Thoughts on TPG Sixth Street Partners

Does anyone have any insight in TPG's Special Situations Group? Couldn't find much on WSO but seems like the team operates multiple strategies (distressed debt, real estate, infra etc) and have a pretty flexible mandate overall. From what I've found on internet it seems like they have managed to grow AUM from $1-$2bn in 2009 to $27bn now so they must have performed quite well?

Is there anyone that can shed some more light on the group?
- What is the background of most juniors?
- How's the performance been?
- What's the work / life balance like?
- Is it more like a HF than a PE?
- Do they recruit in the same cycle as other MFs?
- How are they perceived by the market?
- I know this is an unpopular question here but how prestigious is it? Does it fall in the same bucket as other top tier distressed shops, i.e. Avenue, Baupost, Silver Point, KS etc?

Any insight would be much appreciated!

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Comments (24)

Most Helpful
Oct 20, 2018 - 10:25pm

Much more focused on private deals than the public markets, but at the higher end of the risk spectrum relative to most direct lending funds. They aren't necessarily always funding into "distressed" special situations, but providing debt capital for growth companies. Overall quite different than the HFs you mentioned which are naturally oriented towards more liquid/secondary credit, although there is some crossover (e.g., DIPs and rescue financing). As with most public vs. private investing comparisons, junior work is more about research than transaction execution / process management. Think performance has been very strong, but I believe they use leverage at the fund level to get returns up to private equity type thresholds.

  • 3
Apr 4, 2019 - 8:58pm

Bump. Long-time lurker here.

From what I've heard direct lending is only a part of their strategy, done by a separate team. I heard their special situations team do some pretty cool stuff, investing across cap structures, asset classes and industries. Their strategy seems somewhat like a mix between HF and PE to me, but am curious if anyone has more info on them? Also, do they have a dedicated NY office?

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  • Associate 2 in HF - Other
May 3, 2020 - 8:40pm

they list all their pockets of capital on their website TOP, TAO etc. they're not just direct lending - all the stuff in TOP and TAO are special sits type return money from 10%-25%. most of it is private type deals though. they have a team trying to do liquid distressed but it hasn't really gone off the group. All of the special sits type stuff is done out of SF. in NYC you'll only find TSLX and their CLOs which is all direct lending/performing credit stuff. if you want the 'cool' stuff you'll have to move to SF. they're not like a traditional distressed credit HF. a lot like GS SSG and like 30% of the people are former GS SSG

  • Analyst 1 in IB - Ind
May 4, 2020 - 11:32am

Thanks for the info! Was wondering if you could touch more on the relationship between TSLX and broader special situations at TSSP. It only mentioned that TSSP is the external manager of TSLX but I believe their gross IRR is around 20% - 25% since inception as stated on 10K. Is that a typical return profile for direct lending?

  • Associate 2 in HF - Other
May 5, 2020 - 5:11pm

yes TSSP is the external manager for TSLX but that's normal. TSLX is a BDC. look up externally vs. internally managed BDCs. TSLX is still a part of TSSP even though it is "externally managed" and no 25% IRR deals even on a levered basis is not at all typical for BDCs. just off the bat I would doubt the veracity of that number for TSLX. for Sixth Streets TOP and TAO vehicles I would say that makes sense. basically all TSLX does is middle market direct lending and you can find literally every single investment they've made in their filings so that should give you a sense of the type of stuff they do. given that TOP and TAO are private and PE style drawdown funds it will be harder to find deals that they've been in and executed. I know they were considering 1L Neiman loans a couple of years ago for 10% return

  • Intern in HF - EquityHedge
May 4, 2020 - 4:49pm

AFAIK Sixth Street doesn't hire for investment roles out of undergrad. There are a couple analysts that come up on LinkedIn but they look like BO roles.

May 18, 2020 - 12:25am

Can opine - pretty familiar with the place through friends and peers. Firm has a number of different strategies from low yield ag and infra to growth equity (new fund) and everything in between. Definitely have interesting strategies and structures, good returns on funds. Split from TPG should widen the types of deals they can do (over time, the agreement seems phased).

Culturally, fairly cutthroat. Expect long hours, minimal if any work life balance. New associates expected to work all hours (but don't tell people about it). Turnover is pretty high. Most groups run normal first year recruiting except BDC which does off cycle. They don't hire investment professionals out of college (they might do for finance team / back office). Interviews are usually case study plus a number of interviews with associates, vp/principals, and then if you're interesting, partners.

Leadership is very private which is why you don't see much about them online (didn't have an independent website until a year or two ago), and also why you won't find Glassdoor commentary.

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