TPG valuation hits US$10b on first trading day

Shares of TPG jumped in their first day of trading as the private equity group cofounded by billionaires David Bonderman and Jim Coulter became the latest to capitalise on soaring valuations by tapping public markets to finance growth.

The stock gained more than 15 per cent on Thursday to close at US$34 ($49.56), lifting the company’s market capitalisation above US$10 billion.

US-based TPG had priced its initial public offering at $29.50 a share late on Wednesday, the midpoint of an offering range targeted at the beginning of 2022.

TPG is the largest company to go public in the US so far this year, and its successful listing comes as the wider IPO market grapples with poor performance and rising volatility.

Companies raised a record-breaking US$150b through US IPOs last year, but many of them have struggled to maintain investor enthusiasm after completing their listings. Around two-thirds of businesses that went public in 2021 ended the year trading below their offering price, with some sliding further during a stock market sell-off this month.

On Wednesday Justworks, a software company poised to go public this week, said it would postpone its IPO owing to the recent volatility.

“The markets are turbulent,” TPG chief executive Jon Winkelried told the Financial Times. “This IPO was a high-quality institutional book from a company that’s highly profitable and has been around for 30 years. It’s just a different part of the IPO market.”

In going public, TPG is preparing to dramatically expand its platform, which has US$109b in assets, by launching new funds and investment products and striking acquisitions. TPG raised US$1b in the IPO.

Winkelried also said the listing will help the firm to grow if buoyant market conditions deteriorate. “We sleep with one eye open.”