TPG Poised to Acquire Minority Stake in Creative Planning, Valuing Firm at $15 Billion

TPG is in advanced talks to acquire a minority stake in wealth management firm Creative Planning, potentially valuing the company at over $15 billion, sources revealed. This move marks TPG’s second wealth management investment in a week, highlighting strong demand in the sector.

TPG Emerges as Lead Bidder for $2 Billion Stake in Creative Planning, Valuing Firm at $15 Billion

In a deal that could potentially value the wealth management firm at over $15 billion, buyout firm TPG has emerged as the forerunner to acquire a minority stake in Creative Planning valued at $2 billion. Individuals with knowledge of the situation reported this information on September 28.

The agreement would be TPG's second investment in a wealth manager within a week. It would emphasize the increasing demand for dealmaking in the sector, which generates lucrative fee income for managers. On September 26, TPG successfully agreed to acquire a minority stake in Homrich Berg.

The sources, who requested anonymity due to the confidentiality of the discussions, stated that TPG, a San Francisco-based firm, is expected to emerge victorious in an auction for the Creative Planning stake. This has piqued the interest of other buyout firms, including Permira. The sources also indicated that the agreement may be disclosed shortly.

If the negotiations are successful, TPG will become a co-owner of the wealth manager along with General Atlantic. This private equity firm acquired a minority stake in Creative Planning in 2020.

TPG and Permira declined to provide additional information, and Creative Planning did not promptly address requests for comment.

Private equity firms have historically demonstrated a strong interest in wealth managers. They prefer to invest in companies that produce consistent revenue flows. The fragmented wealth management industry also enables companies to expand rapidly by acquiring competitors.

Creative Planning Manages $300 Billion in Assets as TPG Seeks $2 Billion Stake in Growing Firm

According to its website (via Reuters), Creative Planning, headquartered in Overland Park, Kansas, provides businesses with financial and tax planning, retirement plans, and economic consultancy services. As of the end of 2023, the company managed over $300 billion in assets.

Creative Planning agreed to acquire Goldman Sachs's financial unit in the previous year. This decision was made after the Wall Street bank implemented a strategic shift in its wealth management unit to concentrate on high-net-worth individuals following its exit from the consumer lending business.

TPG, established in 1992 by private equity executives Jim Coulter and David Bonderman, had approximately $229 billion in assets under management as of the end of June, a 65% increase from the previous year. In the most recent quarter, the organization, which is currently under the leadership of Jon Winkelried, experienced a 60% increase in fee-related income from asset management.