TPG (NASDAQ:TPG) used its fourth-quarter and full-year 2025 earnings call to highlight record fundraising, increased deployment activity, and margin expansion, while also addressing investor concerns around direct lending valuations and the potential impact of artificial intelligence on software investments.
Quarterly results, dividend, and fee growth
In prepared remarks, the company reported after-tax distributable earnings of $304 million, or $0.71 per Class A share, for the fourth quarter. The firm declared a $0.61 per share dividend, payable March 5, 2026, to shareholders of record as of February 19, 2026.
Transaction and monitoring fees were a major contributor to the quarter’s results. Weingart said fourth-quarter transaction and monitoring fees more than tripled year-over-year to $122 million, bringing full-year 2025 transaction and monitoring fees to $249 million, a nearly 70% increase. He attributed the increase to an accelerated pace of deployment and deeper integration of the firm’s capital markets capabilities across platforms and geographies.
Fee-related earnings (FRE) were $326 million in the quarter and $953 million for the full year, up 25% from 2024. The fourth-quarter FRE margin reached a record 52%, while full-year FRE margin was 45%, representing a 340-basis-point expansion year-over-year.
Record fundraising, AUM growth, and deployment
Chief Executive Officer Jon Winkelried called 2025 a “breakout year,” citing records in both capital raising and investing. The firm reported record fundraising of $51 billion in 2025, a 71% increase over 2024, and said it formed five cross-platform strategic partnerships totaling more than $10 billion of commitments to be funded over time.
TPG ended 2025 with $303 billion of total AUM, up 23% year-over-year. Fee-earning AUM grew 20% to $170 billion. Despite the faster pace of investing, dry powder increased 26% to $72 billion, representing 43% of fee-earning AUM, according to Weingart.
Deployment also reached new highs. Winkelried said fourth-quarter investment activity reached a record $19 billion, up 88% year-over-year, and total capital deployed in 2025 was $52 billion, the highest annual figure in the firm’s history. At the same time, the firm generated $23 billion of realizations in 2025.
Platform highlights: credit, private equity, and real estate
Management emphasized expansion in credit. Winkelried said the firm raised a record $21 billion of credit capital in 2025, up 67% from 2024, including $9 billion in the fourth quarter. In Credit Solutions, the company held a final close for its third flagship fund at $6.2 billion, which management said exceeded the initial $4.5 billion target and was double the predecessor’s size.
The firm also launched a new middle-market direct lending strategy, TPG Advantage Direct Lending (ADL). Winkelried said ADL held a first close of $875 million of equity in the quarter, translating to more than $2 billion of buying power including expected leverage, and had already built a portfolio of more than 10 first lien loans.
Private equity fundraising also outpaced broader industry trends, according to management. Winkelried noted that while overall private equity fundraising declined in 2025, TPG’s private equity fundraising grew more than 80% to $28 billion. The company also reported a first close for TPG Sports in the fourth quarter at $750 million of third-party capital.
In real estate, Winkelried said the firm deployed $6 billion in 2025 and that the platform appreciated 9% for the year. He cited activity ahead of what the firm expects to be a major fundraising cycle, including a fourth-quarter transaction where the Thematic Advantage Core Plus strategy acquired a majority interest in Quarterra via a carve-out from Lennar.
AI and software exposure: opportunities and risks
Winkelried opened his remarks by addressing investor questions about the intersection of software and AI. He said software represents 11% of total AUM, with 18% of private equity AUM in software and only about 2% of credit AUM.
He said TPG has not invested heavily in software within direct lending and has not offered ARR-based loans. For private equity, he said the firm is selective, viewing some software companies as potentially disrupted by AI while others may benefit.
In the Q&A, Nehal Raj, who leads TPG’s software sector investing, said the firm has used experience across past technology transitions to identify characteristics of potential “winners” and “losers” from AI. He described areas where TPG sees opportunity, including vertical market software with proprietary data and cybersecurity companies that may benefit from rising threats and increased adoption of AI agents.
Raj also noted that horizontal applications that are not systems of record and certain infrastructure-related software not aligned with new AI architectures may be more vulnerable. He said much of the disruption is already showing up in results, particularly as enterprise CIO budgets shift toward AI-related spend, affecting bookings and purchasing decisions.
Outlook: fundraising, margins, and performance revenue visibility
Looking ahead, Weingart said the firm expects 2026 aggregate fundraising to exceed $50 billion, adding that the firm does not view 2025’s record as a cyclical peak due to greater diversification and a larger fundraising team. He said real estate is expected to enter a major fundraising cycle in 2026, including plans to begin fundraising for TREP V and additional regional real estate funds.
For profitability, management guided to a full-year 2026 FRE margin of approximately 47%, up from 45% in 2025. On realized performance revenue, Weingart said that based only on signed monetizations in the pipeline, including the strategic sale of OneOncology to Cencora that closed earlier in the week, the firm expects to generate more than $50 million of realized performance revenue for public shareholders in the first quarter.
Management also discussed the firm’s strategic partnership with Jackson Financial, which it expects to close in the month of the call. Weingart said that at closing, TPG plans to invest $500 million in Jackson common stock, funded through its revolver, bringing net debt to an expected $2.1 billion pro forma from $1.6 billion at the end of the fourth quarter.
In the Q&A, executives also outlined plans to expand the private wealth product suite beyond existing vehicles, citing work on a multi-strategy credit interval fund and a non-traded REIT as near-term priorities, along with discussions on public-private partnership products aimed at broader market access.
About TPG (NASDAQ:TPG)
TPG Inc (NASDAQ: TPG) is a global alternative asset management firm that invests across a range of strategies including private equity, growth equity, real assets, credit and hedge funds. Founded in 1992 as Texas Pacific Group, the firm has expanded its product set to serve a broad set of institutional and individual investors through commingled funds, separately managed accounts and other customized investment vehicles.
TPG operates investment platforms that target buyouts, growth-stage companies, real estate and credit opportunities, and it has developed dedicated thematic and impact vehicles such as the TPG Rise Fund to pursue social and environmental outcomes alongside financial returns.
