're looking for?

Question: Kyle Voigt - Keefe, Bruyette & Woods North America - Analyst : That's great. Thank you.

Question: Mike Brown - Wells Fargo Securities, LLC - Analyst : Great. Good morning. Thanks for taking my question. The FRE margin, it's expected to exit at the mid-40s and in 2025. So it sounds like you'll be approaching kind of that 45% margin that you've guided to in the past. So when you think about 2026 and beyond, I assume that kind of mid-40s is not your end game or certainly not the full potential of the platform. So when you think about that FRE margin longer term, how should we think about that annual margin expansion for, call it, 2026 and beyond? Thank you.

Question: Mike Brown - Wells Fargo Securities, LLC - Analyst : Okay. Great. Thank you.