TPG Inc. 10-K

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in our historical financial statements and the related notes included elsewhere in this report. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and elsewhere in this report, particularly in “Cautionary Note Regarding Forward-Looking Statements,” “Item 1A.—Risk Factors” and “—Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data.” We assume no obligation to update any of these forward-looking statements. On January 12, 2022, we completed a corporate reorganization (the “Reorganization”), which included a corporate conversion of TPG Partners, LLC to a Delaware corporation named TPG Inc., in conjunction with an initial public offering (the “IPO”) of our Class A common stock. The IPO closed on January 18, 2022. Unless the context suggests otherwise, references in this report to “TPG”, “the Company”, “we”, “us” and “our” refer (i) prior to the completion of the Reorganization and IPO to TPG Group Holdings SBS, L.P. and its consolidated subsidiaries and (ii) from and after the completion of the Reorganization and IPO to TPG Inc. and its consolidated subsidiaries. We completed the Acquisition on November 1, 2023. Accordingly, the results of TPG Angelo Gordon included in our consolidated results of operations are from November 1, 2023 through December 31, 2023. Business Overview We are a leading global alternative asset manager with approximately $221.6 billion in assets under management (“AUM”) as of December 31, 2023. We primarily invest in complex asset classes such as private equity, credit, real estate and public market strategies. We have built our firm through more than 30 years of successful innovation and growth, and believe that we have delivered attractive risk-adjusted returns to our clients and established a premier investment business focused on the fastest-growing segments of both the alternative asset management industry and the global economy. We believe that we have a distinctive business approach as compared to other alternative asset managers and a diversified, innovative array of multi-strategy investment platforms that position us well to continue generating sustainable growth across our business. Trends Affecting our Business Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of funds managed by TPG, as well as our ability to source attractive investments and deploy the capital that we have raised. However, we believe our disciplined investment philosophy across our diversified investment platforms and our shared investment themes focusing on attractive and resilient sectors of the global economy has historically contributed to the stability of our performance throughout market cycles. The market environment improved in 2023 as inflation slowed, the Federal Reserve tapered and ultimately paused its rate hiking cycle, and the domestic economy remained strong, all despite ongoing geopolitical instability and stress within the regional banking sector during the early part of the year. The U.S. Consumer Price Index (“CPI”) reading for the last month of 2023 showed a 3.1% year-over-year increase in prices, a much slower rate of increase relative to the December 2022 reading of 6.5%. Core CPI, which excludes food and energy, also declined from 5.7% in December 2022 to 3.9% in the December 2023 reading. As inflation tapered, the Federal Reserve began to slow its pace of rate hikes. After increasing the target federal funds rate by 4.25% over the course of 2022, the Federal Reserve increased rates only by another 1.00% in 2023 via 0.25% increases at four of its first five meetings of 2023. The Central Bank has held rates steady since, at 5.25% - 5.50%. The timing of the Federal Reserve’s first rate cut and the pace of the rate cutting cycle remains a significant question impacting markets. Economic data has remained strong despite the extended period of elevated rates. The U.S. added 2.8 million payrolls over the course of 2023, and the unemployment rate ended the year at 3.7%, a modest increase from 2022’s final reading of 3.4%. U.S. Treasuries experienced a degree of volatility over the twelve months ending December 31, 2023, though finished the year relatively flat to yields seen at the end of 2022. Treasury yields fell sharply early in the year, particularly 93 Table of Contents at the shorter end of the curve, as stress within the U.S. regional banking sector drove a flight to safety. Yields steadily widened over the following months, with the 10-Year Treasury touching above 5% in October. However, Treasury bonds rallied significantly heading into the end of the year. The 10 Year Treasury yield ended the year at 3.879%, little changed from its yield at the end of 2022. 2 Year Yields touched as high as 5.212% during 2023 but closed the year at 4.250%. In corporate credit markets, both U.S. and European high yield markets performed positively during 2023. According to J.P. Morgan data, the U.S. high yield market saw gains of 13.5% in the United States and the European market saw gains of 12.7% during the year. Notably, lower-rated CCCs significantly outperformed higher-rated BBs over this period, generating returns of 19.9% and 11.8%, respectively. In U.S. high, yield bonds further tightened and ended the year at 377 basis points compared to 490 basis points to start the year. In Europe, high yield spreads tightened 44 points ending the year at 449 basis points. The high yield default rate rose modestly to 2.8% in the United States and 2.4% in Europe. Additionally, the J.P. Morgan U.S. Leveraged Loan Index posted a 13.5% return and the J.P. Morgan European Leveraged Loan Index posted a 13.6% return for the year ended 2023. From a spread and yield basis, the US Leveraged Loan Index ended the year at a yield of 8.6% and 500 basis point spread while the European Leverage Loan Index ended the year at a yield of 7.96% and 542 basis point spread. Major U.S. equity indices rallied significantly in 2023, after posting losses in 2022. The S&P 500, Dow Jones, and Nasdaq gained 24.2%, 13.7%, and 43.4% respectively during the year. Growth oriented sectors were market leaders, with the Information Technology and Communication Services sectors rising 56.4% and 54.4% respectively on the year. Energy and Utilities were laggards, declining (4.8%) and (10.2%) respectively. Volatility, as measured by the CBOE Volatility Index, continued its downward trend over the year from 21.7 at the start of the year to 12.5 at the end of 2023. In commercial real estate, the Green Street Commercial Property Price Index ended December 2023 down 9.5% from its the beginning of 2023. Commercial property transaction volume in the United States and Europe remained relatively muted, consistent with 2022, primarily due to continued elevated borrowing rates and reductions in liquidity and credit availability. Major Asian markets faced similar challenges, with commercial property transaction volume for the year declining 17 year-over-year overall; however, Q4 2023 saw an uptick in volume, registering a 3% rise year-on-year. In Hong Kong full year 2023 investment volume reached HK$40.4 billion, marking the weakest period since 2008. In China, transaction volume fell 13.0% year-over-year, largely due to prolonged overseas interest rate hikes and ongoing geopolitical tension. Similarly, Japan saw investment volume decline 3.0% year-over-year, mostly due to a decrease in foreign investment. U.S. residential real estate improved slightly during the quarter, with national U.S. home prices rising approximately 6.0% year-to-date through November 2023, slightly above the peak recorded in June 2022 according to the S&P/Case-Shiller U.S. National Home Price Index, in part due to constrained housing supply. Organization We are a holding company and our only business is to act as the owner of the entities serving as the general partner of the TPG Operating Group partnerships and our only material assets are Common Units representing approximately 22% of the legally outstanding Common Units and 100% of the interests in certain intermediate holding companies as of December 31, 2023. In our capacity as the sole indirect owner of the entities serving as the general partner of the TPG Operating Group partnerships, we indirectly control all of the TPG Operating Group’s business and affairs. Acquisition of Angelo Gordon On November 1, 2023, we acquired Angelo Gordon pursuant to the terms and subject to the conditions set forth in the Transaction Agreement. Pursuant to the Transaction Agreement, we acquired Angelo Gordon for both cash and non-cash consideration under U.S. GAAP equal to $1,145.9 million (the “Purchase Price”), comprised of: • $740.7 million in cash paid at closing; • $18.8 million in payable as of December 31, 2023 to the escrow agent on behalf of the sellers of Angelo Gordon, subject to adjustment; • 9.2 million vested Common Units (and an equal number of Class B common stock) and 43.8 million unvested Common Units which are deemed to be compensatory under U.S. GAAP; 94 Table of Contents • the rights to an aggregate cash payment, payable in three payments of up to $50.0 million each, reflecting an aggregate of $150.0 million (the “Aggregate Annual Cash Holdback Amount”); and • the non-compensatory portion under U.S. GAAP of a total earnout payment of up to $400.0 million in value (the “Earnout Payment”), subject to the satisfaction of certain fee-related revenue (“FRR”) targets during the period beginning on January 1, 2026 and ending on December 31, 2026 (the “Measurement Period”). On November 1, 2023, Angelo Gordon had $75.3 billion in assets under management, with $57.4 billion attributable to its credit business and $17.9 billion attributable to its real estate business. Operating Segments We operate our business in a single operating and reportable segment, which is consistent with how our CEO, who is our chief operating decision maker, reviews financial performance and allocates resources. We operate collaboratively across platforms with a single expense pool. Basis of Accounting We consolidate the financial results of TPG Inc., TPG Operating Group and its consolidated subsidiaries, management companies, the general partners of funds and entities that meet the definition of a variable interest entity (“VIE”) for which we are considered the primary beneficiary. When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities, revenues, expenses, investment income, cash flows and other amounts, on a gross basis. While the consolidation of an entity does not impact the amounts of net income attributable to controlling interests, the consolidation does impact the financial statement presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This is a result of the fact that the accounts of the consolidated entities being reflected on a gross basis, with intercompany transactions eliminated, while the allocable share of those amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts attributable to third parties are recorded are presented as non-controlling interests on the Consolidated Statements of Financial Condition and net income (loss) attributable to non-controlling interests on the Consolidated Statements of Operations. We are not required under U.S. GAAP to consolidate the majority of investment funds we advise in our Consolidated Financial Statements because we do not have a more than insignificant variable interest. Following our Reorganization and IPO, we no longer have a controlling financial interest in certain TPG Funds. Public SPACs are consolidated pursuant to U.S. GAAP. Management fees and performance allocations from the consolidated Public SPACs are eliminated in the Consolidated Financial Statements. The assets and liabilities of the consolidated Public SPACs are generally held within separate legal entities and, as a result, the liabilities of the consolidated Public SPACs are non-recourse to us. Since we only consolidate a limited portion of our TPG investment funds, the performance of the consolidated Public SPACs is not necessarily consistent with or representative of the aggregate performance trends of our TPG investment funds. Key Financial Measures Our key financial and operating measures are discussed below. Revenues Fees and Other . Fees and other consists primarily of (i) management and incentive fees, (ii) monitoring fees, (iii) transaction fees, (iv) incentive fee income and (v) expense reimbursements from unconsolidated funds, portfolio companies and third parties. These fee arrangements are documented within the contractual terms of the governing agreements and are recognized when earned, which generally coincides with the period during which the related services are performed and in the case of transaction fees, upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or change of control. These termination payments are recognized in the period in which the related transaction closes. Capital Allocation-Based Income (Loss) . Capital allocation-based income (loss) is earned from the TPG funds when we have (i) a general partner’s capital interest and (ii) performance allocations which entitle us to a disproportionate 95 Table of Contents allocation of investment income or loss from investment funds. We are entitled to a performance allocation (typically 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to the achievement of preferred returns or high water marks, where applicable, in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the TPG funds, including performance allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member; however, we do not have control as defined by Accounting Standards Codification (“ASC”) Topic 810, Consolidation . The Company accounts for its general partner interests in capital allocation-based arrangements as financial instruments under ASC Topic 323, Investments – Equity Method and Joint Ventures as the general partner has significant governance rights in the TPG funds in which it invests which demonstrates significant influence. Accordingly, performance allocations are not deemed to be within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Expenses Compensation and Benefits . Compensation and benefits expense includes (i) cash-based compensation and benefits, (ii) equity based compensation and (iii) performance allocation compensation. Bonuses are accrued over the service period to which they relate. In addition, we have equity-based compensation arrangements that require certain TPG executives and employees to vest ownership of a portion of their equity interests over a service period of generally one to six years, which under U.S. GAAP will result in compensation charges over current and future periods. In connection with our IPO and subsequent acquisition, we granted restricted stock units (“RSUs”) to executives and employees. Distributions of performance allocations in the legal form of equity made directly or indirectly to our partners and professionals are allocated and distributed, when realized, pro rata based on ownership percentages in the underlying investment partnership and are accounted for as distributions on the equity held by such partners rather than as compensation and benefits expense prior to the Reorganization and IPO. We account for these distributions as performance allocation compensation. General, Administrative and Other . General and administrative expenses include costs primarily related to professional services, occupancy, travel, communication and information services and other general operating items. Depreciation and Amortization . Depreciation and amortization of tenant improvements, furniture and equipment and intangible assets are expensed on a straight-line basis over the useful life of the asset. Interest Expense . Interest expense includes interest paid and accrued on our outstanding debt and the amortization of deferred financing costs. Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs consist of interest expense and other expenses related primarily to professional services fees, research expenses, trustee fees, travel expenses and other costs associated with organizing and offering these entities. Investment Income Net Gains (Losses) from Investment Activities . Realized gains (losses) may be recognized when we redeem all or a portion of an investment interest or when we receive a distribution of capital. Unrealized gains (losses) result from the appreciation (depreciation) in the fair value of our investments. Fluctuations in net gains (losses) from investment activities between reporting periods are primarily driven by changes in the fair value of our investment portfolio and, to a lesser extent, the gains (losses) on investments disposed of during the period. The fair value of, as well as the ability to recognize gains (losses) from, our investments is significantly impacted by the global financial markets. This impact affects the net gains (losses) from investment activities recognized in any given period. Upon the disposition of an investment, previously recognized unrealized gains (losses) are reversed and an offsetting realized gain (loss) is recognized in the period in which the investment is sold. Since our investments are carried at fair value, fluctuations between periods could be significant due to changes to the inputs to our valuation process over time. Interest, Dividends and Other . Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established. Net Gains from Investment Activities of consolidated TPG Funds and Public SPACs . Net gains (losses) from investment activities includes (i) realized gains (losses) from the sale of equity, securities sold and not yet purchased, debt and derivative instruments and (ii) unrealized gains (losses) from changes in the fair value of such instruments. 96 Table of Contents Unrealized Gains (Losses) on Derivative Liabilities of Consolidated Public SPACs . Unrealized gains (losses) on derivative liabilities of consolidated Public SPACs are changes in the fair value of derivative contracts entered into by our consolidated Public SPAC entities, which are included in current period earnings. Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established. Income Tax Expense The Company is treated as a corporation for U.S. federal and state income tax purposes. We are subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of taxable income generated by the TPG Operating Group partnerships. Non-Controlling Interests For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than TPG. The aggregate of the income or loss and corresponding equity that is not owned by us is included in non-controlling interests in the Consolidated Financial Statements. 97 Table of Contents Key Components of our Results of Operations Results of Operations The following table provides information regarding our consolidated results of operations for the periods presented: Year Ended December 31, 2023 2022 2021 (dollars in thousands, except share and per share data) Revenues Fees and other $ 1,534,626 $ 1,246,635 $ 977,904 Capital allocation-based income 855,285 756,252 3,998,483 Total revenues 2,389,911 2,002,887 4,976,387 Expenses Compensation and benefits: Cash-based compensation and benefits 547,377 473,696 579,698 Equity-based compensation 654,922 627,714 — Performance allocation compensation 591,676 416,556 — Total compensation and benefits 1,793,975 1,517,966 579,698 General, administrative and other 482,574 368,915 278,590 Depreciation and amortization 47,673 32,990 21,223 Interest expense 38,528 21,612 16,291 Expenses of consolidated TPG Funds and Public SPACs: Interest expense — — 740 Other 1,053 3,316 20,024 Total expenses 2,363,803 1,944,799 916,566 Investment income (loss) Income (loss) from investments: Net gains (losses) from investment activities 6,564 (110,131) 353,219 Interest, dividends and other 42,622 9,168 6,460 Investment income of consolidated TPG Funds and Public SPACs: Net gains from investment activities — — 23,392 Unrealized gains on derivative liabilities of Public SPACs 667 12,382 211,822 Interest, dividends and other 7,692 6,741 10,321 Total investment income (loss) 57,545 (81,840) 605,214 Income (loss) before income taxes 83,653 (23,752) 4,665,035 Income tax expense 60,268 32,483 9,038 Net income (loss) 23,385 (56,235) 4,655,997 98 Table of Contents Year Ended December 31, 2023 2022 2021 (dollars in thousands, except share and per share data) Net (loss) income attributable to redeemable equity in Public SPACs prior to Reorganization and IPO — (517) 155,131 Net income attributable to non-controlling interests in consolidated TPG Funds prior to Reorganization and IPO — — 19,287 Net income attributable to other non-controlling interests prior to Reorganization and IPO — 966 2,455,825 Net income attributable to TPG Group Holdings prior to Reorganization and IPO — 5,256 2,025,754 Net income attributable to redeemable equity in Public SPACs 12,044 15,165 — Net loss attributable to non-controlling interests in TPG Operating Group (92,411) (180,824) — Net income attributable to other non-controlling interests 23,662 11,293 — Net income attributable to TPG Inc. subsequent to Reorganization and IPO $ 80,090 (1) $ 92,426 $ — Net income (loss) per share data: Net income (loss) available to Class A common stock per share Basic $ 0.89 $ 1.10 $ — Diluted $ (0.04) $ (0.19) $ — Weighted-average shares of Class A common stock outstanding Basic 80,334,871 79,255,411 — Diluted 317,944,496 308,908,052 — ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Revenues consisted of the following for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Change % ($ in thousands) Management fees $ 1,187,947 $ 919,830 $ 268,117 29 % Transaction, monitoring and other fees, net 113,108 117,422 (4,314) (4) % Expense reimbursements and other 233,571 209,383 24,188 12 % Total fees and other 1,534,626 1,246,635 287,991 23 % Performance allocations 808,248 720,106 88,142 12 % Capital interests 47,037 36,146 10,891 30 % Total capital allocation-based income 855,285 756,252 99,033 13 % Total revenues $ 2,389,911 (1) $ 2,002,887 $ 387,024 19 % ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Fees and other revenues increased by $288.0 million, or 23%, during the year ended December 31, 2023 compared to the year ended December 31, 2022. This change resulted from a $268.1 million increase in management fees, a $24.2 million increase in expense reimbursements and other and a $4.3 million decrease in transaction, monitoring and other fees, net. 99 Table of Contents Management Fees . Management fees increased by $268.1 million, or 29%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by fee earning capital raised resulting in additional management fees of $107.6 million from TPG IX, $47.9 million from Asia VIII, $40.7 million from THP II, and $29.2 million from Rise III, each of which were activated during the third quarter of 2022. Management fees also increased $87.3 million due to the additional fees earned from TPG Angelo Gordon, primarily $18.8 million from Middle Market Direct Lending funds, $12.4 million from Real Estate Multi-Strategy funds, and $9.8 million from Credit Solutions funds. These increases were partially offset by a decrease in management fees of $36.9 million earned from Asia VII resulting from a decrease in fee earning AUM during the year ended December 31, 2023 compared to the year ended December 31, 2022. Certain management fees totaling $41.5 million earned during the year ended December 31, 2023 were considered catch-up fees as a result of additional capital commitments from limited partners primarily related to TPG IX of $18.0 million, THP II of $8.7 million, Rise III of $6.7 million and Asia VIII in the amount of $6.3 million. Transaction, Monitoring and Other Fees, Net . Transaction, monitoring and other fees, net decreased by $4.3 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $9.5 million decrease in transaction, monitoring and incentive fees earned from portfolio companies in our Real Estate and Capital platforms, partially offset by a $6.3 million increase in our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer. Expense Reimbursements and Other . Expense reimbursements and other increased by $24.2 million, or 12%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $21.2 million increase in income from services rendered to TPG funds and a $5.1 million increase in additional reimbursements from funds, mainly due to increase in expense reimbursements attributable to TPG Angelo Gordon. Performance Allocations. Performance allocations increased by $88.1 million to $808.2 million, or 12%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. Realized performance allocations for the year ended December 31, 2023 and 2022 totaled $582.2 million and $1,409.8 million, respectively. Unrealized performance allocation gains for the year ended December 31, 2023 was $226.0 million. The change in unrealized performance allocations for the year ended December 31, 2022 was a loss of $689.7 million. The table below highlights performance allocations for the years ended December 31, 2023 and 2022, and separates the entities listed into two categories to reflect the Reorganization: (i) TPG general partner entities from which the TPG Operating Group Common Unit holders are expected to receive a 20% performance allocation and (ii) TPG general partner entities from which the TPG Operating Group Common Unit holders are not expected to receive any performance allocation. Year Ended December 31, 2023 2022 Change % ($ in thousands) TPG Operating Group Shared: TPG VII $ 13,538 $ 171,926 $ (158,388) (92) % TPG VIII 318,945 445,242 (126,297) (28) % TPG IX 32,253 1,146 31,107 NM Asia VI (2) (48,407) (50,005) 1,598 3 % Asia VII (7,058) 9,400 (16,458) (175) % Asia VIII 23,241 — 23,241 NM TPG Healthcare Partners 60,933 5,381 55,552 NM TPG Healthcare Partners II 12,059 2,529 9,530 NM TES 1,986 11,618 (9,632) (83) % TPG AAF 31,051 135,098 (104,047) (77) % Platform: Capital 438,541 732,335 (293,794) (40) % 100 Table of Contents Year Ended December 31, 2023 2022 Change % ($ in thousands) Growth III (2) (5,521) (47,831) 42,310 88 % Growth IV 64,362 21,141 43,221 204 % Growth V 80,780 68,890 11,890 17 % TTAD (13,195) 455 (13,650) NM TDM (4,757) 33,305 (38,062) (114) % Platform: Growth 121,669 75,960 45,709 60 % Rise (3,649) (16,836) 13,187 78 % Rise II 55,927 19,739 36,188 183 % Rise Climate 177,333 — 177,333 NM Platform: Impact 229,611 2,903 226,708 NM TREP III (73,335) 12,728 (86,063) (676) % Platform: Real Estate (73,335) 12,728 (86,063) (676) % TPEP 33,455 9,107 24,348 267 % NewQuest III (20,193) (17,590) (2,603) NM NewQuest IV 1,157 18,374 (17,217) NM NewQuest V 8,820 — 8,820 NM Strategic Capital — (2,793) 2,793 NM Platform: Market Solutions 23,239 7,098 16,141 227 % Credit Solutions II 53,539 — 53,539 NM Credit Solutions II Dislocation A 17,157 — 17,157 NM Credit Solutions I 15,303 — 15,303 NM MVP 13,953 — 13,953 NM MMDL IV 7,410 — 7,410 NM MMDL III 4,001 — 4,001 NM CDPQ Cap Solutions 2,814 — 2,814 NM Asset Based Credit 2,643 — 2,643 NM MMDL IV Annex 2,161 — 2,161 NM MMDL V 2,104 — 2,104 NM Other 18,279 — 18,279 NM TPG Angelo Gordon Credit 139,364 — 139,364 NM Net Lease Realty III 15,687 — 15,687 NM Asia Realty IV (1,673) — (1,673) NM Net Lease Realty IV (1,845) — (1,845) NM Growth Capital I (2,315) — (2,315) NM Realty X (3,828) — (3,828) NM Europe Realty III (5,722) — (5,722) NM Europe Realty II (15,586) — (15,586) NM Other 3,245 — 3,245 NM TPG Angelo Gordon Real Estate (12,037) — (12,037) — % Total TPG Operating Group Shared: $ 867,052 $ 831,024 $ 36,028 4 % 101 Table of Contents Year Ended December 31, 2023 2022 Change % ($ in thousands) TPG Operating Group Excluded: TPG IV $ (495) $ (569) $ 74 13 % TPG V 3 — 3 NM TPG VI (24,561) (19,913) (4,648) (23) % Asia IV — 108 (108) NM Asia V (24,388) (42,864) 18,476 43 % MMI 1,329 117 1,212 NM TPG TFP — (750) 750 NM Platform: Capital (48,112) (63,871) 15,759 25 % Growth II 1,383 8,977 (7,594) (85) % Gator (22,945) 11,731 (34,676) (296) % Biotech II — 203 (203) NM Biotech III 12,566 (34,974) 47,540 136 % Biotech IV (347) (533) 186 35 % Biotech V — — — NM Platform: Growth (9,343) (14,596) 5,253 36 % TREP II (250) (17,337) 17,087 99 % DASA RE (1,099) (1,507) 408 27 % Platform: Real Estate (1,349) (18,844) 17,495 93 % TSI — 124 (124) NM Evercare — (13,731) 13,731 NM Platform: Impact — (13,607) 13,607 NM Total TPG Operating Group Excluded (3) $ (58,804) $ (110,918) $ 52,114 47 % Total Performance Allocations $ 808,248 (1) $ 720,106 $ 88,142 12 % ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. (2) After the Reorganization, we retained an economic interest in performance allocations from the Growth III and Asia VI general partner entities, which entitles us to a performance allocation equal to 10%; however, we intend to allocate the full amount as performance allocation compensation expense. As such, net income available to controlling interest holders is zero for each of these funds following the Reorganization. (3) The TPG Operating Group Excluded entities’ performance allocations are not a component of net income attributable to TPG following the Reorganization; however, the TPG general partner entities continue to be consolidated by us. We transferred the rights to the performance allocations the TPG Operating Group historically would have received to RemainCo on December 31, 2021. As such, net income available to controlling interest holders will be zero for each of the TPG Operating Group Excluded entities beginning January 1, 2022. The increase in total performance allocations for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by higher realized and unrealized appreciation in TPG VIII, THP I, Growth IV, Growth V, Rise Climate and Rise II. These increases were partially offset by lower realized and unrealized appreciation in TREP III and Asia VI. Performance allocations also increased $127.3 million due to the acquisition of TPG Angelo Gordon primarily due to realized and unrealized appreciation from TPG AG Credit. As of December 31, 2023, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $5.3 billion. As of December 31, 2023, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.4 billion. Capital Interests . Capital interests income increased by $10.9 million, or 30%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by an increase in income from our investments in TRTX in our Real Estate platform and Rise Climate in our Impact platform. These increases were partially offset by a decrease in income from our investments in TPG VII, TPG VIII and TPG AAF in our Capital platform. 102 Table of Contents Expenses Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense increased by $73.7 million, or 16%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $63.9 million increase in salaries and benefits driven by an increase in headcount as a result of the Acquisition for the year ended December 31, 2023, and an $8.7 million increase in bonuses for the year ended December 31, 2023. Equity-Based Compensation. Equity-based compensation expense increased by $27.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily attributable to a net $36.6 million increase in expenses largely associated with RSUs granted to TPG employees and certain of our executives and a $12.8 million expense associated with RSUs granted to TPG Angelo Gordon employees as a result of the Angelo Gordon acquisition, partially offset by the vesting of certain Other Awards, as defined in Note 19, during the year ended December 31, 2022. Performance Allocation Compensation. Performance allocation compensation increased by $175.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily attributable to the increase in performance allocations, which drives the compensation allocated to our partners and professionals during the year ended December 31, 2023, inclusive of $103.4 million attributable to TPG Angelo Gordon. General, Administrative and Other. General and administrative expenses increased by $113.7 million, or 31%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by a $78.0 million increase in professional fees and an increase of $7.6 million in travel and other administrative expenses. General and administrative expense also increased $39.1 million from TPG Angelo Gordon. These increases were partially offset by a decrease in insurance expenses, primarily related to a $20.6 million insurance policy purchased in connection with the IPO during the year ended December 31, 2022. Depreciation and Amortization. Depreciation and amortization increased by $14.7 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily due to the amortization of intangible assets resulting from the acquisition of Angelo Gordon in November 2023. Interest Expense. Interest expense increased by $16.9 million, or 78%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to higher interest rates on certain borrowings and increased interest expense on draws under our Senior Unsecured Revolving Credit Facility to partially fund the Acquisition. Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs decreased by $2.3 million, or 68%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. Net Gains (Losses) from Investment Activities. Net gains (losses) from investment activities was a gain of $6.6 million for year ended December 31, 2023 compared to a loss of $110.1 million for the year ended December 31, 2022. This change was primarily attributable to a gain of $15.3 million from our investment in Nerdy Inc, partially offset by a loss of $7.7 million from our investment in Vacasa, Inc. during the year ended December 31, 2023. Interest, Dividends and Other. Interest, dividends and other increased by $33.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily driven by additional interest income earned due to higher interest rates during the year ended December 31, 2023 compared to the year ended December 31, 2022. Unrealized Gains on Derivative Liabilities of Public SPACs . The $0.7 million and $12.4 million of unrealized gain on derivative instruments recognized during the year ended December 31, 2023 and 2022, respectively, were attributable to warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. The warrants held by public investors and forward purchase agreements are treated as liability instruments rather than equity instruments and subject to mark-to-market adjustments each period. Upon the consummation of acquisitions of target companies by our Public SPACs or the wind down of a Public SPAC, the associated liability will no longer be included in our Consolidated Financial Statements. Pursuant to the redemption of Class A Ordinary shares of AFTR and YTPG during the year ended December 31, 2023, we no longer have any derivative liabilities associated with SPACs in our Consolidated Financial Statements as of December 31, 2023. 103 Table of Contents Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest, dividends and other of consolidated TPG Funds and Public SPACs increased by $1.0 million, or 14%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. Income Tax Expense. Income tax expense increased by $27.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to the Pre-Closing TPG Transactions, (as defined herein) which resulted in an increase to our valuation allowance for the year ended December 31, 2023. Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Revenues consisted of the following for the years ended December 31, 2021 and December 31, 2020: Year Ended December 31, 2022 2021 Change % ($ in thousands) Management fees $ 919,830 $ 718,344 $ 201,486 28 % Transaction, monitoring and other fees, net 117,422 104,930 12,492 12 % Expense reimbursements and other 209,383 154,630 54,753 35 % Total fees and other 1,246,635 977,904 268,731 27 % Performance allocations 720,106 3,792,861 (3,072,755) (81) % Capital interests 36,146 205,622 (169,476) (82) % Total capital allocation-based income 756,252 3,998,483 (3,242,231) (81) % Total revenues $ 2,002,887 $ 4,976,387 $ (2,973,500) (60) % Fees and other revenues increased by $268.7 million, or 27%, during the year ended December 31, 2022 compared to the year ended December 31, 2021. This change resulted from a $201.5 million increase in management fees, a $54.8 million increase in expense reimbursements and other and a $12.5 million increase in transaction, monitoring and other fees, net. Management Fees . Management fees increased by $201.5 million, or 28%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by fee earning capital raised resulting in additional management fees of $40.3 million from TPG IX, $22.0 million from Asia VIII, $19.4 million from Rise III and $10.4 million from TPH II, each of which were activated during the third quarter of 2022; $76.2 million from TREP IV, which was activated during the first quarter of 2022; and $65.4 million from Rise Climate, which was activated during the third quarter of 2021. These increases were partially offset by a decrease in management fees of $29.9 million earned from TPG VII resulting from a decrease in fee earning AUM during the year ended December 31, 2022 compared to the year ended December 31, 2021. Certain management fees in the year ended December 31, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise Climate and TTAD II in the amount of $2.8 million. Transaction, Monitoring and Other Fees, Net . Transaction, monitoring and other fees, net increased by $12.5 million, or 12%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $9.6 million increase in transaction fees earned from portfolio companies in our Real Estate and Capital platforms and a $5.1 million increase in our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer. Expense Reimbursements and Other . Expense reimbursements and other increased by $54.8 million, or 35%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $18.4 million increase in additional reimbursements from TPG funds due to increased fundraising activities, $19.8 million in administrative service fees from RemainCo earned during the year ended December 31, 2022, and a $14.9 million increase in income from services rendered to TPG funds and Portfolio Companies. 104 Table of Contents Performance Allocations. Performance allocations decreased by $3,072.8 million to $720.1 million, or 81%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by an 8% appreciation of our realized and unrealized portfolio during the year ended December 31, 2022 compared to a 38% appreciation of our realized and unrealized portfolio during the year ended December 31, 2021. Realized performance allocations for the year ended December 31, 2022 and 2021 totaled $1,409.8 million and $1,956.2 million, respectively. The change in unrealized performance allocations for the year ended December 31, 2022 was a loss of $689.7 million. Unrealized performance allocation gains for the year ended December 31, 2021 totaled $1,836.7 million. The table below highlights performance allocations for the years ended December 31, 2022 and 2021, and separates the entities listed into two categories to reflect the Reorganization: (i) TPG general partner entities from which the TPG Operating Group Common Unit holders are expected to receive a 20% performance allocation and (ii) TPG general partner entities from which the TPG Operating Group Common Unit holders are not expected to receive any performance allocation. Year Ended December 31, 2022 2021 Change % ($ in thousands) TPG Operating Group Shared: TPG VII $ 171,926 $ 902,941 $ (731,015) (81) % TPG VIII 445,242 558,759 (113,517) (20) % TPG IX 1,146 — 1,146 NM Asia VI (1) (50,005) 381,295 (431,300) (113) % Asia VII 9,400 426,270 (416,870) (98) % THP I 5,381 114,805 (109,424) (95) % THP II 2,529 — 2,529 NM TES 11,618 8,232 3,386 41 % TPG AAF 135,098 32,237 102,861 319 % Platform: Capital 732,335 2,424,539 (1,692,204) (70) % Growth III (1) (47,831) 64,111 (111,942) (175) % Growth IV 21,141 326,824 (305,683) (94) % Growth V 68,890 82,612 (13,722) (17) % TTAD I 455 108,458 (108,003) (100) % TDM 33,305 54,325 (21,020) (39) % Platform: Growth 75,960 636,330 (560,370) (88) % Rise I (16,836) 142,938 (159,774) (112) % Rise II 19,739 69,253 (49,514) (71) % Platform: Impact 2,903 212,191 (209,288) (99) % TREP III 12,728 152,658 (139,930) (92) % Platform: Real Estate 12,728 152,658 (139,930) (92) % TPEP 9,107 29,804 (20,697) (69) % NewQuest 784 16,186 (15,402) (95) % Strategic Capital (2,793) 2,793 (5,586) (200) % Platform: Market Solutions 7,098 48,783 (41,685) (85) % Total TPG Operating Group Shared: 831,024 3,474,501 (2,643,477) (76) % 105 Table of Contents Year Ended December 31, 2022 2021 Change % ($ in thousands) TPG Operating Group Excluded: TPG IV (569) 3,580 (4,149) (116) % TPG VI (19,913) 32,031 (51,944) (162) % Asia IV 108 1,430 (1,322) (92) % Asia V (42,864) 74,956 (117,820) (157) % MMI 117 1,333 (1,216) (91) % TPG TFP (750) 201 (951) (473) % Platform: Capital (63,871) 113,531 (177,402) (156) % Growth II 8,977 45,141 (36,164) (80) % Growth II Gator 11,731 65,167 (53,436) (82) % Biotech II 203 (342) 545 159 % Biotech III (34,974) 30,681 (65,655) (214) % Biotech IV (533) 1,977 (2,510) (127) % Biotech V — (4,095) 4,095 100 % Platform: Growth (14,596) 138,529 (153,125) (111) % TREP II (17,337) 40,000 (57,337) (143) % DASA - Real Estate (1,507) (1,954) 447 23 % Platform: Real Estate (18,844) 38,046 (56,890) (150) % TSI 124 14,523 (14,399) (99) % Evercare (13,731) 13,731 (27,462) (200) % Platform: Impact (13,607) 28,254 (41,861) (148) % Total TPG Operating Group Excluded (2) $ (110,918) $ 318,360 $ (429,278) (135) % Total Performance Allocations $ 720,106 $ 3,792,861 $ (3,072,755) (81) % ___________ (1) After the Reorganization, we retained an economic interest in performance allocations from the Growth III and Asia VI general partner entities, which entitles us to a performance allocation equal to 10%; however, we intend to allocate the full amount as performance allocation compensation expense. As such, net income available to controlling interest holders is zero for each of these funds following the Reorganization. (2) The TPG Operating Group Excluded entities’ performance allocations are not a component of net income attributable to TPG following the Reorganization; however, the TPG general partner entities continue to be consolidated by us. We transferred the rights to the performance allocations the TPG Operating Group historically would have received to RemainCo on December 31, 2021. As such, net income available to controlling interest holders will be zero for each of the TPG Operating Group Excluded entities beginning January 1, 2022. See “—Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data” which reflects the projected impact of the Reorganization. The decrease in total performance allocations for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily driven by lower realized and unrealized appreciation in TPG VII, Asia VI, Asia VII, Growth III, Growth IV, THP I, Rise I and TREP III. For the year ended December 31, 2022, our investments have generated realized and unrealized portfolio appreciation of 8% compared to 38% for the year ended December 31, 2021. As of December 31, 2022, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $4.1 billion. As of December 31, 2022, accrued performance allocations presented as investments in the Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.6 billion. Capital Interests . Capital interests income decreased by $169.5 million, or 82%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a decrease in income from our investments in TPG VII, TPG VIII, Asia VI and Asia VII in our Capital platform, TRTX in our Real Estate platform, Growth III, Growth IV and TTAD I in our Growth platform, and Rise I in our Impact platform. These decreases were partially offset by an increase in income from our investment in AAF in our Capital platform. 106 Table of Contents Expenses Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense decreased by $106.0 million, or 18%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $127.7 million decrease in bonuses for senior professionals for the year ended December 31, 2022 which, following our Reorganization and IPO, are recorded in performance allocation compensation expense. This decrease was partially offset by increases in salaries and benefits and accrued bonuses of $29.8 million and $11.0 million, respectively, driven by an increase in headcount for the year ended December 31, 2022. Equity-Based Compensation. Equity-based compensation expense increased by $627.7 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily attributable to the Reorganization and IPO, which resulted in $550.0 million of expense associated with unvested units granted prior to or in conjunction with the IPO to certain of our employees at TPG Partner Holdings, RemainCo, and the TPG Operating Group as well as $77.7 million of expense associated with RSUs granted to TPG employees and certain of our executives upon completion of our IPO in January 2022. We had no such expense during the year ended December 31, 2021. Performance Allocation Compensation. Performance allocation compensation increased by $416.6 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily attributable to the recognition of partnership distributions to our partners and professionals as compensation expense following our IPO. We had no such expense during the year ended December 31, 2021 as we were a private partnership. General, Administrative and Other. General and administrative expenses increased by $90.3 million, or 32%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a $18.4 million increase in expenses related to our fundraising activities that are ultimately reimbursable from TPG funds, a $28.8 million increase in office overhead and other, inclusive of a $20.6 million insurance policy purchased in connection with the IPO and a $26.5 million increase of other administrative expenses. Depreciation and Amortization. Depreciation and amortization increased by $11.8 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily due to the amortization of intangible assets resulting from the acquisition of NewQuest in July 2021. Interest Expense. Interest expense increased by $5.3 million, or 33%, for the year ended December 31, 2022 compared to the year ended December 31, 2021 primarily due to higher interest rates on certain borrowings. Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs decreased by $17.4 million, or 84%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily driven by a reduction in non-recurring professional services expenses as a result of business combinations associated with TPG PACE Tech Opportunities Corp. (“PACE”) and TPG Pace Solutions Corp. (“TPGS”) during the year ended December 31, 2021. Net (Losses) Gains from Investment Activities. Net losses from investment activities for the year ended December 31, 2022 were $110.1 million compared to a gain of $353.2 million for the year ended December 31, 2021. This change was primarily attributable to a gain of $122.7 million recognized on the deconsolidation of PACE, a gain of $109.9 million on the deconsolidation of TPGS, and a gain of $95.0 million recognized on the acquisition of NewQuest during the year ended December 31, 2021. Additionally, we incurred losses of $80.4 million and $25.1 million from our investments in Vacasa, Inc. and Nerdy Inc, respectively, during the year ended December 31, 2022. Following the Reorganization, we no longer recognize net gains or losses from certain strategic investments that were transferred to RemainCo on December 31, 2021. Interest, Dividends and Other. Interest, dividends and other increased by $2.7 million, or 42%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. Net Gains (Losses) from Investment Activities of Consolidated TPG Funds and Public SPACs. Net gains (losses) from investment activities of consolidated TPG Funds and Public SPACs had no activity during the year ended December 31, 2022 compared to a net gain of $23.4 million for the year ended December 31, 2021. Following certain Reorganization activities, we no longer consolidate TPEP as we do not have a controlling financial interest. 107 Table of Contents Unrealized Gains on Derivative Liabilities of Public SPACs . The $12.4 million and $211.8 million of unrealized gain on derivative instruments recognized during the year ended December 31, 2022 and 2021, respectively, were attributable to warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. The warrants held by public investors and forward purchase agreements are treated as liability instruments rather than equity instruments and subject to mark-to-market adjustments each period. Upon the consummation of acquisitions of target companies by our Public SPACs or the wind down of a Public SPAC, the associated liability will no longer be included in our Consolidated Financial Statements. Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest, dividends and other of consolidated TPG Funds and Public SPACs decreased by $3.6 million, or 35%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily related to an expense reimbursement of EUR 15.0 million on the termination of a proposed business combination, recognized by TPG Pace Beneficial Finance Corp. during the year ended December 31, 2021. These decreases were partially offset by increased interest income resulting from higher interest rates on the balance of assets held in Trust Accounts by Consolidated Public SPACs. Income Tax Expense. Income tax expense increased by $23.4 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was due to the Company now being treated as a corporation for U.S. federal and state income taxes in connection with the Reorganization and IPO, beginning in January of 2022. 108 Table of Contents Unaudited Condensed Consolidated Statements of Financial Condition (U.S. GAAP basis) December 31, 2023 2022 ($ in thousands) Assets Cash and cash equivalents $ 665,188 $ 1,107,484 Investments 6,724,112 5,329,868 Due from affiliates 418,977 202,639 Intangible assets and goodwill 1,085,587 366,381 Other assets 475,808 276,177 Assets of consolidated Public SPACs — 659,189 Total assets $ 9,369,672 $ 7,941,738 Liabilities, Redeemable Equity and Equity Debt obligations $ 945,052 $ 444,566 Due to affiliates 143,175 139,863 Accrued performance allocation compensation 4,096,052 3,269,889 Other liabilities 824,259 324,261 Liabilities of consolidated Public SPACs — 23,653 Total liabilities $ 6,008,538 $ 4,202,232 Redeemable equity from consolidated Public SPACs $ — $ 653,635 Equity Class A common stock $0.001 par value, 2,340,000,000 shares authorized (80,596,501 and 79,240,058 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively) $ 80 $ 79 Class B common stock $0.001 par value, 750,000,000 shares authorized (281,657,626 and 229,652,641 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively) 282 230 Preferred stock, $0.001 par value, 25,000,000 shares authorized (0 issued and outstanding as of December 31, 2023 and December 31, 2022) — — Additional paid-in-capital 613,476 506,639 Retained (deficit) earnings (34,681) 2,724 Other non-controlling interests 2,781,977 2,576,199 Total equity 3,361,134 3,085,871 Total liabilities, redeemable equity and equity $ 9,369,672 $ 7,941,738 Cash and cash equivalents decreased $442.3 million during the year ended December 31, 2023 primarily due to the acquisition of Angelo Gordon. The acquisition resulted in cash paid of $740.7 million, which is comprised of $270.7 million of cash on hand and $470.0 million of proceeds from drawing on our Senior Unsecured Revolving Credit Facility. This is partially offset by cash and cash equivalents acquired in the transaction of $383.9 million. Investments increased $1,394.2 million during the year ended December 31, 2023 primarily attributable the acquisition of Angelo Gordon of $1,046.4 million. Investments also increased due to net capital allocation-based income of $855.3 million, which was partially offset by net proceeds from performance allocations of $582.2 million. 109 Table of Contents Goodwill and intangible assets increased $719.2 million for the year ended December 31, 2023, primarily due to the acquisition of Angelo Gordon. As a result of the acquisition, we recognized $547.5 million of intangible assets and $205.9 million of goodwill. Debt obligations increased $500.5 million during the year ended December 31, 2023 primarily due to borrowings on our Senior Unsecured Revolving Credit Facility used to finance the Angelo Gordon acquisition. Accrued performance allocation compensation increased $826.2 million for the year ended December 31, 2023, primarily attributable the acquisition of Angelo Gordon of $745.0 million and net increases in performance fee compensation expense of $591.7 million, partially offset by settlements of performance allocation compensation of $497.8 million during the year ended December 31, 2023. Other liabilities increased $500.0 million for the year ended December 31, 2023. The majority of the change is attributable to the acquisition of Angelo Gordon which resulted in $99.9 million of lease obligations, $80.3 million of accounts payable and accrued expenses, and $83.3 million of repurchase agreement liabilities as of December 31, 2023. In addition, we recorded contingent consideration related to the acquisition valued at $156.3 million, as well as $73.8 million in amounts payable to the sellers of Angelo Gordon. Redeemable equity from consolidated Public SPACs decreased $653.6 million primarily due to the redemption of Class A ordinary shares of YTPG and AFTR during the year ended December 31, 2023. See Note 15 to our Consolidated Financial Statements. Total equity increased $275.3 million, primarily due to the Common Units granted at fair value of $233.9 million in connection with the Angelo Gordon acquisition, as well as net income for the year ended December 31, 2023 of $23.4 million offset by payments of dividends and distributions to our Class A common stockholders and to holders of non-controlling interests in subsidiaries. 110 Table of Contents Non-GAAP Financial Measures Distributable Earnings. Distributable Earnings (“DE”) is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable U.S. GAAP measure of net income. DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include (i) unrealized performance allocations and related compensation and benefit expense, (ii) unrealized investment income, (iii) equity-based compensation expense, (iv) net income (loss) attributable to non-controlling interests in consolidated entities, or (v) certain other items, such as contingent reserves. While we believe that the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of our core operating performance, the use of DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented in accordance with U.S. GAAP discussed further under “—Key Components of our Results of Operations—Results of Operations” prepared in accordance with U.S. GAAP. After-Tax Distributable Earnings . After-tax Distributable Earnings (“After-tax DE”) is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to our Class A common stock holders and Common Unit holders. After-tax DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include the items described in the definition of DE herein; however, unlike DE, it does reflect the impact of income taxes. Income taxes, for purposes of determining After-tax DE, represent the total U.S. GAAP income tax expense adjusted to include only the current tax expense (benefit) calculated on U.S. GAAP net income before income tax and includes the current payable under our Tax Receivable Agreement, which is recorded within other liabilities in our Consolidated Statements of Financial Condition. Further, the current tax expense (benefit) utilized when determining After-tax DE reflects the benefit of deductions available to the Company on certain expense items that are excluded from the underlying calculation of DE, such as equity-based compensation charges. We believe that including the amount currently payable under the Tax Receivable Agreement and utilizing the current income tax expense (benefit), as described above, when determining After-tax DE is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to shareholders. We believe that while the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of our core operating performance, the use of After-tax DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented in accordance with U.S. GAAP discussed further under “—Key Components of our Results of Operations-Results of Operations.” Fee-Related Earnings . Fee-Related Earnings (“FRE”) is a supplemental performance measure and is used to evaluate our business and make resource deployment and other operational decisions. FRE differs from net income computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts to exclude (i) realized performance allocations and related compensation expense, (ii) realized investment income from investments and financial instruments, (iii) net interest (interest expense less interest income), (iv) depreciation, (v) amortization and (vi) certain non-core income and expenses. We use FRE to measure the ability of our business to cover compensation and operating expenses from fee revenues other than capital allocation-based income. The use of FRE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. Fee-Related Revenues . Fee-related revenues is a component of FRE. Fee-related revenues is comprised of (i) management fees, (ii) fee-related performance revenues, (iii) transaction, monitoring and other fees, net, and (iv) other income. Fee-related performance revenues refers to incentive fees from perpetual capital vehicles that are: (i) measured and expected to be received on a recurring basis and (ii) not dependent on realization events from the underlying investments. Fee-related revenue differs from revenue computed in accordance with U.S. GAAP in that it excludes certain reimbursement expense arrangements. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations. 111 Table of Contents Fee-Related Expenses . Fee-related expenses is a component of FRE. Fee-related expenses differs from expenses computed in accordance with U.S. GAAP in that it is net of certain reimbursement arrangements and does not include performance allocation compensation. Fee-related expenses is used in management’s review of the business. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations. Fee-related revenues and fee-related expenses are presented separately in our calculation of non-GAAP measures in order to better illustrate the profitability of our FRE. The use of fee-related revenues and FRE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. Our calculations of DE, FRE, fee-related revenues and fee-related expenses may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers. The following table sets forth our total FRE and DE for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 ($ in thousands) Management fees $ 1,178,721 $ 929,860 $ 718,364 Fee-related performance revenues 1,642 5,182 — Transaction, monitoring and other fees, net 107,713 103,896 102,041 Other income 49,178 47,069 46,673 Fee-Related Revenues 1,337,254 1,086,007 867,078 Cash-based compensation and benefits, net 452,270 392,968 521,413 Fee-related performance compensation 1,401 — — Operating expenses, net 277,252 239,189 167,114 Fee-Related Expenses 730,923 632,157 688,527 Fee-Related Earnings $ 606,331 $ 453,850 $ 178,551 Realized performance allocations, net 74,027 282,383 999,603 Realized investment income and other, net (47,241) 42,038 92,720 Depreciation expense (6,589) (4,590) (6,775) Interest expense, net 1,401 (13,795) (14,928) Distributable Earnings $ 627,929 $ 759,886 $ 1,249,171 Income taxes (42,623) (59,623) (9,308) After-Tax Distributable Earnings $ 585,306 (1) $ 700,263 $ 1,239,863 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Fee-Related Revenues Fee-related revenues increased by $251.2 million, or 23%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily due to additional management fees of $248.9 million. 112 Table of Contents Management Fees The following table presents management fees in our platforms for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Capital $ 513,920 $ 382,992 Growth 155,410 141,735 Impact 201,271 179,742 TPG Angelo Gordon TPG AG Credit 50,477 — TPG AG Real Estate 33,589 — Real Estate 149,555 153,908 Market Solutions 74,499 71,483 Total Management Fees $ 1,178,721 (1) $ 929,860 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Management fees increased by $248.9 million, or 27%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was largely due to fee earning capital raised resulting in additional management fees of $130.9 million earned from the Capital platform, largely from the activation of TPG IX, Asia VIII and THP II in the third quarter of 2022, partially offset by a decrease of $36.7 million in Asia VII. Management fees also increased $50.5 million and $33.6 million due to the additional fees earned from TPG AG Credit and TPG AG Real Estate, respectively, which we acquired in November 2023. Management fees generated from the Impact platform increased $21.5 million, primarily due to the activation of Rise III in the second quarter of 2022. Management fees for the Growth platform increased $13.7 million primarily from additional actively invested capital in TTAD II, and the activation of LSI in the first quarter of 2023. Certain management fees totaling $41.5 million earned during the year ended December 31, 2023 were considered catch-up fees as a result of additional capital commitments from limited partners primarily related to TPG IX of $18.0 million, THP II of $8.7 million, Rise III of $6.7 million and Asia VIII in the amount of $6.3 million. Fee-related Performance Revenues The following table presents fee-related performance revenues for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) TPG AG Credit $ 1,642 $ — Real Estate — 5,182 Total Fee-Related Performance Revenues $ 1,642 (1) $ 5,182 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Fee-related performance revenues decreased $3.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. Performance revenues for the year ended December 31, 2022 related to incentive fees earned from TRTX in our Real Estate platform. 113 Table of Contents Transaction, Monitoring and Other Fees, Net The following table presents transaction, monitoring and other fees, net in our platforms for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Capital $ 2,293 $ 5,094 Growth 386 647 Impact 6,291 6,730 TPG Angelo Gordon TPG AG Credit 739 — TPG AG Real Estate 105 — Market Solutions 97,899 91,425 Total Transaction, Monitoring and Other Fees, Net $ 107,713 (1) $ 103,896 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Transaction, monitoring and other fees, net increased by $3.8 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily attributable to an increase in fees received by our Market Solutions platform as a result of increased capital markets activity among our portfolio companies involving our broker-dealer. Other Income The following table presents other income for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Former affiliate funds $ 33,141 $ 27,915 Other income 16,037 19,154 Total Other Income $ 49,178 (1) $ 47,069 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Total other income increased by $2.1 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. Fee-Related Expenses Fee-related expenses increased by $98.8 million, or 16%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, comprised primarily of higher cash-based compensation and benefits, net of $59.3 million and increased operating expenses, net of $38.1 million. 114 Table of Contents Cash-based Compensation and Benefits, Net The following table presents cash-based compensation and benefits, net for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Salaries $ 237,165 $ 197,587 Bonuses 212,294 196,083 Benefits and other 83,206 71,061 Reimbursements (80,395) (71,764) Total Cash-Based Compensation and Benefits, Net $ 452,270 (1) $ 392,968 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Total cash-based compensation and benefits, net increased by $59.3 million, or 15%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change was primarily due to an increase in salaries of $39.6 million and benefits and other of $12.1 million as a result of headcount growth due to the acquisition of TPG Angelo Gordon. Total cash-based compensation and benefits, net also increased due to an increase of $16.2 million in bonuses, primarily due to bonus expense for TPG Angelo Gordon. These increases were partially offset by an increase in compensation reimbursements related to services provided to certain fund and portfolio companies of $8.6 million. Fee-related Performance Compensation The following table presents fee-related performance compensation for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) TPG AG Credit $ 1,407 $ — TPG AG Real Estate (6) — Total Fee-related Performance Compensation $ 1,401 (1) $ — ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Total fee-related performance compensation increased by $1.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. Operating Expenses, Net Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to investment funds that we manage and monitoring services provided to our portfolio companies. Operating expenses, net were $277.3 million and $239.2 million for the year ended December 31, 2023 and 2022, respectively, with the increase of $38.1 million primarily due to an increase in professional fees of $22.9 million, travel expenses of $8.2 million, and other administrative expenses of $7.0 million. 115 Table of Contents Realized Performance Allocations, Net The following table presents realized performance allocations, net from our platforms for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Capital $ 54,513 $ 250,382 Growth 2,139 13,681 Impact 799 15,961 TPG Angelo Gordon TPG AG Credit 5,552 — TPG AG Real Estate 389 — Real Estate 4,076 1,110 Market Solutions 6,559 1,249 Total Realized Performance Allocations, Net $ 74,027 (1) $ 282,383 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Realized performance allocations, net of $74.0 million for the year ended December 31, 2023 were largely generated from realizations of $39.5 million from TPG AAF and $14.9 million from TPG VIII in the Capital platform, $6.6 million from TPEP in the Market Solutions platform, and $4.1 million from TREP III within the Real Estate platform. Realizations also include $5.6 million primarily from MVP Fund in TPG AG Credit. This activity included realizations sourced from portfolio companies such as Creative Artists Agency, DirecTV and Alloy Properties. Realized Investment Income and Other, Net The following table presents realized investment income and other, net for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Investments in TPG funds $ 27,543 $ 82,174 Non-core income (expense) (74,784) (40,136) Total Realized Investment Income and Other, Net $ (47,241) (1) $ 42,038 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Realized investment income and other, net decreased by $89.3 million, or 212%, due to lower realizations of $54.6 million from investments in funds we manage, plus additional non-core expenses of $34.6 million primarily driven by the Acquisition. Depreciation Depreciation expense increased $2.0 million, or 44%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. 116 Table of Contents Interest Expense, Net The following table presents interest expense, net for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 ($ in thousands) Interest expense $ 38,531 $ 21,601 Interest (income) (39,932) (7,806) Interest Expense, Net $ (1,401) (1) $ 13,795 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. The decrease in interest expense, net during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to higher interest income from interest earned on cash and cash equivalents, partially offset by higher interest rates on certain borrowings and increased interest expense on draws under our Senior Unsecured Revolving Credit Facility to partially fund the Acquisition. Distributable Earnings The decrease in DE for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to lower realized performance allocations, net, partially offset by a 34% increase in our Fee-Related Earnings. Income Taxes Income taxes decreased $17.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, driven by lower realized performance allocations, net. Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Fee-Related Revenues Fee-related revenues increased by $218.9 million, or 25%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily due to additional management fees of $211.5 million and fee-related performance revenues of $5.2 million. Management Fees The following table presents management fees in our platforms for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Capital $ 382,992 $ 335,376 Impact 179,742 106,096 Real Estate 153,908 70,442 Growth 141,735 142,388 Market Solutions 71,483 64,062 Total Management Fees $ 929,860 $ 718,364 Management fees increased by $211.5 million, or 29%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was largely due to fee earning capital raised resulting in additional management fees of $83.5 million earned from the Real Estate platform, primarily as a result of the activation of TREP IV during the first quarter of 2022. Management fees generated from the Impact platform increased $73.6 million, due to the activation of 117 Table of Contents Rise Climate in the third quarter of 2021, and Rise III in the second quarter of 2022. The Capital platform had an increase of $47.6 million in management fees, largely from the activation of both TPG IX and Asia VIII in the third quarter of 2022, partially offset by a decrease of $30.0 million in TPG VII. The Market Solutions platform also contributed $7.4 million to the overall management fee increase primarily due to the acquisition of NewQuest in July 2021. Certain management fees earned during the year ended December 31, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise Climate and TTAD II in the amount of $2.8 million. Fee-related Performance Revenues The following table presents fee-related performance revenues for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Real Estate $ 5,182 $ — Total Fee-Related Performance Revenues $ 5,182 $ — Fee-related performance revenues increased $5.2 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, attributable to the Real Estate platform driven by TRTX incentive fees. Transaction, Monitoring and Other Fees, Net The following table presents transaction, monitoring and other fees, net in our platforms for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Market Solutions $ 91,425 $ 91,737 Impact 6,730 4,264 Capital 5,094 5,545 Growth 647 495 Total Transaction, Monitoring and Other Fees, Net $ 103,896 $ 102,041 Transaction, monitoring and other fees, net increased by $1.9 million, or 2%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. Other Income The following table presents other income for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Former affiliate funds $ 27,915 $ 38,942 Other income 19,154 2,570 Other investments — 5,161 Total Other Income (1) $ 47,069 $ 46,673 ___________ (1) Includes other income of $13.5 million during the year ended December 31, 2021, generated by certain other investments that were transferred to RemainCo as Excluded Assets on December 31, 2021. Accordingly, there was no impact for the year ended December 31, 2022. 118 Table of Contents Total other income increased by $0.4 million, or 1%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change primarily resulted from an increase in income earned from RemainCo under the RemainCo administrative agreement, offset by the transfer of certain of our strategic investments to RemainCo on December 31, 2021. Fee-Related Expenses Fee-related expenses decreased by $56.4 million, or 8%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, comprised primarily of lower cash-based compensation and benefits, net of $128.4 million partially offset by increased operating expenses, net of $72.1 million. Cash-Based Compensation and Benefits, Net The following table presents cash-based compensation and benefits, net for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Salaries $ 197,587 $ 169,552 Bonuses (1) 196,083 342,276 Benefits and other 71,061 71,065 Reimbursements (71,764) (61,480) Total Cash-Based Compensation and Benefits, Net $ 392,968 $ 521,413 ___________ (1) Includes bonus compensation of $140.3 million during the year ended December 31, 2021 for TPG senior professionals. Total cash-based compensation and benefits, net decreased by $128.4 million, or 25%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This change was primarily due to a decrease in bonuses of $146.2 million as a result of certain TPG senior professionals no longer receiving discretionary bonuses, and increased compensation reimbursements related to services provided to certain fund and portfolio companies. The decrease was partially offset by increased salaries of $28.0 million driven by firm headcount expansion. Operating Expenses, Net Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to TPG funds and monitoring services provided to our portfolio companies. Operating expenses, net were $239.2 million and $167.1 million for the year ended December 31, 2022 and 2021, respectively, with the increase of $72.1 million primarily due to an increase in professional fees of $26.1 million, travel expenses of $19.8 million, and other administrative expenses of $26.3 million. 119 Table of Contents Realized Performance Allocations, Net The following table presents realized performance allocations, net from our platforms for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Capital $ 250,382 $ 725,171 Impact 15,961 568 Growth 13,681 234,025 Real Estate 1,110 27,707 Market Solutions 1,249 12,132 Total Realized Performance Allocations, Net (1) $ 282,383 $ 999,603 ___________ (1) Includes realized performance allocation, net of $794.9 million during the year ended December 31, 2021 attributable to the TPG Operating Group Excluded entities. As previously described herein, these entities’ performance allocations are not a component of distributable earnings beginning in the fiscal year ending December 31, 2022. Realized performance allocations, net of $282.4 million for the year ended December 31, 2022 were largely generated from realizations of $191.8 million from TPG VII, $25.9 million from TPG VIII and $19.4 million from Asia VII within the Capital platform. Realizations within the Impact platform of $16.0 million were generated from Rise I. This activity consisted of realizations sourced from portfolio companies including McAfee, Wind River, Kelsey-Seybold Clinics, Greencross, and DirecTV. Realized performance allocations, net of $999.6 million for the year ended December 31, 2021 were largely generated from realizations in TPG VII of $501.6 million, TPG VI of $173.5 million and Asia VI of $28.4 million in the Capital platform. Realizations from the Growth platform were generated from Growth III of $131.2 million, Growth II of $35.8 million, Biotech III of $27.8 million, TSI of $24.0 million and TTAD I of $11.2 million. Realizations from the Real Estate platform were generated from Real Estate II of $24.5 million. The activity consisted of realizations sourced from portfolio companies including Astound, Kindred at Home, Transplace Holdings, Creative Artists Agency, DirecTV and Medical Solutions. Realized Investment Income and Other, Net The following table presents realized investment income and other, net for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Investments in TPG funds $ 82,174 $ 111,151 Other investments — 23,647 Non-core income (expense) (40,136) (42,078) Total Realized Investment Income and Other, Net (1) $ 42,038 $ 92,720 ___________ (1) Includes realized investment income and other, net of $26.0 million during the year ended December 31, 2021 generated by certain other investments that were transferred to RemainCo as of December 31, 2021. Realized investment income and other, net decreased by $50.7 million, or 55%, resulting from lower realizations of $29.0 million from our investments in TPG funds and the transfer of certain of our strategic investments to RemainCo on December 31, 2021. 120 Table of Contents Depreciation Depreciation expense decreased $2.2 million, or 32%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. Interest Expense, Net The following table presents interest expense, net for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 ($ in thousands) Interest expense $ 21,601 $ 15,728 Interest (income) (7,806) (800) Interest Expense, Net $ 13,795 $ 14,928 The decrease in interest expense, net during the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to higher interest income from interest earned on cash and cash equivalents, partially offset by higher interest rates on certain borrowings. Distributable Earnings The decrease in DE for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to lower realized performance allocations, net, partially offset by a 154% increase in our Fee-Related Earnings. Income Taxes Income taxes increased $50.3 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in income taxes is a result of the Company being subject to federal income taxes subsequent to the Reorganization and IPO. Unaudited Non-GAAP Balance Sheet Measures Book assets, book liabilities and net book value are non-GAAP performance measures of TPG Operating Group’s assets, liabilities and equity on a deconsolidated basis which reflects our investments in subsidiaries as equity method investments. Additionally, the book assets, book liabilities and net book value include the tax assets and liabilities of TPG Inc. We utilize these measures to assess the unrealized value of our book assets after deducting for book liabilities as well as assess our indirect interest in accrued performance allocations from our TPG funds and our co-investments in TPG funds and third-party investments. We believe these measures are useful to investors as they provide additional insight into the net assets of the TPG Operating Group on a deconsolidated basis. These non-GAAP financial measures should not be considered as a substitute for, or superior to, similar financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may differ from the calculations of other alternative asset managers and, as a result, may not be comparable to similar measures presented by other companies. Refer to “––Reconciliation to U.S. GAAP Measures” for reconciliations of the Consolidated Statements of Financial Condition to the non-GAAP Balance Sheet. 121 Table of Contents The following table sets forth our non-GAAP book assets, book liabilities and net book value as of December 31, 2023 and December 31, 2022: December 31, 2023 2022 ($ in thousands) Book Assets Cash and cash equivalents $ 105,480 $ 691,687 Net accrued performance 891,455 642,519 Investments in funds 877,802 576,814 Intangible assets and goodwill 1,007,899 274,481 Other assets 679,638 314,926 Total Book Assets $ 3,562,274 $ 2,500,427 Book Liabilities Accounts payable, accrued expenses and other $ 296,147 $ 48,183 Debt obligations 945,052 444,566 Total Book Liabilities $ 1,241,199 $ 492,749 Net Book Value $ 2,321,075 $ 2,007,678 During the year ended December 31, 2023, net book value increased primarily due to vested equity interest of $233.9 million recognized in connection with the acquisition of Angelo Gordon. Net book value also increased due to increases in net accrued performance and investments in funds, primarily associated with TPG VIII, Rise Climate, Growth V, Growth IV and THP I. This was partially offset by the distribution of proceeds received during the year ended December 31, 2023 from TPG AAF and TPG VIII. 122 Table of Contents Reconciliation to U.S. GAAP Measures The following tables reconcile the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP to non-GAAP financial measures for the years ended December 31, 2023, 2022 and 2021: Revenue Year Ended December 31, 2023 2022 2021 ($ in thousands) GAAP Revenue $ 2,389,911 $ 2,002,887 $ 4,976,387 Capital-allocation based income (855,285) (756,252) (3,998,483) Expense reimbursements (185,554) (166,090) (132,810) Investment (income) loss and other (11,818) 5,462 21,984 Fee-Related Revenues $ 1,337,254 $ 1,086,007 $ 867,078 Expenses Year Ended December 31, 2023 2022 2021 ($ in thousands) GAAP Expenses $ 2,363,803 $ 1,944,799 $ 916,566 Depreciation and amortization expense (47,673) (32,990) (21,223) Interest expense (38,528) (21,612) (16,291) Expenses related to consolidated TPG Funds and Public SPACs (1,053) (3,316) (20,764) Expense reimbursements (185,554) (166,090) (132,810) Performance allocation compensation (591,676) (416,556) — Equity-based compensation (654,922) (627,714) — Acquisition success fees (20,000) — — Non-core expenses and other (93,474) (44,364) (36,951) Fee-Related Expenses $ 730,923 $ 632,157 $ 688,527 123 Table of Contents Net income Year Ended December 31, 2023 2022 2021 ($ in thousands) Net income (loss) $ 23,385 $ (56,235) $ 4,655,997 Net income attributable to redeemable interests in Public SPACs (12,044) (14,648) (155,131) Net income attributable to non-controlling interests in consolidated TPG Funds — — (19,287) Net income attributable to other non-controlling interests (23,662) (11,293) (2,081,170) Amortization expense 26,968 14,153 14,195 Equity-based compensation 652,814 634,759 — Unrealized performance allocations, net (112,250) 117,924 (856,505) Unrealized investment (income) loss (11,836) 48,796 (295,390) Unrealized gain on derivatives (59) (1,119) (20,626) Income taxes 18,028 (26,454) — Acquisition success fees 20,000 — — Non-recurring and other 3,962 (5,620) (2,220) After-tax Distributable Earnings $ 585,306 $ 700,263 $ 1,239,863 Income taxes 42,623 59,623 9,308 Distributable Earnings $ 627,929 $ 759,886 $ 1,249,171 Realized performance allocations, net (74,027) (282,383) (999,603) Realized investment loss (income) and other, net 47,241 (42,038) (92,720) Depreciation expense 6,589 4,590 6,775 Interest expense, net (1,401) 13,795 14,928 Fee-Related Earnings $ 606,331 $ 453,850 $ 178,551 124 Table of Contents Balance sheet The following tables reconcile the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP to non-GAAP financial measures as of December 31, 2023 and 2022: December 31, ($ in thousands) 2023 2022 Total GAAP Assets $ 9,369,672 $ 7,941,738 Impact of consolidated Public SPACs Cash and cash equivalents — (5,097) Assets held in Trust Account — (653,635) Due from affiliates — (45) Other assets — (412) Subtotal for consolidated Public SPACs — (659,189) Impact of other consolidated entities Cash and cash equivalents (559,708) (415,797) Due from affiliates (346,910) (211,097) Investments (4,954,855) (4,110,535) Intangible assets and goodwill (77,688) (91,900) Other assets (285,406) (42,605) Subtotal for other consolidated entities (6,224,567) (4,871,934) Reclassification adjustments (1) Restricted cash (13,183) (13,166) Due from affiliates (72,067) 8,458 Investments (1,769,257) (1,219,333) Net accrued performance 891,455 642,519 Investments in funds 877,802 576,814 Other assets 502,419 94,520 Subtotal for reclassification adjustments 417,169 89,812 Total Book Assets $ 3,562,274 $ 2,500,427 125 Table of Contents December 31, ($ in thousands) 2023 2022 Total GAAP Liabilities $ 6,008,538 $ 4,202,232 Impact of consolidated Public SPACs Accounts payable and accrued expenses — (236) Derivative liabilities of Public SPACs — (667) Deferred underwriting — (22,750) Subtotal for consolidated Public SPACs — (23,653) Impact of other consolidated entities Accounts payable and accrued expenses (167,235) (90,685) Due to affiliates (137,479) (134,562) Accrued performance allocation compensation (4,096,052) (3,269,889) Other liabilities (377,727) (206,276) Subtotal for other consolidated entities (4,778,493) (3,701,412) Reclassification adjustments (1) Accounts payable and accrued expenses 291,586 40,698 Due to affiliates (5,696) (5,301) Other liabilities (274,736) (19,815) Subtotal for reclassification adjustments 11,154 15,582 Total Book Liabilities $ 1,241,199 $ 492,749 Total GAAP redeemable equity from consolidated Public SPACs $ — $ 653,635 Impact of consolidated TPG Funds and Public SPACs (2) — (653,635) Total Book redeemable equity from consolidated Public SPACs $ — $ — Total GAAP Equity $ 3,361,134 $ 3,085,871 Impact of consolidated Public SPACs — 18,099 Impact of other consolidated entities (1,446,074) (1,170,522) Reclassification adjustments (1) 406,015 74,230 Net Book Value $ 2,321,075 $ 2,007,678 ___________ (1) Certain amounts were reclassified to reflect how we utilize our non-GAAP balance sheet measures. We separately analyze our investments on a non-GAAP basis between accrued performance fees and other investments, which consists of co-investments into our funds and other equity method investments. Additionally, we reclassified U.S. GAAP financial statement amounts due from affiliates and certain amounts within other assets, net for non-GAAP purposes and reclassified U.S. GAAP financial statement amounts due to affiliates and other liabilities within accounts payable, accrued expenses and other for non-GAAP purposes. (2) The $653.6 million redeemable equity represents ownership interest in each SPAC that is not owned by the TPG Operating Group and is presented separately from U.S. GAAP partners’ capital in the accompanying Consolidated Financial Statements. 126 Table of Contents SUPPLEMENTAL UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION AND OTHER DATA Defined terms included below have the same meaning as terms defined and included elsewhere in this Form 10-K. The following unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 depicts the accounting required under U.S. GAAP for the Acquisition, the related borrowing under the Senior Unsecured Revolving Credit Facility and certain changes in compensation arrangements assuming they occurred on January 1, 2023. An unaudited pro forma condensed combined statement of financial condition is not presented because the Acquisition, the related borrowing under the Senior Unsecured Revolving Credit Facility and certain changes in compensation arrangements are fully reflected in the consolidated statement of financial condition of TPG Inc. as of December 31, 2023 in this Annual Report on Form 10-K. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. Management believes this pro forma presentation is meaningful as the Acquisition is a material acquisition, which occurred close to year-end. Pursuant to the Transaction Agreement, TPG purchased the Acquired Interests for a combination of cash, vested Common Units, the Aggregate Annual Cash Holdback Amount and the portion of the Earnout Payment not considered compensatory under U.S. GAAP. Total consideration in accordance with U.S. GAAP was $1,145.9 million (“Purchase Price”) as described in Note 2. All Common Units issued were accompanied by an equal number of Class B Shares. TPG funded the cash consideration for the Acquisition by drawing $470.0 million under its Senior Unsecured Revolving Credit Facility and paid the remainder with cash on hand. In addition to the Purchase Price, TPG issued to certain Angelo Gordon partners unvested Common Units and RSUs under the TPG Omnibus Plan, in each case as reflected in the Transaction Agreement. The issuance of the unvested Common Units and RSUs is considered compensation under U.S. GAAP, and is subject to ongoing service requirements intended to promote retention. Additionally, following the consummation of the Acquisition, TPG aligned the compensation structure for Angelo Gordon partners with TPG’s, which resulted in replacing some historically received cash-based compensation with a greater share of performance allocation compensation. The unaudited pro forma condensed combined financial information is being furnished solely for informational purposes and is not necessarily indicative of the results of operations that might have been achieved for the period indicated, nor is it necessarily indicative of the future results of the combined company. It does not reflect potential revenue synergies or cost savings expected to be realized from the Acquisition. No assurance can be given that cost savings or synergies will be realized at all. The adjustments contained in the unaudited pro forma condensed combined financial information are based on currently available information and assumptions that we believe are reasonable in order to reflect, on a pro forma basis, the effect of the Acquisition, the financing and the change in compensation arrangements for Angelo Gordon subsequent to the closing of the Acquisition. Such assumptions include, but are not limited to, the Purchase Price allocation of Angelo Gordon’s assets acquired and liabilities assumed based on fair value and post-combination compensation expense. The unaudited pro forma condensed combined financial information does not project TPG’s results of operations for any future period or date. The unaudited pro forma condensed consolidated financial information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes included elsewhere in this Annual Report on Form 10-K. 127 Table of Contents Unaudited Pro Forma Condensed Combined Statement of Operations and Other Data For the Year Ended December 31, 2023 Historical For the Year Ended December 31, 2023 For the period January 1 through October 31, 2023 ($ in thousands, except share and per share amounts) TPG Inc. Angelo Gordon Transaction Accounting Adjustments Notes Transaction Accounting Compensation Adjustments Notes Pro Forma Combined Revenues Fees and other $ 1,534,626 $ 483,413 $ (464) 3 (A), (D) $ — $ 2,017,575 Capital allocation-based income (loss) 855,285 173,329 (1,046) 3 (A) — 1,027,568 Total revenues 2,389,911 656,742 (1,510) — 3,045,143 Expenses Compensation and benefits: Cash-based compensation and benefits 547,377 338,226 — (92,720) 3 (J) 792,883 Equity-based compensation 654,922 13,438 — 267,507 3 (H) 935,867 Performance allocation compensation 591,676 83,337 — 52,880 3 (I) 727,893 Total compensation and benefits 1,793,975 435,001 — 227,667 2,456,643 General, administrative and other 482,574 245,116 839 3 (A), (E) (4,887) 3 (I) 723,642 Depreciation and amortization 47,673 8,315 70,300 3 (B) — 126,288 Interest expense 38,528 5,776 23,505 3 (C) — 67,809 Expenses of consolidated Public SPACs and Investment Funds: Interest expense — 50,450 (50,450) 3 (A) — — General, administrative and other — 956 (956) 3 (A) — — Other 1,053 — — — 1,053 Total expenses 2,363,803 745,614 43,238 222,780 3,375,435 Investment income Income (loss) from investments: Net gains (losses) from investment activities 6,564 (3,736) — — 2,828 Interest, dividends and other 42,622 17,584 — — 60,206 Investment income of consolidated Public SPACs and Investment Funds: Unrealized gains (losses) on derivative liabilities of Public SPACs 667 — — — 667 Net gains (losses) from consolidated fund investment activities — (12,148) 12,148 3 (A) — — Interest, dividends and other 7,692 64,855 (64,855) 3 (A) — 7,692 Total investment income (loss) 57,545 66,555 (52,707) — 71,393 Income (loss) before income taxes 83,653 (22,317) (97,455) (222,780) (258,899) Income tax expense 60,268 4,412 (8,266) 3 (F) (10,174) 3 (F) 46,240 Net (loss) income 23,385 (26,729) (89,189) (212,606) (305,139) Less: Net income attributable to redeemable equity in Public SPACs 12,044 — — — 12,044 Net loss attributable to non-controlling interests in TPG Operating Group (92,411) — (88,245) 3 (G) (178,547) 3 (H), (I) (359,203) Net income (loss) attributable to other non-controlling interests 23,662 (1,332) 1,332 3 (G) — 23,662 Net income attributable to TPG Inc./controlling interest $ 80,090 $ (25,397) $ (2,276) $ (34,059) $ 18,358 Pro forma net income (loss) per share data: Net income available to Class A common stock per share Basic $ 0.89 $ 0.17 Diluted $ (0.04) $ (0.77) Weighted-average shares of Class A common stock outstanding Basic 80,334,871 80,596,501 Diluted 317,944,496 362,254,127 128 Table of Contents Notes to Unaudited Pro Forma Condensed Combined Financial Information Note 1 – Basis of Presentation The unaudited pro forma condensed combined financial information is derived from TPG’s and Angelo Gordon’s historical audited and unaudited consolidated financial statements and depicts the accounting for the Acquisition using the acquisition method of accounting in accordance with ASC 805, Business Combinations , with TPG being deemed the accounting acquirer. ASC 805 references fair value, as defined under ASC 820, Fair Value Measurements and Disclosures . Fair value determinations are inherently subjective, and reasonable persons evaluating the same facts and circumstances may develop different assumptions and arrive at different estimates. The accounting for the related financing and the change in compensation arrangements is depicted under ASC 835, Interest, and ASC 718, Compensation - Stock Compensation, respectively . Note 2 – Purchase Price The following table provides additional information on the total Purchase Price (in thousands): Cash (1) $ 740,703 Amounts payable to seller (2) 18,845 Common Units (3) 233,894 Fair value of Aggregate Annual Cash Holdback Amount (4) 125,158 Fair value of Earnout Payment (5) 27,315 Total Purchase Price $ 1,145,915 _________________ 1. Represents the closing cash consideration of $740.7 million which is comprised of $270.7 million of cash on hand and $470.0 million of proceeds from drawing on the Company’s Senior Unsecured Revolving Credit Facility. Out of the closing cash consideration of $740.7 million, $100.0 million was held in escrow on behalf of the sellers. 2. Represents the expected difference between the Estimated Cash Consideration paid at closing and the Final Cash Consideration to be determined no later than 120 days from closing in accordance with the terms of the Transaction Agreement. 3. Represents the fair value of approximately 9.2 million vested Common Units granted to the Angelo Gordon partners upon consummation of the Acquisition. The fair value of Common Units is based on a $28.18 closing price for the shares of Class A common stock on the Acquisition Date, adjusted for a discount for lack of marketability. Approximately 43.8 million unvested Common Units and 8.4 million RSUs available to be granted in connection with the Acquisition were considered compensatory under U.S. GAAP and not part of the Purchase Price. 4. Represents the estimated fair value of the Aggregate Annual Cash Holdback Amount of up to $150.0 million, which is payable in three equal annual installments of $50.0 million, subject to the absence of promote shortfall in each respective calendar year (2024, 2025, and 2026). The estimated fair value of $125.2 million, reflected as contingent consideration, was determined using a present value approach. Inputs to fair value include the present value period and the discount rate applied to the annual payments. 5. Represents the estimated fair value of the non-compensatory portion of the Earnout Payment expected to be paid in the form of cash and vested Common Units to Angelo Gordon partners upon satisfaction of certain FRR targets during the Measurement Period. This amount, reflected as contingent consideration, was determined using a multiple probability simulation approach. Inputs to the fair value include probability adjusted FRR amounts and FRR target thresholds. The compensatory portion of the Earnout Payment to the Angelo Gordon partners is treated as post-combination compensation expense, as services are required from such partners post-Closing. The total Purchase Price was allocated to the fair value of assets acquired and liabilities assumed as of the Acquisition Date, with the excess Purchase Price recorded as goodwill. A third-party valuation specialist assisted the Company with the fair value estimates for the assets acquired and liabilities assumed. As the Acquisition Date was close to December, 31, 2023, the purchase accounting analysis is subject to subsequent adjustments that are identified through the measurement period, which is limited to one year from the Acquisition Date. 129 Table of Contents Note 3 - Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Statement of Operations (A) Reflects statement of operations activities that will not continue for the combined company, including: 1. Removal of amounts related to Angelo Gordon’s CLOs that were deconsolidated in Angelo Gordon’s unaudited consolidated financial statements as of June 30, 2023 in accordance with the terms of the Transaction Agreement. Such activities include: i. Removal of interest expense of $50.5 million, general, administrative and other of $1.0 million and total net investment income of $52.7 million for the year ended December 31, 2023. ii. Recognition of $3.0 million in management fee income (before the management fee reduction adjustment in Note (D)) and $1.0 million of capital allocation-based loss for the year ended December 31, 2023. 2. Removal of $1.3 million recorded within Angelo Gordon’s general, administrative and other expenses, related to an insurance policy for a founder partner of Angelo Gordon that did not continue after closing. (B) The following table presents the amortization expense of the acquired finite lived intangible assets following the consummation of the Acquisition (refer to Note 3 to our Consolidated Financial Statements for estimated fair values and useful lives): ($ in thousands) Year Ended December 31, 2023 Trade name $ 2,818 Technology 11,500 Acquired carried interest 30,615 Investment management agreements 34,761 Non-compete agreements 4,667 Less: Related intangible amortization recorded within historical TPG financials: (14,061) Total amortization pro forma adjustment $ 70,300 (C) Reflects an adjustment to interest expense of $25.2 million for the year ended December 31, 2023 related to the $470.0 million draw on the Company’s Senior Unsecured Revolving Credit Facility using an estimated effective interest rate of 6.54% per annum based on the terms of the facility. The effective interest rate is based on the one-month SOFR plus 110 basis points. The portion of historical unused commitment fee was reversed, partially offsetting the increase in interest expense. A 0.25% change in the interest rate of the Senior Unsecured Revolving Credit Facility would cause a corresponding increase or decrease in interest expense of $1.2 million for the year ended December 31, 2023. This adjustment also reflects the removal of interest expense of $1.7 million for the year ended December 31, 2023 as a result of the repayment and termination of an Angelo Gordon credit facility prior to closing. (D) Represents the reduction of management fee income related to a certain fund where TPG did not acquire 100% of the on-going management fee stream. This arrangement results in a reduction of management fees of $3.5 million for the year ended December 31, 2023. (E) Represents the net increase of Angelo Gordon lease expense of $2.1 million for the year ended December 31, 2023, as a result of remeasuring Angelo Gordon’s right of use asset and lease liability balances in conjunction with the Acquisition. (F) TPG Operating Group has been and is expected to continue to be treated as partnerships for U.S. federal and state income tax purposes. Following the Acquisition, the income from the Acquired Interests allocable to TPG Inc. from its ownership interest in the TPG Operating Group, is subject to U.S. federal income taxes and local income taxes. 130 Table of Contents As a result, the unaudited pro forma condensed combined financial information reflects adjustments to income tax expense to incorporate the income tax effects in connection with the additional allocable income from the Acquired Interests and the transaction accounting adjustments attributable to TPG Inc. at a blended statutory income tax rate of 23.0%. The blended statutory income tax rate was calculated on a pro forma basis, assuming the U.S. federal rate currently in effect of 21% and the statutory income tax rates applicable to each state and local jurisdiction where we estimate our income will be taxable. The applicable blended statutory tax rate used for the unaudited pro forma condensed combined financial information will likely vary from the actual effective tax rates in future periods subsequent to the Acquisition. The following table summarizes pro forma income tax expense associated with Transaction Accounting Adjustments: ($ in thousands) Year Ended December 31, 2023 Additional allocable income from the Acquired Interests $ (25,397) Transaction Accounting Adjustments attributable to TPG Inc. (10,542) Additional net income attributable to TPG Inc. (35,939) TPG Inc. effective tax rate 23.0 % Total income tax expense pro forma adjustment associated with Transaction Accounting Adjustments $ (8,266) The following table summarizes pro forma income tax expense associated with Transaction Accounting Compensation Adjustments: ($ in thousands) Year Ended December 31, 2023 Transaction Accounting Compensation Adjustments attributable to TPG Inc. $ (44,234) TPG Inc. effective tax rate 23.0 % Total income tax expense pro forma adjustment associated with Transaction Accounting Compensation Adjustments $ (10,174) (G) For purposes of the unaudited pro forma condensed combined statement of operations, TPG owns approximately 25.31% of the Common Units, while non-controlling interest holders of the TPG Operating Group, including former Angelo Gordon partners who received Common Units, own the remaining 74.69% for the year ended December 31, 2023. The following table presents the calculation of the pro forma income attributable to other non-controlling interests in the TPG Operating Group: ($ in thousands) Year Ended December 31, 2023 Loss before provision for income taxes $ (258,899) Less: Provision for local and foreign income taxes 64,680 Net income attributable to redeemable equity in Public SPACs 12,044 Allocable Income (335,623) Less: Net loss attributable to non-controlling interest in TPG Operating Group and its consolidated subsidiaries (359,203) Net income attributable to other non-controlling interests 23,662 TPG Inc.’s income before provision for income taxes in the TPG Operating Group (82) Provision for income taxes (18,440) Net income attributable to TPG Inc. $ 18,358 131 Table of Contents In order to reflect the net loss attributable to non-controlling interests in TPG Operating Group and to adjust historical allocations of loss to non-controlling interests for Angelo Gordon, we made pro forma adjustments of $88.2 million and $1.3 million, respectively, for the year ended December 31, 2023. Transaction Accounting Adjustment - Compensation Adjustments As described in the summary of the Acquisition above, TPG issued unvested Common Units and RSUs to Angelo Gordon partners that are considered compensatory under U.S. GAAP and are not included in the Purchase Price. Such offering of equity instruments is considered a separate transaction entered into between TPG and Angelo Gordon and is therefore presented separately from the Acquisition. (H) At Closing, TPG issued to certain partners approximately 43.8 million unvested Common Units. TPG also granted approximately 7.0 million RSUs to certain partners and professionals out of a pool of 8.4 million RSUs. The unvested Common Units and RSUs were determined to be compensatory for the combined company. The unvested Common Units and RSUs will generally vest over five years, subject to the recipient’s continued provision of services to the combined company through the vesting date. A total grant date fair value of $1,110.4 million for the unvested Common Units will be recognized as post-combination compensation expense during the periods in which the Angelo Gordon partners provide services. The grant date fair value of the unvested Common Units is based on the same inputs as the vested Common Units as detailed in Note 2. The issuance of such unvested Common Units results in the recognition of an additional $186.9 million of compensation expense for year ended December 31, 2023. A total grant date fair value of $201.8 million for the RSUs will be recognized as post-combination compensation expense during the periods in which the Angelo Gordon partners and employees provide services. The grant date fair value of the RSUs is based on the closing price for the shares of Class A common stock on the grant date. The RSU grants result in the recognition of an additional $31.9 million of compensation expense for the year ended December 31, 2023. Additionally, post-combination expense is recognized for the portion of the Earnout Payment that requires provision of on-going services from Angelo Gordon partners. As the Earnout Payment contains both a performance condition and a requisite service period, the Company recognizes compensation expense using the accelerated attribution method. The compensatory portion of the Earnout Payment results in the recognition of an additional $62.1 million of compensation expense for the year ended December 31, 2023. Angelo Gordon historical equity-based compensation of $13.4 million for the year ended December 31, 2023 is reversed. (I) Reflects the additional performance allocation income that is attributed to certain partners of Angelo Gordon as a result of an additional 30% increase in their share of performance allocations. Approximately $52.9 million for the year ended December 31, 2023 is reflected as additional performance allocation compensation allocated to those Angelo Gordon partners and professionals. Within this amount, approximately $4.9 million represents cash amounts paid to certain legacy interest holders of Angelo Gordon, which were reflected within General, administrative and other expenses during the year ended December 31, 2023. (J) Reflects the reduction of cash-based bonuses that were historically paid to certain Angelo Gordon partners and professionals and reflected within compensation and benefits, net. After the Acquisition, the share of performance allocations to certain Angelo Gordon partners and professionals increased to approximately 80%. Additionally, share-based compensation was granted to such partners in the form of unvested Common Units (as discussed in Note (H). The reduction of cash-based bonuses amounts to $92.7 million for year ended December 31, 2023. 132 Table of Contents Note 4 - Earnings Per Share The following table presents a reconciliation of the numerator and denominator used to compute pro forma basic and diluted net income (loss) per share (in thousands, except share and per share data): Year Ended December 31, 2023 Pro forma basic net income per share: Numerator: Net loss $ (305,139) Less: Net income attributable to redeemable equity in Public SPACs 12,044 Net loss attributable to non-controlling interests in TPG Operating Group (359,203) Net income attributable to other non-controlling interests 23,662 Net income attributable to Class A Common Stockholders prior to distributions 18,358 Reallocation of earnings to unvested participating restricted stock units(a) (5,024) Net income attributable to Class A Common Stockholders - Basic 13,334 Reallocation of loss from participating securities assuming exchange of Common Units (291,293) Net loss attributable to Class A Common Stockholders - Diluted $ (277,959) Denominator: Class A Common Stock outstanding - Basic (1) 80,596,501 Exchange of Common Units to Class A Common Stock (2) 281,657,626 Shares of Common Stock Outstanding - Diluted 362,254,127 Net income (loss) available to Class A common stock per share Basic $ 0.17 Diluted $ (0.77) _________________ 1. Represents the Class A Common Stock outstanding at Transaction closing. 2. The assumed exchange of Common Units to Class A Common Stock includes closing Common Units of 228.7 million and 53.0 million vested and unvested Common Units granted to the Angelo Gordon partners upon consummation of the Acquisition. In computing the dilutive effect, if any, that share-based awards would have on earnings per share, TPG considers the reallocation of net income between holders of its Class A Shares and non-controlling interests. 133 Table of Contents Unaudited Pro Forma Non-GAAP Financial Measures Distributable Earnings . DE is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable U.S. GAAP measure of net income. DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include (i) unrealized performance allocations and related compensation and benefit expense, (ii) unrealized investment income, (iii) equity-based compensation expense, (iv) net income (loss) attributable to non-controlling interests in consolidated entities or (v) certain non-cash items, such as contingent reserves. While TPG and Angelo Gordon believe that the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of core operating performance, the use of DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented in accordance with U.S. GAAP. After-Tax Distributable Earnings . After-tax DE is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to holders of our Class A Shares and Common Unit holders. After-tax DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include the items described in the definition of DE herein; however, unlike DE, it does reflect the impact of income taxes. Income taxes, for purposes of determining After-tax DE, represent the total U.S. GAAP income tax expense adjusted to include only the current tax expense (benefit) calculated on U.S. GAAP net income before income tax and includes the current payable under our Tax Receivable Agreement, which is recorded within other liabilities in our Consolidated Statement of Financial Condition. Further, the current tax expense (benefit) utilized when determining After-tax DE reflects the benefit of deductions available to TPG on certain expense items that are excluded from the underlying calculation of DE, such as equity-based compensation charges. We believe that including the amount currently payable under the Tax Receivable Agreement and utilizing the current income tax expense (benefit), as described above, when determining After-tax DE is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to stockholders. TPG and Angelo Gordon believe that while the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of core operating performance, the use of After-tax DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented in accordance with U.S. GAAP. Fee-Related Earnings . FRE is a supplemental performance measure and is used to evaluate our business and make resource deployment and other operational decisions. FRE differs from net income computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts to exclude (i) realized performance allocations and related compensation expense, (ii) realized investment income from investments and financial instruments, (iii) net interest (interest expense less interest income), (iv) depreciation, (v) amortization and (vi) certain non-core income and expenses. We use FRE to measure the ability of our business to cover compensation and operating expenses from fee revenues other than capital allocation-based income. The use of FRE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. Fee-Related Revenues . Fee-related revenues is a component of FRE. Fee-related revenues is comprised of (i) management fees, (ii) fee-related performance revenues, (iii) transaction, monitoring and other fees, net, and (iv) other income. Fee-related performance revenues refers to incentive fees from perpetual capital vehicles that are: (i) measured and expected to be received on a recurring basis and (ii) not dependent on realization events from the underlying investments. Fee-related revenue differs from revenue computed in accordance with U.S. GAAP in that it excludes certain reimbursement expense arrangements. Refer to “Angelo Gordon Information—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Angelo Gordon—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations. Fee-Related Expenses . Fee-related expenses is a component of FRE. Fee-related expenses differs from expenses computed in accordance with U.S. GAAP in that it is net of certain reimbursement arrangements and does not include performance allocation compensation. Fee-related expenses is used in our review of the business. Refer to “Angelo Gordon Information—Management’s Discussion and Analysis of Financial Condition and Results of Operations of Angelo Gordon—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations. 134 Table of Contents The following table sets forth the pro forma non-GAAP financial measures after Adjustments for the year ended December 31, 2023: Year Ended December 31, 2023 Historical Pro Forma Adjustments ($ in thousands) TPG Inc. Angelo Gordon Transaction Accounting Adjustments Notes Transaction Compensation Adjustments Notes Pro Forma Non-GAAP Combined Management fees $ 1,178,721 $ 401,193 $ (3,451) (6) $ — $ 1,576,463 Transaction, monitoring, and other fees, net 107,713 2,798 — — 110,511 Fee-related performance revenues 1,642 7,828 1,173 (5) — 10,643 Other income 49,178 (295) — — 48,883 Fee Related Revenues 1,337,254 411,524 (2,278) — 1,746,500 Cash-based compensation and benefits, net 452,270 327,246 — (92,720) (9) 686,796 Fee-related performance compensation 1,401 3,914 — — 5,315 Operating expenses, net 277,252 77,159 839 (1), (2) (4,887) (8) 350,363 Fee Related Expenses 730,923 408,319 839 (97,607) 1,042,474 Total Fee-Related Earnings $ 606,331 $ 3,205 $ (3,117) $ 97,607 $ 704,026 Realized performance allocations, net 74,027 85,038 — (39,713) (8) 119,352 Realized investment income and other, net (47,241) (48,037) — — (95,278) Depreciation expense (6,589) (8,882) — — (15,471) Interest expense, net 1,401 10,810 (23,505) (3), (4) — (11,294) Distributable Earnings $ 627,929 $ 42,134 $ (26,622) $ 57,894 $ 701,335 Income taxes (42,623) (4,246) (794) (7) (2,963) (7) (50,626) After-Tax Distributable Earnings $ 585,306 $ 37,888 $ (27,416) $ 54,931 $ 650,709 Notes to the Unaudited Pro Forma Non-GAAP Financial Measures Transaction Accounting Adjustments 1. Relates to the removal of charges related to an insurance program of $1.3 million for the year ended December 31, 2023, that did not continue after the consummation of the Acquisition. 2. Relates to additional lease expense of $2.1 million as a result of the Acquisition. 3. Relates to the removal of interest expense of $1.7 million for the year ended December 31, 2023 for an Angelo Gordon credit facility that was repaid and terminated on September 25, 2023. 4. The Senior Unsecured Revolving Credit Facility carries an interest rate of 1 Month Term SOFR plus 110 basis points. The impact of the adjustment is an increase to interest expense of $25.2 million for year ended December 31, 2023. 5. Relates to an increase to Fee-related performance revenues of $1.2 million for the year ended December 31, 2023 that would have been allocable to TPG as of January 1, 2023 for pro forma purposes. 6. Represents the reduction of management fee income related to a certain fund where the Company did not acquire 100% of the on-going management fee interests. This arrangement results in a reduction of management fees of $3.5 million for the year ended December 31, 2023. 7. The TPG Operating Group has been and is expected to continue to be treated as partnerships for U.S. federal and state income tax purposes. Following the Acquisition, the income from the Acquired Interests allocable to TPG Inc. from its partnership interest in the TPG Operating Group, will be subject to U.S. federal income taxes in addition to state and local income taxes. As a result, the pro forma non-GAAP financial measure incorporates the income tax effect in connection with the additional allocable income from the Acquired Interests and the transaction accounting adjustments attributable to TPG Inc. at a blended statutory income tax rate of 23.0%. The blended statutory income tax rate was calculated on a 135 Table of Contents pro forma basis, assuming the U.S. federal rate currently in effect of 21% and the statutory income tax rates applicable to each state and local jurisdiction where we estimate our income will be taxable. Transaction Accounting Adjustments - Compensation Related As described in the summary of the Acquisition above, TPG issued unvested Common Units and RSUs to Angelo Gordon partners that are considered compensatory and not included in the Purchase Price. Such offering of equity instruments was considered a separate transaction entered into by TPG and Angelo Gordon and is therefore presented separately from the Acquisition 8. Following the consummation of the Acquisition, TPG Operating Group received 20% of the performance allocations associated with the general partner entities of Angelo Gordon that TPG Operating Group retained an economic interest in. TPG increased the share of performance allocations of certain partners and professionals from 45%-60% to approximately 80%. The impact of this is a decrease in realized performance fees, net of $39.7 million for the year ended December 31, 2023 Within this amount, approximately $4.9 million represents cash amounts paid to certain legacy interest holders of Angelo Gordon, which were included within operating expenses, net during the year ended December 31, 2023. 9. This adjustment reflects the reduction of cash-based bonuses that were historically paid to Angelo Gordon partners within compensation and benefits, net, resulting in a decrease of $92.7 million for the year ended December 31, 2023. After the Acquisition, the share of performance allocations for certain Angelo Gordon partners were increased to approximately 80%. ($ in thousands) Year Ended December 31, 2023 Total Pro Forma GAAP Net Loss $ (305,139) Net income attributable to redeemable equity in Public SPACs (12,044) Net income attributable to other non-controlling interests (8,630) Amortization expense 97,268 Equity-based compensation expense 933,420 Unrealized performance allocations, net (114,014) Unrealized investment income (7,676) Unrealized gains on derivatives (59) Income-tax expense (3,669) Acquisition success fees 63,824 Non-recurring and other 7,428 Pro Forma After-tax Distributable Earnings $ 650,709 Income tax expense 50,626 Pro Forma Distributable Earnings $ 701,335 Realized performance fees, net (119,352) Realized investment income and other, net 95,278 Depreciation expense 15,471 Interest expense, net 11,294 Total Pro Forma Fee-Related Earnings $ 704,026 136 Table of Contents Operating Metrics We monitor certain operating metrics that are common to the alternative asset management industry and that we believe provide important data regarding our business. The following operating metrics do not include other investments that are not included in the TPG Operating Group. Assets Under Management Assets Under Management (“AUM”) represents the sum of: i. fair value of the investments and financial instruments held by our private equity, credit and real estate funds (including fund-level asset-related leverage), other than as described below, as well as related co-investment vehicles managed or advised by us, plus the capital that we are entitled to call from investors in those funds and vehicles, pursuant to the terms of their respective capital commitments, net of outstanding leverage associated with subscription-related credit facilities, and including capital commitments to funds that have yet to commence their investment periods; ii. the gross amount of assets (including leverage where applicable) for our real estate investment trusts and BDCs; iii. the net asset value of certain of our hedge funds; iv. the aggregate par amount of collateral assets, including principal cash, for our collateralized loan obligation vehicles; and v. IPO proceeds held in trust, excluding interest, as well as forward purchase agreements and proceeds associated with the private investment in public equity related to our Public SPACs upon the consummation of a business combination. Our definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds that we manage, or calculated pursuant to any regulatory definitions. The tables below present rollforwards of our total AUM for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 ($ in millions) Balance as of Beginning of Period $ 135,034 $ 113,618 $ 89,526 Acquisition (1) 75,305 — — Capital Raised 15,743 30,024 20,456 Realizations (10,234) (14,017) (24,103) Outflows (2) (1,135) (1,156) (872) Changes in Investment Value and Other (3) 6,910 6,565 28,611 AUM as of end of period $ 221,623 $ 135,034 $ 113,618 ___________ (1) Represents AUM of TPG Angelo Gordon as of November 1, 2023. (2) Outflows represent redemptions and withdrawals. (3) Changes in Investment Value and Other consists of changes in fair value, capital invested, available capital, and net fund-level asset related leverage activity plus other investment activities, including MITT’s acquisition of the assets of Western Asset Mortgage Capital Corporation during December 2023. 137 Table of Contents The following table summarizes our AUM by platform as of December 31, 2023, 2022 and 2021: December 31, 2023 2022 2021 ($ in millions) Capital $ 71,310 $ 66,392 $ 55,337 Growth 26,516 23,138 21,960 Impact 19,079 16,429 13,549 TPG Angelo Gordon TPG AG Credit 59,631 — — TPG AG Real Estate 18,268 — — Real Estate 17,940 19,503 12,678 Market Solutions 8,879 9,572 10,094 AUM as of end of period $ 221,623 $ 135,034 $ 113,618 AUM increased from approximately $135.0 billion as of December 31, 2022 to approximately $221.6 billion as of December 31, 2023. This increase was primarily attributable to the $75.3 billion of assets managed by TPG Angelo Gordon, which we acquired in November 2023. During the year ended December 31, 2023, new capital of $15.7 billion was raised primarily attributable to TPG IX and THP II within the Capital platform, Growth VI within the Growth platform, Rise III within the Impact platform and TRECO within the Real Estate platform. Realizations totaled $10.2 billion and were primarily attributable to TPG VI, TPG VIII, Asia VI and TPG AAF within the Capital platform and TREP III within the Real Estate platform. AUM increased from approximately $113.6 billion as of December 31, 2021 to approximately $135.0 billion as of December 31, 2022. During the year ended December 31, 2022, new capital of $30.0 billion was raised primarily attributable to TPG IX, Asia VIII and THP II within the Capital platform, TREP IV within the Real Estate platform and Rise III within the Impact platform. Realizations totaled $14.0 billion and were primarily attributable to TPG VII, TPG VIII and Asia VII within the Capital platform, Growth IV within the Growth platform, TRTX and TREP III within the Real Estate platform and Rise I within the Impact platform. AUM also increased due to portfolio appreciation of 8% recognized during the year ended December 31, 2022. Fee Earning Assets Under Management Fee earning AUM, or FAUM, represents only the AUM from which we are entitled to receive management fees. FAUM is the sum of all the individual fee bases that are used to calculate our management fees and differs from AUM in the following respects: (i) assets and commitments from which we are not entitled to receive a management fee are excluded (e.g., assets and commitments with respect to which the firm is entitled to receive only performance allocations or are otherwise not currently entitled to receive a management fee) and (ii) certain assets, primarily in our credit and real estate funds, have different methodologies for calculating management fees that are not based on the fair value of the respective funds’ underlying investments. We believe this measure is useful to investors as it provides additional insight into the capital base upon which we earn management fees. Our definition of FAUM is not based on any definition of AUM or FAUM that is set forth in the agreements governing the investment funds and products that we manage. 138 Table of Contents The table below present rollforwards of our FAUM for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 ($ in millions) Balance as of Beginning of Period $ 77,945 $ 60,094 $ 50,655 Acquisition (1) 51,624 — — Fee Earning Capital Raised (2) 9,005 23,769 10,443 Net Change in Investment Activity (3) 1,719 (215) (137) Outflows (4) (1,109) (1,150) (866) Reduction in Fee Base of Certain Funds (5) (2,389) (4,553) (1) FAUM as of end of period $ 136,794 $ 77,945 $ 60,094 ___________ (1) Represents FAUM of TPG Angelo Gordon as of November 1, 2023. (2) Fee Earning Capital Raised represents capital raised by our funds for which management fees calculated based on commitments were activated during the period. (3) Net Change in Investment Activity includes capital called or invested during the period, net of return of capital distributions and changes in net asset value of hedge funds. It also includes adjustments related to funds with a fee structure based on the lower of cost or fair value. (4) Outflows represent redemptions and withdrawals. (5) Reduction in Fee Base represents decreases in the fee basis for funds where the investment or commitment fee period has expired, and the fee base has reduced from commitment base to actively invested capital. It also includes reductions for funds that are no longer fee paying. The following table summarizes our FAUM by platform as of December 31, 2023, 2022 and 2021: December 31, 2023 2022 2021 ($ in millions) Capital $ 38,972 $ 35,371 $ 26,208 Growth 12,339 10,830 10,514 Impact 13,727 12,739 10,801 TPG Angelo Gordon TPG AG Credit 40,005 — — TPG AG Real Estate 14,035 — — Real Estate 11,298 13,324 6,235 Market Solutions 6,418 5,681 6,336 FAUM as of end of period $ 136,794 $ 77,945 $ 60,094 FAUM increased from $77.9 billion as of December 31, 2022 to $136.8 billion as of December 31, 2023. The increase was primarily attributable to $51.6 billion of assets managed by TPG Angelo Gordon, which we acquired in November 2023. This increase was also related to fee earning capital raised activity totaling $9.0 billion primarily attributable to the subsequent closings of TPG IX, Asia VIII and THP II within the Capital platform, which were activated during the third quarter of 2022, LSI and Growth VI within Growth platform, which were activated during the first and fourth quarters of 2023, respectively, and Rise III and TPG Next in the Impact platform, which were activated during the second quarter of 2022 and the fourth quarter of 2023, respectively. These increases were partially offset by a $1.2 million decrease in actively invested capital related to TPG AAF. For the year ended December 31, 2023, annualized weighted average management fees as a percentage of FAUM, which represent annualized management fees divided by the average of each applicable period’s FAUM, were 1.10%. 139 Table of Contents FAUM increased from $60.1 billion as of December 31, 2021 to $77.9 billion as of December 31, 2022. The increase was related to fee earning capital raised activity totaling $23.8 billion primarily attributable to the activation of TPG IX, Asia VIII and THP II within the Capital platform, which were activated during the third quarter of 2022. The increase was also attributable to the activation of TREP IV in the Real Estate platform, which was activated during the first quarter of 2022 and the activation of Rise III in the Impact platform, which was activated during the second quarter of 2022. These increases were partially offset by a decrease in actively invested capital of TPG VII within the Capital platform and reduction in fee base of TPG VIII and Asia VII within the Capital platform. For the year ended December 31, 2022, annualized weighted average management fees as a percentage of FAUM, which represent annualized management fees divided by the average of each applicable period’s FAUM, were 1.35%. Net Accrued Performance Net accrued performance represents both unrealized and undistributed performance allocations and fee-related performance revenues resulting from our general partner interests in investment funds that we manage. We believe this measure is useful to investors as it provides additional insight into the accrued performance to which the TPG Operating Group Common Unit holders are expected to receive. The table below summarizes our net accrued performance by fund vintage year and platform as of December 31, 2023 and 2022: December 31, 2023 2022 ($ in millions) Fund Vintage 2017 & Prior $ 363 $ 298 2018 77 54 2019 269 193 2020 104 62 2021 56 35 2022 22 1 Net Accrued Performance $ 891 $ 643 December 31, 2023 2022 ($ in millions) Platform Capital $ 404 $ 362 Growth 185 162 Impact 107 62 TPG Angelo Gordon TPG AG Credit 59 — TPG AG Real Estate 97 — Real Estate 12 30 Market Solutions 27 27 Net Accrued Performance $ 891 $ 643 Net accrued performance were primarily comprised of TPG VII, TPG VIII, THP I, Asia VII, Growth IV, Growth V, Rise I, Rise II and Rise Climate as of December 31, 2023 and TPG VII, TPG VIII, Asia VII and Growth IV as of December 31, 2022. We also utilize Performance Generating AUM and Performance Eligible AUM as key metrics to understand AUM that could produce performance allocations or fee related performance revenues. Performance Generating AUM refers to 140 Table of Contents the AUM of funds we manage that are currently above their respective hurdle rate or preferred return, and profit of such funds are being allocated to, or earned by, us in accordance with the applicable limited partnership agreements or other governing agreements. Performance Eligible AUM refers to the AUM that is currently, or may eventually, produce performance allocations or fee-related performance revenues. All funds for which we are entitled to receive a performance allocation incentive fee or fee-related performance revenue are included in Performance Eligible AUM. Performance Generating AUM totaled $150.8 billion and $85.3 billion as of December 31, 2023 and December 31, 2022, respectively. Across the investment funds that we manage, Performance Eligible AUM totaled $191.8 billion and $121.0 billion as of December 31, 2023 and December 31, 2022, respectively. AUM Subject to Fee Earning Growth AUM Subject to Fee Earning Growth represents capital commitments that when deployed have the ability to grow our fees through earning new management fees (AUM Not Yet Earning Fees) or when management fees can be charged at a higher rate as capital is invested or for certain funds as management fee rates increase during the life of a fund (FAUM Subject to Step-Up). AUM Not Yet Earning Fees represents the amount of capital commitments to TPG’s funds and co-investment vehicles that has not yet been invested or considered active, and as this capital is invested or activated, the fee-paying portion will be included in FAUM. FAUM Subject to Step-Up represents capital raised within certain funds where the management fee rate increases once capital is invested or as a fund reaches a certain point in its life where the fee rate for certain investors increases. FAUM Subject to Step-Up is included within FAUM. The table below reflects AUM Subject to Fee Earning Growth by platform as of December 31, 2023, 2022 and 2021: December 31, 2023 2022 2021 ($ in millions) AUM Not Yet Earning Fees: Capital $ 2,444 $ 3,551 $ 1,054 Growth 2,979 2,863 3,279 Impact 173 939 258 TPG Angelo Gordon TPG AG Credit 3,721 — — TPG AG Real Estate 1,206 — — Real Estate 2,720 1,172 1,201 Market Solutions 809 1,573 1,056 Total AUM Not Yet Earning Fees $ 14,052 $ 10,098 $ 6,848 FAUM Subject to Step-Up: Capital $ 1,565 $ 2,129 $ 1,865 TPG Angelo Gordon TPG AG Credit 6,389 — — TPG AG Real Estate 2,389 — — Real Estate — 777 678 Total FAUM Subject to Step-Up: 10,343 2,906 2,543 Total AUM Subject to Fee Earning Growth $ 24,395 $ 13,004 $ 9,391 As of December 31, 2023, AUM Not Yet Earning Fees was $14.1 billion, which primarily consisted of TPG VIII and Asia VII within the Capital platform, TTAD II and TDM within the Growth platform, TREP III and TAC+ within the Real Estate platform, MMDL V and Credit Solutions II within TPG AG Credit and Asia Realty IV and Japan Value within TPG AG Real Estate. 141 Table of Contents As of December 31, 2022, AUM Not Yet Earning Fees was $10.1 billion, which primarily consisted of TPG VII, TPG VIII and Asia VII within the Capital platform, TTAD II and TDM within the Growth platform, TAC+ within the Real Estate platform and TSCF within the Market Solutions platform. Associated with FAUM Subject to Step-Up, management fee rates on undrawn commitments for these respective underlying funds range between 0.05% and 1.70% and step-up to rates in the range of 0.25% and 1.75% after capital is invested or as a fund reaches a certain point in its life where the fee rate for certain investors increases. FAUM Subject to Step-Up as of December 31, 2023 relates primarily to TPG IX within the Capital platform, MMDL IV, MMDL V and Credit Solutions II within TPG AG Credit and Realty Value XI and Asia Realty V within TPG AG Real Estate. Capital Raised Capital raised is the aggregate amount of subscriptions and capital raised by our investment funds and co-investment vehicles during a given period, as well as the senior and subordinated notes issued through the firm’s CLOs and equity raised through our perpetual vehicles. We believe this measure is useful to investors as it measures access to capital across TPG and our ability to grow our management fee base. The table below presents capital raised by platform for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 ($ in millions) Capital $ 9,047 $ 15,319 $ 4,174 Growth 2,673 2,207 4,893 Impact 1,047 3,616 7,172 TPG Angelo Gordon TPG AG Credit 694 — — TPG AG Real Estate 370 — — Real Estate 994 7,295 1,970 Market Solutions 918 1,587 2,247 Total Capital Raised $ 15,743 (1) $ 30,024 $ 20,456 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Capital raised totaled approximately $15.7 billion for the year ended December 31, 2023. This was primarily attributable to the fundraising activities of TPG IX and THP II within the Capital platform, Growth VI within the Growth platform, Rise III within the Impact platform and TRECO within the Real Estate platform during the year ended December 31, 2023. Capital raised totaled approximately $30.0 billion for the year ended December 31, 2022. This was primarily attributable to the fundraising activities of TPG IX, Asia VIII and THP II within the Capital platform, Rise III within the Impact platform, TREP IV within the Real Estate platform and TDM within the Growth platform during the year ended December 31, 2022. Available Capital Available capital is the aggregate amount of unfunded capital commitments and recallable distributions that partners have committed to our funds and co-investment vehicles to fund future investments, as well as IPO and forward purchase agreement proceeds associated with our Public SPACs, and private investment in public equity commitments by investors upon the consummation of a business combination associated with our Public SPACs. Available capital is reduced for investments completed using fund-level subscription-related credit facilities; however, it is not reduced for investments that we have committed to make yet remain unfunded at the reporting date. We believe this measure is useful to investors as it provides additional insight into the amount of capital that is available to our investment funds and co-investment vehicles to make future investments. The table below presents available capital by platform as of December 31, 2023, 2022 and 2021: 142 Table of Contents December 31, 2023 2022 2021 ($ in millions) Capital $ 17,056 $ 19,759 $ 10,696 Growth 5,021 4,211 4,943 Impact 4,761 7,697 7,951 TPG Angelo Gordon TPG AG Credit 7,087 — — TPG AG Real Estate 7,344 — — Real Estate 8,370 8,193 2,278 Market Solutions 1,683 3,098 2,552 Available Capital $ 51,322 $ 42,958 $ 28,420 Available capital increased from approximately $43.0 billion as of December 31, 2022 to approximately $51.3 billion as of December 31, 2023. The change was attributable to the $14.4 billion of available capital for TPG Angelo Gordon, which we acquired in November 2023. Available capital for TPG AG Credit related to MMDL V and Essential Housing II within TPG AG Credit and Realty Value XI, Europe Realty IV and Asia Realty V within TPG AG Real Estate. Available capital also increased due to fundraising activities of THP II within the Capital platform, Growth VI within the Growth platform and TRECO within the Real Estate platform during the year ended December 31, 2023. These increases were partially offset by capital invested in TPG IX and Asia VIII within the Capital platform, Growth V within the Growth platform, Rise Climate within the Impact platform and TREP IV within the Real Estate platform.during the year ended December 31, 2023. Available capital increased from approximately $28.4 billion as of December 31, 2021 to approximately $43.0 billion as of December 31, 2022. The increase was attributable to capital raised in TPG IX, Asia VIII and THP II within the Capital platform, TREP IV within the Real Estate platform, and Rise III within the Impact platform, partially offset by capital invested in TPG VIII within the Capital platform and Rise Climate within the Impact platform. Capital Invested Capital invested is the aggregate amount of capital invested during a given period by our investment funds, co-investment vehicles, CLOs, as well as SPACs in conjunction with the completion of a business combination and increases in gross assets of certain perpetual funds. It excludes certain hedge fund activity, but includes investments made using investment financing arrangements like credit facilities, as applicable. We believe this measure is useful to investors as it measures capital deployment across the firm. The table below presents capital invested by platform for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 ($ in millions) Capital $ 9,988 $ 6,250 $ 10,624 Growth 2,198 3,123 3,333 Impact 3,909 3,667 1,711 TPG Angelo Gordon TPG AG Credit 3,081 — — TPG AG Real Estate 322 — — Real Estate 1,840 2,954 4,537 Market Solutions 879 559 1,434 Capital Invested $ 22,217 (1) $ 16,553 $ 21,639 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. 143 Table of Contents Capital invested was $22.2 billion for the year ended December 31, 2023, which was primarily attributable to TPG IX, Asia VIII and THP II within the Capital platform, Growth V within the Growth platform, Rise Climate within the Impact platform, TREP IV within the Real Estate platform and MITT within TPG AG Credit. Capital invested was $16.6 billion for the year ended December 31, 2022 which was primarily attributable to TPG VIII within the Capital platform, Rise Climate within the Impact platform, TTAD II within the Growth platform and TRTX within the Real Estate platform. Realizations Realizations represent distributions sourced from proceeds from the disposition of investments and current income, in addition to investment proceeds from Public SPACs in conjunction with the completion of a business combination. The table below presents realizations by platform for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 ($ in millions) Capital $ 6,271 $ 9,782 $ 15,773 Growth 750 2,223 4,423 Impact 301 548 1,131 TPG Angelo Gordon TPG AG Credit 641 — — TPG AG Real Estate 293 — — Real Estate 1,703 1,060 1,736 Market Solutions 275 404 1,040 Total Realizations $ 10,234 (1) $ 14,017 $ 24,103 ___________ (1) Includes amounts from TPG Angelo Gordon from November 1, 2023, the date of the Acquisition, through December 31, 2023. Realizations were $10.2 billion for the year ended December 31, 2023 compared to $14.0 billion for the year ended December 31, 2022. This was primarily attributable to a lower pace of realization activities in TPG VII within the Capital platform and Growth IV within the Growth platform, partially offset by higher realizations in TPG AAF and TPG VI within the Capital platform during the year ended December 31, 2023. Realizations were $14.0 billion for the year ended December 31, 2022 compared to $24.1 billion for the year ended December 31, 2021. This was primarily attributable to lower realization activities during the year ended December 31, 2022 in TPG VII, TPG VIII, Asia VII and THP I within the Capital platform, Growth IV and TTAD I within the Growth platform and TRTX and TREP III within the Real Estate platform. Fund Performance Metrics Fund performance information for our investment funds as of December 31, 2023 is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. These fund performance metrics do not include co-investment vehicles, SMAs or certain other legacy or discontinued funds. Additionally, these fund performance metrics exclude the firm’s CLOs and real estate investment trusts. The fund return information for individual funds reflected in this discussion and analysis is not necessarily indicative of our firmwide performance and is also not necessarily indicative of the future performance of any particular fund. An investment in us is not an investment in any of our funds. This track record presentation is unaudited and does not purport to represent the respective fund’s financial results in accordance with U.S. GAAP. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. See “Item 1A.Risk Factors—Risks Related to Our Business—Our funds’ historical returns should not be considered as indicative of our or our funds’ future results or of any returns expected on an investment in our Class A common stock.” 144 Table of Contents The following tables reflect the performance of our selected funds as of December 31, 2023 ($ in millions): Fund Vintage Year (1) Capital Committed (2) Capital Invested (3) Realized Value (4) Unrealized Value (5) Total Value (6) Gross IRR (7) Gross MoM (7) Net IRR (8) Net MoM (9) Platform: Capital Capital Funds Air Partners 1993 $ 64 $ 64 $ 697 $ — $ 697 81 % 10.9x 73 % 8.9x TPG I 1994 721 696 3,095 — 3,095 47 % 4.4x 36 % 3.5x TPG II 1997 2,500 2,554 5,010 — 5,010 13 % 2.0x 10 % 1.7x TPG III 1999 4,497 3,718 12,360 — 12,360 34 % 3.3x 26 % 2.6x TPG IV 2003 5,800 6,157 13,733 — 13,733 20 % 2.2x 15 % 1.9x TPG V 2006 15,372 15,564 22,071 1 22,072 6 % 1.4x 5 % 1.4x TPG VI 2008 18,873 19,220 33,344 196 33,540 14 % 1.7x 10 % 1.5x TPG VII 2015 10,495 10,205 19,422 4,506 23,928 26 % 2.3x 20 % 1.9x TPG VIII 2019 11,505 10,737 3,264 15,438 18,702 37 % 1.7x 25 % 1.5x TPG IX 2022 12,014 4,662 — 5,225 5,225 225 % 1.2x 39 % 1.0x Capital Funds 81,841 73,577 112,996 25,366 138,362 23 % 1.9x 15 % 1.6x Asia Funds Asia I 1994 96 78 71 — 71 (3 %) 0.9x (10 %) 0.7x Asia II 1998 392 764 1,669 — 1,669 17 % 2.2x 14 % 1.9x Asia III 2000 724 623 3,316 — 3,316 46 % 5.3x 31 % 3.8x Asia IV 2005 1,561 1,603 4,089 — 4,089 23 % 2.6x 17 % 2.1x Asia V 2007 3,841 3,257 5,405 166 5,571 10 % 1.7x 6 % 1.4x Asia VI 2012 3,270 3,285 3,380 3,505 6,885 15 % 2.1x 11 % 1.7x Asia VII 2017 4,630 4,522 2,341 5,652 7,993 21 % 1.7x 14 % 1.4x Asia VIII 2022 4,319 2,022 — 2,375 2,375 686 % 1.2x 129 % 1.1x Asia Funds 18,833 16,154 20,271 11,698 31,969 20 % 2.0x 14 % 1.7x Healthcare Funds THP I 2019 2,704 2,405 840 2,978 3,818 33 % 1.6x 19 % 1.3x THP II 2022 3,576 1,093 — 1,294 1,294 339 % 1.3x 85 % 1.1x Healthcare Funds 6,280 3,498 840 4,272 5,112 35 % 1.5x 20 % 1.3x Continuation Vehicles TPG AAF 2021 1,317 1,314 2,720 — 2,720 43 % 2.1x 37 % 1.9x TPG AION 2021 207 207 — 182 182 (5 %) 0.9x (6 %) 0.9x Continuation Vehicles 1,524 1,521 2,720 182 2,902 37 % 1.9x 31 % 1.7x Platform: Growth Growth Funds STAR 2007 1,264 1,259 1,865 42 1,907 13 % 1.5x 6 % 1.3x Growth II 2011 2,041 2,185 4,734 598 5,332 22 % 2.5x 16 % 2.0x Growth III 2015 3,128 3,370 4,675 2,306 6,981 26 % 2.0x 18 % 1.7x Growth IV 2017 3,739 3,612 1,946 4,890 6,836 22 % 1.8x 15 % 1.5x Gator 2019 726 686 661 608 1,269 31 % 1.8x 25 % 1.6x Growth V 2020 3,558 3,225 403 4,375 4,778 29 % 1.5x 18 % 1.3x Growth VI 2023 1,112 144 — 144 144 NM NM NM NM Growth Funds 15,568 14,481 14,284 12,963 27,247 20 % 1.9x 14 % 1.6x Tech Adjacencies Funds TTAD I 2018 1,574 1,497 941 1,709 2,650 25 % 1.7x 20 % 1.5x TTAD II 2021 3,198 1,763 63 1,896 1,959 9 % 1.1x 4 % 1.0x Tech Adjacencies Funds 4,772 3,260 1,004 3,605 4,609 22 % 1.4x 16 % 1.3x TDM 2017 1,326 571 — 1,142 1,142 20 % 2.0x 16 % 1.7x LSI 2023 367 84 — 84 84 NM NM NM NM 145 Table of Contents Fund Vintage Year (1) Capital Committed (2) Capital Invested (3) Realized Value (4) Unrealized Value (5) Total Value (6) Gross IRR (7) Gross MoM (7) Net IRR (8) Net MoM (9) Platform: Impact The Rise Funds Rise I 2017 $ 2,106 $ 1,996 $ 1,318 $ 2,511 $ 3,829 21 % 1.9x 13 % 1.5x Rise II 2020 2,176 1,973 128 2,817 2,945 25 % 1.5x 16 % 1.3x Rise III 2022 2,700 1,103 5 1,261 1,266 98 % 1.2x (2 %) 1.0x The Rise Funds 6,982 5,072 1,451 6,589 8,040 22 % 1.6x 14 % 1.3x TSI 2018 333 133 368 — 368 35 % 2.8x 25 % 2.1x Evercare 2019 621 432 29 326 355 (5 %) 0.8x (10 %) 0.7x Rise Climate 2021 7,268 4,579 208 5,839 6,047 54 % 1.4x 27 % 1.2x TPG NEXT 2023 510 3 — 3 3 NM NM NM NM Platform: Real Estate TPG Real Estate Partners DASA RE 2012 1,078 576 1,069 — 1,069 21 % 1.9x 15 % 1.6x TREP II 2014 2,065 2,213 3,520 60 3,580 28 % 1.7x 18 % 1.5x TREP III 2018 3,722 4,151 2,630 2,606 5,236 14 % 1.3x 9 % 1.2x TREP IV 2022 6,820 1,708 208 1,481 1,689 (14 %) 0.9x (63 %) 0.5x TPG Real Estate Partners 13,685 8,648 7,427 4,147 11,574 21 % 1.5x 13 % 1.3x TAC+ 2021 1,797 916 98 815 913 (1 %) 1.0x (4 %) 0.9x TRECO 378 — — — — NM NM NM NM Platform: Market Solutions NewQuest Funds NewQuest I (11) 2011 390 291 767 — 767 48 % 3.2x 37 % 2.3x NewQuest II (11) 2013 310 342 646 115 761 25 % 2.3x 19 % 1.8x NewQuest III (11) 2016 541 543 412 450 862 13 % 1.6x 8 % 1.3x NewQuest IV (11) 2020 1,000 879 132 1,108 1,240 23 % 1.4x 13 % 1.2x NewQuest V (11) 2022 502 272 7 344 351 NM NM NM NM NewQuest Funds 2,743 2,327 1,964 2,017 3,981 35 % 1.8x 23 % 1.5x TGS (11) 2022 749 272 — 295 295 NM NM NM NM Platform: TPG Angelo Gordon Credit Solutions Credit Solutions Credit Solutions I 2019 1,805 1,801 1,475 1,156 2,631 17 % 1.5x 13 % 1.4x Credit Solutions I Dislocation A 2020 909 602 795 — 795 34 % 1.3x 27 % 1.3x Credit Solutions I Dislocation B 2020 308 176 211 — 211 28 % 1.2x 21 % 1.2x Credit Solutions II 2021 3,134 2,559 245 2,655 2,900 16 % 1.1x 11 % 1.1x Credit Solutions II Dislocation A 2022 1,310 868 5 1,001 1,006 34 % 1.2x 25 % 1.1x Credit Solutions 7,466 6,006 2,731 4,812 7,543 19 % 1.3x 14 % 1.2x Essential Housing Essential Housing I 2020 642 456 470 102 572 15 % 1.3x 12 % 1.2x Essential Housing II 2021 2,534 1,071 59 1,112 1,171 14 % 1.1x 10 % 1.1x Essential Housing 3,176 1,527 529 1,214 1,743 14 % 1.2x 11 % 1.1x Structured Credit & Specialty Finance ABC Fund 2021 1,005 653 29 709 738 17 % 1.1x 13 % 1.1x Structured Credit & Specialty Finance 1,005 653 29 709 738 17 % 1.1x 13 % 1.1x 146 Table of Contents Fund Vintage Year (1) Capital Committed (2) Capital Invested (3) Realized Value (4) Unrealized Value (5) Total Value (6) Gross IRR (7) Gross MoM (7) Net IRR (8) Net MoM (9) Middle Market Direct Lending (12) MMDL I 2015 $ 594 $ 572 $ 846 $ — $ 846 14 % 1.6x 10 % 1.4x MMDL II 2016 1,580 1,563 1,684 608 2,292 14 % 1.6x 11 % 1.5x MMDL III 2018 2,751 2,548 1,929 1,648 3,577 14 % 1.5x 10 % 1.4x MMDL IV 2020 2,671 2,522 457 2,713 3,170 16 % 1.3x 12 % 1.3x MMDL IV Annex 2021 797 672 69 700 769 15 % 1.2x 11 % 1.2x MMDL V 2022 1,972 603 6 668 674 18 % 1.2x 14 % 1.2x Middle Market Direct Lending 10,365 8,480 4,991 6,337 11,328 15 % 1.5x 11 % 1.4x U.S. Real Estate Realty Realty I 1994 30 30 65 — 65 27 % 2.2x 20 % 1.9x Realty II 1995 33 33 81 — 81 31 % 2.4x 22 % 2.2x Realty III 1997 61 94 120 — 120 5 % 1.3x 3 % 1.3x Realty IV 1999 255 332 492 — 492 11 % 1.5x 8 % 1.5x Realty V 2001 333 344 582 — 582 32 % 1.7x 26 % 1.6x Realty VI 2005 514 558 657 — 657 5 % 1.2x 3 % 1.1x Realty VII 2007 1,257 1,675 2,543 1 2,544 17 % 1.7x 12 % 1.5x Realty VIII 2011 1,265 2,129 2,758 213 2,971 16 % 1.7x 11 % 1.5x Realty IX 2015 1,329 1,972 2,171 314 2,485 9 % 1.4x 5 % 1.3x Realty Value X 2018 2,775 4,312 3,492 2,101 5,593 20 % 1.4x 13 % 1.3x Realty Value XI 2022 2,558 1,284 389 998 1,387 20 % 1.1x (3 %) 1.0x Realty 10,410 12,763 13,350 3,627 16,977 15 % 1.5x 10 % 1.3x Core Plus Realty Core Plus Realty I 2003 534 532 876 — 876 20 % 1.6x 18 % 1.5x Core Plus Realty II 2006 794 1,112 1,456 — 1,456 11 % 1.4x 8 % 1.3x Core Plus Realty III 2011 1,014 1,420 2,231 — 2,231 23 % 1.8x 19 % 1.6x Core Plus Realty IV 2015 1,308 1,994 1,988 359 2,347 6 % 1.3x 3 % 1.2x Core Plus Realty 3,650 5,058 6,551 359 6,910 15 % 1.5x 11 % 1.4x Asia Real Estate Asia Realty Asia Realty I 2006 526 506 645 — 645 6 % 1.3x 3 % 1.2x Asia Realty II 2010 616 602 1,071 — 1,071 24 % 1.8x 17 % 1.6x Asia Realty III 2015 847 844 969 244 1,213 14 % 1.5x 9 % 1.3x Asia Realty IV 2018 1,315 1,245 747 1,117 1,864 20 % 1.5x 13 % 1.4x Asia Realty V 2022 1,854 326 17 346 363 NM NM NM NM Asia Realty 5,158 3,523 3,449 1,707 5,156 13 % 1.5x 9 % 1.3x Japan Value Japan Value (13) 2023 398 15 — 17 17 NM NM NM NM Japan Value 398 15 — 17 17 NM NM NM NM Europe Real Estate Europe Realty I 2014 570 1,184 1,709 15 1,724 24 % 2.0x 17 % 1.7x Europe Realty II 2017 843 1,657 1,489 787 2,276 12 % 1.5x 9 % 1.4x Europe Realty III (14) 2019 1,515 1,784 582 1,236 1,818 14 % 1.3x 9 % 1.2x Europe Realty IV (14) 2023 1,163 36 — 36 36 NM NM NM NM Europe Realty 4,091 4,661 3,780 2,074 5,854 17 % 1.6x 12 % 1.4x Net Lease Net Lease Realty I 2006 159 209 457 — 457 18 % 2.4x 14 % 2.2x Net Lease Realty II 2010 559 1,060 1,854 — 1,854 16 % 2.4x 11 % 2.0x Net Lease Realty III 2013 1,026 2,352 2,202 1,002 3,204 12 % 1.8x 8 % 1.5x Net Lease Realty IV 2019 997 1,736 1,132 795 1,927 10 % 1.2x 6 % 1.1x Net Lease Realty V 99 — — — — NM NM NM NM Net Lease 2,840 5,357 5,645 1,797 7,442 15 % 1.8x 10 % 1.5x 147 Table of Contents The following table reflects the performance of our significant perpetual funds as of December 31, 2023 ($ in millions): Fund Vintage Year (1) AUM Total Return (10) Platform: Market Solutions TPEP Long/Short (15) 2013 $ 2,099 126 % TPEP Long Only (15) 2013 1,915 39 % Platform: TPG Angelo Gordon Credit Solutions Corporate Credit Opportunities (16) 1988 333 10 % Structured Credit & Specialty Finance MVP Fund (17) 2009 5,883 12 % Middle Market Direct Lending TCAP (18) 2022 1,478 9 % MMDL Evergreen 2022 698 NM Multi-Strategy Super Fund (17) 1993 902 9 % __________ Note: Past performance is not indicative of future results. “NM” signifies that the relevant data would not be meaningful. Performance metrics are generally deemed “NM” when, among other reasons, there has been limited time since initial investment. Performance metrics generally exclude amounts attributable to the fund’s general partner, its affiliated entities and “friends-of-the-firm” entities that generally pay no or reduced management fees and performance allocations. These metrics also represent an average of returns for all included investors and do not necessarily reflect the actual return of any particular investor. Amounts shown are in U.S. dollars. Unless otherwise noted, when an investment is made in another currency, (i) Capital Invested is calculated using the exchange rate at the time of the investment, (ii) Unrealized Value is calculated using the exchange rate at the period end and (iii) Realized Value reflects actual U.S. dollar proceeds to the fund. (1) Vintage Year represents the year in which the fund consummated its first investment (or, if earlier, received its first capital contributions from investors). For platforms other than TPG Angelo Gordon, for consistency with prior reporting, however, the Vintage Year classification of any fund that held its initial closing before 2018 represents the year of such fund’s initial closing. (2) Capital Committed represents the amount of inception to date commitments a particular fund has received. Certain of our newer vintage funds are actively fundraising and capital committed is subject to change. (3) Capital Invested represents cash outlays by the fund for its investments, whether funded through investor capital contributions or borrowing under the fund’s credit facility. For TPG AG Credit funds, Capital Invested represents inception-to-date investor contributed capital net of returned contributions, excluding borrowings under the fund’s credit facility. (4) Realized Value represents total cash received or earned by the fund in respect of such investment or investments through the period end, including all interest, dividends and other proceeds. For TPG AG Credit funds, Realized Value represents inception-to-date capital distributed by the fund, including any performance distributions net of recalled distributions, if any. (5) Unrealized Value, with respect to an investment in a publicly traded security, is based on the closing market price of the security as of the period end on the principal exchange on which the security trades, as adjusted by the general partner for any restrictions on disposition. Unrealized Value, with respect to an investment that is not a publicly traded security, represents the general partner’s estimate of the unrealized fair value of the fund’s investment. Unrealized Value, with respect to TPG AG Credit funds, represents the ending NAV for such fund, which is the period end ending capital balances of the investors and general partner. Valuations entail a degree of subjectivity, and therefore actual value may differ from such estimated value and these differences may be material and adverse. Except as otherwise noted, valuations are as of the period end. (6) Total Value is the sum of Realized Value and Unrealized Value of investments. (7) Gross IRR and Gross MoM represent investment level performance by the fund and incorporates the impact of fund level credit facilities, to the extent utilized by the fund. Gross IRR and Gross MoM are calculated by adjusting Net IRR and Net MoM to generally approximate investor performance metrics excluding management fees, fund expenses (other than interest expense and other fees arising from amounts borrowed under the fund’s credit facility to fund investments) and performance allocations. Gross IRR is the discount rate at which (i) the present value of all Capital Invested in an investment or investments is equal to (ii) the present value of all realized and unrealized returns from such investment or investments. Gross IRR and Gross MoM for TPG AG Credit funds are calculated at the fund level and do not consider the impact of credit facilities and exclude fund expenses. (8) Net IRR represents the compound annualized return rate (i.e., the implied discount rate) of a fund, which is calculated using investor cash flows in the fund, including cash received from capital called from investors, cash distributed to investors and the investors’ ending capital balances as of the period end. Net IRR is the discount rate at which (i) the present value of all capital contributed by investors to the fund (which excludes, for the avoidance of doubt, any amounts borrowed by the fund in lieu of calling capital) is equal to (ii) the present value of all cash distributed to investors and the investors’ ending capital balances. 148 Table of Contents (9) Net MoM represents the multiple-of-money on contributions to the fund by investors. Net MoM is calculated as the sum of cash distributed to investors and the investors’ ending capital balances as of the period end, divided by the amount of capital contributed to the fund by investors (which amount excludes, for the avoidance of doubt, any amounts borrowed by the fund in lieu of calling capital). (10) Total Return represents net performance data for investors (excluding certain classes/series with special fee arrangements), net of all expenses including actual quarterly management fees payable by the fund and the accrual of carried interest to the general partner. (11) Unless otherwise specified, the fund performance information presented above for certain funds is, due to the nature of their strategy, as of September 30, 2023. (12) Each Middle Market Direct Lending fund is comprised of four vehicles: onshore levered, onshore unlevered, offshore levered and offshore unlevered. Capital Committed, Capital Invested, Realized Value, Unrealized Value and Total Value for each fund are presented on a consolidated basis across the four vehicles. Performance metrics are presented only for the onshore levered vehicle of each fund. The Net IRRs and Net MoMs for TPG AG Middle Market Direct Lending funds on a consolidated basis were: (i) for the onshore unlevered vehicles, 7% and 1.3x, (ii) for the offshore levered vehicles, 10% and 1.3x and (iii) for the offshore unlevered vehicles, 7% and 1.1x. (13) Japanese-Yen denominated fund. Commitments, Capital Invested and Realized Value are calculated using the exchange rate at the end of the quarter in which the relevant commitment was made or transaction occurred, as applicable. (14) Includes Euro denominated fund entity with Commitments, Capital Invested and Realized Value calculated using the exchange rate at the end of the quarter in which the relevant commitment was made or transaction occurred, as applicable. Performance metrics only reflects capital committed in U.S. dollars, which represents the majority of capital committed to each fund. Net IRR and Net MoM were: (i) for the euro-denominated vehicle of Europe Realty III, 7% and 1.2x and (ii) for the euro-denominated vehicle of Europe Realty IV, NM and NM. (15) These performance estimates represent the composite performance of TPG Public Equity Partners, LP and TPG Public Equity Partners Master Fund, L.P., adjusted as described below. The performance estimates are based on an investment in TPG Public Equity Partners, LP made on September 1, 2013, the date of TPEP’s inception, with the performance estimates for the period from January 1, 2016 to present being based on an investment in TPG Public Equity Partners Master Fund, L.P. made through TPG Public Equity Partners-A, L.P., the “onshore feeder.” As of December 31, 2023, TPEP Long/Short had estimated inception-to-date gross returns of 172% and net returns of 126%. Gross performance figures (i) are presented after any investment-related expenses, net interest, other expenses and the reinvestment of dividends; (ii) include any gains or losses from “new issue” securities; and (iii) are adjusted for illustration purposes to reflect the reduction of a hypothetical 1.5% annual management fee. These performance estimates represent performance for TPEP Long Only and are based on an investment in TPEP Long Only made on May 1, 2019, the date of TPEP Long Only’s inception, through TPG Public Equity Partners Long Opportunities-A, L.P., the “onshore feeder.” As of December 31, 2023, TPEP Long Only had estimated inception-to-date gross returns of 39% and net returns of 39%. Gross performance figures are presented after any investment-related expenses, a 1% annual management fee, net interest, other expenses and the reinvestment of dividends, and include any gains or losses from “new issue” securities. (16) Total Return includes onshore investors participating directly through the master fund and investors through the offshore vehicle. Total Return for the offshore vehicle was 4%. (17) Total Returns for onshore funds only. Total Returns for the offshore vehicles were: (i) for the MVP Fund, 11% and (ii) for the Super Fund, 8%. (18) TCAP launched on January 1, 2023. Total Return includes AGTB Private BDC, which commenced operations on May 10, 2022 and merged with TCAP on January 1, 2023. Total Return is calculated as the change in NAV per share during the period, plus distributions per share (assuming dividends and distributions are reinvested) divided by the beginning NAV per share. Inception-to-date figures for Class I, Class D, and Class S shares use the initial offering price per share as the beginning NAV. Total Return presented is for Class I and is prior to the impact of any potential upfront placement fees. An investment in TCAP is subject to a maximum upfront placement fee of 1.5% for Class D and 3.5% for Class S, which would reduce the amount of capital available for investment, if applicable. There are no upfront placement fees for Class I shares. Total Return has been annualized for periods less than or greater than one year. On July 28, 2023, TCAP completed its merger with AGTB where TCAP paid cash consideration for each share of common stock of AGTB. TCAP will continue as the surviving company. At the completion of the merger, AGTB’s final Net IRR was 6.1%. 149 Table of Contents Liquidity and Capital Resources We have historically primarily derived revenues from third party assets under management and have required limited capital resources to support the working capital or operating needs of our business. We believe that our current sources of liquidity described below are sufficient to meet our projected capital needs and other obligations as they arise for at least the next 12 months. To the extent that our current liquidity is insufficient to fund future activities, we may need to raise additional funds. In the future, we may attempt to raise additional capital through the sale of equity securities or through debt financing arrangements. If we raise additional funds by issuing equity securities, the ownership of our existing investors will be diluted. The incurrence of additional debt financing would result in incremental debt service obligations, and any future instruments governing such debt could include operating and financial covenants that could restrict our operations. As of December 31, 2023, our total liquidity was $1,544.2 million, comprised of $665.2 million of cash and cash equivalents, excluding $13.2 million of restricted cash, as well as $699.0 million and $30.0 million of incremental borrowing capacity under the Senior Unsecured Revolving Credit Facility and the Subordinated Credit Facility (each as defined herein), respectively and $150.0 million of the 364-day revolving credit facility. Total cash of $678.4 million as of December 31, 2023 includes $105.5 million of cash that is attributable to the TPG Operating Group and on balance sheet securitization vehicles. Sources of Liquidity We have multiple sources of liquidity to meet our capital needs, including: • cash generated by our operating activities, such as management fees, monitoring, transaction and other fees, realized capital allocation-based income and investment sales from our consolidated funds, • cash received from investing activities, including amounts received from notes receivable from affiliates, and • cash received from our financing activities, including cash and funds available under our credit facilities. Cash and Cash Equivalents Our consolidated cash and cash equivalents totaled approximately $678.4 million at December 31, 2023. Credit Facilities Senior Unsecured Revolving Credit Facility In March 2011, TPG Holdings, L.P. entered into a $400.0 million credit facility (the “Senior Unsecured Revolving Credit Facility”). The Senior Unsecured Revolving Credit Facility, as amended May 2018, November 2020, November 2021, July 2022, August 2022 and September 2023, has aggregate revolving commitments of $1.2 billion and is scheduled to mature on September 26, 2028. Dollar-denominated principal amounts outstanding under the Senior Unsecured Revolving Credit Facility accrue interest, at the option of the applicable borrower, either (i) at a base rate plus applicable margin not to exceed 0.25% per annum or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin not to exceed 1.25%. We are also required to pay a quarterly commitment fee on the unused commitments under the Amended Senior Unsecured Revolving Credit Facility not to exceed 0.15% per annum, as well as certain customary fees for any issued letters of credit. During the year ended December 31, 2023, we borrowed $470.0 million from the Senior Unsecured Revolving Credit Facility to partially fund the cash consideration of the Acquisition, and borrowed an additional $31.0 million for working capital purposes, resulting in a balance of $501.0 million outstanding at December 31, 2023. As of December 31, 2023, $699.0 million was available to be borrowed under the terms of the Senior Unsecured Revolving Credit Facility. During January 2024, we drew $58.5 million under our Senior Unsecured Revolving Credit Facility. 150 Table of Contents Senior Unsecured Term Loan In December 2021, we entered into a credit agreement (the “Senior Unsecured Term Loan Agreement”) pursuant to which the lenders thereunder agreed to make term loans in a principal amount of up to $300.0 million during the period commencing on December 2, 2021 and ending on the date that is 30 days thereafter. Unused commitments were terminated at the end of such period. The proceeds from the term loan were used to make a ratable distribution to each of our investors and are not available for our operations. The Senior Unsecured Term Loan Agreement, as amended in July 2022 and September 2023, is scheduled to mature on March 31, 2026. Principal amounts outstanding under the amended Senior Unsecured Term Loan Agreement accrue interest, at the option of the borrower, either (i) at a base rate plus an applicable margin of 0.00% or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin of 1.00%. As of December 31, 2023, $200.0 million was outstanding under the Senior Unsecured Term Loan Agreement. Secured Borrowings Our secured borrowings are issued using on-balance sheet securitization vehicles. The secured borrowings are required to be repaid only from collections on the underlying securitized equity method investments and restricted cash of the securitization vehicles. The secured borrowings are separated into two tranches. Tranche A secured borrowings (the “Series A Securitization Notes”) were issued in May 2018 at a fixed rate of 5.33% with an aggregate principal balance of $200.0 million due June 20, 2038, with interest payable semiannually. Tranche B secured borrowings (the “Series B Securitization Notes” or, collectively with the Series A Securitization Notes, the “Securitization Notes”) were issued in October 2019 at a fixed rate of 4.75% with an aggregate principal balance of $50.0 million due June 20, 2038, with interest payable semiannually. The secured borrowings contain an optional redemption feature giving us the right to call the notes in full or in part, subject to a prepayment penalty if called before May 2023. If the secured borrowings are not redeemed on or prior to June 20, 2028, we will pay additional interest equal to 4.00% per annum. The secured borrowings contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, default provisions and financial covenants and limitations on certain consolidations, mergers and sales of assets. As of December 31, 2023, we were in compliance with these covenants and conditions. Subordinated Credit Facility In August 2014, one of our consolidated subsidiaries entered into two $15.0 million subordinated revolving credit facilities (collectively, the “Subordinated Credit Facility”), for a total commitment of $30.0 million. The Subordinated Credit Facility is available for direct borrowings and is guaranteed by certain members of TPG Operating Group. In August 2023, the subsidiary extended the maturity date of the Subordinated Credit Facility from August 2024 to August 2025. The interest rate for borrowings under the Subordinated Credit Facility is calculated at a term Secured Overnight Financing Rate (“SOFR”) rate plus a 0.10% per annum adjustment and 2.25%. During the year ended December 31, 2023, the subsidiary did not borrow or make repayments on the Subordinated Credit Facility, resulting in a zero balance outstanding at December 31, 2023. 364-Day Credit Facility On April 14, 2023, a consolidated subsidiary of the Company entered into a 364-day revolving credit facility (the “364-Day Credit Facility”) with Mizuho Bank, Ltd., acting as administrative agent, to provide the subsidiary with revolving borrowings of up to $150.0 million. Borrowings under the 364-Day Credit Facility are subject to one of three interest rates depending on the type of drawdown requested. Alternate Base Rate (“ABR”) loans are denominated in U.S. Dollars and subject to a variable interest rate computed daily as the higher of the Federal Funds Rate plus 0.50% or the one-month Term SOFR plus 1.00%, plus an applicable margin of between 1.00% and 2.00%, depending on the term of the loan. Term Benchmark Loans may be denominated in U.S. Dollars or Euros, and are subject to a fixed interest rate computed as the SOFR rate for a period comparable to the term of the loan in effect two business days prior to the date of borrowing, plus an applicable margin of between 2.00% and 3.00%, depending on the term of the loan. Risk-Free Rate (“RFR”) loans are denominated in Sterling and subject to a fixed interest rate computed daily as the Sterling Overnight Index Average (“SONIA”) in effect five business days prior to the date of borrowing, plus an applicable margin of between 151 Table of Contents 2.00% and 3.00%, depending on the term of the loan. The subsidiary is also required to a pay a quarterly facility fee equal to 0.30% per annum of the total facility capacity of $150.0 million, as well as certain customary fees for any issued loans. The Company entered into an equity commitment letter in connection with the 364-Day Credit Facility, committing to provide capital contributions, if and when required, to the consolidated subsidiary throughout the life of the facility. During the year ended December 31, 2023, the subsidiary borrowed and made repayments of $150.0 million on the 364-Day Credit Facility, resulting in a zero balance outstanding at December 31, 2023. Our Liquidity Needs We expect that our primary liquidity needs include cash required to: • support our working capital needs; • fund cash operating expenses, including compensation and contingencies, including for clawback obligations or litigation matters; • service debt obligations, including the payment of obligations at maturity, on interest payment dates or upon redemption, as well as any contingent liabilities that may give rise to future cash payments; • continue growing our businesses, including seeding new strategies, pursuing strategic investments or acquisitions, funding our capital commitments made to existing and future funds and co-investments, funding any net capital requirements of our broker-dealer and otherwise supporting investment vehicles that we sponsor; • pay amounts that may become due under the Tax Receivable Agreement; • pay earnouts and contingent cash consideration associated with our Acquisition; • pay cash dividends in accordance with our dividend policy for our Class A common stock; • warehouse investments in portfolio companies or other investments for the benefit of one or more of our funds or other investment pending contribution of committed capital by the investors in such vehicles and advance capital to them for other operational needs; • risk retention for CLOs • address capital needs of regulated and other subsidiaries, including our broker-dealer; and • exchange Common Units pursuant to the Exchange Agreement or repurchase or redeem other securities issued by us. 152 Table of Contents Contractual Obligations In the ordinary course of business, we enter into contractual arrangements that require future cash payments. The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of December 31, 2023 (in thousands): Payments Due by Period Total 2024 2025 2026 2027 2028 2029 and Thereafter Debt obligations (1) $ 951,000 $ — $ — $ 200,000 $ — $ 501,000 $ 250,000 Interest on debt obligations (2) 473,877 59,008 58,883 49,043 45,822 42,289 218,832 Capital commitments (3) 521,295 521,295 — — — — — Operating lease obligations 282,302 43,553 39,221 37,353 37,581 36,321 88,273 Repurchase agreements (4) 83,336 1,928 5,862 27,660 23,191 24,695 — Total contractual obligations $ 2,311,810 $ 625,784 $ 103,966 $ 314,056 $ 106,594 $ 604,305 $ 557,105 __________ (1) Debt obligations presented in the table reflect scheduled principal payments related to the Securitization Notes, our senior unsecured term loan and our senior unsecured revolving credit facility. (2) Estimated interest payments on our debt obligations include estimated future interest payments based on the terms of the debt agreements. See Note 12 to the Consolidated Financial Statements for further discussion of these debt obligations. (3) Capital commitments represent our obligations to provide general partner capital funding to the TPG funds. These amounts are generally due on demand, and accordingly, have been presented as obligations payable in the “2024” column. We generally utilize proceeds from return of capital distributions and proceeds from secured borrowings to help fund these commitments. (4) See Note 9 to the Consolidated Financial Statements for further discussion of the repurchase agreements. Additional Contingent Obligations As of December 31, 2023 and December 31, 2022, if all investments held by the TPG funds were liquidated at their current unrealized fair value, there would be clawback of $58.3 million related to STAR, net of tax, for which a performance allocation reserve was recorded within other liabilities in the Consolidated Statements of Financial Condition. The potential liquidation of STAR could require clawback payments. Additionally, if all remaining investments were deemed worthless, a possibility management views as remote, the amount of performance allocations subject to projected clawback as of December 31, 2023 and December 31, 2022 would be $1,910.2 million and $1,869.4 million, respectively. As of December 31, 2023 and December 31, 2022, we had guarantees outstanding totaling $73.6 million and $100.8 million, respectively, related to employee guarantees primarily related to a third-party lending program which enables certain of our eligible employees to obtain financing for co-invest capital commitment obligations with a maximum potential exposure of $176.3 million and $163.7 million, respectively. 153 Table of Contents Dividends The table below presents information regarding the quarterly dividends on the Class A common stock, which were made at the sole discretion of our Executive Committee and Board of Directors. Date Declared Record Date Payment Date Dividend per Class A Common Share May 10, 2022 May 20, 2022 June 3, 2022 $ 0.44 August 9, 2022 August 19, 2022 September 2, 2022 0.39 November 9, 2022 November 21, 2022 December 2, 2022 0.26 February 15, 2023 February 27, 2023 March 10, 2023 0.50 Total 2022 Dividend Year $ 1.59 May 15, 2023 May 25, 2023 June 5, 2023 $ 0.20 August 8, 2023 August 18, 2023 September 1, 2023 0.22 November 7, 2023 November 17, 2023 December 1, 2023 0.48 February 13, 2024 February 23, 2024 March 8, 2024 0.44 Total 2023 Dividend Year (through Q4 2023) $ 1.34 Tax Receivable Agreement The future exchanges by owners of Common Units for cash from a substantially concurrent public offering, reorganization or private sale (based on the price per share of the Class A common stock on the day before the pricing of such public offering or private sale) or, at our election, for shares of our Class A common stock on a one-for-one basis (or, in certain cases, for shares of nonvoting Class A common stock) are expected to produce or otherwise deliver to us favorable tax attributes that can reduce our taxable income. We (and our wholly-owned subsidiaries) are a party to a tax receivable agreement, under which generally we (or our wholly-owned subsidiaries) are required to pay the beneficiaries of the Tax Receivable Agreement 85% of the applicable cash savings, if any, in U.S. federal, state and local income tax that we actually realize or, in certain circumstances, are deemed to realize as a result of the Covered Tax Items. We generally retain the benefit of the remaining 15% of the applicable tax savings. The payment obligations under the Tax Receivable Agreement are obligations of TPG Inc. (or our wholly-owned subsidiaries), and we expect that the payments we will be required to make under the Tax Receivable Agreement will be substantial. On March 31, 2023, a pre-IPO Investor exchanged 1,000,000 Common Units of each TPG Operating Group partnership for 1,000,000 shares of Class A common stock. This exchange resulted in an increase in the Company’s tax basis of its investment in the TPG Operating Group partnerships and is subject to the Tax Receivable Agreement. The Company recognized an additional liability associated with the Tax Receivable Agreement in the amount of $6.3 million in connection with the exchange. Net Cash Flows The following table presents a summary of our cash flows for the periods presented: Year Ended December 31, 2023 2022 2021 ($ in thousands) Net cash provided by operating activities $ 720,518 $ 1,375,878 $ 1,474,820 Net cash used in investing activities (373,563) (3,012) (37,745) Net cash used in financing activities (789,234) (1,238,080) (1,322,566) Net (decrease) increase in cash and cash equivalents (442,279) 134,786 114,509 Cash and cash equivalents, beginning of period 1,120,650 985,864 871,355 Cash and cash equivalents, end of period $ 678,371 $ 1,120,650 $ 985,864 154 Table of Contents Operating Activities Operating activities provided $720.5 million and $1,375.9 million of cash for the year ended December 31, 2023 and 2022, respectively. Key drivers consisted of performance allocation and co-investment proceeds totaling $798.5 million and $1,567.7 million for the year ended December 31, 2023 and 2022, respectively. This was partially offset by changes in operating assets and liabilities for the year ended December 31, 2023 and 2022, respectively. Investing Activities Investing activities used $373.6 million and $3.0 million of cash during the year ended December 31, 2023 and 2022, respectively. During the year ended December 31, 2023, cash used by investing activities is primarily related to our acquisition of Angelo Gordon. During the year ended December 31, 2022, cash used by investing activities is primarily related to repayments and advances on notes receivable from affiliates. Financing Activities Financing activities used $789.2 million and $1,238.1 million of cash during the year ended December 31, 2023 and 2022, respectively. During the year ended December 31, 2023, cash used in financing activities primarily reflects the payments of dividends and distributions to our Class A common stockholders and to holders of non-controlling interests in subsidiaries and the redemption of the outstanding YTPG and AFTR Class A Ordinary Shares, which were funded by our Assets held in Trust Account. This was partially offset by net proceeds from our credit facilities. Cash used in financing activities during year ended December 31, 2022 primarily reflects the net impact of distributions to partners and non-controlling interests, the repayment of amounts borrowed under the Subordinated Credit Facility, and purchase of partnership interests with IPO proceeds, which is partially offset by the net proceeds from the IPO in January 2022. Off-Balance Sheet Arrangements We have not entered into any off-balance sheet arrangements, as defined in Regulation S-K. Critical Accounting Estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities in our Consolidated Financial Statements. We regularly assess these estimates; however, actual amounts could differ from those estimates. The impact of changes in estimates is recorded in the period in which they become known. An accounting policy is considered to be critical if the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the effect of the estimates and assumptions on financial condition or operating performance. The accounting policies we believe to reflect our more significant estimates, judgments and assumptions that are most critical to understanding and evaluating our reported financial results are: revenue recognition and fair value measurements. Revenues We recognize revenue in accordance with ASC 606. Revenue is recognized in a manner that depicts the transfer of promised goods or services to customers and for an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We are required to identify our contracts with customers, identify the performance obligations in a contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, variable consideration is included only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The guidance requires us to assess whether we are the principal versus agent in the arrangement based on the notion of control, which affects recognition of revenue on a gross or net basis. Essentially all of our revenue and operations are directly or indirectly supporting affiliated investment funds and derived from or related to their underlying investments. 155 Table of Contents Management fees related to our funds are generally based on a fixed percentage of the committed capital, invested capital, cost of investments or Net Asset Value (“NAV”). The corresponding fee calculations are both objective in nature and therefore do not require the use of significant estimates or assumptions. Incentive fees within the scope of the revenue guidance are generally calculated as a percentage of the profits earned in respect of certain accounts for which we are the investment adviser, subject to the achievement of minimum return levels or performance benchmarks. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the AUM or advisement over such performance period. Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax. We recognize incentive fee revenue only when these amounts are no longer subject to significant reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period. Incentive fees structured as performance allocations are accounted for under the equity method of accounting. For open-ended funds, we calculate revenue based on a percentage of annual fund profits, reduced by minimum return hurdles, and subject to prior year loss carry-forwards. Performance allocations for open-end funds are either paid in the first quarter following the performance year or during the calendar year if there are investor redemptions, and are generally not subject to repayment by the Company. Performance allocations attributed to certain non-liquid investments (“side pocket investments”) owned by open-ended funds are paid when the associated side pocket investments are realized. For closed-ended funds, Capital Allocation-Based Income is a disproportionate allocation (typically 20%) of performance allocations. Certain funds will allocate performance allocations to us, based on cumulative fund performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to limited partner preferred returns or high watermarks, where applicable, in accordance with the terms set forth in each respective fund’s governing documents. We recognize income attributable to performance allocations from a fund based on the amount that would be due to us pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date. Accordingly, the amount recognized as performance allocation income reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period. Performance allocations are generally realized when an underlying investment is profitably disposed of and the fund’s cumulative returns are in excess of the specific hurdle rates, as defined in the applicable governing documents. For any given period, performance allocations on our consolidated statements of operations may include reversals of previously recognized amounts due to a decrease in the value of a particular fund that results in a decrease of cumulative performance allocations earned to date. Since fund minimum level of returns are cumulative, previously recognized performance allocations also may be reversed in a period of appreciation that is lower than the particular fund’s minimum return levels. Each fund is considered separately in this regard and, for a given fund, performance allocations can never be negative over the life of a fund. If upon a hypothetical liquidation of a fund’s investments, at their then current fair values, previously recognized and distributed performance allocation would be required to be returned, a liability is established for the potential clawback obligation. Our actual obligation, however, would not become payable or realized until the end of a fund’s life. Fair Value Measurements GAAP establishes a hierarchical disclosure framework, which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace—including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of their fair values, as follows: • Level I—Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date. • Level II—Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date, and fair value is determined through the use of models or other valuation methodologies. The types of financial instruments generally classified in this category include 156 Table of Contents securities with less liquidity traded in active markets, securities traded in other than active markets, corporate bonds and loans, and government and agency securities. • Level III—Pricing inputs are unobservable for the financial instruments and include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the financial instrument. The fair value of the investments held by TPG funds is the primary input to the calculation of certain of our management fees, incentive fees, capital allocation based income, and performance allocation compensation. The TPG funds are accounted for as investment companies in accordance with U.S. GAAP guidance and reflect their investments, including majority-owned and controlled investments, at fair value. In the absence of observable market prices, we utilize valuation methodologies applied on a consistent basis and assumptions that we believe market participants would use to determine the fair value of the investments. For investments where little market activity exists, management’s determination of fair value is based on the best information available in the circumstances, which may incorporate management’s own assumptions and involves a significant degree of judgment, and the consideration of a combination of internal and external factors, including the appropriate risk adjustments for non-performance and liquidity risks. TPG has also elected the fair value option for certain other proprietary investments. TPG is required to measure certain financial instruments at fair value, including equity securities and derivatives. Fair Value of Investments or Instruments that are Exchange Traded Securities that are exchange traded and for which a quoted market exists will be valued at the closing price of such securities in the principal market in which the security trades, or in the absence of a principal market, in the most advantageous market on the valuation date. When a quoted price in an active market exists, no block discounts or control premiums are permitted regardless of the size of the public security held. In some cases, securities will include legal restrictions limiting their purchase and sale for a period of time, such as may be required under SEC Rule 144. A discount to publicly traded price may be appropriate in those cases; the amount of the discount, if taken, shall be determined based on the time period that must pass before the restricted security becomes unrestricted or otherwise available for sale. Fair Value of Investments or Instruments that are not Exchange Traded In the absence of observable market prices, we rely on valuation methodologies that primarily employ management’s determination as to fair value based off of available information and management’s own assumptions about the business. These assumptions involve a significant degree of judgement, taking into consideration a combination of internal and external factors. Equity Investments . We determine the fair value of our equity investments using the market approach, income approach or some combination of both. We primarily use the market approach for determining the fair values of our investments. The market approach relies upon valuations for comparable public companies, transactions or assets, and thus requires that we use our discretion to identify comparable companies, transactions and assets. We may also choose to incorporate a secondary methodology, generally used to corroborate the results of the market approach. This would typically be the income approach, which provides an indication of fair value based on the present value of cash flows that a business, security or property is expected to generate in the future. The most widely used methodology under the income approach is the discounted cash flow method, which includes significant assumptions about the underlying investment’s projected net earnings or cash flows, discount rate, capitalization rate or exit multiple. Depending on the facts and circumstances associated with the investment, different primary and secondary methodologies may be used including direct capitalization method, option value, contingent claims or scenario analysis, yield analysis, projected cash flow through maturity or expiration, probability weighted methods or recent round of financing. 157 Table of Contents Credit Investments . The fair values of credit-oriented investments are generally determined on the basis of prices between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments and various relationships between investments. Investments in distressed debt and corporate loans and bonds, we generally determine fair value by comparing against similar investments. We review and analyze the prices obtained from external pricing sources to evaluate their reliability and accuracy, and at times exclude vendor prices and broker quotations that we believe do not reflect fair value. Certain credit financial instruments may not trade or prices are not readily available, or trade infrequently and, when they are traded, the price may be unobservable and, as a result, multiple external pricing sources may not be available. In such instances, we may use an internal pricing model as either a corroborating or sole data point in determining the price. We generally engage specialized third-party valuation service providers to assess and corroborate the valuation of a selection of the investments on a periodic basis. Management Process on Fair Value Due to the importance of fair value throughout the Consolidated Financial Statements and the significant judgment required to be applied in arriving at those fair values, we have developed a process around valuation that incorporates several levels of approval and review from both internal and external sources. Investments held by TPG funds and investment vehicles are valued on at least a quarterly basis by our internal valuation or asset management teams, which are independent from our investment teams. For investments valued utilizing a forward-looking market approach and/or income method, and where TPG has information rights, we generally have a direct line of communication with each of the portfolio company finance teams and collect financial data used to support projections used in the analysis. The respective product’s valuation team or deal team then analyzes the data received and updates the valuation models, reflecting any changes in the underlying forecast, cash flow projections, weighted-average cost of capital, exit multiple and any other valuation input relevant economic conditions. The results of all valuations of investments held by TPG funds and investment vehicles are initially reviewed and approved by the relevant subcommittee. Each subcommittee is comprised of at least one member who does not participate in the process of making or disposing of investments. The valuations are aggregated and significant matters are presented for final approval by TPG’s Global Valuation Committee, which is comprised of senior employees and includes its Chief Financial Officer, General Counsel, Chief Compliance Officer, Chief Operating Officer and Chief Accounting Officer. Approval by any member of the Valuation Committee is related to such member’s role in the Committee, such that control function members’ (i.e., those members who do not participate in the process of making or disposing of investments) approval, for example, represents their confirmation that the process was run appropriately and that the deliberations were on the merits. Additionally, we will generally engage an independent valuation firm to assist with valuations of certain Level III valuations. The valuation firm will either perform certain procedures in order to assess the reasonableness of our valuation or provide a valuation range from which we will select a point in the range to determine the final valuation. Business Combinations We account for business combinations using the acquisition method under ASC Topic 805, Business Combinations (“ASC 805”) under which the purchase price of the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the acquisition date. Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on the best information available in the circumstances and may incorporate management’s own assumptions and involve a significant degree of judgment. Management uses its best estimates and assumptions to accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets. Examples of critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life, discount rates and income tax rates. Our estimates for future cash flows are based on historical data, various internal estimates and certain external sources, and are based on assumptions that are consistent with the plans and estimates we are using to manage the underlying assets acquired. Unanticipated events and circumstances may occur that could affect the accuracy or validity of such assumptions, estimates or actual results. For business combinations accounted for under the acquisition 158 Table of Contents method, the purchase consideration, including the fair value of certain elements of contingent consideration as of the acquisition date, in excess of the fair value of net assets acquired is recorded as goodwill. Intangible Assets Our intangible assets consist of the fair value of our interests in future promote of certain funds and the fair value of acquired investor relationships representing the fair value of management fees earned from existing investors in future funds. Finite-lived intangible assets are amortized over their estimated useful lives, which range from 2 years to 20 years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. Amortization expense is included in depreciation and amortization expense in the Consolidated Financial Statements. Recent Accounting Developments Information regarding recent accounting developments and their effects to us can be found in Note 2 , “Summary of Significant Accounting Policies,” to our audited Consolidated Financial Statements included elsewhere in this report.