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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended September 30, 2022

OR

¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 001-04321

TPG Inc.

(Exact name of registrant as specified in its charter)

Delaware									87-2063362
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
301 Commerce Street,			Suite 3300						76102
Fort Worth,			TX						(Zip Code)

(817) 871-4000

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Class A common stock			TPG			The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

x

Smaller reporting company

¨

Emerging growth company

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of November 4, 2022, there were 70,981,157 shares of the registrant’s Class A common stock, 8,258,901 shares of the registrant’s nonvoting Class A common stock and 229,652,641 shares of the registrant’s Class B common stock outstanding.

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Table of Contents

Table of Contents

						Page
Part I. Financial Information
Item 1.			Financial Statements
			Unaudited Condensed Consolidated Financial Statements
			Condensed Consolidated Statements of Financial Condition (unaudited) as of September 30, 2022 and December 31, 2021			5
			Condensed Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021			6
			Condensed Consolidated Statements of Changes in Equity (unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021			7
			Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2022 and 2021			10
			Notes to Condensed Consolidated Financial Statements			12
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			49
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			112
Item 4.			Controls and Procedures			113
Part II. Other Information
Item 1.			Legal Proceedings			114
Item 1A.			Risk Factors			114
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			114
Item 3.			Defaults Upon Senior Securities			115
Item 4.			Mine Safety Disclosures			115
Item 5.			Other Information			115
Item 6.			Exhibits			115
Signatures

2

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Table of Contents

Cautionary Note Regarding Forward-Looking Statements

This report may contain forward-looking statements. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance, estimated operational metrics, business strategy and plans and objectives of management for future operations, including, among other things, statements regarding the expected filing of our amended and restated certificate of incorporation, the expected growth, future capital expenditures, fund performance and debt service obligations, such as those contained in “Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including, but not limited to, those described in “Item 1A.—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the United States Securities and Exchange Commission (“SEC”) on March 29, 2022, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at https://www.sec.gov, and “Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this report. Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Website and Social Media Disclosure

We use our website (https://www.tpg.com), Rise website (https://therisefund.com), Microsites (https://software.tpg.com, https://healthcare.tpg.com), LinkedIn (https://www.linkedin.com/company/tpg-capital), Twitter (https://twitter.com/tpg), Vimeo (https://vimeo.com/user52190696), Rise YouTube (https://www.youtube.com/channel/UCo8p2iF_I5p-Wr2_MQlzedw/featured) and Rise Instagram (https://www.instagram.com/therisefund/?hl=en) accounts as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about TPG when you enroll your email address by visiting the “Email Alerts” section of our website at https://shareholders.tpg.com. The contents of our website, any alerts and social media channels are not, however, a part of this report.

TERMS USED IN THIS REPORT

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to:

•“TPG,” “the Company,” “we,” “our,” and “us,” or like terms, refer to TPG Inc. and its consolidated subsidiaries taken as a whole.

•“Class A common stock” refers to Class A common stock of TPG Inc., which entitles the holder to one vote per share. When we use the term “Class A common stock” in this Quarterly Report on Form 10-Q, we are referring exclusively to such voting Class A common stock and not to “nonvoting Class A common stock.”

•“Class B common stock” refers to Class B common stock of TPG Inc., which entitles the holder to ten votes per share until the Sunset (as defined in our certificate of incorporation) but carries no economic rights.

•“Common Unit” refers to a common unit in each of the TPG Operating Group partnerships (or, depending on the context, a common unit in a TPG Operating Group partnership).

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•“Excluded Assets” refers to the assets and economic entitlements transferred to RemainCo listed in Schedule A to the master contribution agreement entered into in connection with the Reorganization (as defined herein), which primarily include (i) minority interests in certain sponsors unaffiliated with TPG, (ii) the right to certain performance allocations in TPG funds, (iii) certain co-invest interests and (iv) cash.

•“Founders” refers to David Bonderman and James G. (“Jim”) Coulter.

•“nonvoting Class A common stock” refers to the nonvoting Class A common stock of TPG Inc., which has no voting rights and is convertible into shares of Class A common stock upon transfer to a third party as and when permitted by the Investor Rights Agreement.

•“Pre-IPO Investors” refers to certain sovereign wealth funds, other institutional investors and certain other parties that entered into a strategic relationship with us prior to the Reorganization.

•“Promote Unit” refers to a promote unit in each of the TPG Operating Group partnerships, which entitles the holder to certain distributions of performance allocations received by the TPG Operating Group (or, depending on the context, a promote unit in each TPG Operating Group partnership).

•“Public SPACs” refers to Pace Holdings Corp., TPG Pace Holdings Corp., TPG Pace Tech Opportunities Corp., TPG Pace Beneficial Finance Corp., TPG Pace Energy Holdings Corp., TPG Pace Solutions Corp., TPG Pace Beneficial II Corp. and AfterNext HealthTech Acquisition Corp.

•“RemainCo” refers to, collectively, Tarrant Remain Co I, L.P., a Delaware limited partnership, Tarrant Remain Co II, L.P., a Delaware limited partnership, and Tarrant Remain Co III, L.P., a Delaware limited partnership, which owns the Excluded Assets, and Tarrant Remain Co GP, LLC, a Delaware limited liability company serving as their general partner.

•“Specified Company Assets” refers to TPG general partner entities from which holders of Common Units (including us) received an estimated 20% performance allocation after giving effect to the Reorganization.

•“TPG general partner entities” refers to certain entities that (i) serve as the general partner of certain TPG funds and (ii) are, or historically were, consolidated by TPG Group Holdings.

•“TPG Group Holdings” refers to TPG Group Holdings (SBS), L.P., a Delaware limited partnership that is considered our predecessor for accounting purposes and is a TPG Partner Vehicle and direct owner of certain Common Units and Class B common stock.

•“TPG Operating Group” refers (i) for periods prior to giving effect to the Reorganization, to the TPG Operating Group partnerships and their respective consolidated subsidiaries and (ii) for periods beginning after giving effect to the Reorganization, (A) to the TPG Operating Group partnerships and their respective consolidated subsidiaries and (B) not to RemainCo.

•“TPG Operating Group partnerships” refers to TPG Operating Group I, L.P., a Delaware limited partnership formerly named TPG Holdings I, L.P., TPG Operating Group II, L.P., a Delaware limited partnership formerly named TPG Holdings II, L.P., and TPG Operating Group III, L.P., a Delaware limited partnership formerly named TPG Holdings III, L.P.

•“TPG Partner Holdings” refers to TPG Partner Holdings, L.P., a Delaware limited partnership, which is a TPG Partner Vehicle that indirectly owns substantially all of the economic interests of TPG Group Holdings, a TPG Partner Vehicle.

•“TPG Partner Vehicles” refers to, collectively, the vehicles through which the Founders and current and former TPG partners (including such persons’ related entities and estate planning vehicles) hold their equity in the TPG Operating Group, including TPG Group Holdings and TPG Partner Holdings.

In addition, for definitions of “Gross IRR,” “Net IRR,” “Gross MoM” and related terms, see “Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Fund Performance Metrics.”

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

TPG Inc.

Condensed Consolidated Statements of Financial Condition (unaudited)

(dollars in thousands, except share data)

			September 30, 2022						December 31, 2021
Assets
Cash and cash equivalents			$	1,052,612					$	972,729
Restricted cash (1)			13,172						13,135
Due from affiliates			178,917						185,321
Investments (includes assets pledged of $481,863 and $492,276 as of September 30, 2022 and December 31, 2021, respectively (1))			5,725,828						6,109,046
Other assets			615,736						657,317
Assets of consolidated TPG Funds and Public SPACs (1):
Cash and cash equivalents			6,282						5,371
Assets held in Trust Accounts			1,003,449						1,000,027
Other assets			727						19,067
Total assets			$	8,596,723					$	8,962,013
Liabilities, Redeemable Equity and Equity
Liabilities
Accounts payable and accrued expenses			$	225,263					$	134,351
Due to affiliates			178,305						826,999
Secured borrowings, net (1)			245,182						244,950
Senior unsecured term loan			199,216						199,494
Accrued performance allocation compensation			3,369,182						—
Other liabilities			234,818						238,246
Liabilities of consolidated TPG Funds and Public SPACs (1):
Current redeemable equity			352,015						—
Derivative liabilities			1,333						13,048
Deferred underwriting			22,750						35,000
Other liabilities			623						8,484
Total liabilities			4,828,687						1,700,572
Commitments and contingencies (Note 12)
Redeemable equity attributable to consolidated Public SPACs (1)			651,434						1,000,027
Equity
Class A common stock $0.001 par value, 2,340,000,000 shares authorized (79,240,058 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			79						—
Class B common stock $0.001 par value, 750,000,000 shares authorized (229,652,641 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			230						—
Preferred stock, $0.001 par value, 25,000,000 shares authorized (0 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			—						—
Additional paid-in-capital			498,712						—
Retained earnings			459						—
Partners’ capital controlling interests			—						1,606,593
Other non-controlling interests			2,617,122						4,654,821
Total equity			3,116,602						6,261,414
Total liabilities, redeemable equity and equity			$	8,596,723					$	8,962,013

________________

(1)The Company’s consolidated total assets and liabilities as of September 30, 2022 and December 31, 2021 include assets and liabilities of variable interest entities (“VIEs”). The assets can be used only to satisfy obligations of the VIEs, and the creditors of the VIEs have recourse only to these assets, and not to TPG Inc. These amounts include the assets and liabilities of consolidated Public SPACs, restricted cash, assets pledged of securitization vehicles, secured borrowings of securitization vehicles, and redeemable equity of consolidated Public SPACs. See Notes 2, 7 and 10 to the Condensed Consolidated Financial Statements.

See accompanying notes to Condensed Consolidated Financial Statements.

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TPG Inc.

Condensed Consolidated Statements of Operations (unaudited)

(dollars in thousands, except share and per share data)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Revenues
Fees and other			$	333,496					$	279,908					$	896,456					$	685,115
Capital allocation-based income			227,628						231,356						667,096						3,211,945
Total revenues			561,124						511,264						1,563,552						3,897,060
Expenses
Compensation and benefits:
Cash-based compensation and benefits			116,753						136,139						348,751						392,666
Equity-based compensation			143,149						—						474,200						—
Performance allocation compensation			149,495						—						374,607						—
Total compensation and benefits			409,397						136,139						1,197,558						392,666
General, administrative and other			95,533						68,634						275,468						182,930
Depreciation and amortization			7,372						2,251						24,629						5,137
Interest expense			5,737						4,371						15,106						12,318
Expenses of consolidated TPG Funds and Public SPACs:
Interest expense			—						226						—						573
Other			567						12,556						2,547						23,919
Total expenses			518,606						224,177						1,515,308						617,543
Investment income (loss)
Income (loss) from investments:
Net gains (losses) from investment activities			1,907						224,141						(90,845)						338,346
Interest, dividends and other			2,407						472						3,393						6,959
Investment income of consolidated TPG Funds and Public SPACs:
Net gains from investment activities			—						1,949						—						9,008
Unrealized gains on derivative liabilities of Public SPACs			3,235						7,205						11,715						191,528
Interest, dividends and other			3,571						910						4,540						2,971
Total investment income (loss)			11,120						234,677						(71,197)						548,812
Income (loss) before income taxes			53,638						521,764						(22,953)						3,828,329
Income tax expense			432						1,281						23,534						6,090
Net income (loss)			53,206						520,483						(46,487)						3,822,239
Net (loss) income attributable to redeemable equity in Public SPACs prior to Reorganization and IPO			—						(4,250)						(517)						133,209
Net income attributable to non-controlling interests in consolidated TPG Funds prior to Reorganization and IPO			—						1,293						—						8,191
Net income attributable to other non-controlling interests prior to Reorganization and IPO			—						228,646						966						1,980,946
Net income attributable to TPG Group Holdings prior to Reorganization and IPO			—						294,794						5,256						1,699,893
Net income attributable to redeemable equity in Public SPACs			7,322						—						13,203						—
Net loss attributable to non-controlling interests in TPG Operating Group			(6,898)						—						(140,679)						—
Net income attributable to other non-controlling interests			15,422						—						6,499						—
Net income attributable to TPG Inc. subsequent to Reorganization and IPO			$	37,360					$	—					$	68,785					$	—
Net income (loss) per share data:
Net income (loss) available to Class A common stock per share
Basic			$	0.44					$	—					$	0.82					$	—
Diluted			$	0.09					$	—					$	(0.16)					$	—
Weighted-average shares of Class A common stock outstanding
Basic			79,266,822						—						79,249,528						—
Diluted			308,919,463						—						308,902,169						—

See accompanying notes to Condensed Consolidated Financial Statements.

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TPG Inc.

Condensed Consolidated Statements of Changes in Equity (unaudited)

(dollars in thousands, except share data)

									Shares of TPG Inc.												TPG Inc.
			Partners' Capital						Class A Common Stock						Class B Common Stock						Class A Common Stock, at par value						Class B Common Stock, at par value						Additional Paid-In Capital						Retained Earnings (Deficit)						Total TPG Inc. Equity						Other Non-Controlling Interests						Total Partners' Capital/ Equity
Balance at June 30, 2022			$	—					79,240,058						229,652,641						$	79					$	230					$	489,293					$	(4,789)					$	484,813					$	2,579,225					$	3,064,038
Net income subsequent to Reorganization and IPO			—						—						—						—						—						—						37,360						37,360						8,524						45,884
Shares issued for equity-based awards			—						—						—						0						—						—						—						—						—						—
Equity-based compensation subsequent to Reorganization and IPO			—						—						—						—						—						8,160						—						8,160						135,999						144,159
Capital contributions subsequent to Reorganization and IPO			—						—						—						—						—						—						—						—						5,741						5,741
Dividends/Distributions			—						—						—						—						—						—						(32,112)						(32,112)						(128,131)						(160,243)
Change in redemption value of redeemable non-controlling interest subsequent to Reorganization and IPO			—						—						—						—						—						1,259						—						1,259						15,764						17,023
Balance at September 30, 2022			$	—					79,240,058						229,652,641						$	79					$	230					$	498,712					$	459					$	499,480					$	2,617,122					$	3,116,602

									Shares of TPG Inc.												TPG Inc.
			Partners' Capital						Class A Common Stock						Class B Common Stock						Class A Common Stock, at par value						Class B Common Stock, at par value						Additional Paid-In Capital						Retained Earnings (Deficit)						Total TPG Inc. Equity						Other Non-Controlling Interests						Total Partners' Capital/ Equity
Balance at June 30, 2021			$	3,657,340					—						—						$	—					$	—					$	—					$	—					$	—					$	3,773,515					$	7,430,855
Net income			294,794						—						—						—						—						—						—						—						229,939						524,733
Change in redemption value of redeemable non-controlling interest			(10,853)						—						—						—						—						—						—						—						(20,806)						(31,659)
Capital contributions			—						—						—						—						—						—						—						—						24,083						24,083
Capital distributions			(463,870)						—						—						—						—						—						—						—						(545,791)						(1,009,661)
Deconsolidation of previously consolidated entities			29,309						—						—						—						—						—						—						—						49,562						78,871
Acquisition of NewQuest			—						—						—						—						—						—						—						—						301,189						301,189
Balance at September 30, 2021			$	3,506,720					—						—						$	—					$	—					$	—					$	—					$	—					$	3,811,691					$	7,318,411

See accompanying notes to Condensed Consolidated Financial Statements.

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TPG Inc.

Condensed Consolidated Statements of Changes in Equity (unaudited)

(dollars in thousands, except share data)

									Shares of TPG Inc.												TPG Inc.
			Partners' Capital						Class A Common Stock						Class B Common Stock						Class A Common Stock, at par value						Class B Common Stock, at par value						Additional Paid-In Capital						Retained Earnings (Deficit)						Total TPG Inc. Equity						Other Non-Controlling Interests						Total Partners' Capital/ Equity
Balance at December 31, 2021			$	1,606,593					—						—						$	—					$	—					$	—					$	—					$	—					$	4,654,821					$	6,261,414
Net income prior to Reorganization and IPO			5,256						—						—						—						—						—						—						—						966						6,222
Change in redemption value of redeemable non-controlling interest prior to Reorganization and IPO			(110)						—						—						—						—						—						—						—						(407)						(517)
Effect of Reorganization and purchase of units in the Partnership			(1,611,739)						48,984,961						229,652,641						49						230						271,780						(27)						272,032						1,341,603						1,896
Issuance of common stock in IPO, net of underwriting discount and issuance costs			—						28,310,194						—						28						—						784,611						—						784,639						(25,426)						759,213
Purchase of Partnership Interests with IPO proceeds			—						—						—						—						—						—						—						—						(379,597)						(379,597)
Issuance of common stock from Underwriters' exercise of over-allotment option, net of underwriting discount and issuance costs			—						1,775,410						—						2						—						49,754						—						49,756						—						49,756
Equity reallocation between controlling and non-controlling interests prior to Reorganization and IPO			—						—						—						—						—						(654,129)						—						(654,129)						654,129						—
Acquisition of NewQuest			—						—						—						—						—						33,584						—						33,584						(33,584)						—
Deferred tax effect resulting from purchase of Class A Units, net of amounts payable under Tax Receivable Agreement			—						—						—						—						—						(13,232)						—						(13,232)						—						(13,232)
Liability-based performance allocation compensation			—						—						—						—						—						—						—						—						(3,525,767)						(3,525,767)
Net income (loss) subsequent to Reorganization and IPO			—						—						—						—						—						—						68,785						68,785						(134,180)						(65,395)
Shares issued for equity-based awards			—						169,493						—						0						—						1,088						—						1,088						(901)						187
Equity-based compensation subsequent to Reorganization and IPO			—						—						—						—						—						23,891						—						23,891						456,753						480,644
Capital contributions subsequent to Reorganization and IPO			—						—						—						—						—						—						—						—						9,464						9,464
Dividends/Distributions			—						—						—						—						—						—						(68,299)						(68,299)						(422,130)						(490,429)
Change in redemption value of redeemable non-controlling interest subsequent to Reorganization and IPO			—						—						—						—						—						1,365						—						1,365						21,378						22,743
Balance at September 30, 2022			$	—					79,240,058						229,652,641						$	79					$	230					$	498,712					$	459					$	499,480					$	2,617,122					$	3,116,602

See accompanying notes to Condensed Consolidated Financial Statements.

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TPG Inc.

Condensed Consolidated Statements of Changes in Equity (unaudited)

(dollars in thousands, except share data)

									Shares of TPG Inc.												TPG Inc.
			Partners' Capital						Class A Common Stock						Class B Common Stock						Class A Common Stock, at par value						Class B Common Stock, at par value						Additional Paid-In Capital						Retained Earnings (Deficit)						Total TPG Inc. Equity						Other Non-Controlling Interests						Total Partners' Capital/ Equity
Balance at December 31, 2020			$	2,460,868					—						—						$	—					$	—					$	—					$	—					$	—					$	2,259,834					$	4,720,702
Net income			1,699,893						—						—						—						—						—						—						—						1,989,137						3,689,030
Change in redemption value of redeemable non-controlling interest			25,320						—						—						—						—						—						—						—						41,213						66,533
Capital contributions			—						—						—						—						—						—						—						—						28,738						28,738
Capital distributions			(708,670)						—						—						—						—						—						—						—						(857,982)						(1,566,652)
Deconsolidation of previously consolidated entities			29,309						—						—						—						—						—						—						—						49,562						78,871
Acquisition of NewQuest			—						—						—						—						—						—						—						—						301,189						301,189
Balance at September 30, 2021			$	3,506,720					—						—						$	—					$	—					$	—					$	—					$	—					$	3,811,691					$	7,318,411

See accompanying notes to Condensed Consolidated Financial Statements.

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TPG Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

			Nine Months Ended September 30,
			2022						2021
Operating activities:
Net (loss) income			$	(46,487)					$	3,822,239
Adjustments to reconcile net income to net cash provided by operating activities:
Equity-based compensation			474,200						—
Performance allocation compensation			374,607						—
Loss (gain) from investment activities			90,845						(338,346)
Capital allocation-based income			(667,096)						(3,211,945)
Other non-cash activities			34,897						18,455
Net gains from investment activities of consolidated TPG Funds and Public SPACs			(11,715)						(200,536)
Changes in operating assets and liabilities:
Purchases of investments			(71,115)						(105,382)
Proceeds from investments			1,066,905						1,599,028
Due from affiliates			(24,900)						(38,169)
Other assets			(21,574)						1,397
Accounts payable and accrued expenses			112,857						236,303
Due to affiliates			14,059						24,826
Accrued performance allocation compensation			(531,133)						—
Other liabilities			(12,607)						(14,263)
Changes related to consolidated TPG Funds and Public SPACs:
Purchases of investments			—						(210,037)
Proceeds from investments			—						215,029
Cash and cash equivalents			(911)						(1,330)
Assets held in Trust Accounts			(3,422)						(771,859)
Other assets			18,340						7,916
Other liabilities			(7,151)						24,183
Net cash provided by operating activities			788,599						1,057,509
Investing activities:
Repayments of notes receivable from affiliates			14,937						5,446
Advances on notes receivable from affiliates			(15,500)						(9,053)
Purchases of fixed assets			(2,329)						(1,614)
Acquisition of NewQuest			—						24,817
Net cash (used in) provided by investing activities			(2,892)						19,596
Financing activities:
Proceeds from issuance of common stock in IPO, net of underwriting and issuance costs			770,865						—
Proceeds from issuance of common stock from underwriters' exercise of over-allotment option, net of underwriting and issuance costs			49,756						—
Purchase of partnership interests with IPO proceeds			(379,597)						—
Reorganization activities			2,124						—
Repayments of revolving credit facility to affiliate			—						(50,000)
Proceeds from subordinated credit facility			30,000						—
Repayments of subordinated credit facility			(30,000)						—
Contributions from holders of other non-controlling interests			4,247						3,599
Distributions to holders of other non-controlling interests prior to Reorganization and IPO			(318,942)						(411,022)
Dividends/Distributions			(478,958)						—
Distributions to partners prior to Reorganization and IPO			(355,282)						(437,295)

See accompanying notes to Condensed Consolidated Financial Statements.

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TPG Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(dollars in thousands)
			Nine Months Ended September 30,
			2022						2021
Changes related to TPG Funds and Public SPACs:
Proceeds from SPAC IPOs			—						935,000
Payments of underwriting and offering costs			—						(18,700)
Redemption of redeemable equity			—						(163,176)
Contributions from holders of non-controlling interests			—						540
Distributions to holders of non-controlling interests			—						(11,049)
Net cash used in financing activities			$	(705,787)					$	(152,103)
Net change in cash, cash equivalents and restricted cash			$	79,920					$	925,002
Cash, cash equivalents and restricted cash, beginning of period			985,864						871,355
Cash, cash equivalents and restricted cash, end of period			$	1,065,784					$	1,796,357
Supplemental disclosures of other cash flow information (a):
Cash paid for income taxes			$	36,629					$	7,541
Cash paid for interest			6,550						7,743
Supplemental disclosures of non-cash operating activities:
NewQuest contingent consideration			—						8,400
Investment in equity method investments			—						(3,138)
In-kind proceeds from investments			—						36,334
Proceeds receivable on sale of investments			—						114
Supplemental disclosures of non-cash investing and financing activities:
Deferred underwriting related to Public SPACs			12,250						(35,441)
Contributions from holders of other non-controlling interests			—						24,600
Distributions in-kind to holders of other non-controlling interests			—						(33,197)
Distributions payable to partners			—						591,530
Distributions payable to holders of other non-controlling interests			11,471						462,826
Reconciliation of cash, cash equivalents and restricted cash, end of period:
Cash and cash equivalents			$	1,052,612					$	1,783,221
Restricted cash			13,172						13,136
Cash, cash equivalents and restricted cash, end of period			$	1,065,784					$	1,796,357

_______________

(a)For supplemental disclosures related to deconsolidation of previously consolidated TPG Funds and Public SPACs, see Note 4 to the Condensed Consolidated Financial Statements.

See accompanying notes to Condensed Consolidated Financial Statements.

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Table of Contents

TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1.    Organization

TPG Inc., along with its consolidated subsidiaries (collectively “TPG,” or the “Company”) is a leading global alternative asset manager on behalf of third-party investors under the “TPG” brand name whose predecessor was founded in 1992. TPG Inc. includes the consolidated accounts of management companies, general partners of pooled investment entities and Special Purpose Acquisition Companies (“Public SPACs” and/or “SPACs”), which are held in one of three holding companies (TPG Operating Group I, L.P., TPG Operating Group II, L.P. and TPG Operating Group III, L.P.) (collectively the “TPG Operating Group”).

Reorganization and IPO

The owners of TPG Group Holdings and the TPG Operating Group completed a series of actions on January 12, 2022 as part of a corporate reorganization (the “Reorganization”), in conjunction with an initial public offering (“IPO”) that was completed on January 18, 2022. TPG Partners, LLC was created on August 4, 2021 to effectuate the IPO and acquire Common Units of the TPG Operating Group on behalf of public investors. TPG Partners, LLC was designed as a holding company, and its only business is to act as the owner of the entities serving as the general partner of the TPG Operating Group partnerships. The TPG Operating Group (and the entities through which its direct and indirect partners held their interests) was restructured and recapitalized. On December 31, 2021, the TPG Operating Group transferred certain assets to Tarrant Remain Co I, L.P., Tarrant Remain Co II, L.P., and Tarrant Remain Co III, L.P. (collectively “RemainCo”) and distributed the interests in RemainCo to the owners of the TPG Operating Group. Following the transfer of certain assets, the Company deconsolidated certain TPG Funds (“TPG Funds”) as of December 31, 2021 as the Company is no longer their primary beneficiary.

On January 12, 2022, the following steps were completed:

•TPG Group Holdings, the TPG Operating Group, and TPG Partners, LLC completed the remaining steps of the planned Reorganization. The TPG Operating Group created Common Units and issued them to the Company and the other non-controlling interest holders of the TPG Operating Group. Immediately following the Reorganization, the TPG Operating Group and its subsidiaries are controlled by the same parties and as such, the Reorganization is a transfer of interests under common control. Accordingly, the Company will carry forward the existing value of the members’ interests in the assets and liabilities in these Condensed Consolidated Financial Statements prior to the IPO into the financial statements following the IPO.

•TPG Partners, LLC changed its name to TPG Inc. and converted to a corporation.

•TPG Inc. offered 33,900,000 shares of Class A common stock at a price of $29.50 per share, including 5,589,806 shares sold by a non-controlling interest holder of the TPG Operating Group, in the IPO. Additionally, certain Pre-IPO Investors exchanged their interests in the TPG Operating Group for interests in TPG Inc. totaling 35,136,254 Class A voting and 8,258,901 Class A non-voting common stock. The IPO closed on January 18, 2022, and TPG Inc. received proceeds totaling $770.9 million, net of $41.8 million in underwriting discounts and commissions, as well as $22.5 million of issuance costs. Proceeds of $379.6 million were used to repurchase Common Units of the TPG Operating Group from certain existing non-controlling interest holders, acquire newly issued Common Units of the TPG Operating Group and the remaining net proceeds are available for general corporate purposes. As a result of the Reorganization and IPO, TPG Inc. only holds Common Units of the TPG Operating Group.

On February 9, 2022, the Company and the selling stockholder sold an additional 1,775,410 and 1,614,590 Class A common stock, respectively, at the initial public offering price pursuant to the underwriters’ exercise of their option to purchase additional shares. TPG Inc. received additional net proceeds totaling approximately $49.8 million. The underwriters’ exercise of their option in addition to the IPO related transactions resulted in a total of 70,811,664 and 8,258,901 of Class A voting and Class A non-voting common stock outstanding, respectively. TPG Inc.’s ownership of the TPG Operating Group totaled approximately 26% on September 30, 2022.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

2.    Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements (the “Condensed Consolidated Financial Statements”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Company’s Condensed Consolidated Financial Statements. All dollar amounts are stated in thousands unless otherwise indicated. These interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2021. All intercompany transactions and balances have been eliminated. Certain comparative amounts for the prior fiscal period have been reclassified to conform to the financial statement presentation as of and for the period ended September 30, 2022. These interim Condensed Consolidated Financial Statements are unaudited and have been prepared on a basis consistent with that used to prepare the audited Condensed Consolidated Financial Statements. The operating results presented for interim periods are not necessarily indicative of the results expected for the full year ending December 31, 2022.

The Condensed Consolidated Financial Statements include the accounts of TPG Inc., TPG Operating Group (formerly known as “the Holdings Companies”) and their consolidated subsidiaries, TPG’s management companies, the general partners of TPG Funds and entities that meet the definition of a variable interest entity (“VIE”) for which the Company is considered the primary beneficiary.

The prior period financial statements present the consolidated accounts of TPG Group Holdings, which is considered the predecessor for accounting purposes. Following the completion of our IPO, TPG Inc. is the successor for accounting purposes.

Prior to the Reorganization and IPO, the Company’s predecessor consolidated certain TPG Funds and Public SPACs (herein referred to as “consolidated TPG Funds and Public SPACs”) pursuant to U.S. GAAP, as the Company’s predecessor was considered the primary beneficiary. Following the Reorganization and IPO, the Company no longer has a controlling financial interest in certain TPG Funds and continues to have a controlling financial interest in Public SPACs. Public SPACs are consolidated pursuant to U.S. GAAP. Consequently, the accompanying Condensed Consolidated Financial Statements include the assets, liabilities, revenues, expenses and cash flows of such certain consolidated Public SPACs. The ownership interest in certain TPG Funds held by entities or persons outside of TPG are reflected as other non-controlling interests in the accompanying Condensed Consolidated Financial Statements for fiscal years beginning prior to January 1, 2022. All of the management fees, performance allocations (as defined herein) and other amounts earned from the consolidated TPG Funds and Public SPACs are eliminated in consolidation. In addition, the equivalent expense amounts recorded by the consolidated TPG Funds and Public SPACs are also eliminated, with such reduction of expenses allocated to controlling interest holders. Accordingly, the consolidation of these entities has no net effect on net income attributable to TPG Inc., its predecessor, or net income attributable to other non-controlling interests. TPG Funds’ investments (the “Portfolio Companies”) are considered affiliates due to the nature of the Company’s ownership interests.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues, expenses, and investment income during the reporting periods. Actual results could differ from those estimates and such differences could be material to the Condensed Consolidated Financial Statements.

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Table of Contents

TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Principles of Consolidation

The types of entities TPG assesses for consolidation include subsidiaries, management companies, broker-dealers, general partners of investment funds, investment funds, SPACs and other entities. Each of these entities is assessed for consolidation on a case by case basis depending on the specific facts and circumstances surrounding that entity.

TPG first considers whether an entity is considered a VIE and therefore whether to apply the consolidation guidance under the VIE model. Entities that do not qualify as VIEs are assessed for consolidation as voting interest entities (“VOE”) under the voting interest model.

An entity is considered to be a VIE if any of the following conditions exist: (i) the equity investment at risk is not sufficient to finance the activities of the entity without additional subordinated financial support, (ii) as a group, the holders of the equity investment at risk lack the power to direct the activities that most significantly impact the entity’s economic performance or the obligation to absorb the expected losses or right to receive the expected residual returns, and (iii) the voting rights of some holders of the equity investment at risk are disproportionate to their obligation to absorb losses or right to receive returns, and substantially all of the activities are conducted on behalf of the holder of equity investment at risk with disproportionately few voting rights. For limited partnerships, partners lack power if neither (i) a simple majority or lower threshold (including a single limited partner) with equity at risk is able to exercise substantive kick-out rights through voting interests over the general partner, nor (ii) limited partners with equity at risk are able to exercise substantive participating rights over the general partners.

TPG consolidates all VIEs in which it is the primary beneficiary. An entity is determined to be the primary beneficiary if it holds a controlling financial interest in a VIE. A controlling financial interest is defined as (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The consolidation guidance requires an analysis to determine (i) whether an entity in which TPG holds a variable interest is a VIE and (ii) whether TPG’s involvement, through holding interest directly or indirectly in the entity or contractually through other variable interests, would give it a controlling financial interest. Performance of that analysis requires judgment. The analysis can generally be performed qualitatively; however, if it is not readily apparent that TPG is not the primary beneficiary, a quantitative analysis may also be performed. TPG factors in all economic interests including interests held through related parties, to determine if it holds a variable interest. Fees earned by TPG that are customary and commensurate with the level of effort required for the services provided, and where TPG does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered variable interests. TPG determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and continuously reconsiders that conclusion when facts and circumstances change.

Entities that are determined not to be VIEs are generally considered to be VOEs and are evaluated under the voting interest model. TPG consolidates VOEs that it controls through a majority voting interest or through other means.

The TPG Funds do not consolidate wholly-owned, majority-owned or controlled investments in Portfolio Companies, nor do the TPG Funds account for investments in Portfolio Companies over which they exert significant influence under the equity method of accounting. Rather, these investments are carried at fair value as described below in the section entitled Fair Value Measurement. As of December 31, 2021, the Company no longer consolidates such TPG Funds (see Note 1 to the Condensed Consolidated Financial Statements).

Investments

Investments consist of investments in private equity funds, real estate funds, hedge funds and credit funds, including our share of any performance allocations and equity method and other proprietary investments. Investments denominated in currencies other than the U.S. dollar are valued based on the spot rate of the respective currency at the end of the reporting period with changes related to exchange rate movements reflected in the Condensed Consolidated Statements of Operations.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Equity Method – Performance Allocations and Capital Interests

Investments in which the Company is deemed to have significant influence, but not control, are accounted for using the equity method of accounting except in cases where the fair value option has been elected. The Company as general partner has significant influence over the TPG Funds in which it invests but does not consolidate. The Company uses the equity method of accounting for these interests whereby it records both its proportionate and disproportionate allocation of the underlying profits or losses of these entities in revenues in the accompanying Condensed Consolidated Financial Statements. The carrying amounts of equity method investments are included in investments in the Condensed Consolidated Financial Statements. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value and its estimated fair value is recognized as an impairment when the loss is deemed other than temporary.

The TPG Funds are considered investment companies under Accounting Standards Codification (“ASC”) Topic 946, Financial Services – Investment Companies (“ASC 946”). The Company, along with the TPG Funds, applies the specialized accounting promulgated in ASC 946 and, as such, neither the Company nor the TPG Funds consolidate wholly-owned, majority-owned and/or controlled Portfolio Companies. The TPG Funds record all investments in the Portfolio Companies at fair value. Investments in publicly traded securities are generally valued at quoted market prices based upon the last sales price on the measurement date. Discounts are applied, where appropriate, to reflect restrictions on the marketability of the investment.

When observable prices are not available for investments, the general partners use the market and income approaches to determine fair value. The market approach consists of utilizing observable market data, such as current trading or acquisition multiples of comparable companies, and applying it to key financial metrics, such as earnings before interest, depreciation and taxes, of the Portfolio Company. The comparability of the identified set of comparable companies to the Portfolio Company, among other factors, is considered in the application of the market approach.

The general partners, depending on the type of investment or stage of the Portfolio Company’s lifecycle, may also utilize a discounted cash flow analysis, an income approach, in combination with the market approach in determining fair value of investments. The income approach involves discounting projected cash flows of the Portfolio Company at a rate commensurate with the level of risk associated with those cash flows. In accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”) market participant assumptions are used in the determination of the discount rate.

In applying valuation techniques used in the determination of fair value, the general partners assume a reasonable period of time for liquidation of the investment and take into consideration the financial condition and operating results of the underlying Portfolio Company, the nature of the investment, restrictions on marketability, market conditions, foreign currency exposures and other factors. In determining the fair value of investments, the general partners exercise significant judgment and use the best information available as of the measurement date. Due to the inherent uncertainty of valuations, the fair values reflected in the accompanying Condensed Consolidated Financial Statements may differ materially from values that would have been used had a readily available market existed for such investments and may differ materially from the values that may ultimately be realized.

The carrying value of investments classified as Equity Method — Performance Allocations and Capital Interests approximates fair value, because the underlying investments of the unconsolidated TPG Funds are reported at fair value.

Equity Method Investments – Other

The Company holds non-controlling, limited partnership interests in certain other partnerships in which it has significant influence over their operations. The Company uses the equity method of accounting for these interests whereby it records its proportionate share of the underlying income or losses of these entities in net gains (losses) from investment activities in the accompanying Condensed Consolidated Financial Statements. The carrying amounts of equity method investments are included in investments in the Condensed Consolidated Financial Statements. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value and its estimated fair value is recognized as an impairment when the loss is deemed other than temporary and recorded in net gains (losses) from investment activities within the Condensed Consolidated Financial Statements.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Equity Method – Fair Value Option

The Company elects the fair value option for certain investments that would otherwise be accounted for using the equity method of accounting. Such election is irrevocable and is applied on an investment-by-investment basis at initial recognition. The fair value of such investments is based on quoted prices in an active market. Changes in the fair value of these equity method investments are recognized in net gains (losses) from investment activities in the Condensed Consolidated Financial Statements.

Equity Investments

The Company holds non-controlling ownership interests in which it does not have significant influence over their operations. The Company records such investments at fair value when there is a readily determinable fair value. For certain nonpublic partnerships without readily determinable fair values, the Company has elected to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Impairment is evaluated when significant changes occur that may impact the investee in an adverse manner. Impairment, if any, is recognized in net gains (losses) from investment activities in the Condensed Consolidated Financial Statements.

Non-Controlling Interests

Non-controlling interests consists of ownership interests held by third-party investors in certain entities that are consolidated, but not 100% owned. The aggregate of the income or loss and corresponding equity that is not owned by the Company is included in non-controlling interests in the Condensed Consolidated Financial Statements. Allocation of income to non-controlling interest holders is based on the respective entities’ governing documents.

Revenues

Revenues consisted of the following (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Management fees			$	253,839					$	207,820					$	681,389					$	520,338
Fee Credits			(1,192)						(4,581)						(11,083)						(13,442)
Monitoring fees			3,826						3,990						11,370						13,661
Transaction fees			11,776						35,000						54,285						66,139
Incentive fees			350						—						5,183						—
Expense reimbursements and other			64,897						37,679						155,312						98,419
Total fees and other			333,496						279,908						896,456						685,115
Performance allocations			223,311						218,218						635,784						3,057,464
Capital interests			4,317						13,138						31,312						154,481
Total capital allocation-based income			227,628						231,356						667,096						3,211,945
Total revenues			$	561,124					$	511,264					$	1,563,552					$	3,897,060

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Fees and Other

Fees and other are accounted for as contracts with customers under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance for contracts with customers provides a five-step framework that requires the Company to (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when the Company satisfies its performance obligations. In determining the transaction price, the Company includes variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

Revenue Streams

Customer

Performance Obligations satisfied over time or point in time(a)

Variable or Fixed Consideration

Revenue Recognition

Classification of Uncollected Amounts (b)

Management Fees

TPG Funds, limited partners and other vehicles

Asset management services are satisfied over time (daily) because the customer receives and consumes the benefits of the advisory services daily

Consideration is variable since over time the management fee varies based on fluctuations in the basis of the calculation of the fee

Management fees are recognized each reporting period based on the value provided to the customer for that reporting period

Due from affiliates – unconsolidated VIEs

Monitoring Fees

Portfolio companies

In connection with the investment advisory services provided, the Company earns monitoring fees for providing oversight and advisory services to certain portfolio companies over time

Consideration is variable when based on fluctuations in the basis of the calculation of the fee Consideration is fixed when based on a fixed agreed-upon amount

Monitoring fees are recognized each reporting period based on the value provided to the customer for that reporting period

Due from affiliates – portfolio companies

Transaction Fees

Portfolio companies, third-parties and other vehicles

The company provides advisory services, debt and equity arrangements, and underwriting and placement services for a fee at a point in time

Consideration is fixed and is based on a point in time

Transaction fees are recognized on or shortly after the transaction is completed

Due from affiliates – portfolio companies Other assets - other

Incentive Fees

TPG Funds and other vehicles

Investment management services performed over a period of time that result in achievement of minimum investment return levels

Consideration is variable since incentive fees are contingent upon the TPG Fund or vehicles achieving more than the stipulated investment threshold return

Incentive fees are recognized at the end of the performance measurement period if the investment performance is achieved

Due from affiliates – unconsolidated VIEs

Expense Reimbursements and other

TPG Funds, portfolio companies and third-parties

Expense reimbursements incurred at a point in time relate to providing investment, management and monitoring services. Other revenue is performed over time.

Expense reimbursements and other are fixed consideration

Expense reimbursements and other are recognized as the expenses are incurred or services are rendered

Due from affiliates – portfolio companies and unconsolidated VIEs Other assets – other

_________________

(a)There were no significant judgments made in evaluating when a customer obtains control of the promised service for performance obligations satisfied at a point in time.

(b)See Note 10 to the Condensed Consolidated Financial Statements for amounts classified in due from affiliates.

Management Fees

The Company provides investment management services to the TPG Funds and other vehicles in exchange for a management fee. Management fees are determined quarterly based on an annual rate and are generally based upon a percentage of the capital committed or capital invested during the investment period. Thereafter, management fees are generally based on a percentage of actively invested capital or as otherwise defined in the respective management agreements. Since some of the factors that cause management fees to fluctuate are outside of the Company’s control, management fees are considered constrained and are not included in the transaction price until the uncertainty relating to the constraint is subsequently resolved. After the contract is established, management does not make any significant judgments in determining the transaction price.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Management fees earned from the TPG Funds generally range from 0.50% to 2.00% of committed capital during the commitment period and from 0.25% to 2.00% of actively invested capital after the commitment period or at an annual rate of fund gross assets, as defined in the respective partnership agreements of the TPG Funds. Management fees charged to consolidated TPG Funds and SPACs are eliminated in consolidation.

Monitoring Fees

The Company provides monitoring services to certain Portfolio Companies in exchange for a fee, which is recognized over time as services are rendered. Under the terms of the management agreements with certain TPG Funds, a portion of the monitoring fees received from Portfolio Companies may produce Fee Credits (as defined below) which reduce TPG Funds’ management fees due to the Company. After the monitoring contract is established, there are no significant judgments made in determining the transaction price.

Transaction Fees

The Company provides capital structuring and other advice to Portfolio Companies, third parties and other vehicles generally in connection with debt and equity arrangements, and underwriting and placement services for a fee at a point in time when the underlying advisory services rendered are complete. Transaction fees are separately negotiated for each transaction and are generally based on the underlying transaction value. After the contract is established, management makes no significant judgements when determining the transaction price.

Fee Credits

Under the terms of the management agreements with certain TPG Funds, the Company is required to reduce management fees payable by funds by an agreed upon percentage of certain fees, including monitoring and transaction fees earned from Portfolio Companies (“Fee Credits”). Investment funds receive the benefit of Fee Credits only with respect to monitoring and transaction fees that are allocable to the fund’s investment in the Portfolio Company and not, for example, any fees allocable to capital invested through co-investment vehicles. Fee Credits are calculated after deducting certain costs incurred in connection with reimbursements of specialized operational services associated with providing specialized operations and consulting services to the funds and Portfolio Companies. Fee Credits are recognized by investment funds concurrently with the recognition of monitoring fees and transaction fees. Since Fee Credits are payable to investment funds, amounts of Fee Credits are generally applied as a reduction of the management fee that is otherwise billed to the investment fund. Fee Credits are recorded as a reduction of revenues in the Condensed Consolidated Statement of Operations. Fee Credits payable to investment funds are recorded in due to affiliates in the Condensed Consolidated Financial Statements. See Note 10 to the Condensed Consolidated Financial Statements.

Incentive Fees

The Company provides investment management services to certain TPG funds and other vehicles in exchange for a management fee as discussed above and, in some cases, an incentive fee when the Company is not entitled to performance allocations, as further discussed below. Incentive fees are considered variable consideration as these fees are subject to reversal, and therefore the recognition of such fees is deferred until the end of the measurement period when the performance-based incentive fees become fixed and determinable. After the contract is established, there are no significant judgments made when determining the transaction price.

Expense Reimbursements and Other

In providing investment management and advisory services to TPG funds and monitoring services to the Portfolio Companies, TPG routinely contracts for services from third parties. In situations where the Company is viewed, for accounting purposes only, as having incurred these third-party costs on behalf of the TPG funds or Portfolio Companies, the cost of such services is presented net as a reduction of the Company’s revenues. In all other situations, the expenses and related reimbursements associated with these services are presented on a gross basis, which are classified as part of the Company’s expenses, and reimbursements of such costs are classified as expense reimbursements within revenues in the Condensed Consolidated Financial Statements. After the contract is established, there are no significant judgments made when determining the transaction price.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Capital Allocation-Based Income (Loss)

Capital allocation-based income (loss) is earned from the TPG Funds when the Company has a general partner’s capital interest and is entitled to a disproportionate allocation of investment income (referred to hereafter as “performance allocations”). The Company records capital allocation-based income (loss) under the equity method of accounting assuming the fund was liquidated as of each reporting date pursuant to each TPG Fund’s governing agreements. Accordingly, these general partner interests are accounted for outside of the scope of ASC 606.

Other arrangements surrounding contractual incentive fees through an advisory contract are separate and distinct and accounted for in accordance with ASC 606. In these incentive fee arrangements, the Company’s economics in the entity do not involve an allocation of capital. See discussion above regarding “Incentive Fees”.

Performance allocations are allocated to the general partner based on cumulative fund performance as of each reporting date, and after specified investment returns to the funds’ limited partners are achieved. At the end of each reporting period, the TPG Funds calculate and allocate the performance allocations that would then be due to the general partner for each TPG Fund, pursuant to the TPG Fund governing agreements, as if the fair value of the underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair value of underlying investments (and the investment returns to the funds’ limited partners) varies between reporting periods, it is necessary to make adjustments to amounts recorded as performance allocations to reflect either (i) positive performance resulting in an increase in the performance allocations allocated to the general partner or (ii) negative performance that would cause the amount due to the general partner to be less than the amount previously recognized, resulting in a negative adjustment to performance allocations allocated to the general partner. In each case, performance allocations are calculated on a cumulative basis and cumulative results are compared to amounts previously recorded with a current period adjustment, positive or negative, recorded.

The Company ceases to record negative performance allocations once previously recognized performance allocations for a TPG Fund have been fully reversed, including realized performance allocations. The general partner is not obligated to make payments for guaranteed returns or hurdles of a fund and, therefore, cannot have negative performance allocations over the life of a fund. Accrued but unpaid performance allocations as of the reporting date are reflected in investments in the Company’s Condensed Consolidated Financial Statements. Performance allocations received by the general partners of the respective TPG Funds are subject to clawback to the extent the performance allocations received by the general partner exceed the amount the general partner is ultimately entitled to receive based on cumulative fund results. Generally, the actual clawback liability does not become due until eighteen months after the realized loss is incurred; however, individual fund terms vary. For disclosures at September 30, 2022 related to clawback, see Note 12 to the Condensed Consolidated Financial Statements. Revenue related to performance allocations for consolidated TPG Funds is eliminated in consolidation.

The Company earns management fees, incentive fees and capital allocation-based income (loss) from investment funds and other vehicles whose primary focus is making investments in specified geographical locations and earns transaction and monitoring fees from Portfolio Companies located in varying geographies.

Investment Income

Income from equity method investments

The carrying value of equity method investments in proprietary investments where the Company exerts significant influence is generally determined based on the amounts invested, adjusted for the equity in earnings or losses of the investee allocated based on the Company’s ownership percentage, less distributions and any impairment. The Company records its proportionate share of investee’s equity in earnings or losses based on the most recently available financial information, which in certain cases may lag the date of TPG’s financial statements by up to three calendar months. Income from equity method investments is recorded in net gains (losses) from investment activities on the Condensed Consolidated Statements of Operations.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Income from equity method investments for which the fair value option was elected

Income from equity method investments for which the fair value option was elected includes realized gains and losses from the sale of investments, and unrealized gains and losses from changes in the fair value during the period as a result of quoted prices in an active market. Discounts are applied, where appropriate, to reflect restrictions on the marketability of the investment. Income from equity method investments for which the fair value option was elected is recorded in net gains (losses) from investment activities on the Condensed Consolidated Statements of Operations.

Income from equity investments

Income from equity investments, which represent investments held through equity securities of an investee that the Company does not hold significant influence over, includes realized gains from the sale of investments and unrealized gains and losses result from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Income from equity investments is recorded in net gains (losses) from investment activities on the Condensed Consolidated Statements of Operations.

Net gains (losses) from investment activities of consolidated TPG Funds and Public SPACs

Net gains (losses) from investment activities includes realized gains and losses from the sale of equity, securities sold and not yet purchased, debt and derivative instruments other than warrants and forward purchase agreements (“FPAs”), and unrealized gains and losses from changes in the fair value of such instruments. Realized gains and losses are recognized on the date the transaction is completed. These instruments are generally valued at quoted market prices based upon the last sales price on the measurement date. Discounts are applied, where appropriate, to reflect restrictions on the marketability of the investment. Net gains from investment activities of consolidated TPG Funds and Public SPACs are recorded in net gains (losses) from investment activities of consolidated TPG Funds and Public SPACs on the Condensed Consolidated Statements of Operations.

Unrealized gains (losses) from derivative liabilities of Public SPACs

Unrealized gains (losses) from derivative liabilities of Public SPACs includes unrealized gains and losses from changes in fair value of warrants and FPAs.

Interest, dividends and other

Interest income is recognized as earned. Dividend income is recognized by the Company on the ex-dividend date, or in the absence of a formal declaration, on the date it is received.

Compensation and Benefits

Cash-based compensation and benefits includes (i) salaries and wages, (ii) benefits and (iii) discretionary cash bonuses. Bonuses are accrued over the service period to which they relate.

Compensation expense related to the issuance of equity-based awards is measured at fair value on the grant date. Compensation expense for awards that vest over a future service period is recognized over the relevant service period on a straight-line basis. Compensation expense for awards that do not require future service is recognized immediately. Compensation expense for awards that contain market and service conditions is based on grant-date fair value that factors in the probability that the market conditions will be achieved and is recognized on a tranche by tranche basis using the accelerated attribution method. The requisite service period for those awards is the longer of the explicit service period and

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

the derived service period. The Company recognizes equity-based award forfeitures in the period they occur as a reversal of previously recognized compensation expense.

Prior to the IPO, all performance allocation payments in the form of legal form equity made to the Company’s partners were paid pro rata based on ownership percentages in the underlying investment partnership and accounted for as distributions on the equity held by such partners during such period. For the period in 2022 prior to the IPO, there were no performance allocations earned, allocated or distributed. Performance allocation compensation expense and accrued performance allocation compensation is the portion of performance allocations that TPG allocates to certain of its employees and certain other advisors of the Company. Performance allocations due to our partners and professionals are accounted for as compensation expense in conjunction with the recognition of the related performance allocations and, until paid, are recognized as accrued performance allocation compensation. Accordingly, upon a reversal of performance allocations, the related compensation expense, if any, is also reversed.

Net Income (Loss) Per Share of Class A Common Stock

Basic income (loss) per share of Class A common stock is calculated by dividing net income (loss) attributable to TPG Inc. by the weighted-average shares of Class A common stock, unvested participating shares of Class A common stock outstanding for the period and vested deferred restricted shares of Class A common stock that have been earned for which issuance of the related shares of Class A common stock is deferred until future periods. Diluted income (loss) per share of Class A Common Stock reflects the impact of all dilutive securities. Unvested participating shares of common stock are excluded from the computation in periods of loss as they are not contractually obligated to share in losses.

The Company applies the treasury stock method to determine the dilutive weighted-average common shares represented by the unvested restricted stock units. The Company applies the if-converted method to the TPG Operating Group partnership units to determine the dilutive impact, if any, of the exchange right included in the TPG Operating Group partnership units.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash on deposit with banks and other short-term investments with an initial maturity of 90 days or less. Restricted cash balances relate to cash balances reserved for the payment of interest on the Company’s secured borrowings.

Cash and Cash Equivalents Held by Consolidated Public SPACs

Cash and cash equivalents held by consolidated Public SPACs represent cash and cash equivalents that are held by consolidated Public SPACs and not available to fund the general liquidity needs of the Company.

Assets Held in Trust Accounts

Proceeds from equity issued by certain consolidated Public SPACs have been deposited into trust accounts (“Trust Accounts”) and may only be utilized for specific purposes. Therefore, such cash and investments are reported separately in assets held in Trust Accounts on the Condensed Consolidated Statements of Financial Condition.

As of September 30, 2022 and December 31, 2021, TPG Pace Beneficial II Corp. (“YTPG”) assets held in Trust Accounts were deposited into a non-interest-bearing U.S. based account.

As of September 30, 2022, AfterNext HealthTech Acquisition Corp. (“AFTR”) assets held in Trust Accounts were invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. As of December 31, 2021, these assets were deposited into a non-interest-bearing U.S. based trust account.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

As of September 30, 2022, TPG Pace Beneficial Finance Corp. (“TPGY”) assets held in Trust Accounts were deposited into a non-interest-bearing U.S. based account. As of December 31, 2021, TPGY assets held in Trust Accounts were invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. On October 11, 2022, TPGY used these funds to redeem its outstanding Class A ordinary shares, par value $0.0001 (the “Class A Shares”). See Note 10 to the Condensed Consolidated Financial Statements.

Derivative Liabilities of Public SPACs

Financial derivative assets and liabilities related to our consolidated Public SPACs’ investment activities consist of warrant liabilities and forward purchase agreements.

The Company recognizes these derivative instruments as assets or liabilities at fair value in the accompanying Condensed Consolidated Financial Statements. Changes in the fair value of derivative contracts entered into by the Company are included in current period earnings. These derivative contracts are not designated as hedging instruments for accounting purposes.

These derivatives are agreements in which a consolidated Public SPAC and a counterparty agree to exchange cash flows based on agreed-upon terms. As a result of the derivative transaction, the Company is exposed to the risk that counterparties will fail to fulfill their contractual obligations. To mitigate such counterparty risk, the applicable Public SPAC only enters into contracts with major financial institutions, all of which have investment grade ratings. Counterparty credit risk is evaluated in determining the fair value of the derivative instruments. In the normal course of business, the Company incurs commitments and is exposed to risks resulting from its investment and financing transactions, including derivative instruments. The value of a derivative instrument is based upon an underlying instrument. These instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, performance and operational risks. The Company manages these risks on an aggregate basis as part of its risk management policies and as such, does not distinguish derivative income or loss from any other category of instruments for financial statement presentation purposes. The leverage inherent in the Company’s derivative instruments increases the sensitivity of the Company’s earnings to market changes. Notional amounts often are used to express the volume of these transactions, but the amounts potentially subject to risk are much smaller. The Company routinely evaluates its contractual arrangements to determine whether embedded derivatives exist. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, if a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and if the combined instrument is not measured at fair value through profit or loss.

For derivative contracts where an enforceable master netting agreement is in place, the Company has elected to offset derivative assets and liabilities, as well as cash that may have been received or pledged, as part of collateral arrangements with the respective counterparty in the Condensed Consolidated Financial Statements. The master netting agreements provide the Company and the counterparty the right to liquidate collateral and the right to offset each other’s obligations in the event of default by either party.

Certain of the Company’s consolidated Public SPACs issued public warrants and FPAs in conjunction with their IPO. The Company accounts for warrants and FPAs of the consolidated Public SPAC’s ordinary shares that are not indexed to its own stock as liabilities at fair value on the balance sheet. These warrants and FPAs are subject to remeasurement at each balance sheet date and any change in fair value is recognized in the Company’s Condensed Consolidated Statements of Operations. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants and FPAs that do not meet all the criteria for equity classification, the warrants and FPAs are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants and FPAs are recognized as a non-cash gain or loss on the Condensed Consolidated Statements of Operations.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Fair Value Measurement

ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure the investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements).

Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.

The three levels of the fair value hierarchy under ASC 820 are as follows:

Level I – Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used. The types of investment generally included in Level I are publicly listed equities, debt and securities sold, not yet purchased.

Level II – Pricing inputs are other than quoted prices included within Level I that are observable for the investment, either directly or indirectly. Level II pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. The types of investments generally included in Level II are restricted securities listed in active markets, corporate bonds and loans.

Level III – Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation. The types of investments generally included in Level III are privately held debt and equity securities.

In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.

In certain instances, an investment that is measured and reported at fair value may be transferred into or out of Level I, II, or III of the fair value hierarchy.

In certain cases, debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments and various relationships between investments. When a security is valued based on dealer quotes, the Company subjects those quotes to various criteria in making the determination as to whether a particular investment would qualify for treatment as a Level II or Level III investment. Some of the factors considered include the number and quality of quotes, the standard deviations of the observed quotes and the corroboration of the quotes to independent pricing services.

Level III investments may include common and preferred equity securities, corporate debt, and other privately issued securities. When observable prices are not available for these securities, one or more valuation techniques (e.g., the market approach and/or the income approach) for which sufficient and reliable data is available are used. Within Level III, the use of the market approach generally consists of using comparable market transactions or other data, while the use of the income approach generally utilizes the net present value of estimated future cash flows, adjusted, as appropriate, for liquidity, credit, market and other risk factors. Due to the inherent uncertainty of these valuations, the fair values reflected in the accompanying Condensed Consolidated Financial Statements may differ materially from values that would have been used had a readily available market for the investments existed and may differ materially from the values that may

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

ultimately be realized. The period of time over which the underlying assets of the investments will be liquidated is unknown.

Financial Instruments

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Except for secured borrowings, the fair value of the Company’s assets and liabilities, including our Senior Unsecured Term Loan, which qualify as financial instruments under ASC 820, approximates the carrying amounts represented in the Condensed Consolidated Statements of Financial Condition due to their short-term nature and in the case of our Senior Unsecured Term Loan due to its recent issuance in December 2021 and variable rate nature.

Due from and Due to Affiliates

The Company considers current and former limited partners of funds and employees, including their related entities, entities controlled by the Company’s Founders but not consolidated by the Company, Portfolio Companies of TPG Funds, and unconsolidated TPG Funds to be affiliates (“Affiliates”). Receivables from and payables to affiliates are recorded at their expected settlement amount in due from and due to affiliates in the Condensed Consolidated Financial Statements.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of acquired identifiable net tangible and intangible assets. Goodwill is not amortized. At least annually, management assesses whether goodwill is impaired. Management assesses whether an impairment exists by comparing the fair value of each of its reporting units to its carrying value, including goodwill.

Intangible assets

The Company’s intangible assets consist of the fair value of its interests in future promote of certain funds and the fair value of acquired investor relationships representing the fair value of management fees earned from existing investors in future funds. Finite-lived intangible assets are amortized over their estimated useful lives, which range from five to twelve years, and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable.

Operating Leases

At contract inception, the Company determines if an arrangement contains a lease by evaluating whether (i) an identified asset has been deployed in a contract explicitly or implicitly and (ii) the Company obtains substantially all the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. Additionally, at contract inception the Company will evaluate whether the lease is an operating or finance lease. Right-of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. To the extent these payments are fixed or determinable, they are included as part of the lease payments used to measure the lease liability. The Company’s ROU assets are recognized as the initial measurement of the lease liabilities plus any initial direct costs and any prepaid lease payments less lease incentives received, if any. The lease terms may include options to extend or terminate the lease which are accounted for when it is reasonably certain that the Company will exercise that option. As the discount rate implicit to the lease is not readily determinable, incremental borrowing rates of the Company were used. The incremental borrowing rates are based on the information available including, but not limited to, collateral assumptions, the term of the lease, and the economic environment in which the lease is denominated at the commencement date.

The Company elected the package of practical expedients provided under the guidance. The practical expedient package applies to leases commenced prior to the adoption of the new standard and permits companies not to reassess whether existing or expired contracts are or contain a lease, the lease classification, and any initial direct costs for any existing leases. The Company has elected to not separate the lease and non-lease components within the contract.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Therefore, all fixed payments associated with the lease are included in the ROU asset and the lease liability. These costs often relate to the fixed payments for a proportionate share of real estate taxes, common area maintenance and other operating costs in addition to a base rent. Any variable payments related to the lease are recorded as lease expense when and as incurred. The Company has elected this practical expedient for all lease classes. The Company did not elect the hindsight practical expedient. The Company has elected the short-term lease expedient. A short-term lease is a lease that, as of the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For such leases, the Company will not apply the recognition requirements of ASC Topic 842, Leases (“ASC 842”) and instead will recognize the lease payments as lease cost on a straight-line basis over the lease term. Additionally, the Company elected the practical expedient which allows an entity to not reassess whether any existing land easements are or contain leases.

The Company’s leases primarily consist of operating leases for real estate, which have remaining terms of 1 to 11 years. Some of those leases include options to extend for additional terms ranging from 2 to 10 years. The Company’s other leases, including those for office equipment, vehicles, and aircrafts, are not significant. Additionally, the Company’s leases do not contain restrictions or covenants that restrict the Company from incurring other financial obligations. The Company also does not provide any residual value guarantees for the leases or have any significant leases that have yet to be commenced. From time to time, the Company enters into certain sublease agreements that have terms similar to the remaining terms of the master lease agreements between TPG and the landlord. Sublease income is recorded as an offset to general, administrative and other in the accompanying Condensed Consolidated Statements of Operations.

In response to the COVID-19 pandemic, the Financial Accounting Standards Board (“FASB”) provided relief under ASC 842. Under this relief, companies can make a policy election on how to treat lease concessions resulting directly from the COVID-19 pandemic, provided that the modified contracts result in total cash flows that are substantially the same or less than the cash flows in the original contract. The Company made the policy election to account for lease concessions that result from the COVID-19 pandemic as if they were made under enforceable rights in the original contract. Additionally, the Company made the policy election to account for these concessions outside of the lease modification framework described under ASC 842. The Company records accruals for deferred rental payments and recognizes rent abatements or concessions as variable lease costs in the periods incurred.

Operating lease expense is recognized on a straight-line basis over the lease term and is recorded within general, administrative and other in the accompanying Condensed Consolidated Statements of Operations (see Note 11 to the Condensed Consolidated Financial Statements).

Redeemable Equity from Consolidated Public SPACs

Redeemable equity from consolidated Public SPACs represents the shares issued by the Company’s consolidated Public SPACs that are redeemable for cash by the public shareholders in the event of an election to redeem by individual public shareholders at the time of the business combination. The Company accounts for redeemable equity in accordance with ASC Topic 480-10-S99, Distinguishing Liabilities from Equity (“ASC 480”), which states redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. The redeemable non-controlling interests are initially recorded at their original issuance price and are subsequently allocated their proportionate share of the underlying gains or losses of the Public SPACs. The Company adjusts the redeemable equity to full redemption value on a quarterly basis.

If a Public SPAC is unable to complete a business combination within the time period required by its governing documents, this equity becomes redeemable and is reclassified out of redeemable equity and into Public SPAC current redeemable equity in accordance with ASC 480 as the Public SPAC prepares for dissolution.

Income Taxes

As a result of the Reorganization, the Company is treated as a corporation for U.S. federal and state income tax purposes. The Company is subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of taxable income generated by the TPG Operating Group partnerships. Prior to the Reorganization and the IPO, the Company was treated as a partnership for U.S. federal income tax purposes and therefore was not subject to U.S. federal and state income taxes except for certain consolidated subsidiaries that were subject to taxation in the U.S. (federal, state and local) and foreign jurisdictions as a result of their entity classification for tax

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

reporting purposes. The provision for income taxes in the historical Condensed Consolidated Statements of Operations consists of U.S. (federal, state and local) and foreign income taxes with respect to certain consolidated subsidiaries.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs.

Under ASC Topic 740, Income Taxes, a valuation allowance is established when management believes it is more likely than not that a deferred tax asset will not be realized. The realization of deferred tax assets is dependent on the amount of our future taxable income. When evaluating the realizability of deferred tax assets, all evidence (both positive and negative) is considered. This evidence includes, but is not limited to, expectations regarding future earnings, future reversals of existing temporary tax differences and tax planning strategies.

Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Significant judgment is required in determining tax expense and in evaluating tax positions including evaluating uncertainties. We review our tax positions quarterly and adjust our tax balances as new information becomes available.

Recent Accounting Pronouncements

In June 2022, the FASB issued Accounting Standard Update (“ASU”) 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) which (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. Under current guidance, stakeholders have observed diversity in practice related to whether contractual sale restrictions should be considered in the measurement of the fair value of equity securities that are subject to such restrictions. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The Company does not expect the adoption of ASU 2022-03 to have a material impact to its Condensed Consolidated Financial Statements.

Recently Adopted Accounting Guidance

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions to U.S. GAAP requirements for modifications to debt agreements, leases, derivatives, and other contracts related to the expected market transition from the London Interbank Offered Rate (“LIBOR”), and certain other floating rate benchmark indices to alternative reference rates. ASU 2020-04 generally considers contract modifications related to reference rate reform to be an event that does not require contract remeasurement at the modification date nor a reassessment of a previous accounting determination. In January 2021, the FASB clarified the scope of that guidance with the issuance of ASU 2021-01, Reference Rate Reform: Scope. This ASU provides optional guidance for a limited period of time to ease the burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. These optional expedients and exceptions are effective as of March 12, 2020 through December 31, 2022. Adoption is permitted at any time. The Company elected to apply the optional expedient for contract modifications this quarter in conjunction with the amendments to its credit facilities as further described in Note 8 to the Condensed Consolidated Financial Statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40) (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU’s amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company’s adoption of ASU 2020-06 on January 1, 2022 did not have a material impact to its Condensed Consolidated Financial Statements.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modification or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). The amendments in this ASU affect all entities that issue freestanding written call options that are classified in equity, particularly when a freestanding equity-classified written call option is modified or exchanged and remains equity classified after the modification or exchange. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years. Early adoption is permitted. This ASU is applied prospectively to modifications or exchanges occurring on or after the effective date of the ASU. The Company has no written call options classified in equity and as a result, the adoption of ASU 2021-04 did not have any impact to its Condensed Consolidated Financial Statements.

3.Acquisition

On July 1, 2021 (the “Acquisition Date”), the Company completed the acquisition (the “Acquisition”) of the controlling interests with governance rights of NewQuest Holdings (Cayman) Limited (“NQ Manager”) and NewQuest Partners Master G.P. Ltd. (“NQ GP” and, together with NQ Manager, “NewQuest”). The Company initially acquired a 33.3% interest in NewQuest in July 2018, which was presented as an equity method investment within investments on the Condensed Consolidated Statements of Financial Condition. On the Acquisition Date, the Company acquired the governance rights of NewQuest and an additional 33.3% of NQ Manager for $38.0 million, bringing the Company’s total ownership in NQ Manager to 66.7% and NQ GP to 33.3%. The operating results of NewQuest have been included in the Company’s Condensed Consolidated Financial Statements since the Acquisition Date.

The Acquisition was accounted for as a business combination under ASC Topic 805, Business Combinations (“ASC 805”) that was achieved in stages. As a result of the change of control, the Company was required to remeasure its pre-existing equity investment in NewQuest at fair value prior to consolidation. The Company estimated the fair value of its 33.3% pre-existing investment in NewQuest to be approximately $155.4 million. The remeasurement resulted in the recognition of a pre-tax gain of $95.0 million, which is presented within net gains (losses) from investment activities on the Consolidated Statements of Operations.

In January 2022, the Company completed its acquisition of the remaining 33.3% interest in NQ Manager in exchange for equity interests in the Company, which consisted of 1,638,866 shares of Class A common stock and 1,072,998 Common Units of the TPG Operating Group. All of the granted equity interests are subject to a three-year service vesting condition and as such, will be recognized on a straight-line basis as post-combination compensation expense. The effect of the acquisition was a reallocation of equity between controlling and non-controlling interest of $33.6 million. This transaction was an acquisition under common control in which no gain or loss was recognized.

For additional information on the Acquisition, see Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

4.    Investments

Investments consist of the following (in thousands):

			September 30, 2022						December 31, 2021
Equity method - performance allocations			$	5,049,963					$	5,366,694
Equity method - capital interests (includes assets pledged of $481,863 and $492,276)			611,691						590,662
Equity method - fair value option			20,753						46,013
Equity method - other			12,033						7,778
Equity investments			31,388						97,899
Total investments			$	5,725,828					$	6,109,046

Net gains (losses) from performance allocations and capital interests are disclosed in the Revenue section of Note 2. The following table summarizes net gains (losses) from investment activities (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Net gains (losses) from investment activities
Net gains (losses) of equity method investments, fair value option (a)			$	1,680					$	105,982					$	(25,259)					$	105,982
Net (losses) gains of equity method investments - other (b)			(23)						122,116						924						235,422
Net gains (losses) gains from equity investments			250						(3,957)						(66,510)						(3,058)
Total net gains (losses) from investment activities			$	1,907					$	224,141					$	(90,845)					$	338,346

___________

(a)In September 2021, TPG Pace Tech Opportunities Corp. (“PACE”) completed a business combination which resulted in a gain on deconsolidation of PACE in an amount of $122.7 million in the three and nine months ended September 30, 2021.

(b)Includes pre-tax gain of $95.0 million in the three and nine months ended September 30, 2021 on remeasurement of the Company’s pre-existing equity investment in NewQuest at fair value prior to consolidation. See Note 3 to the Condensed Consolidated Financial Statements.

The following table presents the supplemental cash flow disclosures from activities related to deconsolidation of previously consolidated TPG Funds and Public SPACs (in thousands):

			Nine Months Ended September 30, 2021
Cash and cash equivalents			$	300,824
Investments held in Trust Accounts			286,849
Other assets			492
Due to affiliates			(2,000)
Amounts due to shareholders			(300,000)
Derivative liabilities of Public SPACs			(50,898)
Accounts payable and accrued expenses			(7,189)
Other liabilities			(20,100)
Redeemable equity			(286,849)
Controlling interests			29,309
Other non-controlling interests			49,562

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Equity Method Investments, Fair Value Option

On September 20, 2021, PACE completed a business combination with Nerdy, Inc. (“NRDY”), a leading platform for delivering live online learning. At the time of the business combination, a reconsideration event occurred whereby the Company no longer has control over PACE. As a result, the Company deconsolidated PACE and recorded a gain of $122.7 million, which is included in net gains (losses) from investment activities. As of September 30, 2022 and December 31, 2021, the Company held a 9.2% and 9.4% beneficial ownership interest in NRDY, respectively, consisting of 7.7 million shares of Class A common stock, 4.0 million earnout shares and 4.9 million earnout warrants, with an aggregate fair value of $20.8 million and $46.0 million, respectively. The warrants entitle the Company to acquire one share of Class A common stock at a price of $11.50 per share and expire on September 20, 2026. The earnout shares and warrants are contingent upon NRDY achieving certain market share price milestones or in the event of a change of control, within five years after September 20, 2021.

Equity Method Investments

The Company evaluates its equity method investments in which it has not elected the fair value option for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. During the three and nine months ended September 30, 2022 and 2021, the Company did not recognize any impairment losses on an equity method investment without a readily determinable fair value.

Equity Investments

Equity investments represent proprietary investment securities held by the Company. At September 30, 2022 and December 31, 2021, the Company held equity investments with readily determinable fair values of $31.4 million and $97.9 million, respectively.

Investment Activities of Consolidated TPG Funds

As part of the Reorganization described in Note 1, all TPG Funds were deconsolidated as of December 31, 2021, thus the Company had no gains (losses) from investment activities of consolidated TPG Funds for the three and nine months ended September 30, 2022. Net gains from investment activities of consolidated TPG Funds were $1.9 million and $9.0 million for the three and nine months ended September 30, 2021, respectively.

5.    Derivative Instruments

The consolidated Public SPACs enter into derivative contracts in connection with their proprietary trading activities, including warrants and FPAs, which meet the definition of a derivative in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). As a result of the use of derivative contracts, the consolidated Public SPACs are exposed to the risk that counterparties will fail to fulfill their contractual obligations and are exposed to the volatility of the underlying instruments. These warrants and FPAs are included in derivative liabilities of Public SPACs on the Condensed Consolidated Statements of Financial Condition.

As of September 30, 2022 and December 31, 2021, the fair value of the warrants and FPAs were $1.3 million and $13.0 million, respectively.

There were no related offsets or cash collateral pledged or received for the warrants and FPAs as of September 30, 2022 and December 31, 2021.

For the three and nine months ended September 30, 2022, the Company recorded unrealized gains on warrants and FPAs totaling $3.2 million and $11.7 million, respectively. For the three and nine months ended September 30, 2021, the Company recorded unrealized gains on warrants and FPAs totaling $7.2 million and $191.5 million, respectively.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The consolidated Public SPACs’ derivative instruments were as follows (in thousands):

			September 30, 2022						December 31, 2021
Derivatives not designated as hedging instruments under Subtopic 815-20:
Liability derivatives:
Public warrants			$	1,333					$	11,662
Forward purchase agreements			—						1,386
Derivative liabilities of Public SPACs			$	1,333					$	13,048

Net gains (losses) on derivative instruments are included in the Condensed Consolidated Statements of Operations as net gains (losses) from investment activities of consolidated TPG Funds and Public SPACs or unrealized gains (losses) on derivative liabilities of consolidated TPG Funds and Public SPACs. The following are net gains recognized on derivative instruments of consolidated TPG Funds and Public SPACs (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Realized losses, net on total return swaps			$	—					$	(951)					$	—					$	(10,110)
Realized gains (losses), net on foreign currency forwards			—						21						—						(451)
Unrealized (losses) gains, net on total return swaps			—						(2,111)						—						4,759
Unrealized gains, net on foreign currency forwards			—						510						—						288
Total net losses on derivative instruments from investment activities of consolidated TPG Funds			—						(2,531)						—						(5,514)
Unrealized gains, net on public warrants			2,630						7,991						10,329						39,801
Unrealized gains (losses), net on forward purchase agreements			605						(786)						1,386						151,727
Total unrealized gains on derivative instruments of Public SPACs			3,235						7,205						11,715						191,528
Net gains on derivative instruments			$	3,235					$	4,674					$	11,715					$	186,014

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

6.    Fair Value Measurement

The following tables summarize the valuation of the Company’s financial assets and liabilities and those non-financial assets and liabilities that fall within the fair value hierarchy (in thousands):

			September 30, 2022
			Level I						Level II						Level III						Total
Assets
Equity method investments - fair value option			$	20,753					$	—					$	—					$	20,753
Equity investments			31,388						—						—						31,388
Total assets			$	52,141					$	—					$	—					$	52,141
Liabilities
Liabilities of consolidated Public SPACs (a):
Public warrants			$	1,333					$	—					$	—					$	1,333
Total liabilities			$	1,333					$	—					$	—					$	1,333

_______________

(a)The fair value of the FPAs related to TPGY was at zero as of September 30, 2022

			December 31, 2021
			Level I						Level II						Level III						Total
Assets
Equity method investments - fair value option			$	46,013					$	—					$	—					$	46,013
Equity investments			97,899						—						—						97,899
Total assets			$	143,912					$	—					$	—					$	143,912
Liabilities
Liabilities of consolidated Public SPACs:
Public warrants			$	11,662					$	—					$	—					$	11,662
Forward purchase agreements			—						—						1,386						1,386
Total liabilities			$	11,662					$	—					$	1,386					$	13,048

The valuation methodology used in the determination of the fair value of financial instruments for which Level III inputs were used at September 30, 2022 and December 31, 2021 included a combination of the market approach and income approach.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following tables summarize the changes in the fair value of financial instruments for which the Company has used Level III inputs to determine fair value (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Equity security assets
Balance, beginning of period			$	—					$	7,944					$	—					$	12,324
Realized gains, net			—						804						—						3,869
Unrealized losses, net			—						(851)						—						(3,584)
Purchases			—						1						—						706
Proceeds			—						(2,177)						—						(7,594)
Balance, end of period			$	—					$	5,721					$	—					$	5,721
Derivative liabilities
Balance, beginning of period			$	605					$	40,026					$	1,386					$	197,539
Unrealized (gains) losses, net			(605)						786						(1,386)						(156,727)
Transfers(a)			—						(31,458)						—						(31,458)
Balance, end of period			$	—					$	9,354					$	—					$	9,354

_______________

(a)Transfers out of Level III derivative liabilities of $31.5 million for the three and nine months ended September 30, 2021 were due to the deconsolidation of PACE. See Note 4 to the Condensed Consolidated Financial Statements.

Total realized and unrealized gains and losses recorded for Level III investments are reported in net gains (losses) from investment activities of consolidated TPG Funds and Public SPACs and unrealized gains (losses) on derivative liabilities of consolidated TPG Funds and Public SPACs in the Condensed Consolidated Statements of Operations.

Pursuant to the redemption of the Class A Shares of TPGY, as described in Note 10 to the Condensed Consolidated Financial Statements, the fair value of the FPAs related to TPGY was at zero as of September 30, 2022 which is due to Management’s assessment that the probability of a successful business combination is remote. The following tables provide qualitative information about investments categorized in Level III of the fair value hierarchy as of December 31, 2021. In addition to the techniques and inputs noted in the table below, in accordance with the valuation policy, other valuation techniques and methodologies are used when determining fair value measurements. The below table is not intended to be all-inclusive, but rather provides information on the significant Level III inputs as they relate to the Company’s fair value measurements (fair value measurements in thousands):

Fair Value December 31, 2021

Valuation Technique(s)

Unobservable Input(s) (a)

Range (Weighted Average) (b)

Liabilities

Forward purchase agreements

$

1,386

Market comparables

Implied volatility

13.0%

$

1,386

_______________

(a)In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments, market valuations of comparable companies and company-specific developments including exit strategies and realization opportunities. Management has determined that market participants would take these inputs into account when valuing the investments.

(b)Inputs weighted based on fair value of investments in range.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

7.    Variable Interest Entities

TPG consolidates VIEs in which it is considered the primary beneficiary as described in Note 2. TPG’s investment strategies differ by TPG Fund; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and performance allocations. The Company does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other than its own capital commitments.

The assets of consolidated VIEs may only be used to settle obligations of these consolidated VIEs. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities.

The Company holds variable interests in certain VIEs which are not consolidated as it is determined that the Company is not the primary beneficiary. The Company’s involvement with such entities is in the form of direct equity interests and fee arrangements. The fundamental risks have similar characteristics, including loss of invested capital and loss of management fees and performance allocations. Accordingly, disaggregation of TPG’s involvement by type of VIE would not provide more useful information. TPG may have an obligation as general partner to provide commitments to unconsolidated VIEs. For the three and nine months ended September 30, 2022 and 2021, TPG did not provide any amounts to unconsolidated VIEs other than its obligated commitments.

The maximum exposure to loss represents the loss of assets recognized by TPG relating to non-consolidated entities and any amounts due to non-consolidated entities.

The assets and liabilities recognized in the Company’s Condensed Consolidated Statements of Financial Condition related to its interest in these non-consolidated VIEs and its maximum exposure to loss relating to non-consolidated VIEs were as follows (in thousands):

			September 30, 2022						December 31, 2021
Investments (includes assets pledged of $481,863 and $492,276)			$	5,661,654					$	5,957,356
Due from affiliates			72,559						93,311
VIE-related assets			5,734,213						6,050,667
Potential clawback obligation			1,847,417						1,500,875
Due to affiliates			58,937						36,049
Maximum exposure to loss			$	7,640,567					$	7,587,591

RemainCo

In conjunction with the Reorganization described in Note 1, the TPG Operating Group and RemainCo entered into certain agreements to effectuate the go-forward relationship between the entities. The arrangements discussed below represent the TPG Operating Group’s variable interests in RemainCo, which do not provide the TPG Operating Group with the power to direct the activities that most significantly impact RemainCo’s performance and operations. As a result, RemainCo represents a non-consolidated VIE.

RemainCo Performance Earnings Agreement

In accordance with the TPG Operating Group’s agreement with RemainCo (the “RemainCo Performance Earnings Agreement”), RemainCo is entitled to distributions in respect of performance allocations from TPG Funds as described below. For certain existing TPG Funds that are advanced in their life cycles, which we refer to as the “Excluded Funds,” RemainCo is generally entitled to receive distributions of performance allocations not previously designated for partners and employees or unaffiliated third parties, and the TPG Operating Group is not entitled to further performance allocations from the Excluded Funds. For TPG Funds of a more recent vintage and for future TPG Funds, which we collectively refer to as the “Included Funds,” RemainCo is entitled to a base performance allocation ranging from 10% to 15% (subject to limited exceptions, including TPG Funds acquired in a business combination or formed with meaningful participation by the counterparty of such business combination) depending upon the Included Fund (the “Base Entitlement”).

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

With respect to any TPG Fund that holds a first closing involving non-affiliated investors (a “First Closing”) on or after the fifth anniversary of the IPO, the Base Entitlement will step down ratably for each annual period following the fifth anniversary of the IPO through the fifteenth anniversary. RemainCo will not be entitled to distributions of performance allocations with respect to TPG Funds that have not held a First Closing on or prior to the fifteenth anniversary of the IPO. Once determined, RemainCo’s entitlement to performance allocation percentage with respect to any TPG Fund will remain in effect for the life of the applicable fund.

RemainCo is obligated to fund its pro rata share of clawback obligations with respect to any TPG Fund (in proportion to the Base Entitlement with respect to such TPG Fund) either directly or through indemnity or similar obligations to the TPG Operating Group. In the event that the underlying assets of RemainCo are not sufficient to cover the clawback amount, the TPG Operating Group is obligated to cover any shortfall of the clawback. This shortfall covered by the TPG Operating Group would be required to be repaid by RemainCo out of future distributions.

Further, in the calendar years 2022, 2023 and 2024, if the amount otherwise available under the new discretionary performance allocation program is less than $110.0 million, $120.0 million and $130.0 million, respectively, our Chief Executive Officer can determine to increase the performance allocations available under such performance allocation program by an amount equal to the shortfall plus $10.0 million (which we refer to as “Performance Allocation Increases”), by allocating amounts to the holders of Promote Units that would have otherwise been distributable to RemainCo. The maximum Performance Allocation Increase in any year is $40.0 million.

RemainCo Administrative Services Agreement

The TPG Operating Group has entered into an administrative services agreement with RemainCo whereby the TPG Operating Group provides RemainCo with certain administrative services, including maintaining RemainCo’s books and records, tax and financial reporting and similar support which began on January 1, 2022. In exchange for these services, RemainCo pays the TPG Operating Group an annual administration fee in the amount of 1% per annum of the net asset value of RemainCo’s assets, with such amount payable quarterly in advance.

Securitization Vehicles

During 2018, certain subsidiaries of the Company issued $200.0 million in privately placed securitization notes. Certain equity interests of these subsidiaries serve as collateral for the notes. The Company used one or more special purpose entities that are considered VIEs to issue notes to third-party investors in the securitization transactions. The notes issued by these VIEs are backed by the cash flows related to the Company’s equity method investments (“Participation Rights”) in certain funds. The Company determined that it is the primary beneficiary of the securitization vehicles because (i) its servicing responsibilities for the Participation Rights give it the power to direct the activities that most significantly impact the performance of the VIEs, and (ii) its variable interests in the VIEs give the Company the obligation to absorb losses and the right to receive residual returns that could potentially be significant. In 2019, certain subsidiaries of the Company issued an additional $50.0 million in privately placed securitization notes.

The transfer of Participation Rights to the special purpose entities are considered sales for legal purposes. However, the Participation Rights and the related debt remain on the Company’s Condensed Consolidated Statements of Financial Condition. The Company recognizes interest expense on the secured borrowings issued by the special purpose entities.

The Participation Rights of the VIEs, cash and restricted cash serve as the sole source of repayment for the notes issued by these entities. Investors in the notes issued by the VIEs do not have recourse to the Company or to its other assets. Additionally, the Participation Rights and other assets directly held by the VIEs are not available to satisfy the general obligations of the Company.

As the primary beneficiary of these entities, the Company is exposed to credit, interest rate and market risk from the Participation Rights in the VIEs. However, the Company’s exposure to these risks did not change as a result of the transfer of Participation Rights to the VIEs. The Company may also be exposed to interest rate risk arising from the secured notes issued by the VIEs. The secured notes issued by the VIEs are shown on the Company’s Condensed Consolidated Statements of Financial Condition as secured borrowings, net of unamortized issuance costs as of September 30, 2022 and December 31, 2021 of $4.8 million and $5.1 million, respectively.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table depicts the total assets and liabilities related to VIE securitization transactions included in the Company’s Condensed Consolidated Statements of Financial Condition (in thousands):

			September 30, 2022						December 31, 2021
Cash and cash equivalents			$	19,642					$	24,719
Restricted cash			13,172						13,135
Participation rights receivable (a)			481,863						492,276
Due from affiliates			494						1,146
Total assets			$	515,171					$	531,276
Accrued interest			$	3,450					$	191
Due to affiliates and other			427						22,470
Secured borrowings, net			245,182						244,950
Total liabilities			$	249,059					$	267,611

_______________

(a)Participation rights receivable related to VIE securitization transactions are included in investments in the Company’s Condensed Consolidated Statements of Financial Condition.

8.    Debt

The following table summarizes the Company’s and its subsidiaries’ debt obligations (in thousands):

																											As of September 30, 2022												As of December 31, 2021
			Debt Origination Date												Maturity Date						Borrowing Capacity						Carrying Value						Interest Rate						Carrying Value						Interest Rate
Senior Unsecured Revolving Credit Facility (a)			March 2011												July 2027						$	700,000					$	—					4.14		%				$	—					1.85		%
Subordinated Credit Facility (b)			August 2014												August 2024						30,000						—						5.39		%				—						2.35		%
Senior Unsecured Term Loan (c)			December 2021												December 2024						200,000						199,216						4.14		%				199,494						1.10		%
Secured Borrowings - Tranche A (d)			May 2018												June 2038						200,000						196,124						5.33		%				195,938						5.33		%
Secured Borrowings - Tranche B (d)			October 2019												June 2038						50,000						49,058						4.75		%				49,012						4.75		%
Total debt obligations																					$	1,180,000					$	444,398											$	444,444

_______________

(a)In March 2011, TPG Holdings, L.P. entered into a $400.0 million credit facility (the “Senior Unsecured Revolving Credit Facility”). Between 2018 and 2021, TPG Holdings, L.P. entered into the first, second, third and fourth amendments to the Senior Unsecured Revolving Credit Facility to, among other things, release the collateral package under the facility, reduce commitments to $300.0 million and to provide for successor borrowers. In July 2022, TPG Operating Group II, L.P., as borrower, entered into a fifth amendment and restatement of the Senior Unsecured Revolving Credit Facility (the “Amended Senior Unsecured Revolving Credit Facility”) to among other things, (i) extend the maturity date of the revolving credit facility from November 2025 to July 2027, (ii) increase the aggregate revolving commitments thereunder from $300.0 million to $700.0 million and (iii) replace LIBOR as the applicable reference rate with the Secured Overnight Financing Rate (“SOFR”) and otherwise conform the credit facility to accommodate SOFR as the reference rate. Dollar-denominated principal amounts outstanding under the Amended Senior Unsecured Revolving Credit Facility accrue interest, at the option of the applicable borrower, either (i) at a base rate plus applicable margin not to exceed 0.25% per annum or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin not to exceed 1.25%. The Company is also required to pay a quarterly commitment fee on the unused commitments under the Amended Senior Unsecured Revolving Credit Facility not to exceed 0.15% per annum, as well as certain customary fees for any issued letters of credit. In August 2022, the Company entered into a first amendment to the Amended Senior Unsecured Revolving Credit Facility, which provides that if the Company is not publicly rated, the applicable margin for borrowings under the facility may be determined using the Company’s leverage ratio.

(b)A consolidated subsidiary of the Company entered into two $15.0 million subordinated revolving credit facilities (collectively, the “Subordinated Credit Facility”), for a total commitment of $30.0 million. The Subordinated Credit Facility is available for direct borrowings and is guaranteed by certain members of the TPG Operating Group. In August 2022, the subsidiary extended the maturity date of the Subordinated Credit Facility

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

from August 2023 to August 2024 and replaced LIBOR as the applicable reference rate with SOFR, and otherwise conforms the agreements to accommodate SOFR as the reference rate.

(c)In July 2022, the Company entered into an amended and restated term loan agreement (the “Amended Senior Unsecured Term Loan Agreement”). The Amended Senior Unsecured Term Loan Agreement, among other things, replaces LIBOR as the applicable reference rate with SOFR, and otherwise conforms the term loan agreement to accommodate SOFR as the reference rate. Principal amounts outstanding under the Amended Senior Unsecured Term Loan Agreement accrue interest, at the option of the borrower, either (i) at a base rate plus an applicable margin of 0.00% or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin of 1.00%.

(d)The Company’s secured borrowings are issued using on-balance sheet securitization vehicles, as further discussed in Note 7 to the Condensed Consolidated Financial Statements. The secured borrowings are repayable only from collections on the underlying securitized equity method investments and restricted cash. The secured borrowings contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, default provisions and operating covenants, limitations on certain consolidations, mergers and sales of assets. At September 30, 2022, the Company is in compliance with these covenants and conditions.

During the three and nine months ended September 30, 2022, the Company incurred interest expense of $5.0 million and $13.2 million, respectively, on its debt obligations. During the three and nine months ended September 30, 2021, the Company incurred interest expense of $3.5 million and $10.7 million, respectively, on its debt obligations.

At September 30, 2022 and December 31, 2021, the estimated fair value of the secured borrowings based on current market rates and credit spreads for debt with similar maturities was $232.7 million and $271.6 million, respectively, and the carrying value, excluding unamortized issuance costs, was $250.0 million at September 30, 2022 and December 31, 2021.

The fair value of the Company’s Senior Unsecured Term Loan approximates its carrying amount represented in the Condensed Consolidated Statements of Financial Condition due to its recent issuance in December 2021 and variable rate nature.

9.    Income Taxes

As a result of the Reorganization, the Company is treated as a corporation for U.S. federal and state income tax purposes. We are subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of taxable income generated by the TPG Operating Group partnerships. Prior to the Reorganization, the Company was treated as a partnership for U.S. federal income tax purposes and therefore was not subject to U.S. federal and state income taxes except for certain consolidated subsidiaries that were subject to taxation in the U.S. (federal, state and local) and foreign jurisdictions as a result of their entity classification for tax reporting purposes.

As of September 30, 2022, the Company has recognized net deferred tax assets before the considerations of valuation allowances in the amount of $98.3 million which primarily relate to excess income tax basis versus book basis differences in connection with the Company’s investment in the TPG Operating Group partnerships. The excess of income tax basis in the TPG Operating Group partnerships was primarily due to the Reorganization which resulted in a step-up in the tax basis of certain assets to the Company that will be recovered as those underlying assets are sold or the tax basis is amortized. A portion of the excess income tax basis in the TPG Operating Group partnerships will only reverse upon a sale of the Company’s interest in the TPG Operating Group partnerships which is not expected to occur in the foreseeable future. As a result, the Company has recognized a valuation allowance in the amount of $80.3 million against its net deferred tax assets of $98.3 million (resulting in net deferred tax assets after valuation allowance of $18.0 million) as of September 30, 2022, as it is more-likely-than not that this portion of our deferred tax assets is not realizable. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more-likely-than-not that all or a portion of the deferred tax asset may not be realized. Additionally, and concurrent with the Reorganization, the Company recorded a payable pursuant to the Tax Receivable Agreement within other liabilities in the Condensed Consolidated Statements of Financial Condition of $18.3 million.

The Company’s effective tax rate was 0.8% and 0.2% for the three months ended September 30, 2022 and 2021, respectively, and (102.5)% and 0.2% for the nine months ended September 30, 2022 and 2021, respectively. The Company’s effective tax rate is dependent on many factors, including the estimated amount of income subject to tax. Consequently, the effective tax rate can vary from period to period. The Company’s overall effective tax rate in each of the periods described above deviates from the statutory rate primarily because (i) the Company was not subject to U.S. federal taxes prior to the Reorganization and (ii) a portion of income and losses are allocated to non-controlling interests, and the tax liability on such income or loss is borne by the holders of such non-controlling interests. In addition, during the three and nine months ended September 30, 2022, the Company recognized an income tax benefit in connection with certain

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

changes in estimate of the income tax basis of the Company's investments in the TPG Operating Group partnerships at the time of the Reorganization.

Applicable accounting standards provide that the Company estimate an annual effective tax rate and apply that rate to year-to-date income for each interim period. However, because the Company’s forecast of income before taxes is highly variable due to changes in market conditions, the actual effective income tax rate for the year-to-date period represents a better estimate of the consolidated annual effective income tax rate. Accordingly, for the three and nine months ended September 30, 2022, the actual consolidated effective income tax rate was used to determine the Company’s income tax provision.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted in the United States. The IRA, among other things, includes a 15% minimum tax on adjusted financial statement income of corporations with average annual adjusted financial statement income in excess of $1 billion over a three-year period, a 1% excise tax on stock repurchases and additional clean energy tax incentives. The IRA applies to tax years beginning after December 31, 2022. The Company will continue to evaluate its future impact as regulations are issued by the U.S. Department of the Treasury.

During the three and nine months ended September 30, 2022, there were no material changes to the uncertain tax positions and the Company does not expect there to be any material changes to uncertain tax positions within the next twelve months. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign tax authorities. Although the outcome of tax audits is always uncertain, the Company does not believe the outcome of any future audit will have a material adverse effect on the Company’s Condensed Consolidated Financial Statements.

10.    Related Party Transactions

Due from and Due to Affiliates

Due from affiliates and due to affiliates consist of the following (in thousands):

			September 30, 2022						December 31, 2021
Portfolio companies			$	52,233					$	42,067
Partners and employees			2,042						2,760
Other related entities			52,083						47,183
Unconsolidated VIEs			72,559						93,311
Due from affiliates			$	178,917					$	185,321
Portfolio companies			$	9,786					$	6,567
Partners and employees			59,797						125,429
Other related entities			49,785						658,954
Unconsolidated VIEs			58,937						36,049
Due to affiliates			$	178,305					$	826,999

Affiliate receivables and payables historically have been settled in the normal course of business without formal payment terms, generally do not require any form of collateral and do not bear interest.

Fund Investments

Certain of the Company’s investment professionals and other individuals have made discretionary investments of their own capital in the TPG Funds. These investments are generally not subject to management fees or performance allocations at the discretion of the general partner. Investments made by these individuals during the nine months ended September 30, 2022 and 2021 totaled $107.8 million and $151.0 million, respectively.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Fee Income from Affiliates

Substantially all revenues are generated from TPG Funds or Portfolio Companies. The Company disclosed revenues in Note 2.

Notes Receivable from Affiliates

From time to time, the Company makes loans to its employees and other affiliates. Certain of these loans are collateralized by underlying investment interests of the borrowers. The outstanding balance of these notes was $1.6 million and $1.0 million at September 30, 2022 and December 31, 2021, respectively.

These notes generally incur interest at floating rates, and such interest, which is included in interest, dividends and other in the Condensed Consolidated Financial Statements, totaled less than $0.1 million for the three and nine months ended September 30, 2022, and $0.2 million and $0.5 million for the three and nine months ended September 30, 2021, respectively.

Aircraft Services

The Company terminated its leases of aircraft owned by entities controlled by certain partners of the Company in January 2022. The termination of the leases resulted in the derecognition of a right-of-use asset and a corresponding lease liability of $13.6 million. For the nine months ended September 30, 2022, the Company made no lease payments to entities controlled by certain partners of the Company. For the nine months ended September 30, 2021, such lease payments, which were paid to entities controlled by certain partners of the Company, totaled $3.7 million.

RemainCo Administrative Services Agreement

The TPG Operating Group has entered into an administrative services agreement with RemainCo whereby the TPG Operating Group provides RemainCo with certain administrative services, including maintaining RemainCo’s books and records, tax and financial reporting and similar support which began on January 1, 2022. In exchange for these services, RemainCo pays the TPG Operating Group an annual administration fee in the amount of 1% per annum of the net asset value of RemainCo’s assets, with such amount payable quarterly in advance. The fees earned by the Company for the three and nine months ended September 30, 2022 were $4.8 million and $15.2 million, respectively.

Other Related Party Transactions

The Company has entered into contracts to provide services or facilities for a fee with certain related parties. A portion of these fees are recognized within expense reimbursements and other in the amount of $5.9 million and $5.3 million for the three months ended September 30, 2022 and 2021, respectively, and $17.2 million and $15.7 million for the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, these related parties have made payments associated with these arrangements of $19.9 million and $20.3 million, respectively.

Investment in SPACs

The Company invests in and sponsors SPACs which are formed for the purposes of effecting a merger, asset acquisition, stock purchase, reorganization or other business combination. In the IPO of each of these SPACs, either common shares or units (which include one Class A ordinary share and, in some cases, a fraction of a redeemable public warrant which entitles the holder to purchase one share of Class A ordinary shares at a fixed exercise price) are sold to investors. Each SPAC provides its public shareholders the option to redeem their shares either (i) in connection with a shareholder meeting to approve the business combination or (ii) by means of a tender offer. Assets held in Trust Accounts relate to gross proceeds received from the IPO and can only be used for the initial business combination and any possible investor redemptions. If the SPAC is unable to complete a business combination within a specified time frame, typically within 24 months of the IPO close date, the SPACs will redeem all public shares. The ownership interest in each SPAC which is not owned by the Company is reflected as redeemable equity attributable to Public SPACs in the accompanying Condensed Consolidated Financial Statements.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company consolidates these SPACs during the period before the initial business combination, and therefore the Class F ordinary shares, Class G ordinary shares, private placement shares, private placement warrants and FPAs with consolidated related parties are eliminated in consolidation.

In August 2021, AFTR, a SPAC, completed an initial public offering. AFTR sold 25,000,000 units at a price of $10.00 per unit for a total IPO price of $250.0 million. Each unit consists of one Class A ordinary share of AFTR at $0.0001 par value and one-third of one warrant.

In April 2021, YTPG, a SPAC, completed an initial public offering. YTPG sold 40,000,000 shares at a price of $10.00 per share for a total IPO price of $400.0 million. Each share consists of one Class A ordinary share of YTPG at $0.0001 par value. Prior to the IPO, YTPG entered into FPAs for an aggregate purchase price of $175.0 million, of which the Company is responsible for $24.9 million as of September 30, 2022.

In October 2020, TPGY, a SPAC, completed an initial public offering. TPGY sold 35,000,000 units at a price of $10.00 per unit for a total IPO price of $350.0 million. Each unit consists of one Class A ordinary share of TPGY at $0.0001 par value and one-fifth of one warrant. Prior to the IPO, TPGY entered into FPAs for an aggregate purchase price of $100.0 million, of which the Company is responsible for $17.0 million as of September 30, 2022.

As of September 30, 2022, TPGY held cash in trust of $352.0 million, which includes the $350.0 million in funds deposited into the Trust Account at the time of the TPGY’s initial public offering and $2.0 million in interest and dividend income, which was available for distribution to the shareholders. On October 11, 2022, TPGY redeemed all of its Class A Shares at a per-share redemption price of approximately $10.06, because TPGY did not consummate an initial business combination within the time period required by its Amended and Restated Memorandum and Articles of Association. As of October 11, 2022, the Class A Shares were deemed cancelled and represented only the right to receive the Redemption Amount. There will be no redemption rights or liquidating distributions with respect to the TPGY’s warrants, which expired with no value. FPAs entered into by TPGY at the time of its IPO were terminated on October 11, 2022. After October 11, 2022, TPGY ceased all operations except for those required to wind up its business.

Accordingly, all redeemable equity attributable to TPGY was reclassified to current redeemable equity on the Company’s accompanying Condensed Consolidated Statements of Financial Condition as of September 30, 2022.

11.    Operating Leases

The following tables summarize the Company’s lease cost, cash flows, and other supplemental information related to its operating leases.

The components of lease expense were as follows (in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Lease cost (a):
Operating lease cost			$	6,841					$	9,271					$	19,872					$	28,059
Short-term lease costs			127						(89)						401						149
Variable lease cost			1,946						393						4,722						3,535
Sublease income			(1,004)						(1,498)						(3,224)						(4,505)
Total lease cost			$	7,910					$	8,077					$	21,771					$	27,238
Weighted-average remaining lease term															7.1						7.6
Weighted-average discount rate															4.10		%				4.10		%

___________

(a)Office rent expense for the three and nine months ended September 30, 2022 was $6.3 million and $19.7 million, respectively. Office rent expense for the three and nine months ended September 30, 2021 was $7.9 million and $24.0 million, respectively.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Supplemental Condensed Consolidated Statements of Cash Flows information related to leases were as follows (in thousands):

			Nine Months Ended September 30,
			2022						2021
Cash paid for amounts included in the measurement of lease liabilities			$	21,192					$	21,745
Non-cash right-of-use assets obtained in exchange for new operating lease liabilities			5,468						3,735
Non-cash right-of-use assets and lease liability termination			(13,939)						—

The following table shows the undiscounted cash flows on an annual basis for operating lease liabilities as of September 30, 2022 (in thousands):

Year Due						Lease Amount
Remainder of 2022						$	2,697
2023						19,055
2024						25,321
2025						27,861
2026						24,397
Thereafter						81,904
Total future undiscounted operating lease payments						181,235
Less: imputed interest						(29,106)
Present value of operating lease liabilities						$	152,129

12.    Commitments and Contingencies

Guarantees

Certain of the Company’s consolidated entities have guaranteed debt or obligations. At September 30, 2022 and December 31, 2021, the maximum obligations guaranteed under these agreements totaled $1,099.4 million and $715.0 million, respectively. At September 30, 2022, the guarantees had expiration dates as follows (in thousands):

Maturity Date						Guarantee Amount
August 2024						$	30,000
December 2024						200,000
June 2026						60,000
December 2026						83,483
July 2027						700,000
June 2030						25,868
Total						$	1,099,351

At September 30, 2022 and December 31, 2021, the outstanding amount of debt on obligations related to these guarantees was $324.8 million and $341.3 million, respectively.

Letters of Credit

The Company had $0.4 million and $0.7 million in letters of credit outstanding at September 30, 2022 and December 31, 2021, respectively.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Commitments

At September 30, 2022, the third party investors of the consolidated Public SPACs had unfunded capital commitments of $207.6 million to the consolidated Public SPACs.

At September 30, 2022, the TPG Operating Group had unfunded investment commitments of $381.3 million to the TPG Funds, consolidated Public SPACs and other strategic investments.

Contingent Obligations (Clawback) With Affiliates

The governing agreements of the TPG funds that pay performance allocations generally include a clawback provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the fund for distribution to the fund investors at the end of the life of the fund. Performance allocations received by the general partners of the respective TPG funds are subject to clawback to the extent the performance allocations received by the general partners exceeds the amount the general partners are ultimately entitled to receive based on cumulative fund results.

At September 30, 2022, if all investments held by the TPG funds were liquidated at their current unrealized fair value, there would be clawback of $58.3 million, net of tax, for which a performance fee reserve was recorded within other liabilities in the Condensed Consolidated Financial Statements.

At September 30, 2022, if all remaining investments were deemed worthless, a possibility management views as remote, the amount of performance allocations subject to potential clawback would be $1,847.4 million on a pre-tax basis.

During the nine months ended September 30, 2022, the general partners made no payments on the clawback liability.

Legal Actions and Other Proceedings

From time to time, the Company is involved in legal proceedings, litigation and claims incidental to the conduct of our business, including with respect to acquisitions, bankruptcy, insolvency and other types of proceedings. Such lawsuits may involve claims against our Portfolio Companies that adversely affect the value of certain investments owned by TPG’s funds. The Company’s business is also subject to extensive regulation, which has and may result in the Company becoming subject to examinations, inquiries and investigations by various U.S. and non-U.S. governmental and regulatory agencies, including but not limited to the SEC, Department of Justice, state attorneys general, Financial Industry Regulatory Authority and the U.K. Financial Conduct Authority. Such examinations, inquiries and investigations may result in the commencement of civil, criminal or administrative proceedings or fines against the Company or its personnel.

The Company accrues a liability for legal proceedings in accordance with U.S. GAAP, in particular, the Company establishes an accrued liability for loss contingencies when a settlement arising from a legal proceeding is both probable and reasonably estimable. If the matter is not probable or reasonably estimable, no such liability is recorded. Examples of this include: (i) the proceedings may be in early stages; (ii) damages sought may be unspecified, unsupportable, unexplained or uncertain; (iii) discovery may not have been started or is incomplete; (iv) there may be uncertainty as to the outcome of pending appeals or motions; (v) there may be significant factual issues to be resolved or (vi) there may be novel legal issues or unsettled legal theories to be presented or a large number of parties. Consequently, management is unable to estimate a range of potential loss, if any, related to such matters. Even when the Company accrues a liability for a loss contingency such cases, there may be an exposure to loss in excess of any amounts accrued. Loss contingencies may be, in part or in whole, subject to insurance or other payments such as contributions and/or indemnity, which may reduce any ultimate loss.

Based on information presently known by management, the Company has not recorded a potential liability related to any pending legal proceeding and is not subject to any legal proceedings that we expect to have a material impact on our operations, financial positions, or cash flows. It is not possible, however, to predict the ultimate outcome of all pending legal proceedings, and the claimants in the matter discussed below seek potentially large and indeterminate amounts. As such, although we do not consider such an outcome likely, given the inherent unpredictability of legal proceedings, it is possible that an adverse outcome in the matter described below or certain other matters could have a material effect on the Company’s financial results in any particular period.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Since 2011, a number of TPG-related entities and individuals, including David Bonderman and Jim Coulter, have been named as defendants/respondents in a series of lawsuits in the US, UK, and Luxembourg concerning an investment TPG held from 2005-2007 in a Greek telecommunications company, known then as TIM Hellas (“Hellas”). Entities and individuals related to Apax Partners, a London based investment firm also invested in Hellas at the time, are named in the suits as well. The cases all allege generally that a late 2006 refinancing of the Hellas group of companies was improper.

To date, most of the lawsuits filed in New York Federal and State courts against TPG and Apax-related defendants have been dismissed, with those dismissals upheld on appeal, or the appeal period has passed. A lawsuit pending in the District Court of Luxembourg against two former TPG partners and two individuals related to Apax involved in the investment has been decided after trial in their favor on all claims and is now on appeal. In February 2018, a High Court case in London against a number of TPG and Apax related parties and individuals was abandoned by the claimants in the early days of a scheduled six-week trial with costs of $9.5 million awarded to the TPG and Apax-related parties, of which $3.4 million was awarded to TPG.

In addition to the Luxembourg appeal, two cases in New York state court are active against TPG and Apax-related parties concerning the Hellas investment. Motions to dismiss by all defendants were made in both actions with the Court now having granted and denied in part those motions, paring back the parties, claims and amounts at issue. Appeals are pending as to the ruling in one matter (with immediate appeals possible as to the ruling in the other). No trial date has been set in either of the two active actions. The prior noted stayed federal actions have now been dismissed by court order and stipulation.

The Company believes that the suits related to the Hellas investment are without merit and intends to continue to defend them vigorously.

In October 2022, the Company received a document request from the SEC focusing on the use and retention of business-related electronic communications, which, as has been publicly reported, is part of an industry-wide review. The Company intends to cooperate with the SEC’s request.

Indemnifications

In the normal course of business, the Company enters into contracts that contain a variety of representations and warranties that provide general indemnifications. In addition, certain of the Company’s funds have provided certain indemnities relating to environmental and other matters and has provided nonrecourse carve-out guarantees for fraud, willful misconduct and other customary wrongful acts, each in connection with the financing of certain real estate investments that the Company has made. The Company’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of material loss to be remote.

13.    Net Income Per Class A Common Share

Basic and diluted net income per share of Class A common stock is presented from January 13, 2022 through September 30, 2022, the period following the Reorganization and IPO. There were no shares of Class A common stock outstanding prior to January 13, 2022, therefore no income per share information has been presented for any period prior to that date.

The Company calculates its basic and diluted income (loss) per share using the two-class method for all periods presented, which defines unvested share-based payment awards that contain nonforfeitable rights to dividends as participating securities. The two-class method is an allocation formula that determines income per share for each share of common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all income (distributed and undistributed) is allocated to common shares and participating securities based on their respective rights to receive dividends.

In computing the dilutive effect that the exchange of TPG Operating Group partnership units would have on net income available to Class A common stock per share, TPG considered that net income available to holders of shares of Class A common stock would increase due to the elimination of non-controlling interests in the TPG Operating Group, inclusive of any tax impact. The hypothetical conversion may be dilutive to the extent there is activity at the TPG Inc. level

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

that has not previously been attributed to the non-controlling interests or if there is a change in tax rate as a result of a hypothetical conversion.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted net income per share of Class A common stock (in thousands, except share and per share data):

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
Numerator:
Net income (loss)			$	53,206					$	(46,487)
Less:
Net loss attributable to redeemable equity in Public SPACs prior to IPO			—						(517)
Net income attributable to other non-controlling interests prior to Reorganization and IPO			—						966
Net income attributable to TPG Group Holdings prior to Reorganization and IPO			—						5,256
Net income (loss) subsequent to IPO			53,206						(52,192)
Less:
Net income attributable to redeemable equity in Public SPACs subsequent to IPO			7,322						13,203
Net loss attributable to non-controlling interests in TPG Operating Group subsequent to IPO			(6,898)						(140,679)
Net income attributable to other non-controlling interests subsequent to IPO			15,422						6,499
Net income attributable to Class A Common Stockholders prior to distributions			37,360						68,785
Reallocation of earnings to unvested participating restricted stock units			(2,143)						(3,575)
Net income attributable to Class A Common Stockholders - Basic			35,217						65,210
Net loss assuming exchange of non-controlling interest			(8,237)						(114,476)
Reallocation of income from participating securities assuming exchange of Common Units			604						—
Net income (loss) attributable to Class A Common Stockholders - Diluted			$	27,584					$	(49,266)
Denominator:
Weighted-Average Shares of Common Stock Outstanding - Basic			79,266,822						79,249,528
Exchange of Common Units to Class A Common Stock			229,652,641						229,652,641
Weighted-Average Shares of Common Stock Outstanding - Diluted			308,919,463						308,902,169
Net income (loss) available to Class A common stock per share
Basic			$	0.44					$	0.82
Diluted			$	0.09					$	(0.16)
Dividends declared per share of Class A Common Stock (a)			$	0.39					$	0.83

___________

(a)Dividends declared reflects the calendar date of the declaration for each distribution.

14.    Equity-Based Compensation

In conjunction with the IPO, TPG employees, certain of the Company’s executives and certain non-employees received grants of equity-based awards in the form of restricted stock units which entitle the holder to one share of Class A common stock upon vesting. These grants were issued as part of the IPO to promote broad ownership of the firm among its employees and further align its interests with those of its shareholders. As a result of the Reorganization and the IPO, the Company’s current partners hold restricted indirect interests in Common Units through TPG Partner Holdings, L.P. (“TPG Partner Holdings”) and indirect economic interests through RemainCo. In conjunction with the Reorganization, TPG Partner Holdings distributed its interest in RemainCo and the underlying assets as part of a common control transaction to

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

its existing owners, which are the Company’s current and former partners. No changes were made to the terms of the unvested units. TPG Partner Holdings and RemainCo are presented as non-controlling interest holders within our Condensed Consolidated Financial Statements. The interests in TPG Partner Holdings (“TPH Units”) and indirectly in RemainCo (“RPH Units”) are generally subject to both service-based vesting, primarily over a four to seven-year period from the date of grant or, in certain cases, to performance conditions. Holders of these interests participate in distributions regardless of the vesting status. Additionally, as a result of the Reorganization, the IPO and the acquisition of the final 33.3% of NQ Manager discussed in Note 3 of the Condensed Consolidated Financial Statements, certain TPG partners and NewQuest principals were granted Common Units directly at TPG Operating Group (“TOG Units”) and Class A common stock (collectively with “TOG Units,” the “Other IPO-Related Awards”) subject to both service and performance conditions, which are deemed probable of achieving.

The following table summarizes the granted and outstanding awards for the three and nine months ended September 30, 2022 (in millions, including share data):

			Shares / Units Granted for the nine months ended September 30, 2022						Shares / Units Outstanding as of September 30, 2022						Compensation Expense for the three months ended September 30, 2022						Compensation Expense for the nine months ended September 30, 2022						Unrecognized Compensation Expense as of September 30, 2022
Restricted Stock Units
IPO Service-Vesting Awards			10.2						9.5						$	16.8					$	52.2					$	234.1
IPO Executive Service-Vesting Awards			1.1						1.1						1.6						4.6						27.9
IPO Executive Performance Condition Awards			1.1						1.1						1.4						3.8						14.4
Ordinary Service-Vesting Awards			0.7						0.7						1.1						1.4						17.6
Ordinary Performance-Vesting Awards			0.1						0.1						0.2						0.4						3.2
Total Restricted Stock Units			13.2						12.5						$	21.1					$	62.4					$	297.2
Other IPO-Related Awards
Unvested TOG Common Units			2.4						2.4						$	6.3					$	18.0					$	47.2
Unvested Class A Common Stock			1.8						1.8						4.4						12.7						39.5
Total Other IPO-Related Awards			4.2						4.2						$	10.7					$	30.7					$	86.7
			Unvested Units at IPO						Unvested Units Outstanding as of September 30, 2022						Compensation Expense for the three months ended September 30, 2022						Compensation Expense for the nine months ended September 30, 2022						Unrecognized Compensation Expense as of September 30, 2022
TPH and RPH Units
TPH units			66.6						64.2						$	91.2					$	326.1					$	1,293.5
RPH units			0.6						0.6						21.1						61.4						232.8
Total TPH and RPH Units			67.2						64.8						$	112.3					$	387.5					$	1,526.3

Restricted Stock Units

Under the Company’s 2021 Omnibus Equity Incentive Plan (the “Omnibus Plan”), the Company is permitted to grant equity awards representing ownership interests in TPG Inc.’s Class A common stock. On January 13, 2022, the Omnibus Plan became effective and the Company authorized for issuance 30,694,780 shares of TPG Inc.’s Class A common stock.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

For the three and nine months ended September 30, 2022, the Company recorded equity-based compensation expense of $21.1 million and $62.4 million, respectively.

IPO and Ordinary Service-Vesting Awards

Under the Omnibus Plan, the Company granted equity awards that are subject to service-based vesting, primarily over a four to six-year period from the date of grant (“Service-Vesting Awards”). Holders of the Service-Vesting Awards participate in dividends whether the awards are unvested or vested.

The Company awarded 10.2 million of restricted stock units to employees and certain non-employees of the Company in conjunction with the IPO. Additionally, for the three and nine months ended September 30, 2022, the Company issued 0.5 million and 0.7 million of ordinary Service-Vesting Awards, respectively. The related expense associated with awards granted to certain non-employees of the Company is recognized in general, administrative and other in our Condensed Consolidated Statements of Operations and totaled $0.6 million and $6.5 million for the three and nine months ended September 30, 2022, respectively. This excludes 2.2 million of restricted stock units granted to certain executives (“Executive Awards”) in conjunction with the IPO.

The fair value is based on the grant date fair value, which considers the public share price of the Company’s Class A common stock. The following table presents the rollforward of the Company’s unvested Service-Vesting Awards for the nine months ended September 30, 2022 (awards in millions):

			Service-Vesting Awards						Weighted-Average Grant Date Fair Value
Balance at December 31, 2021			—						$	—
Granted			10.9						29.51
Vested, settled			(0.2)						29.50
Forfeited			(0.5)						29.50
Balance at September 30, 2022			10.2						$	29.51

As of September 30, 2022, there was approximately $251.7 million of total estimated unrecognized compensation expense related to unvested Service-Vesting Awards, which is expected to be recognized over the weighted average remaining requisite service period of 3.7 years.

Ordinary Performance-Vesting Awards

Under the Omnibus Plan, the Company also granted 0.1 million of ordinary equity awards that are subject to both service and performance conditions (“Performance-Vesting Awards”). The weighted-average grant date fair value per share was $26.93 for these awards. For each of the three and nine months ended September 30, 2022, the Company recorded equity-based compensation expense of $0.2 million and $0.4 million, respectively. Further, as of September 30, 2022, there was approximately $3.2 million of total estimated unrecognized compensation expense related to unvested Performance-Vesting Awards, which is expected to be recognized over the weighted average remaining requisite service period of 3.4 years.

IPO Executive Awards

Under the Omnibus Plan, the Company also granted 2.2 million of Executive Awards in order to incentivize and retain key members of management and further their alignment with our shareholders in conjunction with the IPO. The Executive Awards includes awards of (i) 1.1 million restricted stock units subject to service-based vesting over a five-year service period beginning with the second anniversary of the grant date (“Executive Service-Vesting Awards”) and (ii) 1.1 million market and service based restricted stock units (“Executive Performance Condition Awards”). Each Executive Performance Condition Award is comprised of two parts: (i) a time-based component requiring a five-year service period (“Type I”) and (ii) a market price component with a target Class A common stock share price at either $44.25 within five years or $59.00 within eight years (“Type II”). Dividend equivalents are paid on vested and unvested Executive Service-Vesting Awards when the dividend occurs. Dividend equivalents accrue for vested and unvested Executive Performance Condition Awards and are paid only when both the applicable service and performance conditions are satisfied.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The fair value of the Executive Service-Vesting Awards, $32.5 million, is based on the grant date fair value, which considers the public share price of the Company’s Class A common stock. Compensation expense for those awards is recognized on a straight-line basis. The grant date fair value of the Executive Performance Condition Awards made during the nine month period ended September 30, 2022 was $18.2 million and was based on a Monte-Carlo simulation valuation model. Compensation expense for those awards is recognized using the accelerated attribution method on a tranche by tranche basis.

The following table presents the rollforwards of the Company’s unvested Executive Awards for the nine months ended September 30, 2022 (awards in millions):

			Executive Service-Vesting Awards						Grant Date Fair Value						Executive Performance Condition Awards						Weighted Average Grant Date Fair Value
Balance at December 31, 2021			—						$	—					—						$	—
Granted			1.1						29.50						1.1						16.58
Vested			—						—						—						—
Forfeited			—						—						—						—
Balance at September 30, 2022			1.1						$	29.50					1.1						$	16.58

Below is a summary of the grant date fair value based on the Monte-Carlo simulation valuation model.

Vesting Condition			Grant Date Fair Value
Type I			$	17.58
Type II			$	15.59

Significant Assumptions			Type I						Type II
TPG Class A common stock share price as of valuation date			$	29.50					$	29.50
Volatility			35.0		%				35.0		%
Dividend Yield			4.0		%				4.0		%
Risk-free rate			1.46		%				1.65		%
Cost of Equity			10.7		%				10.7		%

As of September 30, 2022, there was approximately $27.8 million of total estimated unrecognized compensation expense related to unvested Executive Service-Vesting Awards, which is expected to be recognized over the weighted average remaining requisite service period of 4.3 years. There was approximately $14.4 million of unrecognized compensation expense related to unvested Executive Performance Condition Awards, which is expected to be recognized over the weighted average remaining requisite service period of 3.1 years.

TPH and RPH Awards

We account for the TPH Units and RPH Units as compensation expense in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). The unvested TPH and RPH Units are recognized as equity-based compensation subject to primarily service vesting conditions and in certain cases performance conditions, which are currently deemed probable of achieving. The Company recognized compensation expense of $112.3 million and $387.5 million for the three and nine months ended September 30, 2022, respectively. The Company did not recognize compensation expense for the three and nine months ended September 30, 2021. There is no additional dilution to our stockholders related to these interests. Contractually these units are only related to non-controlling interest holders of the TPG Operating Group, and there is no impact to the allocation of income and distributions to TPG Inc. Therefore, we have allocated these expense amounts to our non-controlling interest holders.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table presents the rollforwards of the Company’s unvested TPH Units and RPH Units for the period commencing on January 13, 2022 and ending on September 30, 2022 (units in millions):

			TPH Units												RPH Units
			Partnership Units						Grant Date Fair Value						Partnership Units						Grant Date Fair Value
Balance at January 13, 2022			34.0						$	23.60					0.6						$	457.10
Granted			33.1						25.10						—						—
Vested			(2.4)						25.08						—						—
Forfeited			(0.5)						24.78						—						—
Balance at September 30, 2022			64.2						$	24.31					0.6						$	457.10

As of September 30, 2022, there was approximately $1,526.3 million of total estimated unrecognized compensation expense related to unvested TPH and RPH Units.

Other IPO-Related Awards

In accordance with ASC 718 the Other IPO-Related Awards are also recognized as equity-based compensation. The expense for the three and nine months ended September 30, 2022 totaled $10.7 million and $30.7 million, respectively. The Company had no such expense for the three and nine months ended September 30, 2021. As TPG Operating Group holders would accrete pro-rata or benefit directly upon forfeiture of those awards, this compensation expense was allocated pro-rata to all controlling and non-controlling interest holders of TPG, Inc. The weighted average grant date fair value of the TOG Units was $27.29 and of Class A common stock was $29.50. Total unrecognized compensation expense related to outstanding unvested awards as of September 30, 2022 was $86.7 million, of which our TOG Units and Class A common stock represented $47.2 million and $39.5 million, respectively.

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TPG Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

15.    Equity

The Company has two classes of common stock outstanding, Class A common stock and Class B common stock. Class A common stock is traded on the Nasdaq Global Select Market. The Company is authorized to issue 2,240,000,000 shares of Class A common stock with a par value of $0.001 per share, 100,000,000 shares of nonvoting Class A common stock, 750,000,000 shares of Class B common stock with a par value of $0.001 per share, and 25,000,000 shares of preferred stock, with a par value of $0.001 per share. Each share of the Company’s Class A common stock entitles its holder to one vote, and each share of our Class B common stock entitles its holder to ten votes. Holders of Class A common stock and Class B common stock generally vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval. The nonvoting Class A common stock have the same rights and privileges as, rank equally and share ratably with, and are identical in all respects as to all matters to, the Class A common stock, except that the nonvoting Class A common stock have no voting rights other than such rights as may be required by law. Holders of Class A common stock are entitled to receive dividends when and if declared by the board of directors. Holders of the Class B common stock are not entitled to dividends in respect of their shares of Class B common stock. As of September 30, 2022, 79,240,058 shares of Class A common stock were outstanding, 229,652,641 shares of Class B common stock were outstanding, and there were no shares of preferred stock outstanding.

Dividends and distributions are reflected in the Condensed Consolidated Statements of Stockholders’ Equity when declared by the board of directors. Dividends are made to Class A common stockholders and distributions are made to holders of non-controlling interests in subsidiaries.

On May 10, 2022, the Company’s board of directors declared and approved a cash dividend for the first quarter of 2022 of $0.44 per share of Class A common stock, which was paid on June 3, 2022 to holders of record of the Company’s Class A common stock as of May 20, 2022.

On August 9, 2022, the Company’s board of directors declared and approved a cash dividend for the second quarter of 2022 of $0.39 per share of Class A common stock, which was paid on September 2, 2022 to holders of record of the Company’s Class A common stock as of August 19, 2022.

On November 9, 2022, the Company’s board of directors declared and approved a a cash dividend for the third quarter of 2022 of $0.26 per share of Class A common stock of record at the close of business on November 21, 2022, payable on December 2, 2022.

16.    Subsequent Events

On November 4, 2022, the Board of Directors of the Company (the “Board”) adopted resolutions authorizing an amendment to its certificate of incorporation (the “Existing Charter”) to revise Section 4.2(a) of the Existing Charter (as amended, the “Amended Charter”) to stipulate that “Free Float” (as defined under the rules of FTSE Russell relating to the Russell indices) Class A shares are entitled to at least 5.1% of the aggregate voting power (the “Free Float Threshold”). If on any record date the votes entitled to be cast by Free Float Class A shares do not equal 5.1% of the aggregate voting power, the voting power of the Class B shares will be reduced proportionately until the Free Float Threshold is met.

Other than the events noted in Note 10, Note 12 and Note 15, there have been no additional events since September 30, 2022 that require recognition or disclosure in the Condensed Consolidated Financial Statements.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in our historical financial statements and the related notes included elsewhere in this report. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and elsewhere in this report, particularly in “Cautionary Note Regarding Forward-Looking Statements,” “Part II—Item 1A.—Risk Factors” and “––Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data” should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 29, 2022. We assume no obligation to update any of these forward-looking statements.

On January 12, 2022, we completed a corporate reorganization (the “Reorganization”), which included a corporate conversion of TPG Partners, LLC to a Delaware corporation named TPG Inc., in conjunction with an initial public offering (“IPO”) of our Class A common stock. The IPO closed on January 18, 2022. Unless the context suggests otherwise, references in this report to “TPG”, “the Company”, “we”, “us” and “our” refer (i) prior to the completion of the Reorganization and IPO to TPG Group Holdings SBS, L.P. and its consolidated subsidiaries and (ii) from and after the completion of the Reorganization and IPO to TPG Inc. and its consolidated subsidiaries.

Business Overview

We are a leading global alternative asset manager with approximately $135.1 billion in assets under management (“AUM”) as of September 30, 2022. We primarily invest in complex asset classes such as private equity, real estate and public market strategies. We have built our firm through a 30-year history of successful innovation and organic growth, and we believe that we have delivered attractive risk-adjusted returns to our clients and established a premier investment business focused on the fastest-growing segments of both the alternative asset management industry and the global economy. We believe that we have a distinctive business approach as compared to other alternative asset managers and a diversified, innovative array of multi-product investment platforms that position us well to continue generating sustainable growth across our business. Our platforms are:

•Capital: Our Capital platform is focused on large-scale, control-oriented private equity investments. Capital platform funds are organized in four primary products, including (i) TPG Capital, our North America and Europe-focused private equity and large-scale growth equity investing business, (ii) TPG Asia, our Asia dedicated franchise, (iii) TPG Healthcare Partners, which makes healthcare-related investments primarily in partnership with other TPG funds, and (iv) single asset continuation vehicles which allow limited partners to remain invested in a portfolio company beyond the life of the TPG fund that initially invested in the company.

•Growth: Our Growth platform provides us with a flexible mandate to capitalize on investment opportunities that are earlier in their life cycle, are smaller in size and/or have different profiles than would be considered for our Capital platform. Our Growth platform consists of three primary products, including (i) TPG Growth, our dedicated growth equity and middle market investing product which makes growth equity, control growth buyout, and late-stage venture investments globally, (ii) TPG Tech Adjacencies, which pursues minority structured investments in technology sectors, and (iii) TPG Digital Media, which focuses on opportunities in digital media and content-centric themes.

•Impact: We have a fundamental belief that private enterprise can contribute significantly to addressing societal challenges globally and launched our Impact platform in 2016 to pursue both competitive financial returns and measurable societal benefits at scale. Our Impact funds are organized in three primary products, including (i) The Rise Funds, our vehicles for investing across multiple vectors of societal impact, such as climate, education, financial inclusion, agriculture, and healthcare, (ii) TPG Rise Climate, our dedicated climate impact investing product, and (iii) an emerging markets healthcare fund, Evercare.

•Real Estate: We established our real estate investing practice in 2009 to pursue real estate investments systematically and build the capabilities to do so at significant scale. Today, we are investing in real estate through three primary products, including (i) TPG Real Estate Partners (“TREP”), an opportunistic strategy that focuses on acquiring and building real estate platforms utilizing a distinct theme-based strategy, which often aligns with TPG’s broader thematic sector expertise, (ii) TPG Real Estate Thematic Advantage Core-Plus (“TAC+”), an extension of

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TREP which targets investments in stabilized or near stabilized real estate, and (iii) TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX”), our publicly traded mortgage real estate investment trust (“REIT”).

•Market Solutions: Our Market Solutions platform leverages the broader TPG ecosystem to create differentiated products in order to address specific market opportunities. The Market Solutions platform products consist of Public Market Investing funds, Private Markets Solutions, Capital Markets activities, which seeks to acquire private equity positions on a secondary basis, and SPACs.

The investment adviser of our funds generally receives a management fee based on a percentage of the fund’s capital commitments, or the fund’s invested capital, depending on the fund’s terms and position in its lifecycle. The investment advisers to certain of our funds may also receive special fees, including transaction fees upon consummation of transactions, monitoring fees from portfolio companies following acquisition and other fees in connection with their activities. As part of its partnership interest in a fund and, in addition to a return on its capital interest in a fund, the general partner or an affiliate is generally entitled to receive performance allocations from a fund. Performance allocations are generally calculated on a realized basis, and each general partner (or affiliate) is generally entitled to an allocation of 20% of the net realized profits generated by such fund, subject to a preferred limited partner return typically of 8% per year.

Operating Segments

We operate our business as a single operating and reportable segment, which is consistent with how our CEO, who is our chief operating decision maker, reviews financial performance and allocates resources. We operate collaboratively across platforms with a single expense pool.

Trends Affecting our Business

Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions. Changes in global economic conditions and regulatory or other governmental policies or actions can materially affect the values of funds managed by TPG, as well as our ability to source attractive investments and deploy the capital that we have raised. However, we believe our disciplined investment philosophy across our diversified investment platforms and our shared investment themes focused on attractive and resilient sectors of the global economy have historically contributed to the stability of our performance throughout market cycles.

The three months ended September 30, 2022 experienced persistent, elevated volatility across asset classes as global markets continued to contend with rising consumer prices, tightening financial conditions and slowing economic growth. Heightened inflation and monetary policy remained the largest factors affecting the macro environment with many central banks, including the U.S. Federal Reserve, signaling a commitment to continue to raise interest rates in order to tame inflation. Geopolitical risks also remained elevated amid the conflict between Russia and the Ukraine, furthering global growth and energy supply concerns.

Inflation continued to rise across many major economies in the third quarter of 2022, with the U.S. Consumer Price Index rising 8.3% and 8.2% year-over-year in August and September, respectively. While headline inflation was lower than the 9.1% and 8.5% year-over-year increases in June and July, respectively, levels remained elevated enough to counter narratives of peak inflation or a dovish pivot by the Federal Reserve. Core Consumer Price Index (CPI), which excludes food and energy components, increased 6.3% and 6.6% year-over-year in August and September, respectively, with the September figure representing a 40-year high.

The Federal Reserve continued its rapid interest rate hiking pace in the quarter, announcing 75 basis points Federal Funds rate increases at both the July and September Federal Open Market Committee meetings, with the most recent hike bringing the target rate to 3.00-3.25%. Commentary from Chairman Jerome Powell reiterated the Federal Reserve’s commitment to reducing inflation to 2.0%, potentially at the cost of economic deterioration, indicating that additional hikes are likely. As of the September meeting, many Federal Reserve officials expect rates to rise to approximately 4.4% by year-end 2022 and 4.6% by year-end 2023.

The rising interest rate and economic environment caused U.S. Treasury yields to rise across the curve during the third quarter of 2022, with the yield curve flattening as increases were sharper at the shorter end. Benchmark 10-year Treasuries ended the quarter yielding 3.80%, up from 2.98% as of the end of June 2022. The three months ended September 30, 2022 saw a sustained inversion of the yield curve as 2-year Treasury yields crossed higher than 10-year Treasury yields in early July, ultimately ending the quarter at 4.20%, 127 basis points higher than as of the end of the prior

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quarter. Corporate bond prices likewise fell during the quarter but fared better than other risk assets. U.S. High Yield and Investment Grade Bond indices fell 6.0% and 2.3%, respectively, in the quarter. Trends in credit spreads improved from the first half of 2022. Investment grade corporate spreads widened by only three basis points from the end of the second quarter of 2022, though remain near their widest point of the year, while high yield spreads tightened by 44 basis points.

U.S. equities fell for the third straight quarter during the three months ended September 30, 2022, recording their third consecutive quarterly losses. Positive momentum generated during the first half of the quarter, as investors anticipated slowing inflation, gave way to selling pressure in August and September as inflation persisted more than anticipated. The S&P 500, Dow Jones and Nasdaq Composite declined 5.3%, 6.7% and 4.1%, respectively, in the quarter, bringing year-to-date losses to 24.8%, 20.9% and 32.4%, respectively. U.S. equities are poised to post their worst annual performance since 2008, during which the S&P 500 fell 38.5%. The consumer discretionary and energy sectors were the only two S&P 500 sectors to post gains during the quarter, rising 4.1% and 1.2%, respectively. Communication services and real estate were the weakest performing sectors, declining 11.7% and 12.9%, respectively. Volatility, as measured by the CBOE Volatility Index, finished the three months ended September 30, 2022 modestly higher, closing at 31.62, up from 28.71 as of the end of the three months prior.

Our portfolio appreciated 2% in the third quarter, compared to declines in public indices this quarter, which reflects the strong operating performance and value creation initiatives in our portfolio. Both our private portfolio and public portfolio appreciated in the third quarter.

The U.S. labor market remained a key factor in the overall domestic economic picture. September’s labor report published by the U.S. Bureau of Labor Statistics indicated unemployment fell to 3.5% during the month, down from 3.7% in August. Job growth slowed but remained relatively robust. Employers added a seasonally adjusted 263,000 jobs in September, fewer than the 315,000 increase in August. While generally positive data points for the labor market, risk assets declined in response to labor data reports given the implications of continued inflation and monetary tightening measures.

In addition to these macroeconomic trends and market factors, our future performance is heavily dependent on our ability to attract new capital, generate strong, stable returns, source investments with attractive risk-adjusted returns and provide attractive investment products to a growing investor base. We believe the following factors will influence our future performance:

•The extent to which prospective fund investors favor alternative investments. Our ability to attract new capital is in part dependent on our current and prospective fund investors’ views of alternative investments relative to traditional asset classes. We believe that our fundraising efforts will continue to be subject to certain fundamental asset management trends, including (i) the increasing importance and market share of alternative investment strategies to fund investors of all types as fund investors focus on lower-correlated and absolute levels of return, (ii) the increasing demand for private markets from private wealth fund investors, (iii) shifting asset allocation policies of institutional fund investors in particular favoring private markets and (iv) increasing barriers to entry and growth.

•Our ability to generate strong, stable returns on behalf of our fund investors. Our ability to raise and retain capital is significantly dependent on our track record and the investment returns we are able to generate for our fund investors. The capital we raise drives growth in our AUM, fee earning assets under management (“FAUM”) management fees and performance fees. Although our AUM, FAUM and fee-related revenues have grown significantly since our inception and in recent years, a significant deterioration in the returns we generate for our fund investors, adverse market conditions or an outflow of capital in the alternative asset management industry in general, or in the private equity segments in which we specialize, could negatively affect our future growth rate. In addition, market dislocations, contractions or volatility could adversely affect our returns in the future, which could in turn affect our fundraising abilities in the future, as both existing and prospective fund investors will consider our historical return profile in future asset allocations.

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•Our ability to source investments with attractive risk-adjusted returns. Our ability to continue to grow our revenue is dependent on our continued ability to source attractive investments and efficiently deploy the capital that we have raised. Although the capital deployed in any one quarter may vary significantly from period to period due to the availability of attractive opportunities and the long-term nature of our investment strategies, we believe that our ability to efficiently and effectively invest our growing pool of fund capital puts us in a favorable position to maintain our revenue growth over time. Our ability to identify attractive investments and execute on those investments is dependent on a number of factors, including the general macroeconomic environment, market positioning, valuation, transaction size and the expected duration of such investment opportunities. A significant decrease in the quality or quantity of potential opportunities, particularly in our core focus sectors (including technology and healthcare), could adversely affect our ability to source investments with attractive risk-adjusted returns.

•The attractiveness of our product offerings to a broad and evolving investor base. Investors in our industry may have changing investment priorities and preferences over time, including with respect to risk appetite, portfolio allocation, desired returns and other considerations. Fund investors’ increasing desire to work with fewer managers has also resulted in heightened competition. We continue to expand and diversify our product offerings to increase investment options for our fund investors, while balancing this expansion with our goal of continuing to deliver consistent, attractive returns. Our track record of innovation and the organic incubation of new product platforms and strategies is representative of our adaptability and focus on delivering products that are in demand by our clients.

•Our ability to maintain our competitive advantage relative to competitors. Our data, analytical tools, deep industry knowledge, culture and teams allow us to provide our fund investors with attractive returns on their committed capital as well as customized investment solutions, including specialized services and reporting packages as well as experienced and responsive compliance, administration and tax capabilities. Our ability to maintain our advantage is dependent on a number of factors, including our continued access to a broad set of private market information, access to deal flow, retaining and developing our talent and our ability to grow our relationships with sophisticated partners.

Reorganization

On December 31, 2021, we undertook certain transactions as part of the Reorganization (as defined herein), which included transferring to RemainCo certain economic entitlements to performance allocations from certain of the TPG general partner entities as well as cash at the TPG Operating Group that related to those TPG general partner entities’ economic entitlements. We continue to consolidate these TPG general partner entities because we maintain control and have an implicit variable interest. We also transferred the TPG Operating Group’s co-investment interests in consolidated TPG Funds which led to the deconsolidation of those funds as of December 31, 2021. Additionally, we transferred certain other economic entitlements associated with certain other investments, including our investment in certain TPG funds we do not consolidate, our former affiliate and other equity method investments. This did not include certain of our strategic equity method investments, including Harlem Capital partners, VamosVentures and LandSpire Group, as the economics of these investments continue to be part of the TPG Operating Group after the Reorganization.

Subsequent to December 31, 2021 and in connection with our IPO, TPG Partners, LLC converted from a limited liability company to a Delaware corporation and changed its name to TPG Inc. and completed the remainder of the Reorganization on January 12, 2022. Following our incorporation, the Reorganization and the IPO, we are a holding company and our only business is to act as the owner of the entities serving as the general partner of the TPG Operating Group partnerships and our only material assets are Common Units representing 25.6% of the Common Units and 100% of the interests in certain intermediate holding companies as of September 30, 2022. In our capacity as the sole indirect owner of the entities serving as the general partner of the TPG Operating Group partnerships, we indirectly control all of the TPG Operating Group’s business and affairs.

Basis of Accounting

TPG Inc. is considered the successor of TPG Group Holdings for accounting purposes, and TPG Group Holdings’ consolidated financial statements are our historical financial statements. Given the ultimate controlling partners of TPG Group Holdings control TPG Inc., who in turn controls the TPG Operating Group, we account for the acquisition of such continuing limited partners’ interests in our business, as part of the Reorganization, as a transfer of interests under common control. Accordingly, we carry forward the existing value of such continuing limited partners’ interest in the assets and

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liabilities recognized in the TPG Operating Group’s financial statements prior to our IPO into our financial statements following our IPO.

TPG Group Holdings’ historical financial statements include the consolidated accounts of management companies, general partners of pooled investment entities and certain consolidated TPG funds, which are held in TPG Operating Group I, L.P. (formerly known as “TPG Holdings I, L.P.” and referred to as “TPG Operating Group I”), TPG Operating Group II, L.P. (formerly known as “TPG Holdings II, L.P.” and referred to as “TPG Operating Group II”) and TPG Operating Group III, L.P. (formerly known as “TPG Holdings III, L.P.” and referred to as “TPG Operating Group III”). Prior to our IPO, the TPG Operating Group was controlled by TPG Group Holdings and as a result of the Reorganization is controlled by TPG Inc. after our IPO.

When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities, revenues, expenses, investment income, cash flows and other amounts, on a gross basis. While the consolidation of an entity does not impact the amounts of net income attributable to controlling interests, the consolidation does impact the financial statement presentation in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). This is a result of the fact that the accounts of the consolidated entities being reflected on a gross basis, with intercompany transactions eliminated, while the allocable share of those amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts attributable to third parties are recorded are presented as non-controlling interests on the condensed consolidated statements of financial condition and net income (loss) attributable to non-controlling interests on the condensed consolidated statements of operations.

We are not required under U.S. GAAP to consolidate the majority of investment funds we advise in our condensed consolidated financial statements because we do not have a more than insignificant variable interest. Pursuant to U.S. GAAP, we consolidate certain TPG funds and SPACs, which we refer to collectively as the “consolidated TPG Funds and Public SPACs,” in our condensed consolidated financial statements for certain of the periods we present. Management fees and performance allocations from the consolidated TPG Funds and Public SPACs are eliminated in the condensed consolidated financial statements. The assets and liabilities of the consolidated TPG Funds and Public SPACs are generally held within separate legal entities and, as a result, the liabilities of the consolidated TPG Funds and Public SPACs are non-recourse to us. Since we only consolidate a limited portion of our TPG investment funds, the performance of the consolidated TPG Funds and Public SPACs is not necessarily consistent with or representative of the aggregate performance trends of our TPG investment funds.

Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic. Numerous countries, including the United States, instituted a variety of restrictive measures to contain the viral spread, including mandatory quarantines and travel restrictions, leading to significant disruptions and uncertainty in the global financial markets. While many of the initial restrictions in the United States have been relaxed or removed, the risk of future outbreaks of COVID-19, or variants thereof, or of other public health crises remain. Further, certain public health restrictions remain in place and lifted restrictions may be reimposed to mitigate risks to public health. Further, the emergence of COVID-19 variants and related surges in cases have resulted in setbacks to the recovery, and subsequent surges could lead to renewed restrictions. Many public health experts believe that COVID-19 could persist or reoccur for years, and even if the lethality of the virus declines, such reoccurrence could trigger increased restrictions on business operations.

The COVID-19 pandemic has affected, and will continue to affect, our business. We continue to closely monitor developments related to COVID-19 and assess any potential negative impacts to our business. In particular, our future results may be adversely affected by (i) decreases in the value of investments in certain industries that have been materially impacted by the COVID-19 pandemic and related governmental measures, (ii) slowdowns in fundraising activity and (iii) reductions in our capital deployment pace. See “Item 1A.—Risk Factors—Risks Related to Our Business—Significant setbacks in the reopening of the global economy or reinstatement of lockdowns or other restrictions as a result of the ongoing COVID-19 pandemic may negatively impact our business and our results of operations, financial condition and cash flow” in our Annual Report on Form 10-K for the year ended December 31, 2021.

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Key Financial Measures

Our key financial and operating measures are discussed below.

Revenues

Fees and Other. Fees and other consists primarily of (i) management and incentive fees for providing investment management services to unconsolidated funds, collateralized loan obligations and other vehicles; (ii) monitoring fees for providing services to portfolio companies; (iii) transaction fees for providing advisory services, debt and equity arrangements and underwriting and placement services; and (iv) expense reimbursements from unconsolidated funds, portfolio companies and third-parties. These fee arrangements are documented within the contractual terms of the governing agreements and are recognized when earned, which generally coincides with the period during which the related services are performed and in the case of transaction fees, upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or change of control. These termination payments are recognized in the period in which the related transaction closes.

Capital Allocation-Based Income (Loss). Capital allocation-based income (loss) is earned from the TPG funds when we have (i) a general partner’s capital interest and (ii) performance allocations which entitle us to a disproportionate allocation of investment income or loss from an investment fund’s limited partners. We are entitled to a performance allocation (typically 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These performance allocations are subject to the achievement of minimum return levels (typically 8%), in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the TPG Funds, including performance allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member; however, we do not have control as defined by Accounting Standards Codification (“ASC”) Topic 810, Consolidation. The Company accounts for its general partner interests in capital allocation-based arrangements as financial instruments under ASC Topic 323, Investments – Equity Method and Joint Ventures as the general partner has significant governance rights in the TPG funds in which it invests which demonstrates significant influence. Accordingly, performance allocations are not deemed to be within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Expenses

Compensation and Benefits. Compensation and benefits expense includes (i) cash-based compensation and benefits, (ii) equity based compensation and (iii) performance allocation compensation. Bonuses are accrued over the service period to which they relate. In addition, we have equity-based compensation arrangements that require certain TPG executives and employees to vest ownership of a portion of their equity interests over a service period of generally one to six years, which under U.S. GAAP will result in compensation charges over current and future periods. In connection with our IPO, we granted restricted stock units (“RSUs”) to executives and employees. Performance allocation payments in the legal form of equity made directly or indirectly to our partners and professionals are allocated and distributed, when realized, pro rata based on ownership percentages in the underlying investment partnership and are accounted for as distributions on the equity held by such partners rather than as compensation and benefits expense prior to the Reorganization and IPO. Subsequent to the Reorganization and IPO, we account for these distributions as performance allocation compensation.

General, Administrative and Other. General and administrative expenses include costs primarily related to professional services, occupancy, travel, communication and information services and other general operating items.

Depreciation and Amortization. Depreciation and amortization of tenant improvements, furniture and equipment and intangible assets are expensed on a straight-line basis over the useful life of the asset.

Interest Expense. Interest expense includes interest paid and accrued on our outstanding debt and the amortization of deferred financing costs.

Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs consists of interest expense and other expenses related primarily to professional services fees, research expenses, trustee fees, travel expenses and other costs associated with organizing and offering these entities.

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Investment Income

Net Gains (Losses) from Investment Activities. Realized gains (losses) may be recognized when we redeem all or a portion of an investment interest or when we receive a distribution of capital. Unrealized gains (losses) result from the appreciation (depreciation) in the fair value of our investments. Fluctuations in net gains (losses) from investment activities between reporting periods are primarily driven by changes in the fair value of our investment portfolio and, to a lesser extent, the gains (losses) on investments disposed of during the period. The fair value of, as well as the ability to recognize gains (losses) from, our investments is significantly impacted by the global financial markets. This impact affects the net gains (losses) from investment activities recognized in any given period. Upon the disposition of an investment, previously recognized unrealized gains (losses) are reversed and an offsetting realized gain (loss) is recognized in the period in which the investment is sold. Since our investments are carried at fair value, fluctuations between periods could be significant due to changes to the inputs to our valuation process over time.

Interest, Dividends and Other. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established.

Net Gains (Losses) from Investment Activities of Consolidated TPG Funds and Public SPACs. Net gains (losses) from investment activities includes (i) realized gains (losses) from the sale of equity, securities sold and not yet purchased, debt and derivative instruments and (ii) unrealized gains (losses) from changes in the fair value of such instruments.

Unrealized Gains (Losses) on Derivative Liabilities of consolidated Public SPACs. Unrealized gains (losses) on derivative liabilities of consolidated Public SPACs are changes in the fair value of derivative contracts entered into by our consolidated Public SPAC entities, which are included in current period earnings.

Interest, Dividends and Other of consolidated TPG Funds and Public SPACs. Interest income is recognized on an accrual basis to the extent that such amounts are expected to be collected using the effective interest method. Dividends and other investment income are recorded when the right to receive payment is established.

Income Tax Expense

As a result of the Reorganization, the Company is treated as a corporation for U.S. federal and state income tax purposes. We are subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to our allocable share of taxable income generated by the TPG Operating Group partnerships. Prior to the Reorganization, the Company was treated as a partnership for U.S. federal income tax purposes and therefore was not subject to U.S. federal and state income taxes except for certain consolidated subsidiaries that were subject to taxation in the U.S. (federal, state and local) and foreign jurisdictions as a result of their entity classification for tax reporting purposes.

Non-controlling Interests

For entities that are consolidated, but not 100% owned, a portion of the income or loss and corresponding equity is allocated to owners other than TPG. The aggregate of the income or loss and corresponding equity that is not owned by us is included in non-controlling interests in the condensed consolidated financial statements.

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Key Components of our Results of Operations

Results of Operations

The following table provides information regarding our condensed consolidated results of operations for the periods presented:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(dollars in thousands, except share and per share data)
Revenues
Fees and other			$	333,496					$	279,908					$	896,456					$	685,115
Capital allocation-based income			227,628						231,356						667,096						3,211,945
Total revenues			561,124						511,264						1,563,552						3,897,060
Expenses
Compensation and benefits:
Cash-based compensation and benefits			116,753						136,139						348,751						392,666
Equity-based compensation			143,149						—						474,200						—
Performance allocation compensation			149,495						—						374,607						—
Total compensation and benefits			409,397						136,139						1,197,558						392,666
General, administrative and other			95,533						68,634						275,468						182,930
Depreciation and amortization			7,372						2,251						24,629						5,137
Interest expense			5,737						4,371						15,106						12,318
Expenses of consolidated TPG Funds and Public SPACs:
Interest expense			—						226						—						573
Other			567						12,556						2,547						23,919
Total expenses			518,606						224,177						1,515,308						617,543
Investment income (loss)
Income (loss) from investments:
Net gains (losses) from investment activities			1,907						224,141						(90,845)						338,346
Interest, dividends and other			2,407						472						3,393						6,959
Investment income of consolidated TPG Funds and Public SPACs:
Net gains from investment activities			—						1,949						—						9,008
Unrealized gains on derivative liabilities of Public SPACs			3,235						7,205						11,715						191,528
Interest, dividends and other			3,571						910						4,540						2,971
Total investment income (loss)			11,120						234,677						(71,197)						548,812
Income (loss) before income taxes			53,638						521,764						(22,953)						3,828,329
Income tax expense			432						1,281						23,534						6,090
Net income (loss)			53,206						520,483						(46,487)						3,822,239
Net (loss) income attributable to redeemable equity in Public SPACs prior to Reorganization and IPO			—						(4,250)						(517)						133,209
Net income attributable to non-controlling interests in consolidated TPG Funds prior to Reorganization and IPO			—						1,293						—						8,191
Net income attributable to other non-controlling interests prior to Reorganization and IPO			—						228,646						966						1,980,946
Net income attributable to TPG Group Holdings prior to Reorganization and IPO			—						294,794						5,256						1,699,893
Net income attributable to redeemable equity in Public SPACs			7,322						—						13,203						—
Net loss attributable to non-controlling interests in TPG Operating Group			(6,898)						—						(140,679)						—
Net income attributable to other non-controlling interests			15,422						—						6,499						—
Net income attributable to TPG Inc. subsequent to Reorganization and IPO			$	37,360					$	—					$	68,785					$	—

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			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			(dollars in thousands, except share and per share data)
Net income (loss) per share data:
Net income (loss) available to Class A common stock per share
Basic			$	0.44					$	—					$	0.82					$	—
Diluted			$	0.09					$	—					$	(0.16)					$	—
Weighted-average shares of Class A common stock outstanding
Basic			79,266,822						—						79,249,528						—
Diluted			308,919,463						—						308,902,169						—

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Revenues

Revenues consisted of the following for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021						Change						%
			($ in thousands)
Management fees			$	253,839					$	207,820					$	46,019					22		%
Transaction, monitoring and other fees, net			14,760						34,409						(19,649)						(57)		%
Expense reimbursements and other			64,897						37,679						27,218						72		%
Total fees and other			333,496						279,908						53,588						19		%
Performance allocations			223,311						218,218						5,093						2		%
Capital interests			4,317						13,138						(8,821)						(67)		%
Total capital allocation-based income			227,628						231,356						(3,728)						(2)		%
Total revenues			$	561,124					$	511,264					$	49,860					10		%

Fees and other revenues increased by $53.6 million, or 19%, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021. This change resulted from a $46.0 million increase in management fees and a $27.2 million increase in expense reimbursements, which was partially offset by a $19.6 million decrease in transaction, monitoring and other fees, net.

Management Fees. Management fees increased by $46.0 million, or 22%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was largely due to additional management fees of $17.6 million from TPG IX, $9.4 million from Asia VIII and $4.6 million from THP II, each of which were activated during the third quarter of 2022. Management fees also increased $21.3 million as a result of the launch of TREP IV during the first quarter of 2022 and $11.8 million from Rise Climate. These increases were partially offset by a decrease of $19.4 million in fees earned from Growth V, primarily related to $19.9 million in catch-up fees recognized in the three months ended September 30, 2021 and $8.8 million from TPG VII, resulting from a decrease in fee earning AUM during the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Certain management fees earned during the three months ended September 30, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise III in the amount of $1.2 million and $0.7 million for TREP IV which had initial closings prior to the third quarter of 2022.

Transaction, Monitoring and Other Fees, Net. Transaction, monitoring and other fees, net decreased by $19.6 million, or 57%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily driven by a $20.8 million decrease in our Market Solutions platform as a result of less capital markets activity among our portfolio companies involving our broker-dealer, partially offset by a $1.2 million increase in transaction and incentive fees earned from portfolio companies in our Growth platform.

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Expense Reimbursements and Other. Expense reimbursements and other increased $27.2 million, or 72%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This increase was largely driven by additional reimbursements from TPG funds of $21.1 million and $4.8 million in administrative service fees from RemainCo during the three months ended September 30, 2022.

Performance Allocations. Performance allocations increased by $5.1 million, or 2%, for the three months ended September 30, 2022, compared to the three months ended September 30, 2021. Our realized and unrealized portfolio appreciated by approximately 2% during each of the three months ended September 30, 2022 and 2021. Realized performance allocations gains for the three months ended September 30, 2022 and 2021 totaled $41.5 million and $967.8 million, respectively. Unrealized performance allocation gains for the three months ended September 30, 2022 totaled $181.8 million. Unrealized performance allocation losses for the three months ended September 30, 2021 totaled $749.5 million.

The table below highlights performance allocations for the three months ended September 30, 2022 and 2021, and separates the entities listed into two categories to reflect the Reorganization: (i) TPG general partner entities from which the TPG Operating Group Common Unit holders are expected to receive a 20% performance allocation and (ii) TPG general partner entities from which the TPG Operating Group Common Unit holders are not expected to receive any performance allocation.

			Three Months Ended September 30,
			2022						2021						Change						%
			($ in thousands)
TPG Operating Group Shared:
TPG VII			$	(44,178)					$	113,840					$	(158,018)					(139)		%
TPG VIII			144,330						(150,939)						295,269						196		%
Asia VI (1)			(41,039)						48,936						(89,975)						(184)		%
Asia VII			(36,152)						117,295						(153,447)						(131)		%
THP I			31,699						(173,803)						205,502						118		%
TES			527						1,203						(676)						(56)		%
AAF			63,222						—						63,222						NM
Platform: Capital			118,409						(43,468)						161,877						372		%
Growth III (1)			(1,517)						6,580						(8,097)						(123)		%
Growth IV			14,475						30,789						(16,314)						(53)		%
Growth V			49,190						15,158						34,032						225		%
TTAD I			2,412						61,908						(59,496)						(96)		%
TDM			3,550						12,479						(8,929)						(72)		%
Platform: Growth			68,110						126,914						(58,804)						(46)		%
Rise I			2,918						60,745						(57,827)						(95)		%
Rise II			31,996						31,507						489						2		%
Platform: Impact			34,914						92,252						(57,338)						(62)		%
TREP III			2,594						44,758						(42,164)						(94)		%
Platform: Real Estate			2,594						44,758						(42,164)						(94)		%
TPEP			342						1,412						(1,070)						(76)		%
NewQuest			(705)						(4,827)						4,122						85		%
Platform: Market Solutions			(363)						(3,415)						3,052						89		%
Total TPG Operating Group Shared:			$	223,664					$	217,041					$	6,623					3		%

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			Three Months Ended September 30,
			2022						2021						Change						%
			($ in thousands)
TPG Operating Group Excluded:
TPG IV			$	(153)					$	(88)					$	(65)					(74)		%
TPG VI			(2,244)						1,159						(3,403)						(294)		%
Asia IV			(10)						(12)						2						17		%
Asia V			(20,566)						20,928						(41,494)						(198)		%
MMI			165						338						(173)						(51)		%
TPG TFP			(11)						(10)						(1)						(10)		%
Platform: Capital			(22,819)						22,315						(45,134)						(202)		%
Growth II			6,693						(8,801)						15,494						176		%
Growth II Gator			8,729						(10,310)						19,039						185		%
Biotech III			16,976						(6,475)						23,451						362		%
Biotech IV			(113)						(410)						297						72		%
Platform: Growth			32,285						(25,996)						58,281						224		%
TREP II			(9,218)						384						(9,602)						(2501)		%
DASA - Real Estate			(572)						553						(1,125)						(203)		%
Platform: Real Estate			(9,790)						937						(10,727)						(1145)		%
TSI			(29)						3,921						(3,950)						(101)		%
Platform: Impact			(29)						3,921						(3,950)						(101)		%
Total TPG Operating Group Excluded (2)			$	(353)					$	1,177					$	(1,530)					(130)		%
Total Performance Allocations			$	223,311					$	218,218					$	5,093					2		%

___________

(1)After the Reorganization, we retained an economic interest in performance allocations from the Growth III and Asia VI general partner entities, which entitles us to a performance allocation equal to 10%; however, we intend to allocate the full amount as performance allocation compensation expense. As such, net income available to controlling interest holders is zero for each of these funds following the Reorganization.

(2)The TPG Operating Group Excluded entities’ performance allocations are not a component of net income attributable to TPG following the Reorganization; however, the TPG general partner entities continue to be consolidated by us. We transferred the rights to the performance allocations the TPG Operating Group historically would have received to RemainCo on December 31, 2021. As such, net income available to controlling interest holders will be zero for each of the TPG Operating Group Excluded entities beginning January 1, 2022. See “Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data” which reflects the projected impact of the Reorganization.

The increase in total performance allocations for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily driven by an increase in unrealized appreciation in TPG VIII, THP I and AAF, partially offset by lower unrealized appreciation in TPG VII and Asia VII.

As of September 30, 2022, accrued performance allocations presented as investments in the Condensed Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $4.4 billion. As of September 30, 2022, accrued performance allocations presented as investments in the Condensed Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.6 billion.

Capital Interests. Capital interests income decreased by $8.8 million, or 67%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily driven by a decrease in income from our investments in Asia VII, TPG VII and Asia VI in our Capital platform, Rise I in our Impact platform and TTAD I in our Growth platform, partially offset by increases in TPG VIII, THP I and AAF in our Capital platform.

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Expenses

Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense decreased by $19.4 million, or 14%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily driven by a $31.1 million decrease in accrued bonuses for senior professionals for the three months ended September 30, 2022 which, following our Reorganization and IPO, are recorded in performance allocation compensation expense. This decrease was partially offset by increases in salaries and benefits and accrued bonuses of $6.8 million and $7.1 million, respectively, driven by an increase in headcount for the three months ended September 30, 2022.

Equity-based Compensation. Equity-based compensation expense increased by $143.1 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily attributable to the Reorganization and IPO, which resulted in a $123.0 million expense associated with units granted to certain of our employees at TPG Partner Holdings, RemainCo, and the TPG Operating Group as well as a $20.5 million expense associated with RSUs granted to TPG employees and certain of our executives upon completion of our IPO in January 2022, partially offset by a $0.4 million reduction of equity-based compensation expense associated with awards granted by TRTX. We had no such expense during the three months ended September 30, 2021.

Performance Allocation Compensation. Performance allocation compensation increased by $149.5 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was attributable to the change in fair value of performance allocations attributable to our partners and professionals. We had no such expense during the three months ended September 30, 2021 as we were a private partnership.

General, Administrative and Other. General and administrative expenses increased by $26.9 million, or 39%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily driven by a $21.1 million increase in reimbursable expenses incurred on behalf of TPG Funds and an increase of $5.8 million of other administrative expenses during the three months ended September 30, 2022.

Depreciation and Amortization. Depreciation and amortization increased by $5.1 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Interest Expense. Interest expense increased by $1.4 million, or 31%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs decreased by $12.2 million, or 96%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily driven by a $6.7 million decrease in non-recurring professional services expenses from PACE, which completed its business combination in September 2021, and a $2.0 million and $0.9 million decrease in other expenses for TPG Pace Beneficial Finance Corp. and TPG Pace Beneficial II Corp., respectively.

Net Gains (Losses) from Investment Activities. Net gains (losses) from investment activities decreased by $222.2 million to a gain of $1.9 million for three months ended September 30, 2022 from a gain of $224.1 million for the three months ended September 30, 2021. This change was primarily attributable to a gain of $122.7 million recognized on the deconsolidation of PACE and a gain of $95.0 million recognized on the acquisition of NewQuest during the three months ended September 30, 2021. Following the Reorganization, we no longer recognize net gains or losses from certain strategic investments that were transferred to RemainCo on December 31, 2021.

Interest, Dividends and Other. Interest, dividends and other increased by $1.9 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Net Losses from Investment Activities of Consolidated TPG Funds and Public SPACs. Net losses from investment activities of consolidated TPG Funds and Public SPACs had no activity during the three months ended September 30, 2022 compared to $1.9 million for the three months ended September 30, 2021. Following the Reorganization, the Company no longer consolidates TPEP as the Company does not have a controlling financial interest.

Unrealized Gains on Derivative Liabilities of Public SPACs. The $3.2 million and $7.2 million of unrealized gain on derivative instruments recognized during the three months ended September 30, 2022 and 2021, respectively, were attributable to warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. The warrants held by public investors and forward purchase agreements are treated as liability instruments rather

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than equity instruments and subject to mark-to-market adjustments each period. Upon the consummation of acquisitions of target companies by our Public SPACs or the wind down of a Public SPAC, the associated liability will no longer be included in our Condensed Consolidated Financial Statements.

Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest, dividends and other of consolidated TPG Funds and Public SPACs increased by $2.7 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily driven by higher interest income on Assets held in Trust Accounts due to increasing interest rates.

Income Tax Expense. Income tax expense decreased by $0.8 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was due to the Company now being treated as a corporation for U.S. federal and state income taxes in connection with the Reorganization and IPO, beginning in January of 2022.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Revenues

Revenues consisted of the following for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021						Change						%
			($ in thousands)
Management fees			$	681,389					$	520,338					$	161,051					31		%
Transaction, monitoring and other fees, net			59,755						66,358						(6,603)						(10)		%
Expense reimbursements and other			155,312						98,419						56,893						58		%
Total fees and other			896,456						685,115						211,341						31		%
Performance allocations			635,784						3,057,464						(2,421,680)						(79)		%
Capital interests			31,312						154,481						(123,169)						(80)		%
Total capital allocation-based income			667,096						3,211,945						(2,544,849)						(79)		%
Total revenues			$	1,563,552					$	3,897,060					$	(2,333,508)					(60)		%

Fees and other revenues increased by $211.3 million, or 31% during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021. This change resulted from a $161.1 million increase in management fees, a $56.9 million increase in expense reimbursements and other and a $6.6 million decrease in transaction, monitoring and other fees, net.

Management Fees. Management fees increased by $161.1 million, or 31%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by higher fee earning AUM resulting in additional management fees from TPG IX of $17.6 million and Rise III of $10.5 million, which held their initial closings in the second quarter of 2022, TREP IV of $55.4 million, which held its initial close during the first quarter of 2022, and Rise Climate of $65.6 million, which held its initial close in the third quarter of 2021. NewQuest, which was acquired on July 1, 2021, also contributed an additional $13.1 million of management fees during the nine months ended September 30, 2022. These increases were partially offset by a decline in management fees of $21.1 million earned from TPG VII resulting from a decrease in fee earning AUM during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Certain management fees in the nine months ended September 30, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise Climate in the amount of $2.8 million. Rise Climate had its initial closing in the third quarter of 2021.

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Transaction, Monitoring and Other Fees, Net. Transaction, monitoring and other fees, net decreased by $6.6 million, or 10%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change during the nine months ended September 30, 2022 was primarily driven by a decrease of $14.1 million in our Market Solutions platform as a result of less capital markets activity among our portfolio companies involving our broker-dealer, partially offset by increased transaction fees of $7.5 million earned from portfolio companies in our Real Estate platform.

Expense Reimbursements and Other. Expense reimbursements and other increased by $56.9 million, or 58%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by a $29.5 million increase in additional reimbursements from TPG funds, $15.2 million in administrative service fees from RemainCo received during the nine months ended September 30, 2022 and a $10.8 million increase in income from services rendered to TPG funds.

Performance Allocations. Performance allocations decreased by $2,421.7 million to $635.8 million, or 79%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by a 7% appreciation of our realized and unrealized portfolio during the nine months ended September 30, 2022 compared to a 32% appreciation of our realized and unrealized portfolio during the nine months ended September 30, 2021. Realized performance allocations for the nine months ended September 30, 2022 and 2021 totaled $953.4 million and $1,463.0 million, respectively. Unrealized performance allocation losses for the nine months ended September 30, 2022 totaled $317.6 million. Unrealized performance allocation gains for the nine months ended September 30, 2021 totaled $1,594.5 million, respectively.

The table below highlights performance allocations for the nine months ended September 30, 2022 and 2021, and separates the entities listed into two categories to reflect the Reorganization: (i) TPG general partner entities from which the TPG Operating Group Common Unit holders are expected to receive a 20% performance allocation and (ii) TPG general partner entities from which the TPG Operating Group Common Unit holders are not expected to receive any performance allocation.

			Nine Months Ended September 30,
			2022						2021						Change						%
			($ in thousands)
TPG Operating Group Shared:
TPG VII			$	320,026					$	800,440					$	(480,414)					(60)		%
TPG VIII			297,999						436,545						(138,546)						(32)		%
Asia VI (1)			(76,064)						278,569						(354,633)						(127)		%
Asia VII			(36,112)						319,645						(355,757)						(111)		%
THP I			20,098						154,135						(134,037)						(87)		%
TES			10,833						6,067						4,766						79		%
AAF			87,828						—						87,828						NM
Platform: Capital			624,608						1,995,401						(1,370,793)						(69)		%
Growth III (1)			(42,611)						82,406						(125,017)						(152)		%
Growth IV			(5,640)						239,818						(245,458)						(102)		%
Growth V			65,353						60,785						4,568						8		%
TTAD I			1,253						92,467						(91,214)						(99)		%
TDM			20,626						44,614						(23,988)						(54)		%
Platform: Growth			38,981						520,090						(481,109)						(93)		%
Rise I			(14,712)						98,371						(113,083)						(115)		%
Rise II			24,283						38,744						(14,461)						(37)		%
Platform: Impact			9,571						137,115						(127,544)						(93)		%
TREP III			36,359						107,948						(71,589)						(66)		%
Platform: Real Estate			$	36,359					$	107,948					$	(71,589)					(66)		%

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			Nine Months Ended September 30,
			2022						2021						Change						%
			($ in thousands)
TPEP			$	9,716					$	12,778					$	(3,062)					(24)		%
NewQuest			12,753						(4,827)						17,580						364		%
Strategic Capital			(2,793)						—						(2,793)						NM
Platform: Market Solutions			19,676						7,951						11,725						147		%
Total TPG Operating Group Shared:			$	729,195					$	2,768,505					$	(2,039,310)					(74)		%
TPG Operating Group Excluded:
TPG IV			$	(312)					$	2,521					$	(2,833)					(112)		%
TPG VI			(14,787)						26,937						(41,724)						(155)		%
Asia IV			(52)						1,454						(1,506)						(104)		%
Asia V			(41,874)						68,427						(110,301)						(161)		%
MMI			(320)						1,205						(1,525)						(127)		%
TPG TFP			(25)						(20)						(5)						(25)		%
Platform: Capital			(57,370)						100,524						(157,894)						(157)		%
Growth II			8,719						39,435						(30,716)						(78)		%
Growth II Gator			11,490						57,678						(46,188)						(80)		%
Biotech II			—						(342)						342						100		%
Biotech III			(23,116)						43,755						(66,871)						(153)		%
Biotech IV			(215)						1,139						(1,354)						(119)		%
Biotech V			—						(4,095)						4,095						100		%
Platform: Growth			(3,122)						137,570						(140,692)						(102)		%
TREP II			(19,617)						38,213						(57,830)						(151)		%
DASA—Real Estate			298						(1,938)						2,236						115		%
Platform: Real Estate			(19,319)						36,275						(55,594)						(153)		%
TSI			131						14,590						(14,459)						(99)		%
Evercare			(13,731)						—						(13,731)						NM
Platform: Impact			(13,600)						14,590						(28,190)						(193)		%
Total TPG Operating Group Excluded(2)			$	(93,411)					$	288,959					$	(382,370)					(132)		%
Total Performance Allocations			$	635,784					$	3,057,464					$	(2,421,680)					(79)		%

___________

(1)After the Reorganization, we retained an economic interest in performance allocations from the Growth III and Asia VI general partner entities, which entitles us to a performance allocation equal to 10%; however, we intend to allocate the full amount as performance allocation compensation expense. As such, net income available to controlling interest holders is zero for each of these funds following the Reorganization.

(2)The TPG Operating Group Excluded entities’ performance allocations are not a component of net income attributable to TPG following the Reorganization; however, the TPG general partner entities continue to be consolidated by us. We transferred the rights to the performance allocations the TPG Operating Group historically would have received to RemainCo on December 31, 2021. As such, net income available to controlling interest holders will be zero for each of the TPG Operating Group Excluded entities beginning January 1, 2022. See “Unaudited Pro Forma Condensed Consolidated Financial Information and Other Data” which reflects the projected impact of the Reorganization.

The decrease in total performance allocations for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily driven by lower realized and unrealized appreciation in TPG VII, Asia VII, Asia VI, Growth IV, TPG VIII, THP I and Rise I.

As of September 30, 2022, accrued performance allocations presented as investments in the Condensed Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group shared TPG general partner entities totaled $4.4 billion. As of September 30, 2022, accrued performance allocations presented as investments in the Condensed Consolidated Statement of Financial Condition for Common Unit holders TPG Operating Group excluded TPG general partner entities totaled $0.6 billion.

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Capital Interests. Capital interests income decreased by $123.2 million, or 80%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by a decrease in income from our investments in TPG VII, TPG VIII, Asia VI and Asia VII in our Capital platform, Growth III, Growth IV and TTAD I in our Growth platform, TRTX in our Real Estate platform and Rise I in our Impact platform. These decreases were partially offset by an increase in income from our investment in AAF in our Capital platform.

Expenses

Cash-Based Compensation and Benefits. Cash-based compensation and benefits expense decreased by $43.9 million, or 11%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by a $87.6 million decrease in accrued bonuses for senior professionals for the nine months ended September 30, 2022 which, following our Reorganization and IPO, are recorded in performance allocation compensation expense. This decrease was partially offset by increases in salaries and benefits and accrued bonuses of $24.4 million and $16.8 million, respectively, driven by an increase in headcount for the nine months ended September 30, 2022.

Equity-based Compensation. Equity-based compensation expense increased by $474.2 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was attributable to the Reorganization and IPO, which resulted in $418.2 million of expense associated with units granted to certain of our employees at TPG Partner Holdings, RemainCo, and the TPG Operating Group as well as $56.0 million of expense associated with RSUs granted to TPG employees and certain of our executives upon completion of our IPO in January 2022. We had no such expense during the nine months ended September 30, 2021.

Performance Allocation Compensation. Performance allocation compensation increased by $374.6 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was attributable to the recognition of partnership distributions to our partners and professionals as compensation expense following our IPO. We had no such expense during the nine months ended September 30, 2021 as we were a private partnership.

General, Administrative and Other. General and administrative expenses increased by $92.5 million, or 51%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by a $42.8 million increase in office, overhead and other, inclusive of a $20.6 million insurance policy purchased in connection with the IPO. This change was also driven by an increase in reimbursable expenses incurred on behalf of TPG Funds of $29.5 million, a $12.7 million increase of other administrative expenses and an increase of $6.5 million of expense associated with equity-based awards granted to certain non-employees of the Company.

Depreciation and Amortization. Depreciation and amortization increased by $19.5 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily due to the amortization of intangible assets during the nine months ended September 30, 2022.

Interest Expense. Interest expense increased by $2.8 million, or 23%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Expenses of Consolidated TPG Funds and Public SPACs. Expenses of consolidated TPG Funds and Public SPACs decreased by $21.9 million, or 90%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by $12.1 million decrease in non-recurring professional services expenses from PACE, which completed its business combination in September 2021, and a decrease of $6.4 million of other expenses for TPG Pace Beneficial Finance Corp.

Net Gains (Losses) from Investment Activities. Net gains (losses) from investment activities decreased by $429.2 million, to a loss of $90.8 million for nine months ended September 30, 2022 from a gain of $338.3 million for the nine months ended September 30, 2021. This change was primarily attributable to a gain of $122.7 million recognized on the deconsolidation of PACE and a gain of $95.0 million recognized on the acquisition of NewQuest during the nine months ended September 30, 2021. Additionally, we incurred losses of $61.5 million and $25.3 million from our investments in Vacasa, Inc. and NRDY, respectively, during the nine months ended September 30, 2022. Following the Reorganization, we no longer recognize net gains or losses from certain strategic investments that were transferred to RemainCo on December 31, 2021.

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Interest, Dividends and Other. Interest, dividends and other decreased by $3.6 million, or 51% for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily driven by unrealized gains of $5.0 million recorded during the nine months ended September 30, 2021 on the non-financial derivative liability consisting of an embedded contingent zero strike price forward contract granted to an investor as part of a purchase of a non-controlling interest in the Holdings Companies.

Net Losses from Investment Activities of Consolidated TPG Funds and Public SPACs. Net losses from investment activities of consolidated TPG Funds and Public SPACs had no activity during the nine months ended September 30, 2022 compared to $9.0 million for the nine months ended September 30, 2021. Following certain Reorganization activities, the Company no longer consolidates TPEP as the Company does not have a controlling financial interest.

Unrealized Gains on Derivative Liabilities of Public SPACs. The $11.7 million and $191.5 million of unrealized gain on derivative instruments recognized during the nine months ended September 30, 2022 and 2021, respectively, were attributable to warrants issued by the consolidated Public SPAC entities and forward purchase agreements held by third parties. The warrants held by public investors and forward purchase agreements are treated as liability instruments rather than equity instruments and subject to mark-to-market adjustments each period. Upon the consummation of acquisitions of target companies by our Public SPACs or the wind down of a Public SPAC, the associated liability will no longer be included in our Condensed Consolidated Financial Statements.

Interest, Dividends and Other of Consolidated TPG Funds and Public SPACs. Interest, dividends and other of consolidated TPG Funds and Public SPACs increased by $1.6 million, or 53%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Income Tax Expense. Income tax expense increased by $17.4 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was due to the Company now being treated as a corporation for U.S. federal and state income taxes in connection with the Reorganization and IPO, beginning in January of 2022.

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Unaudited Condensed Consolidated Statements of Financial Condition (U.S. GAAP basis)

			September 30, 2022						December 31, 2021
($ in thousands)
Assets
Cash and cash equivalents			$	1,052,612					$	972,729
Investments			5,725,828						6,109,046
Due from affiliates			178,917						185,321
Other assets			628,908						670,452
Assets of consolidated TPG Funds and Public SPACs			1,010,458						1,024,465
Total assets			$	8,596,723					$	8,962,013
Liabilities, Redeemable Equity and Equity
Debt obligations			$	444,398					$	444,444
Due to affiliates			178,305						826,999
Accrued performance allocation compensation			3,369,182						—
Other liabilities			460,081						372,597
Liabilities of consolidated TPG Funds and Public SPACs			376,721						56,532
Total liabilities			$	4,828,687					$	1,700,572
Redeemable equity from consolidated Public SPACs			$	651,434					$	1,000,027
Equity
Class A common stock $0.001 par value, 2,340,000,000 shares authorized (79,240,058 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			$	79					$	—
Class B common stock $0.001 par value, 750,000,000 shares authorized (229,652,641 and 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			230						—
Preferred stock, $0.001 par value, 25,000,000 shares authorized (0 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively)			—						—
Additional paid-in-capital			498,712						—
Retained earnings			459						—
Partners’ capital controlling interests			—						1,606,593
Other non-controlling interests			2,617,122						4,654,821
Total equity			3,116,602						6,261,414
Total liabilities, redeemable equity and equity			$	8,596,723					$	8,962,013

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Cash and cash equivalents increased $79.9 million primarily due to net proceeds of $391.3 million from our IPO in January 2022.

Investments decreased $383.2 million primarily due to unrealized performance allocation losses of $317.6 million and unrealized losses of $91.8 million of investment activities during the nine months ended September 30, 2022. For the nine months ended September 30, 2022, our investments have generated realized and unrealized portfolio appreciation of 7%.

Accrued performance allocation compensation increased $3,369.2 million primarily due to recognizing performance allocation compensation for the nine months ended September 30, 2022 following our IPO.

Liabilities of consolidated TPG Funds and Public SPACs increased $320.2 million primarily due to the reclassification of redeemable equity attributable to TPGY to current redeemable equity as a result of the October redemption of Class A ordinary shares. See Note 10 to our Condensed Consolidated Financial Statements.

Total equity decreased $3,144.8 million primarily due to the Reorganization and our IPO in January 2022, which transferred certain investments to RemainCo, reclassified certain performance allocations historically reflected as non-controlling interests to performance allocation compensation liabilities, and resulted in the issuance of approximately 79.1 million shares of Class A common stock and net proceeds of $793.4 million.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this Form 10-Q.

The following unaudited pro forma Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021 presents our consolidated results of operations and gives pro forma effect to the Reorganization, the consummation of the initial public offering (the “IPO”) and other impacts of the IPO (see transactions described under Note 1, “Organization” in the notes to the financial statements), as if they had occurred January 1, 2020. The owners of the TPG Operating Group completed a series of actions during the year ended December 31, 2021 and on January 12, 2022 as part of the Reorganization, in conjunction with the IPO that was completed on January 18, 2022. An unaudited pro forma condensed combined balance sheet is not presented because the Reorganization, IPO and the related transactions are fully reflected in the Company’s unaudited Condensed Consolidated Statement of Financial Condition as of September 30, 2022 included elsewhere in this Quarterly Report on Form 10-Q. The following unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosure about Acquired and Disposed Businesses.”

The pro forma adjustments are based on available information and upon assumptions that management believes are reasonable in order to reflect, on a pro forma basis, the effect of the Reorganization, IPO and related transactions on the historical financial information of TPG. The Company’s historic operations consist of multiple consolidated entities formed to provide asset management services under a single controlling entity, TPG Group Holdings. The historical period presented in the unaudited pro forma financial information reflects the operating results of TPG Group Holdings. Immediately following the Reorganization, the TPG Operating Group and its subsidiaries are controlled by the same parties and as such, we account for the Reorganization as a transfer of interests under common control.

The unaudited pro forma Condensed Consolidated Statement of Operations may not be indicative of the results of operations that would have occurred had the Reorganization or the IPO and related transactions, as applicable, taken place on the dates indicated, or that may be expected to occur in the future. The adjustments are described in the notes to the unaudited pro forma Condensed Consolidated Statement of Operations. The unaudited pro forma Condensed Consolidated Financial Information and other data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Condensed Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

The pro forma adjustments in the “Reorganization and Other Transaction Adjustments” column principally give effect to certain of the Reorganization and other transactions including:

•The TPG Operating Group transferred to RemainCo certain performance allocation economic entitlements from certain of the TPG general partner entities that are defined as Excluded Assets. We continue to consolidate these TPG general partner entities because we maintain control and have an implicit variable interest. The impact of this adjustment is a reallocation from controlling interests to non-controlling interests.

•The TPG Operating Group transferred to RemainCo the economic entitlements associated with certain other investments that are part of the Excluded Assets.

•The transfer of certain investments in TPG Funds to RemainCo resulted in the deconsolidation of those TPG Funds that have been consolidated in our historical combined financial statements with the exception of our Public SPACs.

•Adjustments to sharing percentages of future profits between controlling and non-controlling interests of the TPG Operating Group related to the Specified Company Assets.

The pro forma adjustments in the “Offering Transaction Adjustments” column principally give effect to the consummation of the IPO, including the corporate conversion.

We have not made any pro forma adjustments relating to any incremental reporting, compliance or investor relations costs that we may incur as a public company, as estimates of such expenses are not determinable.

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The unaudited pro forma condensed consolidated financial information should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

The unaudited pro forma condensed consolidated financial information is included for informational purposes only and does not purport to reflect the results of operations of TPG that would have occurred had the transactions described above transpired on the dates indicated or had we operated as a public entity during the period presented or for any future period or date. The unaudited pro forma condensed consolidated financial information should not be relied upon as being indicative of our future or actual results of operations had the Reorganization and IPO transactions and the other transactions described above occurred on the dates assumed. The unaudited pro forma condensed consolidated financial information also does not project our results of operations for any future period or date.

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Unaudited Pro Forma Condensed Consolidated Statement of Operations and Other Data
For the Three Months Ended September 30, 2021
						TPG Group Holdings Historical						Reorganization and Other Transaction Adjustments						Offering Transaction Adjustments						TPG Inc. Pro Forma
($ in thousands, except share and per share amounts)
Revenues
Fees and other						$	279,908					$	5,507		(3)			$	—					$	285,415
Capital allocation-based income						231,356						4,938			(1)			—						236,294
Total revenues						511,264						10,445						—						521,709
Expenses
Compensation and benefits:
Cash-based compensation and benefits						136,139						(33,144)			(5)			—						102,995
Equity-based compensation						—						—						107,545			(6)			125,004
																		17,459			(7)
Performance allocation compensation						—						190,279			(5)			—						190,279
Total compensation and benefits						136,139						157,135						125,004						418,278
General, administrative and other						68,634						—						—						68,634
Depreciation and amortization						2,251						—						—						2,251
Interest expense						4,371						997			(4)			—						5,368
Expenses of consolidated entities:
Interest expense						226						(226)			(1)			—						—
Other						12,556						(898)			(1)			—						11,658
Total expenses						224,177						157,008						125,004						506,189
Investment income
Income from investments:
Net gains from investment activities						224,141						(23,716)			(1)			—						200,425
Interest, dividends and other						472						—						—						472
Investment income of consolidated entities:
Net gains from investment activities						1,949						(1,949)			(1)			—						—
Unrealized gains on derivative liabilities						7,205						—						—						7,205
Interest, dividends and other						910						(900)			(1)			—						10
Total investment income						234,677						(26,565)						—						208,112
Income before income taxes						521,764						(173,128)						(125,004)						223,632
Income tax expense						1,281						—						17,251			(8)			18,532
Net income						520,483						(173,128)						(142,255)						205,100
Less:
Net loss attributable to redeemable equity in consolidated entities						(4,250)						—						—						(4,250)
Net income attributable to non-controlling interests in consolidated TPG Funds						1,293						(1,293)			(1)			—						—
Net income attributable to other non-controlling interests						228,646						21,183			(1)			44,202			(9)			151,128
												41,559			(2)
												850			(3)
												(155)			(4)
												(185,157)			(5)
Net income attributable to TPG Inc.						$	294,794					$	(50,115)					$	(186,457)		(10)			$	58,222

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TPG Group Holdings Historical

Reorganization and Other Transaction Adjustments

Offering Transaction Adjustments

TPG Inc. Pro Forma

Pro forma net income per share data: (11)

Weighted-average shares of Class A common stock outstanding

Basic

79,384,787

Diluted

309,037,428

Net income available to Class A common stock per share

Basic

$

0.74

Diluted

$

0.47

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Unaudited Pro Forma Condensed Consolidated Statement of Operations and Other Data
For the Nine Months Ended September 30, 2021
			TPG Group Holdings Historical						Reorganization and Other Transaction Adjustments						Offering Transaction Adjustments						TPG Inc. Pro Forma
($ in thousands, except share and per share amounts)
Revenues
Fees and other			$	685,115					$	16,857		(3)			$	—					$	701,972
Capital allocation-based income			3,211,945						(1,206)			(1)			—						3,210,739
Total revenues			3,897,060						15,651						—						3,912,711
Expenses
Compensation and benefits:
Cash-based compensation and benefits			392,666						(97,358)			(5)			—						295,308
Equity-based compensation			—						—						322,635			(6)			376,288
															53,653			(7)
Performance allocation compensation			—						2,036,197			(5)			—						2,036,197
Total compensation and benefits			392,666						1,938,839						376,288						2,707,793
General, administrative and other			182,930						—						—						182,930
Depreciation and amortization			5,137						—						—						5,137
Interest expense			12,318						2,993			(4)			—						15,311
Expenses of consolidated TPG Funds and Public SPACs:
Interest expense			573						(573)			(1)			—						—
Other			23,919						(1,195)			(1)			—						22,724
Total expenses			617,543						1,940,064						376,288						2,933,895
Investment income
Income from investments:
Net gains from investment activities			338,346						(110,279)			(1)			—						228,067
Interest, dividends and other			6,959						—						—						6,959
Investment income of consolidated TPG Funds and Public SPACs:
Net gains from investment activities			9,008						(9,008)			(1)			—						—
Unrealized gains on derivative liabilities of Public SPACs			191,528						—						—						191,528
Interest, dividends and other			2,971						(2,936)			(1)			—						35
Total investment income			548,812						(122,223)						—						426,589
Income before income taxes			3,828,329						(2,046,636)						(376,288)						1,405,405
Income tax expense			6,090						—						56,643			(8)			62,733
Net income			3,822,239						(2,046,636)						(432,931)						1,342,672
Less:
Net income attributable to redeemable equity in Public SPACs			133,209						—						—						133,209
Net income attributable to non-controlling interests in consolidated TPG Funds			8,191						(8,191)			(1)			—						—
Net income attributable to other non-controlling interests			1,980,946						121,411			(1)			212,834			(9)			1,019,362
									723,034			(2)
									2,627			(3)
									(467)			(4)
									(2,021,023)			(5)
Net income attributable to TPG Inc.			$	1,699,893					$	(864,027)					$	(645,765)		(10)			$	190,101

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TPG Group Holdings Historical

Reorganization and Other Transaction Adjustments

Offering Transaction Adjustments

TPG Inc. Pro Forma

Pro forma net income per share data: (11)

Weighted-average shares of Class A common stock outstanding

Basic

79,352,582

Diluted

309,005,223

Net income available to Class A common stock per share

Basic

$

2.39

Diluted

$

1.61

Notes to the Unaudited Pro Forma Condensed Consolidated Statement of Operations and Other Data

1)This adjustment relates to Excluded Assets and is made up of the following components:

Impact of changes in economics of certain TPG general partner interests in TPG Funds:

The TPG Operating Group transferred to RemainCo certain performance allocation economic entitlements from certain of the TPG general partner entities that are defined as Excluded Assets, as well as certain cash and amounts due to affiliates of the TPG Operating Group that relate to these TPG general partner entities’ economic entitlements. We continue to consolidate these TPG general partner entities because we maintain control and have an implicit variable interest. This adjustment results in a transfer of $24.1 million and $139.1 million from net income attributable to controlling interests to non-controlling interests for the three and nine months ended September 30, 2021, respectively, and is reflected in the table below.

Transfer of other investments:

The TPG Operating Group also transferred the economic entitlements associated with certain other investments, including our investment in our former affiliate. For the three months ended September 30, 2021, the impact results in an increase of total revenues of $4.9 million and the exclusion of investment income of $23.7 million with a reduction to net income attributable to controlling interests of $15.9 million and non-controlling interest of $2.9 million. For the nine months ended September 30, 2021, the impact results in the exclusion of total revenues of $1.2 million and investment income of $110.3 million with a reduction to net income attributable to controlling interests of $94.1 million and non-controlling interest of $17.4 million.

This does not include certain of our strategic equity method investments, including Harlem Capital Partners, VamosVentures and LandSpire Group, as the economics of these investments continue to be part of the TPG Operating Group after the Reorganization.

Deconsolidation of consolidated TPG Funds:

We transferred the TPG Operating Group’s co-investment interests in certain TPG Funds to RemainCo. These TPG Funds were historically consolidated and as a result of the transfer to RemainCo, are deconsolidated because we no longer hold a more than insignificant economic interest. For the three months ended September 30, 2021, this results in a reduction of $1.1 million of expenses and $2.8 million of investment income, and associated impacts to income attributable to controlling, non-controlling interest in consolidated TPG Funds, and non-controlling interests, as shown in the table below. For the nine months ended September 30, 2021, this results in a reduction of $1.8 million of expenses and $11.9 million of investment income, and associated impacts to income attributable to controlling, non-controlling interest in consolidated TPG Funds, and non-controlling interests, as shown in the table below.

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Impact Summary:

The amounts for these adjustments were derived based on historical financial results. The following table summarizes the pro forma impact for the Excluded Assets and deconsolidated TPG Funds:

			Three Months Ended September 30, 2021																		Nine Months Ended September 30, 2021
($ in thousands)			Exclusion of legacy entities						Exclusion of consolidated funds						Total						Exclusion of legacy entities						Exclusion of consolidated funds						Total
Revenues
Fees and other			$	—					$	—					$	—					$	—					$	—					$	—
Capital allocation-based income (loss)			4,938						—						4,938						(1,206)						—						(1,206)
Total revenues			4,938						—						4,938						(1,206)						—						(1,206)
Expenses
Compensation and benefits			—						—						—						—						—						—
General, administrative and other			—						—						—						—						—						—
Depreciation and amortization			—						—						—						—						—						—
Interest expense			—						—						—						—						—						—
Expenses of consolidated TPG Funds and Public SPACs:															—																		—
Interest expense			—						(226)						(226)						—						(573)						(573)
Other			—						(898)						(898)						—						(1,195)						(1,195)
Total expenses			—						(1,124)						(1,124)						—						(1,768)						(1,768)
Investment income
Income from investments:
Net losses from investment activities			(23,716)						—						(23,716)						(110,279)						—						(110,279)
Interest, dividends and other			—						—						—						—						—						—
Investment income of consolidated TPG Funds and Public SPACs:
Net losses from investment activities			—						(1,949)						(1,949)						—						(9,008)						(9,008)
Unrealized gains (losses) on derivative liabilities Public SPACs			—						—						—						—						—						—
Interest, dividends and other			—						(900)						(900)						—						(2,936)						(2,936)
Total investment income			(23,716)						(2,849)						(26,565)						(110,279)						(11,944)						(122,223)
Income before income taxes			(18,778)						(1,725)						(20,503)						(111,485)						(10,176)						(121,661)
Income tax expense			—						—						—						—						—						—
Net income (loss)			(18,778)						(1,725)						(20,503)						(111,485)						(10,176)						(121,661)
Less:
Net loss attributable to redeemable equity in Public SPACs			—						—						—						—						—						—
Net income (loss) attributable to non-controlling interests in consolidated TPG Funds			—						(1,293)						(1,293)						—						(8,191)						(8,191)
Net income (loss) attributable to other non-controlling interests			21,251						(67)						21,184						121,721						(310)						121,411
Net income (loss) attributable to controlling interests			$	(40,029)					$	(365)					$	(40,394)					$	(233,206)					$	(1,675)					$	(234,881)

2)This adjustment relates to the changes in economic entitlements that the holders of TPG Operating Group Common Units retain, and the associated reallocation of interests after the Reorganization. Specified Company Assets include certain TPG general partner entities to which the TPG Operating Group retained an economic entitlement and that are consolidated both before and after the Reorganization. As part of the Reorganization, the sharing percentage of the associated performance allocation income was reallocated between controlling and non-controlling interests. Subject to certain exceptions, we expect RemainCo to be entitled to between 10% and 15% of these Specified Company Assets’ related performance allocations, which we treat as non-controlling interests, and to allocate generally between 65% and 70% indirectly to our partners and professionals through performance allocation

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vehicles and Promote Units, with the remaining 20% available for distribution to the TPG Operating Group Common Unit holders. RemainCo’s entitlement to performance allocations associated with future funds will step down over time. See “Item 13.––Certain Relationships and Related Transactions, and Director Independence—RemainCo Performance Earnings Agreement” in our Annual Report on Form 10-K for the year ended December 31, 2021. In conjunction with allocating between 65% and 70% of performance allocations associated with the Specified Company Assets to our partners and professionals, have reduced the amount of cash-based bonuses historically paid to these individuals as further described in Note 5 below.

The primary impact of this is a reallocation from income attributable to controlling interests to income attributable to non-controlling interests. Specifically, this adjustment reflects reclassifications of $41.6 million and $723.0 million for the three and nine months ended September 30, 2021, respectively, from net income attributable to controlling interests to net income attributable to other non-controlling interests.

3)This amount reflects an administrative services fee that we receive for managing the Excluded Assets transferred to RemainCo that are not part of the TPG Operating Group. The fee is based on 1% of the net asset value of RemainCo.

4)This adjustment reflects incremental interest expense related to additional financing the TPG Operating Group used to declare a distribution of $200.0 million to our controlling and non-controlling interest holders prior to the Reorganization and the IPO. The distribution was made with $200.0 million of proceeds from the senior unsecured term loan issuance. The Senior Unsecured Term Loan carries an interest rate of LIBOR plus 1.00% and matures in December 2024.

The impact of the adjustment is an increase to interest expense of $1.0 million and $3.0 million with a corresponding impact to net income attributable to controlling interests and non-controlling interest holders for the three and nine months ended September 30, 2021, respectively.

5)Reflects the reclassification of performance allocation amounts owed to senior professionals from other non-controlling interests to performance allocation compensation. Following the IPO, we account for partnership distributions to our partners and professionals as performance allocation compensation expense. As described in Note 2 above, we have adjusted our performance allocation sharing percentage and in conjunction with allocating between 65% and 70% of performance allocations associated with the Specified Company Assets to certain of our people, we are reducing the amounts of cash-based bonuses and increasing the performance allocation compensation expense. For the three months ended September 30, 2021, the impact to the unaudited pro forma Condensed Consolidated Statement of Operations included additional performance allocation compensation of $190.3 million with a corresponding reduction to net income attributable to non-controlling interest and a reduction of $33.1 million from cash-based compensation and benefits with a corresponding increase to net income attributable to controlling and non-controlling interest of $28.0 million and $5.1 million, respectively. Amounts have been derived based upon our historical results.

For the nine months ended September 30, 2021, the impact to the unaudited pro forma Condensed Consolidated Statement of Operations included additional performance allocation compensation of $2,036.2 million with a corresponding reduction to net income attributable to non-controlling interest and a reduction of $97.4 million from cash-based compensation and benefits with a corresponding increase to net income attributable to controlling and non-controlling interest of $82.2 million and $15.2 million, respectively. Amounts have been derived based upon our historical results.

6)Our current partners hold restricted indirect interests in Common Units through TPG Partner Holdings and indirect economic interests in RemainCo as a result of the Reorganization and the IPO. The number of TPG Partner Holdings units outstanding at the time of the IPO total 245,397,431, of which 73,849,986 are unvested. The number of units outstanding related to our existing partners’ indirect economic interests in RemainCo at the time of the IPO total 198,040,459, of which 26,922,374 are unvested. In conjunction with the Reorganization, TPG Partner Holdings distributed its interest in RemainCo and the underlying assets as part of a common control transaction to its existing owners, which are our current and former partners. No changes were made to the terms of the unvested units. TPG Partner Holdings and RemainCo are both presented as non-controlling interest holders within our Condensed Consolidated Financial Statements.

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We account for the TPG Partner Holdings units and indirect economic interests in RemainCo as compensation expense in accordance with ASC Topic 718, Compensation – Stock Compensation. The unvested TPG Partner Holdings units and unvested indirect economic interests in RemainCo will be charged to compensation and benefits as they vest over the remaining requisite service period on a straight-line basis. The vesting periods range from immediate vesting up to six years. Expense amounts for TPG Partner Holdings units have been derived utilizing a per unit value of $29.50 (the IPO price) and adjusting for factors unique to those units, multiplied by the number of unvested units, and will be expensed over the remaining requisite service period. Expense amounts for the unvested indirect interests in RemainCo have been derived based on the fair value of RemainCo, utilizing a discounted cash flow valuation approach, multiplied by the number of unvested interests, and will be expensed over the remaining requisite service period. These adjustments resulted in expenses for the three and nine months ended September 30, 2021 totaling $107.5 million and $322.6 million, respectively. There is no additional dilution to our stockholders, contractually these units are only related to our non-controlling interest holders, and there is no impact to the allocation of income and distributions to our stockholders. Therefore, we have allocated these expense amounts to our non-controlling interest holders. See “Item 13.––Certain Relationships and Related Transactions, and Director Independence—RemainCo Performance Earnings Agreement” and “Item 13.––Certain Relationships and Related Transactions, and Director Independence—The TPG Operating Group Limited Partnership Agreements” in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional details on RemainCo.

7)At IPO, we granted to certain of our people RSUs with respect to approximately 9,280,000 shares of Class A common stock (although we are authorized to grant up to 4% of our shares of Class A common stock, measured on a fully-diluted, as converted basis, which would be 12,277,912 shares of Class A common stock). Of these RSUs, we granted 8,229,960 shares of Class A common stock immediately following the completion of the IPO. These RSUs generally vest over four years in three equal installments on the second through fourth anniversaries of the grant date (with some grants vesting on shorter alternate vesting schedules), subject to the recipient’s continued provision of services to the Company or its affiliates through the vesting date. In addition, under TPG Inc.’s Omnibus Equity Incentive Plan, which was approved by our board of directors on December 7, 2021 and our shareholders on December 20, 2021 (the “Omnibus Plan”), we granted immediately following the IPO long-term performance incentive awards to certain of our key executives in the form of RSUs (certain of which have performance-vesting criteria) with respect to a total of 2,203,390 shares of Class A common stock. Furthermore, we have currently named two of our three independent directors, and granted RSUs to the two named independent directors with respect to 20,340 shares of Class A common stock, immediately following the IPO. This adjustment reflects compensation expense associated with the grants described above had they occurred at January 1, 2020. The grants of such RSUs results in recognition of compensation expense for the three and nine months ended September 30, 2021 in the amount of $17.5 million and $53.7 million, respectively. These expenses are non-cash in nature and allocated to the Common Unit holders.

Not included in the above Offering Transaction Adjustment are RSUs (which are part of the RSUs with respect to approximately 9,280,000 shares of Class A common stock referred to above) with respect to 1,050,040 shares that were granted in 2022 after the IPO, including those to people hired for new roles created in connection with the IPO. In addition, we plan to grant RSUs of 10,170 shares to our third independent director when named. These additional grants will have similar vesting terms and conditions as the RSUs mentioned above.

8)The TPG Operating Group partnerships continue to be treated as partnerships for U.S. federal and state income tax purposes. Following the IPO, we are subject to U.S. federal income taxes, in addition to state, local and foreign income taxes with respect to our allocable share of any taxable income generated by the TPG Operating Group that flows through to its interest holders, including us. As a result, the unaudited pro forma Condensed Consolidated Statement of Operations reflects adjustments to our income tax expense to reflect a blended statutory tax rate of 23% at TPG, which was calculated assuming the U.S. federal rates currently in effect and the statutory rates applicable to each state, local and foreign jurisdiction where we estimate our income will be apportioned. The following table summarizes the impact for the period presented:

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			Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
($ in thousands)			Reorganization and Other Transaction Adjustments						Reorganization and Other Transaction Adjustments
Income before provision for income taxes			$	348,636					$	1,781,693
Less:
Provision for local and foreign income taxes			1,281						6,090
Net (loss) income attributable to redeemable interest in Public SPACs			(4,250)						133,209
Net income attributable to other non-controlling interests			106,926						806,528
Income before provision for income taxes attributable to TPG Operating Group			244,679						835,866
TPG Inc. blended statutory tax rate			0.00		%				0.00		%
Provision for TPG Inc. statutory income tax			—						—
Provision for local and foreign income taxes			1,281						6,090
Less: Prior recorded provision attributable to TPG			1,281						6,090
Adjustment to provision for income taxes			$	—					$	—

			Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
($ in thousands)			Offering Transaction Adjustment						Offering Transaction Adjustment
Income before provision for income taxes			$	223,632					$	1,405,405
Less:
Provision for local and foreign income taxes			1,281						6,090
Net (loss) income attributable to redeemable interest in Public SPACs			(4,250)						133,209
Net income attributable to other non-controlling interests			151,128						1,019,362
Income before provision for income taxes attributable to TPG Inc.			75,473						246,744
TPG Inc. blended statutory tax rate			23		%				23		%
Provision for income taxes			$	17,359					$	56,751
Add: Provision for income taxes of consolidated affiliates of TPG Inc.			1,173						5,982
Less: Prior recorded provision attributable to TPG			1,281						6,090
Adjustment to provision for income taxes			$	17,251					$	56,643

9)Prior to the IPO, TPG held Common Units representing 78.1% of the Common Units and 100% of the interests in certain intermediate holding companies. In our capacity as the sole indirect owner of the entities serving as the general partner of the TPG Operating Group partnerships, we indirectly control all of the TPG Operating Group’s business and affairs. As a result, we consolidate the financial results of the TPG Operating Group and its consolidated subsidiaries and report non-controlling interests related to the interests held by the other partners of the TPG Operating Group and its consolidated subsidiaries in our consolidated statements of operations. Following the IPO, TPG owns 25.6% of the Common Units, and the other partners of the TPG Operating Group own the remaining 74.4%, excluding the equity-based compensation expense related to our partners’ unvested TPG Partner Holdings units and indirect economic interests in RemainCo, which has been allocated only to non-controlling interest holders. Net income attributable to non-controlling interests represent 74.4% of the consolidated income before taxes of the TPG Operating Group. Promote Units are not included in this calculation of ownership interest.

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The computation of the pro forma income attributable to non-controlling interests in the TPG Operating Group is shown below.

			Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
($ in thousands)			Reorganization and Other Transaction Adjustments						Reorganization and Other Transaction Adjustments
Income before provision for income taxes			$	348,636					$	1,781,693
Less:
Provision for local and foreign income taxes			1,281						6,090
Net (loss) income attributable to redeemable interest in Public SPACs			(4,250)						133,209
Allocable Income			351,605						1,642,394
Less:
TPG Inc.’s economic interest in the TPG Operating Group (a)			244,679						835,866
Net income attributable to non-controlling interest in the TPG Operating Group and its consolidated subsidiaries			$	106,926					$	806,528

___________

(a)The amount represents the net income attributable to non-controlling interest holders in the TPG Operating Group adjusted for the allocation of equity-based compensation expenses related to TPG Partner Holdings units and indirect economic interests in RemainCo held by our partners. Refer to Note 6 herein.

			Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
($ in thousands)			Offering Transaction Adjustment						Offering Transaction Adjustment
Income before provision for income taxes			$	223,632					$	1,405,405
Less:
Provision for local and foreign income taxes			18,532						62,733
Net (loss) income attributable to redeemable interest in Public SPACs			(4,250)						133,209
Allocable Income			209,350						1,209,463
Less:
TPG Inc.’s economic interest in the TPG Operating Group			58,222						190,101
Net income attributable to non-controlling interest in the TPG Operating Group and its consolidated subsidiaries (a)			151,128						1,019,362
Less: As adjusted pro forma income attributable to non-controlling interest in the TPG Operating Group and its consolidated subsidiaries			106,926						806,528
Adjustment to income attributable to non-controlling interest in the TPG Operating Group and its consolidated subsidiaries			$	44,202					$	212,834

___________

(a)The amount represents the net income attributable to non-controlling interest holders in the TPG Operating Group adjusted for the allocation of equity-based compensation expenses related to TPG Partner Holdings units and indirect economic interests in RemainCo held by our partners. Refer to Note 6 herein.

10)Pro forma basic net income per share is computed by dividing net income available to Class A common stockholders by the weighted-average shares of Class A common stock outstanding during the period. The weighted-average shares outstanding excludes shares of Class A common stock reserved for issuance under the Omnibus Plan equal to 10% of our shares of Class A common stock, measured on a fully-diluted, as converted basis, including that we granted up to 4% to certain of our people in connection with the IPO, as well as certain long-term performance incentive awards and awards to our independent directors. We anticipate that a portion of the RSUs we granted to certain of our people in connection with the offering were granted immediately following the effectiveness of the IPO and a portion may be granted thereafter in 2022 in relation to the IPO, including to people hired for new roles created in connection with the IPO. Pro forma diluted net income per share is computed by adjusting the net income available to Class A common stockholders and the weighted-average shares of Class A common stock outstanding to give effect to potentially dilutive securities. The calculation of diluted earnings per share excludes Class B common stock, which may only be held by the TPG Operating Group owners other than us or our wholly-owned

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subsidiaries and their respective permitted transferees, and are therefore not included in the computation of pro forma basic or diluted net income per share.

11)The following table sets forth a reconciliation of the numerators and denominators used to compute pro forma basic and diluted net income per share.

			Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
($ in thousands, except share and per share amounts)
Pro forma basic net income per share:
Numerator
Net income			$	205,100					$	1,342,672
Less: Net income attributable to participating securities			5,898						19,049
Net (loss) income attributable to redeemable interests in Public SPACs			(4,250)						133,209
Net income attributable to interests in other non-controlling interest			144,696						1,000,709
Net income attributable to Class A common stockholders – Basic			$	58,756					$	189,705
Denominator
Shares of Class A common stock outstanding – Basic			79,384,787						79,352,582
Basic net income per share			$	0.74					$	2.39
Pro forma diluted net income per share:
Numerator
Net income attributable to Class A common stockholders – Basic			58,756						189,705
Reallocation of net income assuming exchange of Common Units to Class A common stock			86,506						308,241
Net income attributable to Class A common stockholders – Diluted			$	145,262					$	497,946
Denominator
Weighted-average shares of Class A common stock outstanding – Basic			79,384,787						79,352,582
Vesting of restricted share awards			—						—
Exchange of Common Units to Class A common stock			229,652,641						229,652,641
Weighted-average shares of Class A common stock outstanding – Diluted			309,037,428						309,005,223
Diluted net income per share:			$	0.47					$	1.61

In computing the dilutive effect, if any, that equity-based awards would have on earnings per share, we consider the reallocation of net income between holders of Class A common stock and non-controlling interests.

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Unaudited Pro Forma Non-GAAP Financial Measures

The following table sets forth our non-GAAP and pro forma non-GAAP financial measures after Reorganization and Offering Transaction Adjustments for the three and nine months ended September 30, 2021:

			Three Months Ended September 30, 2021												Nine Months Ended September 30, 2021
($ in thousands)			Non-GAAP						Pro Forma Non-GAAP						Non-GAAP						Pro Forma Non-GAAP
Management fees			$	206,995					$	206,995					$	516,488					$	516,488
Transaction, monitoring and other fees, net			42,208						42,208						77,375						77,375
Other income			10,304						13,699			(1)			34,091						42,133			(1)
Fee Related Revenues			259,507						262,902						627,954						635,996
Compensation and benefits, net			125,530						92,386			(2)			366,939						269,581			(2)
Operating expenses, net			47,090						47,090						131,287						131,287
Fee Related Expenses			172,620						139,476						498,226						400,868
Total Fee-Related Earnings			$	86,887					$	123,426					$	129,728					$	235,128
Realized performance allocations, net			505,626						141,199			(2), (3)			748,445						150,999			(2), (3)
Realized investment income and other, net			48,312						42,763			(4)			76,748						58,553			(4)
Depreciation expense			(1,736)						(1,736)						(4,617)						(4,617)
Interest expense, net			(3,806)						(4,803)			(5)			(11,245)						(14,238)			(5)
Distributable Earnings			$	635,283					$	300,849					$	939,059					$	425,825
Income taxes			(3)						(17,722)			(6)			(6,399)						(25,084)			(6)
After-Tax Distributable Earnings			$	635,280					$	283,127					$	932,660					$	400,741

Notes to the Unaudited Pro Forma Non-GAAP Financial Measures

1)The difference in other income between non-GAAP and pro forma non-GAAP financial measures is attributable to: (i) removing the other income associated with the other investments that were transferred to RemainCo and (ii) an administrative services fee that we receive for managing the Excluded Assets transferred to RemainCo that are not part of the TPG Operating Group. The fee is based on 1% of the net asset value of RemainCo.

2)This adjustment reflects the reduction of our cash-based bonuses we historically paid to our partners and professionals within compensation and benefits, net. Through the Reorganization, we have increased certain of our people’s share of performance allocations associated with the Specified Company Assets from approximately 50% to between 65% and 70%. The impact of this is a decrease in compensation and benefits, net of $33.1 million and $97.4 million for the three and nine months ended September 30, 2021, respectively.

3)Realized performance allocations, net only include the amounts the TPG Operating Group is entitled to after gross realized performance allocations has been reduced by realized performance allocation compensation and non-controlling interests. Following the Reorganization, the TPG Operating Group receives approximately 20% of the future performance allocations associated with the general partner entities that we retained an economic interest in. This adjustment to our sharing percentage was made to allow us to reduce cash-based bonuses paid to our partners. The impact of this adjustment is a decrease in realized performance allocations, net of $364.4 million and $597.4 million for the three and nine months ended September 30, 2021, respectively.

4)The difference in realized investment income and other, net is related to the transfer to RemainCo of the certain other investments that make up the Excluded Assets. The TPG Operating Group retained its interests in our strategic investments in NewQuest, Harlem Capital Partners, VamosVentures and LandSpire Group. This resulted in a decrease to realized investment income and other, net of $5.6 million and $18.2 million for the three and nine months ended September 30, 2021.

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5)This difference relates to additional interest expense from new financing the TPG Operating Group used to declare a distribution of $200.0 million to our controlling and non-controlling interest holders prior to the Reorganization and the IPO. The distribution was made with $200.0 million proceeds from the senior unsecured term loan issuance. The Senior Unsecured Term Loan carries an interest rate of LIBOR plus 1.00% and matures in December 2024. The impact of the adjustment is an increase to interest expense of $1.0 million and $3.0 million for the three and nine months ended September 30, 2021, respectively.

6)The difference in income tax expense is attributable to the corporate conversion. The income tax expense adjustment reflects TPG Inc.’s share of pro forma pre-tax distributable earnings, which equals 25.6%, multiplied by TPG Inc.’s effective tax rate of 23.0%.

Unaudited Pro Forma Non-GAAP Balance Sheet Measures

Book assets, book liabilities and net book value are non-GAAP performance measures of the TPG Operating Group’s assets, liabilities and equity on a deconsolidated basis which reflects our investments in subsidiaries as equity method investments. Additionally, the book assets, book liabilities and net book value include the tax assets and liabilities of TPG Inc. We utilize these measures to assess the unrealized value of our book assets after deducting for book liabilities as well as assess our indirect interest in accrued performance allocations from our TPG Funds and our co-investments in TPG Funds and third-party investments. We believe these measures are useful to investors as they provide additional insight into the net assets of the TPG Operating Group on a deconsolidated basis. These non-GAAP financial measures should not be considered as a substitute for, or superior to, similar financial measures calculated in accordance with U.S. GAAP. These non-GAAP financial measures may differ from the calculations of other alternative asset managers and, as a result, may not be comparable to similar measures presented by other companies. Certain comparative amounts for the prior fiscal period have been reclassified to conform to the below presentation as of September 30, 2022. Refer to “––Reconciliation to U.S. GAAP Measures” for reconciliations of the Condensed Consolidated Statement of Financial Condition to the non-GAAP Balance Sheet.

			As of
($ in thousands)			September 30, 2022						December 31, 2021						Pro Forma December 31, 2021
Book Assets
Cash and cash equivalents			$	571,792					$	242,370					$	646,387		(1), (2)
Restricted cash			13,172						13,135						13,135
Accrued performance allocations			725,318						1,344,348						769,283			(3)
Investments in funds			581,793						559,810						559,810
Other assets, net			570,110						733,085						504,644			(1), (2)
Total Book Assets			$	2,462,185					$	2,892,748					$	2,493,259
Book Liabilities
Accounts payable, accrued expenses and other			$	44,789					$	525,267					$	308,421		(1), (2), (4)
Securitized borrowing, net			245,182						244,950						244,950
Senior unsecured term loan			199,216						199,494						199,494
Total Book Liabilities			$	489,187					$	969,711					$	752,865
Net Book Value			$	1,972,998					$	1,923,037					$	1,740,394		(5)

Notes to the Unaudited Pro Forma Non-GAAP Balance Sheet Measures

1)    The difference between non-GAAP and pro forma non-GAAP balance sheet measures relates to the transfer of Excluded Assets, which consist of rights to future performance allocations related to certain general partner entities. Additionally, certain of our other investments and investments into TPG Funds have been excluded, because such interests are not part of the TPG Operating Group. We would have transferred (i) $27.2 million of cash; (ii) $204.5 million of other assets; and (iii) $203.3 million of other liabilities to RemainCo.

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2)    Includes $431.2 million of proceeds, net of estimated underwriting discounts and unpaid offering costs of $31.8 million, of which $24.0 million was previously capitalized and accrued in other assets, net and accounts payable, accrued expenses and other, respectively.

3)    Following the Reorganization, the TPG Operating Group and Common Unit holders receive approximately 20% of the future performance allocations associated with the general partner entities that we retain an economic interest in as described in Note 1 above. This adjustment reduces our share of accrued performance allocations by $575.1 million.

4)    Reflects a Tax Receivable Agreement liability of $10.4 million related to the reorganization of TPG into a corporation and associated offering transactions.

5)    Represents the impact to the net book value of the TPG Operating Group after the IPO transaction adjustments.

Reconciliations to U.S. GAAP Measures

The following table reconciles the most directly comparable financial measures calculated and presented in the Unaudited Pro Forma U.S. GAAP Statement of Operations to our Unaudited Non-GAAP Pro Forma financial measures for the three and nine months ended September 30, 2021:

($ in thousands)			Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
Total Pro Forma GAAP Net Income			$	205,100					$	1,342,672
Net loss (income) attributable to redeemable equity in Public SPACs			4,250						(133,209)
Net income attributable to other non-controlling interests			(56,797)						(639,626)
Share-based compensation expense			125,004						376,288
Unrealized performance allocations, net			91,224						(349,651)
Unrealized investment income			(71,281)						(216,971)
Unrealized gains on derivatives			(13,907)						(16,719)
Income tax expense			(466)						37,957
Other			—						—
Pro Forma After-tax Distributable Earnings			$	283,127					$	400,741
Income tax expense			17,722						25,084
Pro Forma Distributable Earnings			$	300,849					$	425,825
Realized performance fees, net			(141,199)						(150,999)
Realized investment income and other, net			(42,763)						(58,553)
Depreciation expense			1,736						4,617
Interest expense, net			4,803						14,238
Total Pro Forma Fee-Related Earnings			$	123,426					$	235,128

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Non-GAAP Financial Measures

Distributable Earnings. Distributable Earnings (“DE”) is used to assess performance and amounts potentially available for distributions to partners. DE is derived from and reconciled to, but not equivalent to, its most directly comparable U.S. GAAP measure of net income. DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include (i) unrealized performance allocations and related compensation and benefit expense, (ii) unrealized investment income, (iii) equity-based compensation expense, (iv) net income (loss) attributable to non-controlling interests in consolidated entities, or (v) certain non-cash items, such as contingent reserves.

While we believe that the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of our core operating performance, the use of DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented accordance with U.S. GAAP discussed further under “—Key Components of our Results of Operations—Results of Operations” prepared in accordance with U.S. GAAP.

After-tax Distributable Earnings. After-tax Distributable Earnings (“After-tax DE”) is a non-GAAP performance measure of our distributable earnings after reflecting the impact of income taxes. We use it to assess how income tax expense affects amounts available to be distributed to our Class A common stock holders and Common Unit holders. After-tax DE differs from U.S. GAAP net income computed in accordance with U.S. GAAP in that it does not include the items described in the definition of DE herein; however, unlike DE it does reflect the impact of income taxes. Income taxes, for purposes of determining After-tax DE, represent the total U.S. GAAP income tax expense adjusted to include only the current tax expense (benefit) calculated on U.S. GAAP net income before income tax and includes the current payable under our Tax Receivable Agreement, which is recorded within other liabilities in our consolidated statement of financial condition. Further, the current tax expense (benefit) utilized when determining After-tax DE reflects the benefit of deductions available to the Company on certain expense items that are excluded from the underlying calculation of DE, such as equity-based compensation charges. We believe that including the amount currently payable under the Tax Receivable Agreement and utilizing the current income tax expense (benefit), as described above, when determining After-tax DE is meaningful as it increases comparability between periods and more accurately reflects earnings that are available for distribution to shareholders.

We believe that while the inclusion or exclusion of the aforementioned U.S. GAAP income statement items provides investors with a meaningful indication of our core operating performance, the use of After-tax DE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein. This measure supplements U.S. GAAP net income and should be considered in addition to and not in lieu of the results of operations presented in accordance with U.S. GAAP discussed further under “—Key Components of our Results of Operations-Results of Operations.”

Fee-Related Earnings. Fee-Related Earnings (“FRE”) is a supplemental performance measure and is used to evaluate our business and make resource deployment and other operational decisions. FRE differs from net income computed in accordance with U.S. GAAP in that it adjusts for the items included in the calculation of DE and also adjusts to exclude (i) realized performance allocations and related compensation expense, (ii) realized investment income from investments and financial instruments, (iii) net interest (interest expense less interest income), (iv) depreciation, (v) amortization and (vi) certain non-core income and expenses. We use FRE to measure the ability of our business to cover compensation and operating expenses from fee revenues other than capital allocation-based income. The use of FRE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein.

Fee-Related Revenues. Fee-related revenues is a component of FRE. Fee-related revenues is comprised of (i) management fees, (ii) transaction, monitoring and other fees, net, and (iii) other income. Fee-related revenue differs from revenue computed in accordance with U.S. GAAP in that it excludes certain reimbursement expense arrangements. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations.

Fee-Related Expenses. Fee-related expenses is a component of FRE. Fee-related expenses differs from expenses computed in accordance with U.S. GAAP in that it is net of certain reimbursement arrangements. Fee-related expenses is used in management’s review of the business. Refer to “—Reconciliation to U.S. GAAP Measures” to the comparable line items on the combined statements of operations.

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Fee-related revenues and fee-related expenses are presented separately in our calculation of non-GAAP measures in order to better illustrate the profitability of our FRE. The use of fee-related revenues and FRE without consideration of the related U.S. GAAP measures is not adequate due to the adjustments described herein.

Our calculations of DE, FRE, fee-related revenue and fee-related expenses may differ from the calculations of other investment managers. As a result, these measures may not be comparable to similar measures presented by other investment managers.

The following table sets forth our total FRE and DE for the three and nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in thousands)
Management fees			$	254,510					$	206,995					$	679,927					$	516,488
Transaction, monitoring and other fees, net			14,909						42,208						62,833						77,375
Other income			12,874						10,304						35,937						34,091
Fee Related Revenues			282,293						259,507						778,697						627,954
Compensation and benefits, net			96,758						125,530						290,492						366,939
Operating expenses, net			64,324						47,090						173,208						131,287
Fee Related Expenses			161,082						172,620						463,700						498,226
Total Fee-Related Earnings			$	121,211					$	86,887					$	314,997					$	129,728
Realized performance allocations, net			4,977						505,626						187,344						748,445
Realized investment income and other, net			(336)						48,312						22,400						76,748
Depreciation expense			(280)						(1,736)						(3,319)						(4,617)
Interest expense, net			(4,077)						(3,806)						(12,763)						(11,245)
Distributable Earnings			$	121,495					$	635,283					$	508,659					$	939,059
Income taxes			(8,678)						(3)						(34,942)						(6,399)
After-Tax Distributable Earnings			$	112,817					$	635,280					$	473,717					$	932,660

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Fee-Related Revenues

Fee-related revenues increased by $22.8 million, or 9% for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase was primarily due to additional management fees of $47.5 million, partially offset by a decrease in transaction, monitoring and other fees, net of $27.3 million.

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Management Fees

The following table presents management fees in our platforms for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Capital			$	113,131					$	84,427
Impact			46,961						30,780
Real Estate			40,875						17,466
Growth			36,103						54,440
Market Solutions			17,440						19,882
Total Management Fees			$	254,510					$	206,995

Management fees increased by $47.5 million, or 23%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This increase was largely due to additional management fees of $28.7 million earned from the Capital platform, primarily as a result of the activation of TPG IX and Asia VIII during the third quarter of 2022. Management fees generated from the Real Estate platform increased $23.4 million, primarily as a result of the launch of TREP IV during the first quarter of 2022. Management fees generated from the Impact platform increased $16.2 million, primarily driven by Rise Climate. This increase was partially offset by a $19.4 million decrease in fees earned from Growth V primarily related to $19.9 million in catch-up fees recognized in the three months ended September 30, 2021.

Certain management fees earned during the three months ended September 30, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise III in the amount of $1.2 million and $0.7 million for TREP IV, both of which had initial closings prior to the third quarter of 2022.

Transaction, Monitoring and Other Fees, Net

The following table presents transaction, monitoring and other fees, net in our platforms for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Market Solutions			$	11,864					$	39,442
Impact			1,599						1,649
Capital			963						1,385
Real Estate			350						(407)
Growth			133						139
Total Transaction, Monitoring and Other Fees, Net			$	14,909					$	42,208

Transaction, monitoring and other fees, net decreased by $27.3 million, or 65%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This decrease was primarily attributable to the Market Solutions platform as a result of less capital markets activity among our portfolio companies involving our broker-dealer.

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Other Income

The following table presents other income for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Former affiliate funds			$	6,936					$	8,215
Other income			5,938						698
Other investments			—						1,391
Total Other Income(1)			$	12,874					$	10,304

___________

(1)Includes other income of $2.1 million during the three months ended September 30, 2021, generated by certain other investments that were transferred to RemainCo as Excluded Assets on December 31, 2021. Accordingly, there was no impact for the three months ended September 30, 2022.

Other income increased by $2.6 million, or 25%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This increase primarily resulted from income earned from RemainCo under the RemainCo administrative agreement, partially offset by the transfer of certain of our strategic investments to RemainCo on December 31, 2021.

Fee-Related Expenses

Fee-related expenses decreased by $11.5 million, or 7%, during the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This decrease was primarily comprised of lower compensation and benefits, net of $28.8 million, partially offset by increased operating expenses, net of $17.2 million.

Compensation and Benefits, Net

The following table presents compensation and benefits, net for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Salaries			$	50,466					$	43,615
Bonuses(1)			49,278						79,931
Benefits and other			14,408						18,428
Reimbursements			(17,394)						(16,444)
Total Compensation and Benefits, Net			$	96,758					$	125,530

___________

(1)Includes bonus compensation of $33.1 million during the three months ended September 30, 2021 for TPG senior professionals that are paid as performance allocation rather than discretionary bonus beginning in 2022.

Compensation and benefits, net decreased by $28.8 million, or 23%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily due to decreased bonuses of $30.7 million, largely a result of certain TPG senior professionals being compensated through discretionary realized performance allocations rather than discretionary bonuses, and a decrease in benefits and other of $4.0 million. The decrease was partially offset by increased salaries of $6.9 million as a result of headcount growth.

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Operating Expenses, Net

Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to TPG funds and monitoring services provided to our portfolio companies in the amounts of $64.3 million and $47.1 million for the three months ended September 30, 2022 and 2021, respectively.

Operating expenses, net increased by $17.2 million, or 37%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. This change was primarily due to an increase in professional fees of $8.3 million, travel expenses of $4.4 million, and other administrative expenses of $4.5 million.

Realized Performance Allocations, Net

Realized performance allocations, net were $5.0 million during the three months ended September 30, 2022 and $505.6 million for three months ended September 30, 2021.

The following table presents realized performance allocations, net from our platforms for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Capital			$	3,324					$	451,759
Impact			1,660						—
Growth			—						51,890
Real Estate			—						1,778
Market Solutions			(7)						199
Total Realized Performance Allocations, Net(1)			$	4,977					$	505,626

___________

(1)Includes realized performance allocation, net of $364.4 million during the three months ended September 30, 2021 attributable to the TPG Operating Group Excluded entities. As previously described herein, these entities’ performance allocations are not a component of distributable earnings beginning in the fiscal year ending December 31, 2022.

Realized performance allocations, net of $5.0 million for the three months ended September 30, 2022 were generated from realizations of $3.3 million from TPG VIII within the Capital platform. Realizations within the Impact platform of $1.7 million were generated from Rise I. The activity consisted of realizations sourced from portfolio companies including DirecTV, EverFi and Dodla Dairy (NSE: DODLA).

Realized performance allocations, net of $505.6 million for the three months ended September 30, 2021 were largely generated from realizations of $370.5 million from TPG VII and $75.7 million from TPG VI within the Capital platform. Realizations of $25.4 million from TSI II, $10.6 million from Growth II, and $8.3 million from Biotech III were generated within the Growth platform. Realizations within the Real Estate platform of $1.7 million were generated from TREP II. The realized performance allocations, net mainly consisted of amounts from portfolio companies such as Astound, Kindred at Home, Ellucian and McAfee.

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Realized Investment Income and Other, Net

The following table presents realized investment income and other, net for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Investments in TPG funds			$	2,390					$	49,034
Other investments			—						4,765
Non-core income (expense)			(2,726)						(5,487)
Total Realized Investment Income and Other, Net(1)			$	(336)					$	48,312

___________

(1)Includes realized investment income and other, net of $5.5 million during the three months ended September 30, 2021 generated by certain other investments that were transferred to RemainCo as of December 31, 2021.

The decrease in realized investment income and other, net of $48.6 million during the three months ended September 30, 2022 compared to the three months ended September 30, 2021 resulted primarily from decreased realizations from our investments in TPG funds as well as the transfer of certain of our strategic investments to RemainCo on December 31, 2021, partially offset by a decrease in non-core IPO-related transaction expenses in the third quarter of 2021. For the three months ended September 30, 2022, our non-core activity consists of one-time compensation arrangements and other non-core operating income and expenses.

Depreciation

Depreciation expense decreased $1.5 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Interest Expense, Net

The following table presents interest expense, net for the three months ended September 30, 2022 and 2021:

			Three Months Ended September 30,
			2022						2021
			($ in thousands)
Interest expense			$	5,737					$	4,011
Interest (income)			(1,660)						(205)
Interest Expense, Net			$	4,077					$	3,806

The increase in interest expense, net during the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily due to incremental debt outstanding following borrowings under the Senior Unsecured Term Loan in December 2021 as well as increased interest rates on certain borrowings, partially offset by an increase in interest income.

Distributable Earnings

The decrease in DE for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was primarily due to lower realized performance allocations, net, partially offset by increased Fee-Related Earnings.

Income Taxes

Income taxes increased $8.7 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. The increase in income taxes is a result of the Company being subject to federal income taxes subsequent to the Reorganization and IPO.

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Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Fee-Related Revenues

Fee-related revenues increased by $150.7 million, or 24% for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase was primarily due to additional management fees of $163.4 million, partially offset by a decrease in transaction, monitoring and other fees, net of $14.5 million.

Management Fees

The following table presents management fees in our platforms for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Capital			$	274,951					$	247,623
Impact			132,291						63,673
Real Estate			113,516						52,048
Growth			104,687						108,320
Market Solutions			54,482						44,824
Total Management Fees			$	679,927					$	516,488

Management fees increased by $163.4 million, or 32%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was largely due to increases in fee earning AUM resulting in additional management fees of $68.6 million earned from the Impact platform, primarily as a result of the launch of Rise Climate during the third quarter of 2021. Management fees generated from the Real Estate platform increased $61.5 million, primarily as a result of the initial closing of TREP IV during the first quarter of 2022. Management fees generated from the Capital platform increased $27.3 million, primarily driven by TPG IX, TPG VIII and Asia VIII, partially offset by a decline in management fees of $21.1 million earned from TPG VII resulting from a decrease in fee earning AUM. The Market Solutions platform also contributed $9.7 million to the overall management fee increase primarily due to the acquisition of NewQuest in July 2021.

Certain management fees earned during the nine months ended September 30, 2022 were considered catch-up fees as a result of additional capital commitments from limited partners to Rise Climate in the amount of $2.8 million. Rise Climate had its initial closing in 2021.

Transaction, Monitoring and Other Fees, Net

The following table presents transaction, monitoring and other fees, net in our platforms for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Market Solutions			$	47,848					$	66,150
Real Estate			5,181						2,344
Impact			5,069						3,695
Capital			4,194						4,867
Growth			541						319
Total Transaction, Monitoring and Other Fees, Net			$	62,833					$	77,375

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Transaction, monitoring and other fees, net decreased by $14.5 million, or 19%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This decrease was primarily attributable to the Market Solutions platform as a result of less capital markets activity among our portfolio companies involving our broker-dealer.

Other Income

The following table presents other income for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Former affiliate funds			$	20,889					$	27,684
Other income			15,048						2,159
Other investments			—						4,248
Total Other Income(1)			$	35,937					$	34,091

___________

(1) Includes other income of $8.8 million during the nine months ended September 30, 2021, generated by certain other investments that were transferred to RemainCo as Excluded Assets on December 31, 2021. Accordingly, there was no impact for the nine months ended September 30, 2022.

Total other income increased by $1.8 million, or 5%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change primarily resulted from an increase in income earned from RemainCo under the RemainCo administrative agreement, partially offset by the transfer of certain of our strategic investments to RemainCo on December 31, 2021.

Fee-Related Expenses

Fee-related expenses decreased by $34.5 million, or 7%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The decrease was primarily comprised of lower compensation and benefits, net of $76.4 million, partially offset by increased operating expenses, net of $41.9 million.

Compensation and Benefits, Net

The following table presents compensation and benefits, net for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Salaries			$	147,212					$	123,943
Bonuses(1)			145,130						239,028
Benefits and other			50,628						46,505
Reimbursements			(52,478)						(42,537)
Total Compensation and Benefits, Net			$	290,492					$	366,939

___________

(1)Includes bonus compensation of $97.4 million during the nine months ended September 30, 2021 for TPG senior professionals that are paid as performance allocation rather than discretionary bonus beginning in 2022.

Total compensation and benefits, net decreased by $76.4 million, or 21%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This change was primarily due to decreased bonuses of $93.9 million as a result of certain TPG senior professionals being compensated through discretionary realized performance allocations rather than discretionary bonuses, and increased compensation reimbursements related to services provided to certain fund and portfolio companies. The decrease was partially offset by increased salaries of $23.3 million.

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Operating Expenses, Net

Operating expenses, net includes general and administrative expenses as well as reimbursements for professional services and travel expenses related to investment management and advisory services provided to TPG funds and monitoring services provided to our portfolio companies in the amounts of $173.2 million and $131.3 million for the nine months ended September 30, 2022 and 2021, respectively.

The increase in operating expenses, net of $41.9 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to an increase in professional fees of $12.9 million, travel expenses of $10.8 million, and other administrative expenses of $18.2 million.

Realized Performance Allocations, Net

Realized performance allocations, net were $187.3 million during the nine months ended September 30, 2022 and $748.4 million during the nine months ended September 30, 2021.

The following table presents realized performance allocations, net from our platforms for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Capital			$	161,449					$	578,656
Impact			15,957						—
Growth			8,660						144,797
Real Estate			1,110						24,591
Market Solutions			168						401
Total Realized Performance Allocations, Net(1)			$	187,344					$	748,445

___________

(1)Includes realized performance allocation, net of $597.4 million during the nine months ended September 30, 2021 attributable to the TPG Operating Group Excluded entities. As previously described herein, these entities’ performance allocations are not a component of distributable earnings beginning in the fiscal year ending December 31, 2022.

Realized performance allocations, net of $187.3 million for the nine months ended September 30, 2022 were largely generated from realizations of $108.1 million from TPG VII, $20.8 million from TPG VIII and $19.4 million from Asia VII within the Capital platform. Realizations within the Impact platform of $16.0 million were generated from Rise I. The activity consisted of realizations sourced from portfolio companies including McAfee, Kelsey-Seybold Clinics, Greencross (ASX: GXL), DirecTV, EverFi and Renaissance Learning.

Realized performance allocations, net of $748.4 million for the nine months ended September 30, 2021 were largely generated from realizations of $385.6 million from TPG VII, $151.6 million from TPG VI, and $20.2 million million from Asia VI within the Capital platform. Realizations within the Growth platform were $44.2 million from Growth III, $35.5 million from Growth II, and $27.8 million from Biotech III. Realizations within the Real Estate platform were $24.5 million from TREP II. Realized performance allocations, net mainly consisted of amounts from portfolio companies, including Astound, Kindred at Home, Creative Artists Agency, Ellucian, McAfee, and C3.ai (NYSE: AI).

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Realized Investment Income and Other, Net

The following table presents realized investment income and other, net for the nine months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Investments in TPG funds			$	52,969					$	72,320
Other investments			—						16,153
Non-core income (expense)			(30,569)						(11,725)
Total Realized Investment Income and Other, Net(1)			$	22,400					$	76,748

___________

(1)Includes realized investment income and other, net of $18.2 million during the nine months ended September 30, 2021 generated by certain other investments that were transferred to RemainCo as of December 31, 2021.

Realized investment income and other, net decreased by $54.3 million, or 71%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. This decrease resulted primarily from decreased realizations of $19.4 million from our investments in TPG funds, additional non-core expenses of $18.8 million, largely related to IPO-related transaction expenses, and the transfer of certain of our strategic investments to RemainCo on December 31, 2021.

Depreciation

Depreciation expense decreased $1.3 million, or 28%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Interest Expense, Net

The following table presents interest expense, net for the three months ended September 30, 2022 and 2021:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Interest expense			$	15,096					$	11,958
Interest (income)			(2,333)						(713)
Interest Expense, Net			$	12,763					$	11,245

The increase in interest expense, net during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to incremental debt outstanding following borrowings under the Senior Unsecured Term Loan in December 2021 as well as increased interest rates on certain borrowings, partially offset by an increase in interest income.

Distributable Earnings

The decrease in DE for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 was primarily due to lower realized performance allocations, net, partially offset by an increase in our Fee-Related Earnings.

Income Taxes

Income taxes increased $28.5 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase in income taxes is a result of the Company being subject to federal income taxes subsequent to the Reorganization and IPO.

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Reconciliation to U.S. GAAP Measures

The following tables reconcile the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP to non-GAAP financial measures for the three and nine months ended September 30, 2022 and 2021:

Revenue

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in thousands)
GAAP Revenue			$	561,124					$	511,264					$	1,563,552					$	3,897,060
Capital-allocation based income			(227,628)						(231,356)						(667,096)						(3,211,945)
Expense reimbursements			(54,219)						(21,961)						(122,918)						(82,701)
Investment income and other			3,016						1,560						5,159						25,540
Fee-Related Revenue			$	282,293					$	259,507					$	778,697					$	627,954

Expenses

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in thousands)
GAAP Expenses			$	518,606					$	224,177					$	1,515,308					$	617,543
Depreciation and amortization expense			(7,372)						(2,251)						(24,629)						(5,137)
Interest expense			(5,737)						(4,371)						(15,106)						(12,318)
Expenses related to consolidated TPG Funds and Public SPACs			(567)						(12,782)						(2,547)						(24,492)
Expense reimbursements			(54,219)						(21,961)						(122,918)						(82,701)
Performance allocation compensation			(149,495)						—						(374,607)						—
Equity-based compensation			(143,149)						—						(474,200)						—
Non-core expenses and other			3,015						(10,192)						(37,601)						5,331
Fee-Related Expenses			$	161,082					$	172,620					$	463,700					$	498,226

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Net income

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in thousands)
Net income (loss)			$	53,206					$	520,483					$	(46,487)					$	3,822,239
Net (income) loss attributable to redeemable interests in Public SPACs			(7,322)						4,250						(12,686)						(133,209)
Net income attributable to non-controlling interests in consolidated TPG Funds			—						(1,293)						—						(8,191)
Net income attributable to other non-controlling interests			(15,422)						(179,199)						(6,499)						(1,666,764)
Amortization expense			2,949						—						9,304						—
Equity-based compensation			144,159						—						480,644						—
Unrealized performance allocations, net			(48,067)						389,482						35,205						(760,088)
Unrealized investment (income) loss			(2,116)						(84,536)						26,494						(304,608)
Unrealized gain on derivatives			(338)						(13,907)						(1,060)						(16,719)
Income tax			(7,543)						—						(10,692)						—
Non-recurring and other			(6,689)						—						(506)						—
After-tax Distributable Earnings			$	112,817					$	635,280					$	473,717					$	932,660
Income taxes			8,678						3						34,942						6,399
Distributable Earnings			$	121,495					$	635,283					$	508,659					$	939,059
Realized performance allocations, net			(4,977)						(505,626)						(187,344)						(748,445)
Realized investment income and other, net			336						(48,312)						(22,400)						(76,748)
Depreciation expense			280						1,736						3,319						4,617
Interest expense, net			4,077						3,806						12,763						11,245
Fee-Related Earnings			$	121,211					$	86,887					$	314,997					$	129,728

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Balance sheet

The following tables reconcile the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP to non-GAAP financial measures as of September 30, 2022 and December 31, 2021:

($ in thousands)						As of September 30, 2022
Total GAAP Assets						$	8,596,723
Impact of consolidated TPG Funds and Public SPACs
Cash and cash equivalents						(6,282)
Assets held in Trust Account						(1,003,449)
Due from affiliates						(45)
Other assets						(682)
Subtotal for consolidated TPG Funds and Public SPACs						(1,010,458)
Impact of other consolidated entities
Cash and cash equivalents						(480,820)
Due from affiliates						(131,291)
Investments						(4,418,717)
Other assets						(143,390)
Subtotal for other consolidated entities						(5,174,218)
Reclassification adjustments (1)
Due from affiliates						(47,626)
Investments						(1,307,111)
Accrued performance allocations						725,318
Investments in funds						581,793
Other assets						97,764
Subtotal for reclassification adjustments						50,138
Total Book Assets						$	2,462,185

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($ in thousands)						As of September 30, 2022
Total GAAP Liabilities						$	4,828,687
Impact of consolidated TPG Funds and Public SPACs
Accounts payable and accrued expenses						(623)
Current redeemable equity						(352,015)
Derivative liabilities of Public SPACs						(1,333)
Deferred underwriting						(22,750)
Subtotal for consolidated TPG Funds and Public SPACs						(376,721)
Impact of other consolidated entities
Accounts payable and accrued expenses						(222,556)
Due to affiliates						(169,090)
Accrued performance allocation compensation						(3,369,182)
Other liabilities						(212,697)
Subtotal for other consolidated entities						(3,973,525)
Reclassification adjustments (1)
Accounts payable and accrued expenses						42,082
Due to affiliates						(9,215)
Other liabilities						(22,121)
Subtotal for reclassification adjustments						10,746
Total Book Liabilities						$	489,187
Total GAAP redeemable equity from consolidated Public SPACs						$	651,434
Impact of consolidated TPG Funds and Public SPACs (2)						(651,434)
Total Book redeemable equity from consolidated Public SPACs						$	—
Total GAAP Equity						$	3,116,602
Impact of consolidated TPG Funds and Public SPACs						17,697
Impact of other consolidated entities						(1,200,693)
Reclassification adjustments (1)						39,392
Net Book Value						$	1,972,998

___________

(1)Certain amounts were reclassified to reflect how we utilize our non-GAAP balance sheet measures. We separately analyze our investments on a non-GAAP basis between accrued performance fees and other investments, which consists of co-investments into our funds and other equity method investments. Additionally, we reclassified U.S. GAAP financial statement amounts due from affiliates and certain amounts within other assets, net for non-GAAP purposes and reclassified U.S. GAAP financial statement amounts due to affiliates and other liabilities within accounts payable, accrued expenses and other for non-GAAP purposes.

(2)The $651.4 million redeemable equity represents ownership interest in each SPAC that is not owned by the TPG Operating Group and is presented separately form U.S. GAAP partners’ capital in the accompanying Condensed Consolidated Financial Statements.

($ in thousands)						As of December 31, 2021
Total GAAP Assets						$	8,962,013
Impact of consolidated TPG Funds and Public SPACs
Cash and cash equivalents						(5,371)
Assets held in Trust Account						(1,000,027)
Due from affiliates						(74)
Other assets						(18,993)
Subtotal for consolidated TPG Funds and Public SPACs						(1,024,465)
Impact of other consolidated entities
Cash and cash equivalents						(730,359)
Due from affiliates						81,557
Investments						(4,204,888)
Other assets, net						(282,272)
Subtotal for other consolidated entities						$	(5,135,962)

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($ in thousands)						As of December 31, 2021
Reclassification adjustments (1)
Due from affiliates						(13,930)
Investments						(1,904,158)
Accrued performance allocations						1,344,348
Investments in funds						559,810
Other assets						105,092
Subtotal for reclassification adjustments						91,162
Total Book Assets						$	2,892,748
Total GAAP Liabilities						$	1,700,572
Impact of consolidated TPG Funds and Public SPACs
Accounts payable and accrued expenses						(8,484)
Derivative liabilities of Public SPACs						(13,048)
Deferred underwriting						(35,000)
Subtotal for consolidated TPG Funds and Public SPACs						(56,532)
Impact of other consolidated entities
Accounts payable and accrued expenses						(131,737)
Due to affiliates						(820,998)
Other liabilities						(238,055)
Subtotal for other consolidated entities						(1,190,790)
Reclassification adjustments (1)
Accounts payable and accrued expenses						522,653
Due to affiliates						(6,001)
Other liabilities						(191)
Subtotal for reclassification adjustments						516,461
Total Book Liabilities						$	969,711
Total GAAP redeemable equity from consolidated Public SPACs						$	1,000,027
Impact of consolidated TPG Funds and Public SPACs (2)						(1,000,027)
Total Book redeemable equity from consolidated Public SPACs						$	—
Total GAAP Equity						$	6,261,414
Impact of consolidated TPG Funds and Public SPACs						32,094
Impact of other consolidated entities						(3,945,172)
Reclassification adjustments (1)						(425,299)
Net Book Value						$	1,923,037

___________

(1)Certain amounts were reclassified to reflect how we utilize our Non-GAAP balance sheet measures. We separately analyze our investments on a Non-GAAP basis between accrued performance fees and other investments, which consists of co-investments into our funds and other equity method investments. Additionally, we reclassified U.S. GAAP financial statement amounts due from affiliates and certain amounts within other assets, net for Non-GAAP purposes and reclassified U.S. GAAP financial statement amounts due to affiliates and other liabilities within accounts payable, accrued expenses and other for Non-GAAP purposes.

(2)The $1,000.0 million redeemable equity represents ownership interest in each SPAC that is not owned by the TPG Operating Group and is presented separately form U.S. GAAP Partners’ Capital in the accompanying Condensed Consolidated Financial Statements.

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Operating Metrics

We monitor certain operating metrics that are common to the asset management industry and that we believe provide important data regarding our business. The following operating metrics do not include those of our former affiliate or other investments that will not be included in the TPG Operating Group.

Assets Under Management

AUM represents the sum of (i) fair value of the investments and financial instruments held by our TPG funds managed by us, plus the capital that we are entitled to call from investors in those funds and co-investors, pursuant to the terms of their respective capital commitments, net of outstanding leverage, including capital commitments to funds that have yet to commence their investment periods; (ii) the net asset value of our hedge funds; (iii) the gross amount of assets (including leverage) for our mortgage REIT and collateralized fundraising vehicle; and (iv) IPO proceeds held in trust, excluding interest, as well as forward purchase agreements and proceeds associated with the private investment in public equity related to our SPACs upon the consummation of a business combination. Our definition of AUM is not based on any definition of AUM that may be set forth in the agreements governing the investment funds that we manage or calculated pursuant to any regulatory definitions.

The tables below present rollforwards of our total AUM for the three and nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in millions)
Balance as of Beginning of Period			$	126,704					$	108,264					$	113,618					$	89,526
Capital Raised			8,237						10,469						26,393						17,701
Realizations			(2,166)						(12,130)						(11,355)						(18,395)
Changes in Investment Value (1)			2,275						2,495						6,394						20,266
AUM as of end of period			$	135,050					$	109,098					$	135,050					$	109,098

___________

(1)Changes in investment value consists of changes in fair value, capital invested and available capital and other investment activities, including the change in net asset value of our hedge funds.

The following table summarizes our AUM by platform as of September 30, 2022 and 2021:

			As of September 30,
			2022						2021
			($ in millions)
Capital			$	67,917					$	52,609
Growth			21,790						22,147
Real Estate			19,771						11,463
Impact			15,811						12,622
Market Solutions			9,761						10,257
AUM as of end of period			$	135,050					$	109,098

AUM increased from approximately $113.6 billion as of December 31, 2021 to approximately $135.1 billion as of September 30, 2022. During the three months ended September 30, 2022, new capital of $8.2 billion was raised primarily attributable to TPG IX, Asia VIII and THP II within the Capital platform and Rise III within the Impact platform. Realizations totaled $2.2 billion and were primarily attributable to Growth V within the Growth platform and TRTX within the Real Estate platform. AUM also increased due to realized and unrealized portfolio appreciation of 2% recognized for the three months ended September 30, 2022.

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During the nine months ended September 30, 2022, new capital of $26.4 billion was raised primarily attributable to TPG IX, Asia VIII and THP II within the Capital platform, TREP IV within the Real Estate platform and Rise III within the Impact platform. Realizations totaled $11.4 billion and were primarily attributable to TPG VII, TPG VIII, Asia VII and THP I within the Capital platform, Growth IV and TTAD I within the Growth platform, and TRTX within the Real Estate platform. AUM also increased due to portfolio realized and unrealized appreciation of 7% recognized for the nine months ended September 30, 2022.

Fee Earning Assets Under Management

Fee earning AUM or FAUM represents only the AUM from which we are entitled to receive management fees. FAUM is the sum of all the individual fee bases that are used to calculate our management fees and differs from AUM in the following respects: (i) assets and commitments from which we are not entitled to receive a management fee are excluded (e.g., assets and commitments with respect to which we are entitled to receive only performance allocations or are otherwise not currently entitled to receive a management fee) and (ii) certain assets, primarily in our private equity funds, are reflected based on capital commitments and invested capital as opposed to fair value because fees are generally not impacted by changes in the fair value of underlying investments. We believe this measure is useful to investors as it provides additional insight into the capital base upon which we earn management fees. Our definition of FAUM is not based on any definition of AUM or FAUM that is set forth in the agreements governing the investment funds and products that we manage.

The table below present rollforwards of our FAUM for the three and nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in millions)
Balance as of Beginning of Period			$	67,128					$	52,250					$	60,094					$	50,655
Fee Earning Capital Raised(1)			14,587						8,073						22,862						9,711
Net Change in Actively Invested Capital(2)			(527)						(975)						(1,286)						(1,018)
Reduction in Fee Base of Certain Funds(3)			—						(1)						(482)						(1)
FAUM as of end of period			$	81,188					$	59,347					$	81,188					$	59,347

___________

(1)Fee Earning Capital Raised represents capital raised by our funds for which management fees calculated based on commitments were activated during the period.

(2)Net Change in Actively Invested Capital includes capital invested during the period, net of return of capital distributions and changes in net asset value of hedge funds. It also includes adjustments related to funds with a fee structure based on the lower of cost or fair value.

(3)Reduction in Fee Base represents decreases in the fee basis for funds where the investment or commitment fee period has expired, and the fee base has reduced from commitment base to actively invested capital. It also includes reductions for funds that are no longer fee paying.

FAUM increased from $60.1 billion from December 31, 2021 to $81.2 billion as of September 30, 2022. The increase was primarily related to fee earning capital raised activity totaling $22.9 billion primarily attributable to the Capital and Impact platforms. For the nine months ended September 30, 2022, annualized weighted average management fees as a percentage of FAUM, which represent annualized management fees divided by the average of each applicable period’s FAUM, were 1.93%. Fee earning capital raised of $14.6 billion is primarily due to TPG IX and THP II, which had their initial closings in the second quarter of 2022 and were activated during the three months ended September 30, 2022 and Asia VIII which was activated during the three months ended September 30, 2022.

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The following table summarizes our FAUM by platform as of September 30, 2022 and 2021:

			As of September 30,
			2022						2021
			($ in millions)
Capital			$	38,983					$	26,563
Real Estate			13,295						5,790
Impact			12,514						10,254
Growth			10,920						10,465
Market Solutions			5,476						6,275
FAUM as of end of period			$	81,188					$	59,347

FAUM increased from approximately $60.1 billion as of December 31, 2021 to approximately $81.2 billion as of September 30, 2022. The increase was primarily attributable to the initial activation of TPG IX, Asia VIII and THP II during the third quarter of 2022, within the Capital platform. There were additional increases in FAUM in the Real Estate platform due to the initial close of TREP IV in the first quarter of 2022 and the Impact platform due to the initial close of Rise III in the second quarter of 2022, partially offset by a decrease in actively invested capital of TPG VII within the Capital platform.

Net Accrued Performance Allocations

Net accrued performance allocations represents both unrealized and undistributed performance allocations resulting from our general partner interests in our TPG funds.

The table below summarizes our net accrued performance allocations by fund vintage year and platform as of September 30, 2022 and December 31, 2021:

			As of September 30, 2022						As of December 31, 2021
			($ in millions)
Fund Vintage
2016 & Prior			$	175					$	463
2017			227						435
2018			59						95
2019			171						245
2020			63						68
2021			30						40
Net Accrued Performance Allocations			$	725					$	1,346

			As of September 30, 2022						As of December 31, 2021
			($ in millions)
Platform
Capital			$	434					$	856
Growth			158						289
Impact			63						89
Real Estate			35						38
Market Solutions			35						74
Net Accrued Performance Allocations			$	725					$	1,346

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Key TPG funds that drove the net accrued performance allocations included TPG VII, TPG VIII, Asia VII and Growth IV as of September 30, 2022 and TPG VII, TPG VIII, Asia VI, Asia VII and Growth III as of December 31, 2021.

We also utilize Performance Allocation Generating AUM and Performance Allocation Eligible AUM as key metrics to understand AUM that could produce performance allocations. Performance Allocation Generating AUM refers to the AUM of funds we manage that are currently above their respective hurdle rate or preferred return, and profit of such funds are being allocated to, or earned by, us in accordance with the applicable limited partnership agreements or other governing agreements. Performance Allocation Eligible AUM refers to the AUM that is currently, or may eventually, produce performance allocations. All funds for which we are entitled to receive a performance allocation or incentive fee are included in Performance Allocations Eligible AUM.

Performance Allocation Generating AUM totaled $76.8 billion and $78.0 billion as of September 30, 2022 and December 31, 2021, respectively. Across our TPG funds, Performance Allocation Eligible AUM totaled $122.0 billion and $102.1 billion as of September 30, 2022 and December 31, 2021, respectively.

AUM Subject to Fee Earning Growth

AUM Subject to Fee Earning Growth represents capital commitments that when deployed have the ability to grow our fees through earning new management fees (AUM Not Yet Earning Fees) or when capital is invested and management fees can be charged at a higher rate (FAUM Subject to Step-Up).

AUM Not Yet Earning Fees represents the amount of capital commitments to TPG investment funds and co-investment vehicles that has not yet been invested or considered active, and as this capital is invested or activated, the fee-paying portion will be included in FAUM. FAUM Subject to Step-Up represents capital raised within certain funds where the management fee rate increases once capital is invested. Subject to certain limitations, limited partners in these funds pay a lower fee on committed and undrawn capital. As capital is drawn down for investments, the fees paid on that capital increases. FAUM Subject to Step-Up is included within FAUM.

The table below reflects AUM Subject to Fee Earning Growth by platform as of September 30, 2022 and December 31, 2021:

			As of September 30, 2022						As of December 31, 2021
			($ in millions)
AUM Not Yet Earning Fees:
Growth			$	2,309					$	3,279
Market Solutions			1,666						1,056
Real Estate			1,264						1,201
Capital			861						1,054
Impact			520						258
Total AUM Not Yet Earning Fees			$	6,620					$	6,848
FAUM Subject to Step-Up:
Capital			$	3,719					$	1,865
Real Estate			789						678
Total FAUM Subject to Step-Up:			4,508						2,543
Total AUM Subject to Fee Earning Growth			$	11,128					$	9,391

As of September 30, 2022, AUM Not Yet Earning Fees was $6.6 billion, which primarily consisted of TTAD II and Growth IV within the Growth platform, TSCF within the Market Solutions platform, TAC+ within the Real Estate platform and TPG VII within the Capital platform.

Associated with FAUM Subject to Step-Up, management fee rates on undrawn commitments for these respective underlying TPG funds range between 0.50% and 1.00% and step-up to rates in the range of 1.25% and 1.75% after capital is invested. FAUM Subject to Step-Up as of September 30, 2022 relates to TPG VIII, TPG IX, THP and THP II within the Capital platform and TREP III within the Real Estate platform.

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Capital Raised

Capital raised is the aggregate amount of capital commitments raised by TPG’s investment funds and co-investment vehicles during a given period, as well as IPO and forward purchase agreements associated with our Public SPACs and private investment in public equity upon the consummation of a business combination associated with one of our Public SPACs. We believe this measure is useful to investors as it measures access to capital across TPG and our ability to grow our management fee base. The table below presents capital raised by platform for three and nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in millions)
Capital			$	6,163					$	1,532					$	14,598					$	3,622
Real Estate			340						14						7,190						1,220
Impact			716						6,209						2,794						6,253
Market Solutions			1,017						640						1,173						2,026
Growth			1						2,074						638						4,580
Total Capital Raised			$	8,237					$	10,469					$	26,393					$	17,701

Capital raised totaled approximately $8.2 billion for the three months ended September 30, 2022. This was primarily attributable to the fundraising activities of Asia VIII, TPG IX and THP II within the Capital platform, Rise III within the Impact platform and GP Solutions, TPG TIGER and NewQuest V within the Market Solutions platform during the three months ended September 30, 2022.

Capital raised totaled approximately $26.4 billion for the nine months ended September 30, 2022. This was primarily attributable to the fundraising activities of TPG IX, Asia VIII and THP II within the Capital platform, TREP IV within the Real Estate platform and Rise III within the Impact platform during the nine months ended September 30, 2022.

Available Capital

Available capital is the aggregate amount of unfunded capital commitments that partners have committed to our funds and co-invest vehicles to fund future investments, as well as IPO and forward purchase agreement proceeds associated with our Public SPACs, and private investment in public equity commitments by investors upon the consummation of a business combination associated with our Public SPACs. Available capital is reduced for investments completed using fund-level financing arrangements; however, it is not reduced for investments that we have committed to make yet remain unfunded at the reporting date. We believe this measure is useful to investors as it provides additional insight into the amount of capital that is available to our investment funds and co-investment vehicles to make future investments. The table below presents available capital by platform as of as of September 30, 2022 and 2021:

			As of September 30,
			2022						2021
			($ in millions)
Capital			$	23,413					$	11,479
Real Estate			8,457						2,185
Impact			7,294						7,421
Growth			3,933						5,367
Market Solutions			3,278						3,344
Available Capital			$	46,375					$	29,796

Available capital increased from approximately $28.4 billion as of December 31, 2021 to approximately $46.4 billion as of September 30, 2022. The increase was attributable to capital raised in TPG IX, Asia VIII and THP II within the Capital platform, TREP IV within the Real Estate platform and Rise III within the Impact platform, partially offset by a decrease in TPG VIII within the Capital platform and Rise Climate and Rise II within the Impact platform.

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Capital Invested

Capital invested is the aggregate amount of capital invested during a given period by TPG’s investment funds, co-investment vehicles and SPACs in conjunction with the completion of a business combination. It excludes hedge fund activity. Capital invested includes investments made using investment financing arrangements like credit facilities, as applicable. The table below presents capital invested by platform for the three and nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in millions)
Impact			$	711					$	546					$	3,301					$	1,317
Real Estate			1,195						933						2,539						2,817
Capital			57						2,632						2,422						6,341
Growth			449						527						2,134						2,545
Market Solutions			105						828						410						887
Capital Invested			$	2,517					$	5,466					$	10,806					$	13,907

Capital invested was $2.5 billion for the three months ended September 30, 2022 which was primarily attributable to Rise Climate within the Impact platform, TRTX within the Real Estate platform and Growth V within the Growth platform.

Capital invested was $10.8 billion for the nine months ended September 30, 2022 which was primarily attributable to Rise Climate and Rise II within the Impact platform, TPG VIII and THP I within the Capital platform, Growth V and TTAD II within the Growth platform, and TREP IV and TRTX within the Real Estate platform.

Realizations

Realizations represent the aggregate investment proceeds generated by our TPG investment funds and co-investment vehicles and Public SPACs in conjunction with the completion of a business combination. The table below presents realizations by platform for the three and nine months ended September 30, 2022 and 2021:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
			($ in millions)
Capital			$	735					$	9,605					$	6,667					$	11,823
Growth			629						913						1,932						3,108
Real Estate			552						602						1,927						2,217
Impact			201						414						468						651
Market Solutions			49						596						361						596
Total Realizations			$	2,166					$	12,130					$	11,355					$	18,395

Realizations were $2.2 billion for the three months ended September 30, 2022 compared to $12.1 billion for the three months ended September 30, 2021. This was primarily attributable to a higher pace of realization activities during the three months ended September 30, 2021 in Asia V, Asia VI and TPG VIII within the Capital platform, Growth V within the Growth platform and TRTX within the Real Estate platform.

Realizations were $11.4 billion for the nine months ended September 30, 2022 compared to $18.4 billion for the nine months ended September 30, 2021. This was primarily attributable to a higher pace of realization activities during the three months ended September 30, 2021 in TPG VII, TPG VIII, Asia VII and THP I within the Capital platform, Growth IV and TTAD I within the Growth platform and TRTX within the Real Estate platform.

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Fund Performance Metrics

Fund performance information for our investment funds as of September 30, 2022 is included throughout this discussion and analysis to facilitate an understanding of our results of operations for the periods presented. These fund performance metrics do not include co-investment vehicles. The fund return information for individual funds reflected in this discussion and analysis is not necessarily indicative of our firmwide performance and is also not necessarily indicative of the future performance of any particular fund. An investment in us is not an investment in any of our funds. This track record presentation is unaudited and does not purport to represent the respective fund’s financial results in accordance with U.S. GAAP. There can be no assurance that any of our funds or our other existing and future funds will achieve similar returns. See “Item 1A.—Risk Factors—Risks Related to Our Business—The historical returns attributable to our funds should not be considered as indicative of the future results of us or our funds or any returns expected on an investment in our Class A common stock” in our Annual Report on Form 10-K for the year ended December 31, 2021.

The following tables reflect the performance of our funds as of September 30, 2022:

Fund			Vintage Year (1)						Capital Committed (2)						Capital Invested (3)						Realized Value (4)						Unrealized Value (5)						Total Value (6)						Gross IRR (7)						Gross MoM (7)						Net IRR (8)						Investor Net MoM (9)
			($ in millions)
Platform: Capital
Capital Funds
Air Partners			1993						$	64					$	64					$	697					$	—					$	697					81		%				10.9x						73		%				8.9x
TPG I			1994						721						696						3,095						—						3,095						47		%				4.4x						36		%				3.5x
TPG II			1997						2,500						2,554						5,010						—						5,010						13		%				2.0x						10		%				1.7x
TPG III			1999						4,497						3,718						12,360						—						12,360						34		%				3.3x						26		%				2.6x
TPG IV			2003						5,800						6,157						13,733						—						13,733						20		%				2.2x						15		%				1.9x
TPG V			2006						15,372						15,564						22,071						1						22,072						6		%				1.4x						5		%				1.4x
TPG VI			2008						18,873						19,220						32,651						1,036						33,687						14		%				1.7x						10		%				1.5x
TPG VII			2015						10,495						10,046						16,641						7,772						24,413						28		%				2.4x						22		%				2.0x
TPG VIII			2019						11,505						9,037						2,569						11,758						14,327						59		%				1.6x						37		%				1.4x
TPG IX (19)			2022						8,719						—						—						—						—						NM						NM						NM						NM
Capital Funds									78,546						67,056						108,827						20,567						129,394						23		%				1.9x						15		%				1.7x
Asia Funds
Asia I			1994						96						78						71						—						71						(3)		%				0.9x						(10)		%				0.7x
Asia II			1998						392						764						1,669						—						1,669						17		%				2.2x						14		%				1.9x
Asia III			2000						724						623						3,316						—						3,316						46		%				5.3x						31		%				3.8x
Asia IV			2005						1,561						1,603						4,089						—						4,089						23		%				2.6x						17		%				2.1x
Asia V			2007						3,841						3,257						5,151						433						5,584						10		%				1.7x						6		%				1.4x
Asia VI			2012						3,270						3,207						2,649						4,246						6,895						17		%				2.2x						13		%				1.8x
Asia VII			2017						4,630						4,227						1,791						5,578						7,369						28		%				1.8x						18		%				1.5x
Asia VIII (19)			2022						3,389						—						—						—						—						NM						NM						NM						NM
Asia Funds									17,903						13,759						18,736						10,257						28,993						21		%				2.1x						15		%				1.7x
Healthcare Funds
THP I			2019						2,704						1,845						805						2,154						2,959						57		%				1.6x						32		%				1.3x
THP II (19)			2022						1,913						—						—						—						—						NM						NM						NM						NM
Healthcare Funds									4,617						1,845						805						2,154						2,959						57		%				1.6x						32		%				1.3x
Continuation Vehicles
TPG AAF			2021						1,317						1,314						75						2,095						2,170						57		%				1.7x						47		%				1.5x
TPG AION			2021						207						207						—						207						207						—		%				1.0x						(1)		%				1.0x
Continuation Vehicles									1,524						1,521						75						2,302						2,377						49		%				1.6x						41		%				1.5x
Platform: Capital (excl-Legacy (15))									102,590						84,181						128,443						35,280						163,723						23		%				2.0x						15		%				1.7x
Legacy Funds
TES I			2016						303						206						210						165						375						29		%				1.8x						19		%				1.5x
Platform: Capital									102,893						84,387						128,653						35,445						164,098						23		%				2.0x						15		%				1.7x

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Fund			Vintage Year (1)						Capital Committed (2)						Capital Invested (3)						Realized Value (4)						Unrealized Value (5)						Total Value (6)						Gross IRR (7)						Gross MoM (7)						Net IRR (8)						Investor Net MoM (9)
			($ in millions)
Platform: Growth
Growth Funds
STAR			2007						1,264						1,259						1,859						68						1,927						13		%				1.5x						6		%				1.3x
Growth II			2011						2,041						2,184						4,695						623						5,318						22		%				2.5x						16		%				2.0x
Growth III			2015						3,128						3,315						4,530						2,411						6,941						29		%				2.1x						20		%				1.7x
Growth IV			2017						3,739						3,481						1,628						4,542						6,170						26		%				1.8x						17		%				1.5x
Gator			2019						726						685						627						619						1,246						40		%				1.8x						30		%				1.6x
Growth V			2020						3,558						2,363						313						3,029						3,342						48		%				1.5x						31		%				1.3x
Growth Funds									14,456						13,287						13,652						11,292						24,944						21		%				1.9x						15		%				1.6x
TDM			2017						510						442						—						961						961						27		%				2.2x						22		%				1.9x
Tech Adjacencies Funds
TTAD I			2018						1,574						1,497						782						1,932						2,714						40		%				1.8x						32		%				1.6x
TTAD II			2021						2,612						1,063						—						1,076						1,076						(3)		%				1.0x						(21)		%				0.9x
Tech Adjacencies Funds									4,186						2,560						782						3,008						3,790						38		%				1.6x						30		%				1.4x
Platform: Growth (excl-Legacy (15))									19,152						16,289						14,434						15,261						29,695						22		%				1.9x						15		%				1.6x
Legacy Funds
Biotech III			2008						510						468						949						443						1,392						17		%				3.0x						12		%				2.3x
Biotech IV			2012						106						99						121						4						125						8		%				1.3x						3		%				1.1x
Biotech V			2016						88						79						26						63						89						4		%				1.1x						—		%				1.0x
ART			2013						258						242						27						266						293						3		%				1.2x						—		%				1.0x
Platform: Growth									20,114						17,177						15,557						16,037						31,594						21		%				1.9x						15		%				1.6x
Platform: Impact
The Rise Funds
Rise I			2017						2,106						1,872						1,242						2,451						3,693						26		%				2.0x						18		%				1.6x
Rise II			2020						2,176						1,747						63						2,314						2,377						48		%				1.4x						28		%				1.3x
Rise III			2022						1,881						297						—						297						297						NM						NM						NM						NM
The Rise Funds									6,163						3,916						1,305						5,062						6,367						29		%				1.8x						19		%				1.5x
TSI			2018						333						133						368						—						368						35		%				2.8x						25		%				2.1x
Evercare			2019						621						415						16						505						521						8		%				1.3x						2		%				1.1x
Rise Climate			2021						7,268						2,176						8						2,274						2,282						55		%				1.1x						(41)		%				0.9x
Platform: Impact									14,385						6,640						1,697						7,841						9,538						27		%				1.6x						16		%				1.3x
Platform: Real Estate
TPG Real Estate Partners
DASA RE			2012						1,078						576						1,068						13						1,081						21		%				1.9x						15		%				1.6x
TPG RE II			2014						2,065						2,211						3,174						415						3,589						29		%				1.7x						19		%				1.5x
TPG RE III			2018						3,722						3,868						1,575						3,529						5,104						28		%				1.5x						20		%				1.3x
TPG RE IV			2022						6,820						413						—						413						413						NM						NM						NM						NM
TPG Real Estate Partners									13,685						7,068						5,817						4,370						10,187						25		%				1.6x						18		%				1.4x
TRTX			2014						1,916			14			NM						NM						NM						NM						NM						NM						NM						NM
TAC+			2021						1,797						822						69						797						866						7		%				1.1x						5		%				1.0x
Platform: Real Estate									17,398						7,890						5,886						5,167						11,053						25		%				1.5x						18		%				1.4x

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Fund			Vintage Year (1)						Capital Committed (2)						Capital Invested (3)						Realized Value (4)						Unrealized Value (5)						Total Value (6)						Gross IRR (7)						Gross MoM (7)						Net IRR (8)						Investor Net MoM (9)
			($ in millions)
Platform: Market Solutions
TPEP Long/Short			NM						NM						NM						NM						2,370						NM						NM (13)						NM						NM (13)						NM
TPEP Long Only			NM						NM						NM						NM						1,605						NM						NM (13)						NM						NM (13)						NM
TSCF			2021						1,108						158						12						132						144						(10)		%				0.9x						(11)		%				0.9x
GP Solutions			2022						312						88						—						88						88						NM						NM						NM						NM
TPG TIGER			2022						300						8						—						8						8						NM						NM						NM						NM
NewQuest I (18)			2011						390						291						767						—						767						48		%				3.2x						37		%				2.3x
NewQuest II (18)			2013						310						337						567						171						738						25		%				2.2x						20		%				1.8x
NewQuest III (18)			2016						541						499						320						560						880						18		%				1.8x						12		%				1.4x
NewQuest IV (18)			2020						1,000						788						103						1,020						1,123						62		%				1.5x						35		%				1.3x
NewQuest V (18)			2022						378						—						—						—						—						NM						NM						NM						NM
Platform: Market Solutions (12)									4,339						2,169						1,769						5,954						3,748						38		%				1.8x						26		%				1.5x
Discontinued Funds (16)									5,870						4,103						5,303						—						5,303						7		%				1.3x						3		%				1.1x
Total (excl-Legacy (15) and Discontinued Funds (16))									157,864						117,169						152,229						69,503						217,757						23		%				1.9x						15		%				1.6x
Total									$	164,999					$	122,366					$	158,865					$	70,444					$	225,334					22		%				1.9x						14		%				1.6x

__________

Note: Past performance is not indicative of future results.

(1)Vintage Year, with respect to an investment or group of investments, as applicable, represents the year such investment, or the first investment in such a group, was initially consummated by the fund. For follow-on investments, Vintage Year represents the year that the fund’s first investment in the relevant company was initially consummated. Vintage Year, with respect to a fund, represents the year in which the fund consummated its first investment (or, if earlier, received its first capital contributions from investors). We adopted this standard for fund Vintage Year to better align with current market and investor benchmarking practices. For consistency with prior reporting, however, the Vintage Year classification of any fund that held its initial closing before 2018 remains unchanged and represents the year of such fund’s initial closing.

(2)Capital Committed represents the amount of inception to date commitments a particular fund has received.

(3)Capital Invested, with respect to an investment or group of investments, as applicable, represents cash outlays by the fund for such investment or investments (whether funded through investor capital contributions or borrowing under the fund’s credit facility), including capitalized expenses and unrealized bridge loans allocated to such investment or investments. Capital Invested may be reduced after the date of initial investment as a result of sell-downs. This does not include proceeds eligible for recycling under fund limited partnership agreements. Capital Invested does not include interest expense on borrowing under the fund’s credit facility.

(4)Realized Value, with respect to an investment or group of investments, as applicable, represents total cash received or earned by the fund in respect of such investment or investments through the quarter end, including all interest, dividends and other proceeds. Receipts are recognized when cash proceeds are received or earned. Proceeds from an investment that is subject to pending disposition are not included in Realized Value and remain in Unrealized Value until the disposition has been completed and cash has been received. Similarly, any proceeds from an investment that is pending liquidation, or a similar event are not included in Realized Value until the liquidation or similar event has been completed. In addition, monitoring, transaction and other fees are not included in Realized Value but are applied to offset management fees to the extent provided in the fund’s partnership agreement.

(5)Unrealized Value, with respect to an investment in a publicly traded security, is based on the closing market price of the security as of the quarter end on the principal exchange on which the security trades, as adjusted by the general partner for any restrictions on disposition. Unrealized Value, with respect to an investment that is not a publicly traded security, represents the general partner’s estimate of the unrealized fair value of the fund’s investment, assuming a reasonable period of time for liquidation of the investment, and taking into consideration the financial condition and operating results of the portfolio company, the nature of the investment, applicable restrictions on marketability, market conditions, foreign currency exposures and other factors the general partner may deem appropriate. Where applicable, such estimate has been adjusted from cost to reflect (i) company performance relative to internal performance markers and the performance of comparable companies; (ii) market performance of comparable companies; and (iii) recent, pending or proposed transactions involving us, such as recapitalizations, initial public offerings or mergers and acquisitions. Given the nature of private investments, valuations necessarily entail a degree of uncertainty and/or subjectivity. There can be no assurance that expected transactions will actually occur or that performance markers will be achieved, and therefore actual value may differ from such estimated value and these differences may be material and adverse. Except as otherwise noted, valuations are as of the quarter end.

(6)Total Value, with respect to an investment or group of investments, as applicable, is the sum of Realized Value and Unrealized Value of such investment or investments.

(7)Gross IRR and Gross MoM are calculated by adjusting Investor Net IRR and Investor Net MoM to generally approximate investor performance metrics excluding management fees, fund expenses (other than interest expense and other fees arising from amounts borrowed under the fund’s credit facility to fund investments) and performance allocations. With respect to interest expense and other fees arising from amounts borrowed under the fund’s credit facility to fund investments, we have assumed that investor capital contributions were made in respect thereof as of the midpoint of each relevant quarter in which such amounts were incurred. We have further assumed that distributions to investors occurred in the

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middle of the month in which the related proceeds were received by the fund. Like the Net IRR, Gross IRR and Gross MoM (i) do not reflect the effect of taxes borne, or to be borne, by investors and (ii) excludes amounts attributable to the fund’s general partner, its affiliated entities and “friends of the firm” entities that generally pay no or reduced management fees and performance allocations. Such Gross IRR and Gross MoM represent an average of returns for all included investors and does not necessarily reflect the actual return of any particular investor. Gross IRR and Gross MoM are an approximation calculated by adjusting historical data using estimates and assumptions that we believe are appropriate for the relevant fund, but that inherently involve significant judgment. For funds that engaged in de minimis or no fund-level borrowing, Gross IRR is the discount rate at which (i) the present value of all Capital Invested in an investment or investments is equal to (ii) the present value of all realized and unrealized returns from such investment or investments. In this scenario, Gross IRR, with respect to an investment or investments, has been calculated based on the time that capital was invested by the fund in such investment or investments and that distributions were received by the fund in respect of such investment or investments, regardless of when capital was contributed to or distributed from the fund. Gross IRR does not reflect the effect of management fees, fund expenses, performance allocations or taxes borne, or to be borne, borne, by investors in the fund and would be lower if it did. For funds that engaged in de minimis or no fund-level borrowing, Gross MoM represents the multiple-of-money on capital invested by the fund for an investment or investments and is calculated as Total Value divided by Capital Invested (i.e., cash outlays by the fund for such investment or investments, whether funded through investor capital contributions or borrowing under the fund’s credit facility). Gross MoM is calculated on a gross basis and does not reflect the effect of management fees, fund expenses, performance allocations or taxes borne, or to be borne, by investors in the fund, and would be lower if it did.

(8)Net IRR represents the compound annualized return rate (i.e., the implied discount rate) of a fund, which is calculated using investor cash flows in the fund, including cash received from capital called from investors, cash distributed to investors and the investors’ ending capital balances as of the quarter end. Net IRR is the discount rate at which (i) the present value of all capital contributed by investors to the fund (which excludes, for the avoidance of doubt, any amounts borrowed by the fund in lieu of calling capital) is equal to (ii) the present value of all cash distributed to investors and the investors’ ending capital balances. Net IRR reflects the impact of management fees, fund expenses (including interest expense arising from amounts borrowed under the fund’s credit facility) and performance allocations, but does not reflect the effect of taxes borne, or to be borne, by investors. The Net IRR calculation assumes that investor contributions and distributions occurred in the middle of the month in which they were made. The Net IRR calculation excludes amounts attributable to the general partner, its affiliated entities and “friends of the firm” entities that generally pay no or reduced management fees and performance allocations. Net IRR represents an average return for all included investors, including those that pay reduced management fees and/or carried interest, and does not necessarily reflect the actual return of any particular investor. An actual investor that paid management fees and/or carried interest at rates higher than the average would have a lower individual Net IRR. In addition, management fees, fund expenses and carried interest differ from fund to fund, and therefore the impact of such amounts in a particular fund should not be assumed to reflect the impact such amounts would have on any other fund, including in respect of any fund in which a prospective investor is considering an investment. Net IRR for a platform does not include the cash flows for funds that are not currently presenting a Net IRR to their investors.

(9)Investor Net MoM, with respect to a fund, represents the multiple-of-money on contributions to the fund by investors. Investor Net MoM is calculated as the sum of cash distributed to investors and the investors’ ending capital balances as of the quarter end, divided by the amount of capital contributed to the fund by investors (which amount excludes, for the avoidance of doubt, any amounts borrowed by the fund in lieu of calling capital). Investor Net MoM reflects the impact of management fees, fund expenses (including interest expense arising from amounts borrowed under the fund’s credit facility) and performance allocations, but does not reflect the effect of taxes borne, or to be borne, by investors. The Investor Net MoM calculation excludes amounts attributable to the fund’s general partner, its affiliated entities and “friends of the firm” entities that generally pay no or reduced management fees and performance allocations. Investor Net MoM represents an average multiple-of-money for all included investors and does not necessarily reflect the actual return of any particular investor. An actual investor that paid management fees and/or carried interest at rates higher than the average would have a lower individual net M-o-M. In addition, management fees, fund expenses and carried interest differ from fund to fund, and therefore the impact of such amounts in a particular fund should not be assumed to reflect the impact such amounts would have on any other fund, including in respect of any fund in which a prospective investor is considering an investment.

(10)“NM” signifies that the relevant data would not be meaningful. Performance metrics are generally deemed “NM” for an investment or group of investments when, among other reasons, a fund is in its initial period of operation, or the holding period of the investment or investments is in its initial period of holding, which in each case we typically determine to mean up to twelve months, or the investment or investments do not have a significant cost basis. IRR metrics are generally deemed “NM” prior to the fund calling capital for the applicable investment(s).

(11)Amounts shown are in US dollars. When an investment is made in another currency, (i) Capital Invested is calculated using the exchange rate at the time of the investment, (ii) Unrealized Value is calculated using the exchange rate at the quarter end and (iii) Realized Value reflects actual US dollar proceeds to the fund. A fund may enter into foreign currency hedges in connection with an investment made in a currency other than US dollars. Capital Invested with respect to such investment includes the cost of establishing foreign currency hedges. For hedges entered into to facilitate payment of the purchase price for an investment, gains or losses on such hedges are applied, respectively, to reduce or increase Capital Invested with respect to such investment. Thereafter during the life of such investment, (i) Capital Invested includes any inception-to-date net realized losses on such hedges, (ii) Unrealized Value includes the unrealized fair value of such hedges as estimated by the general partner and (iii) Realized Value includes any inception-to-date net realized gain on such hedges. For hedges entered into in anticipation of receipt of exit proceeds, (i) losses on such hedges are first applied to offset exit proceeds, with any remaining losses applied to increase Capital Invested and (ii) gains on such hedges are first applied to reverse any inception-to-date net realized losses that were previously included in Capital Invested, with any remaining gains applied to increase Realized Value. Where a foreign currency hedge is implemented as part of the investment structure below the fund, such hedge is similarly reflected in Capital Invested and Realized Value to the extent that there are corresponding cash outflows from and inflows to the fund in respect of such hedge, and otherwise is included in Unrealized Value.

(12)Our special purpose acquisition companies (“SPACs”) which include Pace Holdings Corp., TPG Pace Holdings Corp., TPG Pace Tech Opportunities Corp., TPG Pace Beneficial Finance Corp., TPG Pace Energy Holdings Corp., TPG Pace Solutions Corp., TPG Pace Beneficial II Corp. and AFTR within the Market Solutions platform are not reflected. Gross IRR, Gross MoM and Net IRR are not meaningful for SPAC products as they are designed to identify an investment and merge to become a public company.

(13)As of September 30, 2022, TPEP Long/Short had estimated inception-to-date gross returns of 135% and net returns of 98%. These performance estimates represent the composite performance of TPG Public Equity Partners, LP and TPG Public Equity Partners Master Fund, L.P., adjusted as described below. The performance estimates are based on an investment in TPG Public Equity Partners, LP made on September 1, 2013, the date of TPEP’s inception, with the performance estimates for the period from January 1, 2016 to present being based on an investment in TPG Public Equity Partners Master Fund, L.P. made through TPG Public Equity Partners-A, L.P., the “onshore feeder.” Gross performance figures (i) are presented after any investment-related expenses, net interest, other expenses and the reinvestment of dividends; (ii) include any gains or losses from “new issue” securities; and (iii) are adjusted for illustration purposes to reflect the reduction of a hypothetical 1.5% annual management fee.

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Net performance assumes a 20% performance allocation. Performance results for a particular investor may vary from the performance stated as a result of, among other things, the timing of its investment(s) in TPEP, different performance allocation terms, different management fees, the feeder through which the investor invests and the investor’s eligibility to participate in gains and losses from “new issue” securities. Unrealized Value represents net asset value before redemptions.

As of September 30, 2022, TPEP Long Only had estimated inception-to-date gross returns of 7% and net returns of 6%. These performance estimates represent performance for TPEP Long Only and are based on an investment in TPEP Long Only made on May 1, 2019, the date of TPEP Long Only’s inception, through TPG Public Equity Partners Long Opportunities-A, L.P., the “onshore feeder.” Gross performance figures are presented after any investment-related expenses, a 1% annual management fee, net interest, other expenses and the reinvestment of dividends, and include any gains or losses from “new issue” securities. Net performance assumes a 20% performance allocation, with the performance allocation only received upon outperforming the relevant benchmark. Performance results for a particular investor may vary from the performance stated as a result of, among other things, the timing of its investment(s) in TPEP Long Only, different performance allocation terms, different management fees, the feeder through which the investor invests and the investor’s eligibility to participate in gains and losses from “new issue” securities. Unrealized Value represents net asset value before redemptions.

(14)Capital Committed for TRTX includes $1,201 million of private capital raised prior to TRTX’s initial public offering and $716 million issued during and subsequent to TRTX’s initial public offering.

(15)Legacy funds represent funds whose strategies are not expected to have successor funds but that have not yet been substantially wound down.

(16)Discontinued funds represent legacy funds that have substantially been wound down or are fully liquidated. The following TPG funds are considered discontinued: Latin America, Aqua I, Aqua II, Ventures, Biotech I, Biotech II, TPG TFP, TAC 2007 and DASA PE.

(17)Total TPG track record amounts do not include results from RMB - Shanghai and RMB - Chongqing or China Ventures, a joint venture partnership.

(18)Unless otherwise specified, the fund performance information presented above for NewQuest I, NewQuest II, NewQuest III, NewQuest IV and NewQuest V is, due to the nature of NewQuest’s strategy, as of and for the quarter ended June 30, 2022. Accordingly, the fund performance information presented above for the NewQuest funds does not reflect any fund activity for the quarter ended September 30, 2022 and therefore does not cover the same period presented for other funds. Any activity occurring during the quarter ended September 30, 2022 will be reflected in the performance information presented in future reporting.

(19)Certain funds recorded capital commitments prior to September 30, 2022 but were not activated or did not make their first investment. Therefore the only activity reflected in the track record with respect to these funds was the capital commitments.

Liquidity and Capital Resources

Our liquidity needs primarily include working capital and debt service requirements. We believe that our current sources of liquidity, which include cash generated by our operating activities, cash and funds available under our credit agreement, along with the proceeds from the IPO, are sufficient to meet our projected operating and debt service requirements for at least the next 12 months. To the extent that our current liquidity is insufficient to fund future activities, we may need to raise additional funds. In the future, we may attempt to raise additional capital through the sale of equity securities or through debt financing arrangements. If we raise additional funds by issuing equity securities, the ownership of our existing investors will be diluted. The incurrence of additional debt financing would result in incremental debt service obligations, and any future instruments governing such debt could include operating and financial covenants that could restrict our operations.

The following table presents a summary of our cash flows for the periods presented:

			Nine Months Ended September 30,
			2022						2021
			($ in thousands)
Net cash provided by operating activities			$	788,599					$	1,057,509
Net cash (used in) provided by investing activities			(2,892)						19,596
Net cash used in financing activities			(705,787)						(152,103)
Net increase in cash and cash equivalents			79,920						925,002
Cash and cash equivalents, beginning of period			985,864						871,355
Cash and cash equivalents, end of period			$	1,065,784					$	1,796,357

As of September 30, 2022, TPG’s total liquidity was $1,782.6 million, comprised of $1,052.6 million of cash and cash equivalents, excluding $13.2 million of restricted cash, as well as $700.0 million and $30.0 million of incremental borrowing capacity under the Senior Unsecured Revolving Credit Facility and the Subordinated Credit Facility, respectively. Total cash of $1,065.8 million as of September 30, 2022 is comprised of $571.8 million of cash that is attributable to the TPG Operating Group and on balance sheet securitization vehicles. Total liquidity increased by $479.9 million, or 37%, relative to $1,302.7 million as of December 31, 2021. This increase was the result of $79.9 million net increase in cash and cash equivalents primarily due to $788.6 million of cash provided by operating activities, partially offset by $705.8 million of net cash used in financing activities and $2.9 million of net cash used in investing activities.

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Our operating activities primarily consist of investment management activities. The primary sources of cash within the operating activities section include: (i) management fees, (ii) monitoring, transaction and other fees, (iii) realized capital allocation-based income and (iv) investment sales from our consolidated funds. The primary uses of cash within the operating activities section include: (i) compensation and non-compensation related expenses and (ii) investment purchases from our consolidated funds. Additionally, operating activities also reflect the activity of our consolidated TPG Funds and Public SPACs, which primarily include proceeds from sales of investments offset by cash outflows for purchases of investments and deposits of SPAC IPO proceeds into trust accounts.

Operating activities provided $788.6 million and $1,057.5 million of cash for the nine months ended September 30, 2022 and 2021, respectively. Key drivers consisted of performance allocation and co-investment proceeds totaling $1,066.9 million and $1,599.0 million for the nine months ended September 30, 2022 and 2021, respectively. This was partially offset by changes in operating assets and liabilities for the nine months ended September 30, 2022 and 2021, respectively.

Investing Activities

Our investing activities primarily consist of lending to affiliates and capital expenditures. The primary sources of cash within the investing activities section include cash received from a note receivable from affiliates. The primary uses of cash within the investing activities section includes capital expenditures and purchases of collateralized loan obligations.

Investing activities used $2.9 million of cash during the nine months ended September 30, 2022 and provided $19.6 million of cash during the nine months ended September 30, 2021. During the nine months ended September 30, 2022, cash used by investing activities is primarily related to repayments and advances on notes receivable from affiliates. During the nine months ended September 30, 2021, cash provided by investing activities primarily related to the acquisition of NewQuest described in Note 3 to the Condensed Consolidated Financial Statements.

Financing Activities

Our financing activities reflect our capital markets transactions and transactions with owners. The primary sources of cash within the financing activities section includes proceeds from debt and notes issuances. The primary uses of cash within the financing activities section include distributions to partners and non-controlling interests and repayments of debt and notes. Net cash provided by financing activities also reflects the financing activity of our consolidated funds, which primarily include cash inflows and outflows from consolidated funds related to their capital activity.

Financing activities used $705.8 million of cash during the nine months ended September 30, 2022 and $152.1 million of cash during the nine months ended September 30, 2021. During the nine months ended September 30, 2022, cash used in financing activities primarily reflects the net impact of distributions to partners and non-controlling interests, the repayment of amounts borrowed under the Revolving Credit Facility to Affiliate, and purchase of partnership interests with IPO proceeds, which is partially offset by the net proceeds from the IPO in January 2022. During the nine months ended September 30, 2021, cash provided by financing activities primarily reflects the distributions to partners and non-controlling interests.

Credit Facilities

Subordinated Credit Facility

In August 2014, one of our consolidated subsidiaries entered into two $15.0 million subordinated revolving credit facilities (collectively, the “Subordinated Credit Facility”), for a total commitment of $30.0 million. The Subordinated Credit Facility is available for direct borrowings and is guaranteed by certain members of TPG Operating Group. In August 2022, the subsidiary extended the maturity date of the Subordinated Credit Facility from August 2023 to August 2024, replaced LIBOR as the applicable reference rate with SOFR and otherwise conformed the credit facility to accommodate SOFR as the reference rate. The interest rate for borrowings under the Subordinated Credit Facility is calculated at a term SOFR rate plus a 0.10% per annum adjustment and 2.25%.

During the nine months ended September 30, 2022, the subsidiary borrowed $30.0 million and made repayments of $30.0 million on the Subordinated Credit Facility, leaving a zero balance at September 30, 2022.

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Secured Borrowings

Our secured borrowings are issued using on-balance sheet securitization vehicles. The secured borrowings are required to be repaid only from collections on the underlying securitized equity method investments and restricted cash of the securitization vehicles. The secured borrowings are separated into two tranches. Tranche A secured borrowings (the “Series A Securitization Notes”) were issued in May 2018 at a fixed rate of 5.33% with an aggregate principal balance of $200.0 million due June 20, 2038, with interest payable semiannually. Tranche B secured borrowings (the “Series B Securitization Notes” or, collectively with the Series A Securitization Notes, the “Securitization Notes”) were issued in October 2019 at a fixed rate of 4.75% with an aggregate principal balance of $50.0 million due June 20, 2038, with interest payable semiannually. The secured borrowings contain an optional redemption feature giving us the right to call the notes in full or in part, subject to a prepayment penalty if called before May 2023. If the secured borrowings are not redeemed on or prior to June 20, 2028, we will pay additional interest equal to 4.00% per annum.

The secured borrowings contain covenants and conditions customary in transactions of this nature, including negative pledge provisions, default provisions and financial covenants and limitations on certain consolidations, mergers and sales of assets. As of September 30, 2022, we were in compliance with these covenants and conditions.

Senior Unsecured Revolving Credit Facility

In March 2011, TPG Holdings, L.P. entered into a $400.0 million credit facility (the “Senior Unsecured Revolving Credit Facility”). In May 2018, TPG Holdings, L.P. amended and restated the Senior Unsecured Revolving Credit Facility Agreement to, among other things, reduce commitments to $300.0 million, extend the maturity to May 2023 and redefine certain components of the financial covenants. In November 2020, TPG Holdings, L.P. further amended and restated the facility to, among other things, release all collateral pledged under the prior amendment to the facility and to extend the maturity to November 2025. The interest rate for borrowings on the Senior Unsecured Revolving Credit Facility were calculated at the LIBOR rate at the time of the borrowing plus an applicable margin not to exceed 1.75% (subject to credit rating based stepdowns).

In November 2021, TPG Holdings, L.P. entered into a fourth amendment and restatement of the Senior Unsecured Revolving Credit Facility Agreement under which certain terms were modified, including that TPG Holdings, L.P. may elect to have (i) TPG Operating Group II, L.P. (f/k/a TPG Holdings II, L.P.) assume its obligations as borrower under the Senior Unsecured Revolving Credit Facility (and thereby release TPG Holdings, L.P. from its obligations as borrower thereunder) and (ii) correspondingly release TPG Operating Group II, L.P., TPG Holdings I-A, LLC, TPG Holdings II-A, LLC and TPG Holdings III-A, L.P from their guarantees of the Senior Unsecured Revolving Credit Facility. TPG Holdings, L.P. made such election in conjunction with the Reorganization, upon which TPG Operating Group II, L.P. assumed its obligations as borrower under the Senior Unsecured Revolving Credit Facility (and TPG Holdings, L.P. was thereby released from its obligations as borrower thereunder) and correspondingly, TPG Operating Group II, L.P., TPG Holdings I-A, LLC, TPG Holdings II-A, LLC and TPG Holdings III-A, L.P were released from their guarantees of the Senior Unsecured Revolving Credit Facility.

In July 2022, we entered into a fifth amendment and restatement of the Senior Unsecured Revolving Credit Facility to among other things, (i) extend the maturity date of the revolving credit facility from November 2025 to July 2027, (ii) increase the aggregate revolving commitments thereunder from $300.0 million to $700.0 million and (iii) replace LIBOR as the applicable reference rate with SOFR and otherwise conform the credit facility to accommodate SOFR as the reference rate.

Dollar-denominated principal amounts outstanding under the Senior Unsecured Revolving Credit Facility accrue interest, at the option of the applicable borrower, either (i) at a base rate plus applicable margin not to exceed 0.25% per annum or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin not to exceed 1.25%. We are also required to pay a quarterly commitment fee on the unused commitments under the Amended Senior Unsecured Revolving Credit Facility not to exceed 0.15% per annum, as well as certain customary fees for any issued letters of credit.

In August 2022, we entered into a first amendment to the Amended Senior Unsecured Revolving Credit Facility, which provides that if the Company is not publicly rated, the applicable margin for borrowings under the facility may be determined using the Company’s leverage ratio.

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During the nine months ended September 30, 2022, we made no borrowings or repayments on the Senior Unsecured Revolving Credit Facility, leaving a balance of zero at September 30, 2022. As of September 30, 2022, $700.0 million was available to be borrowed under the terms of the Senior Unsecured Revolving Credit Facility.

Senior Unsecured Term Loan

In December 2021, we entered into a credit agreement (the “Senior Unsecured Term Loan Agreement”) pursuant to which the lenders thereunder have agreed to make term loans in a principal amount of up to $300.0 million during the period commencing on December 2, 2021 and ending on the date that is 30 days thereafter. Unused commitments were terminated at the end of such period. As of September 30, 2022, $200.0 million was outstanding under the Senior Unsecured Term Loan Agreement. The proceeds from the term loan were used to make a ratable distribution to each of our investors and will not be available for our operations.

In July 2022, we entered into an amended Senior Unsecured Term Loan Agreement. The amended Senior Unsecured Term Loan Agreement, among other things, replaces LIBOR as the applicable reference rate with SOFR, and otherwise conforms the term loan agreement to accommodate SOFR as the reference rate.

Principal amounts outstanding under the amended Senior Unsecured Term Loan Agreement accrue interest, at the option of the borrower, either (i) at a base rate plus an applicable margin of 0.00% or (ii) at a term SOFR rate plus a 0.10% per annum adjustment and an applicable margin of 1.00%.

Tax Receivable Agreement

The future exchanges by owners of Common Units for cash from a substantially concurrent public offering, reorganization or private sale (based on the price per share of the Class A common stock on the day before the pricing of such public offering or private sale) or, at our election, for shares of our Class A common stock on a one-for-one basis (or, in certain cases, for shares of nonvoting Class A common stock) are expected to produce or otherwise deliver to us favorable tax attributes that can reduce our taxable income. We (and our wholly-owned subsidiaries) are a party to a tax receivable agreement, under which generally we (or our wholly-owned subsidiaries) are required to pay the beneficiaries of the Tax Receivable Agreement 85% of the applicable cash savings, if any, in U.S. federal, state and local income tax that we actually realize or, in certain circumstances, are deemed to realize as a result of the Covered Tax Items. We generally retain the benefit of the remaining 15% of the applicable tax savings. The payment obligations under the Tax Receivable Agreement are obligations of TPG Inc. (or our wholly-owned subsidiaries), and we expect that the payments we will be required to make under the Tax Receivable Agreement will be substantial. See “Item 13.—Certain Relationships and Related Transactions, and Director Independence—Tax Receivable Agreement” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Contractual Obligations

In the ordinary course of business, we enter into contractual arrangements that require future cash payments. The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of September 30, 2022 (in thousands):

			Payments Due by Period
			Total						Remainder of 2022						2023						2024						2025						2026						2027 and Thereafter
Operating lease obligations			$	181,235					$	2,697					$	19,055					$	25,321					$	27,861					$	24,397					$	81,904
Debt obligations (1)			450,000						—						—						200,000						—						—						250,000
Interest on debt obligations (2)			332,925						11,116						21,274						20,584						13,216						13,216						253,519
Capital commitments (3)			381,300						381,300						—						—						—						—						—
Total contractual obligations			$	1,345,460					$	395,113					$	40,329					$	245,905					$	41,077					$	37,613					$	585,423

__________

(1)Debt obligations presented in the table reflect scheduled principal payments related to the Securitization Notes and our Senior Unsecured Term Loan.

(2)Estimated interest payments on our debt obligations reflect amounts that would be paid over the life on the Securitization Notes based the Series A and B Securitization Notes respective fixed interest rates and assuming the debt is held until final maturity.

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(3)Capital commitments represent our obligations to provide general partner capital funding to the TPG funds. These amounts are generally due on demand, and accordingly, have been presented as obligations payable in the “2022” column. We generally utilize proceeds from return of capital distributions and proceeds from Secured Borrowings to help fund these commitments.

Additional Contingent Obligations

As of September 30, 2022 and December 31, 2021, if all investments held by the TPG funds were liquidated at their current unrealized fair value, there would be clawback of $58.3 million related to STAR, net of tax, for which a performance allocation reserve was recorded within other liabilities in the Condensed Consolidated Financial Statements. The potential liquidation of STAR in 2022 could require clawback payments. Additionally, if all remaining investments were deemed worthless, a possibility management views as remote, the amount of performance allocations subject to projected clawback as of September 30, 2022 and December 31, 2021 would be $1,847.4 million and $1,500.9 million on a pre-tax basis, respectively.

As of September 30, 2022 and December 31, 2021, we had guarantees outstanding totaling $98.9 million and $96.1 million, respectively, related to employee guarantees primarily related to a third-party lending program which enables certain of our eligible employees to obtain financing for co-invest capital commitment obligations with a maximum potential exposure of $143.5 million and $139.7 million, respectively.

Dividends

On May 10, 2022, our board of directors declared and approved a cash dividend for the first quarter of 2022 of $0.44 per share of Class A common stock, which was paid on June 3, 2022 to holders of record of our Class A common stock as of May 20, 2022.

On August 9, 2022, our board of directors declared and approved a cash dividend for the second quarter of 2022 of $0.39 per share of Class A common stock, which was paid on September 2, 2022 to holders of record of our Class A common stock as of August 19, 2022.

On November 9, 2022, our board of directors declared and approved a cash dividend of $0.26 per share of Class A common stock for the three months ended September 30, 2022. The Class A common stock dividend is payable on December 2, 2022, 2022 to the holders of record of our Class A common stock as of November 21, 2022.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements, as defined in Regulation S-K.

Critical Accounting Policies

We prepare our Condensed Consolidated Financial Statements in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities in our financial statements. We regularly assess these estimates; however, actual amounts could differ from those estimates. The impact of changes in estimates is recorded in the period in which they become known. For a description of our accounting policies, see Note 2, “Summary of Significant Accounting Policies,” to the Condensed Consolidated Financial Statements included elsewhere in this report and “Item 7.––Management's Discussion and Analysis of Financial Condition and Results of Operation” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risks primarily relates to our role as investment advisor or general partner to our TPG funds

and the impact of movements in the underlying fair value of their investments. There was no material change in our market risks during the three months ended September 30, 2022. For additional information, refer to our Annual Report on Form 10-K for the year ended December 31, 2021.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

We, under the supervision of and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of September 30, 2022.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the fiscal quarter ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in litigation and claims incidental to the conduct of our business. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. See “Item 1A.—Risk Factors—Risks Related to Our Industry—Extensive regulation of our businesses affects our activities and creates the potential for significant liabilities and penalties. Increased regulatory focus on the alternative asset industry or legislative or regulatory changes could result in additional burdens and expenses on our business” in our Annual Report on Form 10-K for the year ended December 31, 2021. We are not currently subject to any pending legal (including judicial, regulatory, administrative or arbitration) proceedings that we expect to have a material impact on our Condensed Consolidated Financial Statements. However, given the inherent unpredictability of these types of proceedings, an adverse outcome in certain matters could have a material effect on TPG’s financial results in any particular period. See Note 12, “Commitments and Contingencies,” to the Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, see the information under “Item 1A.––Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

In connection with the Reorganization, TPG Inc. issued 40,726,060 shares of Class A common stock and 8,258,901 shares of nonvoting Class A common stock to certain unitholders of the TPG Operating Group in exchange for Common Units, including to the selling stockholder in the IPO. The shares of Class A common stock were issued in reliance on the exemption contained in Section 4(a)(2) of the Securities Act on the basis that the transaction did not involve a public offering. No underwriters were involved in the transaction.

Also in connection with the Reorganization, TPG Inc. issued 229,652,641 shares of Class B common stock to certain unitholders of the TPG Operating Group, including entities beneficially owned by certain members of its management and board of directors. The shares of Class B common stock were issued for nominal consideration in reliance on the exemption contained in Section 4(a)(2) of the Securities Act on the basis that the transaction did not involve a public offering. No underwriters were involved in the transaction.

Use of Proceeds

On January 18, 2022, we closed our IPO of our Class A common stock in which we and the selling stockholder sold 33,900,000 shares of Class A common stock, consisting of 28,310,194 shares from us and 5,589,806 from the selling stockholder. Subsequent to the IPO, the underwriters exercised their option to purchase an additional 3,390,000 shares of Class A common stock, consisting of 1,775,410 shares from us and 1,614,590 shares from the selling stockholder, and the sale of such additional shares closed on February 9, 2022. The shares sold in the IPO and shares sold pursuant to the underwriters’ option to purchase additional shares were registered under the Securities Act pursuant to our Registration Statement on Form S-1 (File No. 333-261681) which was declared effective by the SEC on January 12, 2022.

The shares of Class A common stock were sold at an offering price to the public of $29.50 per share. We received proceeds from the IPO of approximately $770.9 million, net of $41.8 million in underwriting discounts and commissions, as well as $22.5 million of issuance costs, and the selling stockholder received net proceeds from the IPO of approximately $156.7 million, net of $8.2 million in underwriting discounts and commissions. The sale of additional shares to the underwriters pursuant to the underwriters’ option to purchase additional shares resulted in net proceeds to us of approximately $49.8 million, net of $2.6 million in underwriting discounts and commissions, and to the selling stockholder of approximately $45.2 million, net of $2.4 million in underwriting discounts and commissions. We did not receive any proceeds from the sale of shares of our Class A common stock by the selling stockholder. We did, however, bear the costs associated with the sale of shares by the selling stockholder, other than underwriting discounts and commissions. We estimate that we incurred offering expenses of approximately $34.2 million.

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Our use of proceeds was consistent with the final prospectus filed on January 14, 2022:

•We used approximately $379.6 million of the proceeds from the IPO to purchase Common Units from certain existing owners of the TPG Operating Group (none of whom is an active TPG partner or Founder) at an aggregate per-unit price equal to the per-share price paid by the underwriters for shares of our Class A common stock in the IPO. Accordingly, we did not retain any of these proceeds.

•We used approximately $413.3 million of the proceeds from the IPO to acquire 14,745,763 Common Units of the TPG Operating Group to obtain our economic interest in the TPG Operating Group at an aggregate per-unit price equal to the per-share price paid by the underwriters for shares of our Class A common stock in the IPO and such amount was contributed to the TPG Operating Group partnerships based on their relative fair market values as determined by the general partner of the TPG Operating Group partnerships.

•The TPG Operating Group intends to use these proceeds, after paying the expenses incurred by us in connection with the IPO and the Reorganization, for general corporate purposes, which may include facilitating the growth of our existing business and/or expanding into complementary new lines of business or geographic markets.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC acted as joint book-running managers of the IPO and as representatives of the underwriters.

No offering expenses were paid directly or indirectly to any of our directors or officers, or their associates, or persons owning 10% or more of any class of our equity securities or to any other affiliates, other than to TPG Capital BD, our indirect subsidiary that served as an underwriter in the IPO and which received customary underwriting discount and commissions.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following is a list of all exhibits filed or furnished as part of this report:

Exhibits are included below.

Exhibit No.						Description
3.1*						Certificate of Incorporation of TPG Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (File No. 001-41222), filed on January 13, 2022).
3.2*						Bylaws of TPG Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (File No. 001-41222), filed on January 13, 2022).
10.1*						Fifth Amended and Restated Credit Agreement, dated as of July 15, 2022, among TPG Operating Group II, L.P., acting through its general partner, TPG Holdings II-A, LLC, the co-borrowers party thereto, the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on July 18, 2022).
10.2						First Amendment Agreement to the Fifth Amended and Restated Credit Agreement, dated as of August 23, 2022, among TPG Operating Group II, L.P., the co-borrowers party thereto, the subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent.

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10.3*						Amended and Restated Credit Agreement, dated as of July 15, 2022, among TPG Operating Group II, L.P., as borrower, TPG Operating Group I, L.P., TPG Holdings II Sub, L.P., TPG Operating Group III, L.P. as guarantors, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on July 18, 2022).
31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1						Certification of Chief Executive Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2						Certification of Chief Financial Officer of Periodic Financial Reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
101.INS						Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

________________

* Incorporated by reference

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Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 9, 2022

/s/ Jack Weingart
Jack Weingart
Chief Financial Officer and Director (Principal Financial Officer and Authorized Signatory)

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