said on Wednesday its after-tax quarterly distributable earnings fell more than 60% due to a plunge in asset sales across its private equity, growth, real estate and impact businesses.
The Fort Worth, Texas-based firm said third-quarter after-tax distributable earnings, which represent the cash used to pay dividends to shareholders, fell to $113 million from $283 million a year ago. However, TPG's fee-related earnings, a closely watched measure that captures income from management fees, was flat at $121 million. That exceeded the average analyst forecast of $108 million, according to Refinitiv data."What we're seeing is that investors don't care so much about performance fees but about fee-related earnings and its growth trajectory," said BMO Capital Markets analyst Rufus Hone.
"Fee-related earnings is predictable; every dollar of fee-related earnings is worth $2 of performance fees," Hone added. TPG generated just $5 million of net performance fees stemming from asset divestments during the quarter, down significantly from $141 million a year earlier, as the firm held off from sales amid financial market volatility caused by higher interest rates and geopolitical tensions.