Ridgemont Says TPG ‘Good Fit’ For Placement

One person with knowledge of the firm described the TPG effort as a “one-off” relationship stemming from past co-investments and other dealings between the two firms. It’s too early to say if TPG has any concrete plans to expand its placement business, but it’s possible the practice could increase in future years, the source said.

“The Ridgemont team has known the individuals who lead TPG’s internal fundraising practice for many years,” according to an Aug. 28 email to Buyouts from Charlotte, North Carolina-based Ridgemont. “Both parties believed there was a good fit between Ridgemont Equity Partners’s goals and TPG. Overall, it seemed to us that the process was efficient, as we had relatively few meetings—TPG was vigilant in getting us in front of the right investors rather than just seeing as many as possible.”

Ridgemont’s roster of eight partners includes Rob Edwards, Travis Hain, Donny Harrison, George Morgan, Walker Poole, Scott Poole, Trey Sheridan and John Shimp, according to the firm’s website.

TPG Capital BD drew limited partners for Ridgemont Equity Partners I LP, which closed in March with $735 million in commitments. A Ridgemont spokesperson said REP I is nearly 50 percent committed, with nine investments.

TPG also raised money for  Ridgemont Partners Secondary Fund I LP, which disclosed $460 million in commitments. That fund closed in March 2012.

Based in San Francisco—the home town of TPG co-founder James Coulter—TPG Capital BD LLC is headed up by Chief Executive Peter McMillan. Charles Froeb, a TPG partner, also works on fundraising for the firm. Froeb joined TPG after serving as West Coast managing director of Credit Suisse’s fund placement group, raising money for The Blackstone Group, Oak Hill Investment Management, New Mountain Capital and Leonard Green & Partners. Froeb did not return a phone call from Buyouts, and McMillan declined to comment.

TPG Capital BD LLC unit rang up 2012 revenue of $22 million in private placement service fees, according to a filing with regulators.

A person familiar with TPG said the relationship between Ridgemont and TPG Capital BD has continued, although a separate source said Ridgemont has no funds officially raising money at this time.

TPG transitioned into a money-raising role for Ridgemont Equity Partners after advising the smaller firm on its separation from Bank of America in 2010.

The two firms also teamed up on co-investments in buyout targets including Caesars, Biomet and Aptalis Pharmaceutical Technologies, a source said. Last fall, TPG paid an undisclosed sum to buy truck and trailer parts retailer FleetPride from Investcorp and Ridgemont Equity Partners.

TPG has plenty of experience raising money for its own funds. The firm is seeking about $2.5 billion for TPG Opportunities Partners III, according to a report by Bloomberg News. TPG Partners VI  raised $20 billion in 2008 as one of the largest private equity funds of all time.

It’s not unique for a big private equity firm to operate a placement unit. Park Hill, a leading placement agent, is owned by The Blackstone Group.