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Resilient Lending Structures in an Uncertain Market: Navigating the Rise of Payment-in-Kind (“PIK”)

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Trevor Clark Managing Partner, TPG Twin Brook
Lindsey Franceschelli, CFA Director, TPG Twin Brook


Payment in Kind (“PIK”) Financing in Private Credit

With its increasing prevalence across private credit, payment-in-kind (“PIK”) financing - which allows borrowers to defer cash interest payments while increasing their loan balance - has come into the spotlight. While the concept of PIK is not new, its presence within loan structures in the direct lending market has increased considerably in recent years.

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TPG

TPG is a leading global alternative asset manager with $269 billion in assets under management. Jim Coulter and David Bonderman, former colleagues at the Bass Family Office, created TPG in 1992 and opened the firm's first offices in San Francisco. Today, TPG is led by CEO Jon Winkelried, who became sole CEO in 2021 after serving as Co-CEO since 2015.

A Unique Perspective    
With our family office roots, entrepreneurial heritage, and West Coast base, TPG has developed a distinctive approach to alternative investments based on innovation-led growth, an affinity for disruption and technology, and a distinctive culture of openness and collaboration.

Innovation and Organic Growth   
Our principled focus on innovation has resulted in a disciplined, organic evolution of our business. Incubating, launching, and scaling new platforms and products organically—often early in the development of important industry trends—is embedded in our DNA. Over 30 years, we have developed an ecosystem of insight, engagement, and collaboration across our platforms and products, which currently include more than 300 active portfolio companies headquartered in more than 30 countries. With an extensive track record, a diversified set of investment strategies, and a strategic orientation towards areas of high growth, such as technology, healthcare, and impact, we are helping shape the future of alternative asset management.

Strategic Acquisition   
In 2023, TPG acquired Angelo Gordon, marking a significant expansion into credit investing and offering real estate capabilities that are complementary to our current strategies. This strategic transaction meaningfully expanded our investing capabilities and broadens our product offering, underscoring our continued focus on growing and scaling through diversification.   
 

Matt Heintz   
Co-Head of Insurance   
mheintz@tpg.com   
(312) 779-8957


245 Park Avenue   
New York, NY 10167

 

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