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The Misunderstanding of Below- Investment Grade Risk in Net Lease

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Gordon Whiting Co-Head of Net Lease gwhiting@tpg.com
Scott Soussa Co-Head of Net Lease ssoussa@tpg.com


Because of the extremely low default rates in investment grade corporate credit (weighted average annual default rate of less than 0.50% since 19811), investors often assume that all investment grade strategies are less risky than their below-investment grade counterparts. TPG Angelo Gordon (“TPG AG”) would argue that our net lease business, which makes significant investments in properties occupied by below-investment grade tenants, has delivered both greater downside protection (resulting in fewer defaults) and upside potential than investment grade net lease given our underwriting and investment approach and the structural downside protections in our deals.

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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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