Alternative asset management firm TPG Inc. is acquiring credit and real estate investor Angelo Gordon in a cash and equity transaction valued at $2.7 billion. The news is significant for the commercial real estate community as Angelo Gordon has a $18 billion real estate platform that manages dedicated value-add strategies around the world, as well as a net lease strategy.
One of TPG's main goals for this deal is to expand deeper into the private credit market. It notes that Angelo Gordon's platform includes corporate credit and special situations, direct lending, and structured credit and that "each product area is well established with strong investment performance and substantial opportunities for significant organic growth." It also points out that the firm's real estate capabilities are complementary to TPG's current strategies and that on a combined basis, TPG will have "meaningful scale" with $38 billion of collective AUM in real estate across TPG and Angelo Gordon as of December 31, 2022.
Josh Baumgarten, Angelo Gordon Co-CEO and Head of Credit, echoed the sentiment in a prepared comment, noting that the transaction will provide it with "the scale to capitalize on the growing opportunity set we see in the credit and real estate markets."
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The acquisition is part of the growing momentum among private equity firms and other nonbank entities to step into the lending gap created by regional banks and seize new opportunities.
TPG CEO Jon Winkelried, for example, told Bloomberg that "there's a whole range of things regional banks have historically done" and "private sources of credit will be stepping into that breach in a number of different ways."
Whether that trend works out as intended, though, is another story.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
