https://www.semafor.com/article/09/03/2024/tpg-sells-stake-in-former-credit-arm-sixth-street-back-to-the-firm

TPG quietly sold its stake in its former credit arm, Sixth Street, back to that firm last month for more than $1 billion, people familiar with the matter said, bringing to a formal end one of Wall Street's longest and most profitable partnerships.

The deal valued Sixth Street at about $10 billion, a number agreed on last fall, after TPG's takeover of Angelo Gordon brought it into direct competition with Sixth Street's lending business and triggered negotiations, the people said.

The deal leaves Sixth Street — which has already been touchy once about having a competitor as a part owner — free to dabble in corporate buyouts and sports investing. And TPG can focus on building its own lending business, where it lags far behind rivals like Blackstone and Apollo. Branching out is increasingly a survival requirement in today's private-investment world.

Spokesmen for both companies declined to comment.

Sixth Street launched in 2009 when a band of Goldman Sachs investors spun out with cash from TPG. It mostly lends money, but has pioneered a go-anywhere style — it's backed everything from PG&E's bankruptcy to orange groves to professional sports — that has spawned copycats across Wall Street all boasting of "flexible capital."

Their arrangement eventually outlived its usefulness. By 2020, TPG had its eye on going public and wanted to build a credit business of its own. Sixth Street had built a track record on which to raise money. The two occasionally competed over deals, like the pandemic rescue of Airbnb early that year. (Sixth Street won that one.)

So they separated in 2020, with TPG retaining a 10% stake that Sixth Street had the right to buy if TPG made a major competitive push into lending. Its purchase of Angelo Gordon, a credit and real-estate shop, started the clock.

Sixth Street raised cash from outside sources to buy back the stake, but none of them were strategic investors along the lines of TPG, one of the people said.