TPG has established a special purpose acquisition company, Pace Holdings, to buy underperforming technology, media or business services enterprises, according to a Securities & Exchange Commission filing.
TPG plans to raise $400 million by listing the acquisition vehicle, the filing said.
Karl Peterson, a senior partner at TPG, who managed the firm’s European buyout business in 2010, has been appointed president and CEO of the so called “blank check vehicle”. He had led investments for TPG in the technology, media, financial services and travel industries, according to the regulatory filing.
TPG founding partner David Bonderman will serve as chairman of Pace Holdings’ board. TPG’s Jim Coulter, also a founding partner at TPG, will also be a director. Dirk Eller, a partner in the firm’s operating partners group, is the CFO.
Officials from TPG declined to comment on Pace Holdings.
One private equity market participant said the SPAC launch is not surprising in light of the robust equity market as it provides “another form of currency” for TPG.
The launch of Pace Holdings follows the final close of TPG Growth III at more than $3 billion in April. The fund is focused on investing in small and midmarket businesses.
SPACs have attracted the attention of North American private equity investors since the mid-2000’s with the likes of Thomas Hicks of the now defunct Texas buyout firm Hicks Muse Tate & Furst and Apollo Management’s Michael Gross launching their own blank check vehicles at the time.
But public investment in SPACs waned following the financial crisis as the equity markets dropped.
Typically with a SPAC investors also have their capital returned should no acquisitions be made within a specified timeframe.
However, blank check companies can serve to provide realisations for private equity groups. In March, Charlesbank Capital Partners and Leonard Green & Partners exited their investment in Del Taco to Illinois SPAC Levy Holding for $500 million.