TPG collected more than $1.7 billion for its second impact fund, according to an SEC filing, despite the departure this year of the vehicle’s CEO due to charges involving a college admissions scandal.
In March, TPG fired Bill McGlashan after federal authorities charged him and other wealthy parents with using fraud to get their children into elite U.S. universities (McGlashan said he resigned before he was fired). Following the dismissal, the private equity firm reportedly offered early investors in Rise Fund II an opportunity to withdraw.
TPG, which originally set a $3 billion target for Rise Fund II, told Buyouts fundraising activity was relaunched in the summer with a goal of $2.5 billion. It added that all early limited partners elected to stay with the fund.
Previously disclosed investors include New Jersey State Investment Council, San Francisco Employees’ Retirement System and Washington State Investment Board.
The relaunch came in the wake of TPG’s June acquisition of Abraaj Group’s Growth Markets Health Fund, now called Evercare Health Fund, which invests in health delivery systems in Africa and South Asia. Rise Fund II is managing the outstanding $500 million of dry powder in the Evercare pool, the firm said.
Should Rise Fund II meet the $2.5 billion target, it will as a result of the Evercare deal have $3 billion for deployments to fresh investment opportunities, TPG said.
TPG’s Rise Fund platform was launched in 2016 to make control and minority investments in small and mid-market companies that can achieve measurable social or environmental gains, as well as competitive returns. The fund seeks opportunities in the education, energy, food and agriculture, financial services, infrastructure, healthcare, technology, media and telecom sectors.
Rise Fund I, which closed in 2017 at $2.1 billion, is almost fully invested, a person with knowledge of the matter told Buyouts. The platform has invested in more than 25 businesses operating in over 20 countries.
With McGlashan’s departure, oversight of Rise Funds I and II is shared by Co-Managing Partners Jim Coulter, Maya Chorengel and Steve Ellis. Coulter, TPG’s co-founder and co-CEO, also replaced McGlashan as head of the firm’s family of growth funds, Buyouts reported in May.
TPG, based in Fort Worth, Texas, and San Francisco, raised $14.2 billion in the final close of its eighth flagship PE fund and a sidecar vehicle for healthcare investing, Buyouts reported earlier this month.
Update: This story was updated to reflect that all early investors in Rise Fund II elected to stay in the fund.
Action Item: Learn more about TPG’s Rise Fund platform here.