Private equity giant TPG said Jon Winkelried will become the sole chief executive officer as his counterpart, co-founder Jim Coulter, shifts focus to its fast-growing impact investing business.
Winkelried, 61, will take on day-to-day operations. Coulter will become executive chairman and lead the firm’s climate initiatives. The centerpiece of that is TPG Rise Climate, a fund he’s raising with former U.S. Treasury Secretary Hank Paulson.
The concentration under Winkelried elevates a former Goldman Sachs Group Inc. president who helped double TPG’s assets to $91 billion and move the firm into more than a dozen investment strategies during his tenure. It’s also recognition that specialized funds -- whether focused on clean energy or backing women fund managers -- are key to TPG’s future.
“This isn’t growth for growth’s sake, but it’s important to have the tools to stay very relevant and competitive,” Winkelried said in an interview. “Growth is required to be nimble.”
Coulter first assumed oversight of the impact funds on an interim basis in 2019 after the executive who ran the funds, Bill McGlashan, was charged in the college admissions scandal.
Coulter, 61, said he and Winkelried think TPG’s future is tied to funds that have moved from the margins of the investment world into the mainstream. He will continue as co-managing partner of TPG Rise, the firm’s five-year-old initiative around impact investing. The second Rise fund closed earlier this year, bringing the total assets in those funds to more than $5 billion.
He will also shift his focus to relationships outside the firm, including with key investors across all of TPG’s businesses.
Leadership transitions are occurring across the buyout industry. Until the past several years, the biggest private equity firms were headed almost exclusively by their founders. Now many of those executives have been contemplating how to cede management, often while keeping a broader strategy role.
Jim Coulter
Photographer: Victor J. Blue/Bloomberg
Some changes have been less than elegant. Carlyle Group Inc. named Kewsong Lee and Glenn Youngkin co-CEOs in 2018. Youngkin exited last year, leaving Lee as the sole CEO. At Apollo Global Management Inc., the crisis surrounding Leon Black led the firm to name co-founder Marc Rowan to the top job over Josh Harris, the third Apollo co-founder.
Read more: Apollo’s Billionaire Founders Brawl, Shunting Aside Josh Harris
TPG was born almost three decades ago out of a partnership between Coulter and David Bonderman, who initially met working for Texas billionaire Robert M. Bass. The pair created what was then called Texas Pacific Group (a nod to offices in Fort Worth and San Francisco) and their signature early deal was the purchase of bankrupt Continental Airlines in 1993, which they turned around and sold for a profit.
The firm’s willingness to take massive bets on unloved or risky companies has often paid off. It was an early investor in Uber Technologies Inc. and Airbnb Inc. -- but it has also stumbled, backing Caesar’s Entertainment Inc., TXU Corp. and Washington Mutual Inc., all of which went bankrupt.
Bonderman, 78, became chairman in 2014 and will continue in that role, TPG said Monday.
Coulter and Winkelried described a methodical process at TPG whereby the two men ran the firm together as Winkelried integrated himself into the culture of the firm and set about organizing and expanding it. Even though their roles are changing, both will continue to be involved in the deal process, TPG said.
“It’s the continuation of a natural evolution,” Coulter said in an interview. “This allows the firm more breadth.”
The question is whether that will extend to TPG finally shedding its status as a private company -- as many of its peers have done.
Coulter said the leadership changes were “divorced from any consideration of an IPO,” reiterating his long-standing view that TPG will go public “if it’s the right thing to do.”
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