TPG offers reduction in financial fund commitments

Private equity firm TPG is offering investors the opportunity to reduce the size of their commitments to a financial fund, TPG Financial Partners, a source familiar with the situation said on Sunday.

Investors can reduce their commitments to the fund to US$2.5bn, the source said, from an original US$6bn in size. TPG previously reduced the size of the fund to US$4.6bn in January.

The Financial Times earlier reported the news.

The reduction was not requested by limited partners — the pension and endowment funds that invest in private equity — but was an effort to help their allocation pressures, the source said.

Such investors were hard hit by the financial crisis, and some found that the fall in value of their equity holdings left them overexposed to private equity as an asset class.

The source said the reduction offered was also to better size the fund for available opportunities.