Did CPPIB really make US$4.2B on TPG IV?
I feel richer already!
According to the CPP Investment Board’s public disclosure, our nation’s US$106.8 million investment in the Texas Pacific Group’s Fund IV is currently being marked to market at US$4.429 billion. As returns go, this is as big a home run as you’ll ever see in the world of private equity. Mega Fund or otherwise:
| TPG Partners IV | USD | 2003 | 100.0 | 106.8 | 4,429.1 | 62.1 | 4,491.2 | |
You might think that it’s a typo, and I assumed the same, but I emailed the CPPIB webmaster a week ago to see if it was an error and the number is still posted on their site.
Since things kicked off in 2000, CPPIB has invested hard cash of $16.98 billion into its externally managed private equity program via 130 or so GPs (another $15.7B was pledged but uncalled as at June 30/09). As of June 2009’s public stats, the PE program had a value of $17.9 billion, based upon distributions of $7.6 billion and a carrying value of $10.3 billion.
If the new report is true, wouldn’t a US$4 billion lift be a beautiful thing for Canada’s future pensioners! And it would also get the CPPIB’s massive PE program out of its current breakeven IRR state.
MRM
What in the world did the fund invest in to generate those kind of returns?
The TPG website is, of course, mum. Kudos to WF displaying its portfolio companies transparently.
That is a typo. Here are the TPG IV Sept 30, 2009 metrics from another source:
TPG IV (2003)
Performance Overview
(%) Called
(%) Distributed
(%) DPI Rem. Value
(%) RVPI Multiple
(%) Net IRR
110.3 60.1 68.6 1.29 11.2
That would be a pretty unrealistic net multiple for a private equity fund of that vintage. But I think CPPIB also includes co-investments in their published fund returns. In this case though, I think you move the decimal over a couple spots.
AT
If it is a typo, you’d think the CPPIB webmaster would reply to my email from last week, or at least change the site data once he found out. How many emails a day does a webmaster get that are a potential call to action?
MRM
Sorry the metrics should read:
1) % Called
2) % Distributed
3) % Remaining Value
4) % Total Value
5) Net IRR (%)
Calpers also publishes this type of data and they too are invested in TPG IV (2003). Their reported net IRR is 10% and investment multiple is 1.3x. Their data, which covers hundreds of funds, is on the Calpers website – navigate thru CalPERS Investments > CalPERS Assets > Equities > Alternative Investment Management Program > Private Equity Performance Review > AIM Program Fund Performance.
I guess the webmaster just does not care. There is no way that number is correct. All the other funds TPG had were not very stellar. And with the size of the fund they would have had to been leveraged short the housing market(like paulson) to get returns like this.
Nosy VC and I seem to have gotten the same result from 2 different sources…
Are we really debating whether or not TPG is running a ~40x multiple of cost on their Fund IV?
Let me settle the debate quickly for everyone in one second. No, they didn’t. The end.
TF
Thanks for stopping by. Perhaps you’ve hit the nail on the head. 😉
MRM