According to insiders, private equity firm TPG is leading the race to acquire a $2 billion minority stake in Creative Planning. This deal could value the wealth management company at over $15 billion. This marks TPG's second investment in a wealth management firm within a week, highlighting the increasing demand in this sector, which earns substantial fee income for its managers. Earlier in the week, TPG agreed to acquire a minority stake in Homrich Berg.
Based in San Francisco, TPG is expected to win the equity auction for Creative Planning, competing against other firms, including Permira. The deal is anticipated to be announced in the coming days, although negotiations remain confidential.
If successful, TPG will join General Atlantic, a private equity firm that acquired a minority stake in Creative Planning in 2020, as owners of the company. Both TPG and Permira have declined to comment, and Creative Planning has not yet responded.
Wealth management companies are attractive to private equity firms due to their stable cash flows. The industry's fragmentation allows companies to grow rapidly by acquiring competitors.
Creative Planning, headquartered in Overland Park, Kansas, offers services such as financial and tax planning, retirement plans, and corporate financial advisory. As of the end of 2023, it managed over $300 billion in assets. Last year, Creative Planning agreed to acquire Goldman Sachs' personal financial management unit following Goldman's strategic shift to focus on high-net-worth individuals.
TPG was founded in 1992 by Jim Coulter and David Bonderman. As of the end of June, TPG managed approximately $229 billion in assets, a 65% increase from the previous year. The company, currently led by Jon Winkelried, saw a 60% rise in asset management fee-related income in the latest quarter.
