KKR buys auto loans portfolio
Auto finance appears to be increasingly attracting the attention of private debt firms. In Loan Note two weeks ago, we reported Carlyle’s purchase of Evolution Funding, the UK’s largest used auto finance platform. Now it’s the turn of KKR to climb into the driving seat with the $373 million acquisition of a portfolio of prime auto loans from Synovus Bank.

The deal comes from KKR’s asset-based finance strategy, which accounts for around half of the firm’s private credit assets under management. KKR has made 65 asset-based finance investments since 2016 through portfolio acquisitions, platform investments and structured investments and has around $42 billion in asset-based finance assets under management.

“There is an immense opportunity for scaled private capital investment across the ABF space, especially as traditional lenders increasingly focus on optimising their balance sheets and increasing liquidity,” said Avi Korn and Chris Mellia, managing directors at KKR, in a statement.

Tikehau bucks fundraising trend
Against a backdrop of rising rates, fears of recession and talk of increasing pressure on borrowers, Paris-based investment manager Tikehau Capital revealed its best ever six months of fundraising in the first half of this year.

As part of the firm’s H1 2023 results presentation, Tikehau said it had raised net new money of €3.3 billion, bringing its assets under management to €40.5 billion – up 14 percent on a year-on-year basis.

Fundraising outpaced capital deployment of €2.5 billion during the period. “Discipline remained a core focus for the investment teams in a market which has not yet stabilised,” the firm said.

Tikehau’s fundraising experience was in contrast to the overall environment in the first half. According to our data, private debt funds globally collected the lowest amount in the first half of this year since the equivalent period of 2016 – and European funds had a particularly tough time of it.

Tikehau also had a balance sheet investment portfolio worth €3.6 billion at the end of June. The portfolio is 78 percent invested in the firm’s own investment strategies.

TPG reports earnings as AG acquisition nears
Fort Worth-based investment manager TPG reported that its assets under management rose to $139 billion as of 30 June 2023, from $127 billion the year before.

The numbers were part of its unaudited Q2 2023 results, which it reported on Tuesday.

Second-quarter net income swung to a profit of  $27 million, or $0.32 per share of Class A common stock, from a loss of $10 million in the like quarter a year ago. The corresponding number for Q1 was $25 million.

Jon Winkelried, the company’s chief executive officer, said in a statement: “As we’ve been working towards closing the Angelo Gordon acquisition, we’ve also been very active in our core business. The pace of activity across our investment platforms has continued to accelerate in the current environment.”

TPG has been at its core a PE firm, especially since its separation from Sixth Street in 2020, but its interest in Angelo Gordon is part of a broader move to build up its credit and real estate platforms.

TPG announced its agreement to acquire Angelo Gordon, an alternative investment firm focused on credit and real estate investing, in May. The parties expect the deal to close in Q4.

TPG’s fee-related earnings for Q2 2023 were $125 million, a year-on-year increase of 23 percent. This produced a fee-related earnings margin of 44 percent. The margin represents an increase from 37 percent in Q1 and from 40 percent in Q2 2022. TPG declared a quarterly dividend of $0.22 per share of Class A common stock to holders of record at the end of 18 August 2023, payable on 1 September 2023.

The firm’s real estate platform raised $204 million in Q2 and now has more than $8.6 billion in available capital.

As noted in affiliate publication Private Equity International, TPG expects to raise between $5 billion and $6 billion by early next year to fulfill its revised fundraising targets (registration required). The company’s chief financial officer, Jack Weingart, said in the earnings call that there is a “pronounced barbell effect across the industry where the middle period of campaigns has been elongated,” so TPG expects the rest of its flagship fundraises to be weighted near the end of the barbell.

Including its real estate credit fund, TPG has raised or has visibility on more than $2.6 billion for first-time funds.

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