How TPG rode two Wall Street trends to a big deal
In one transaction — the takeover of EV Charged, the electric vehicle charging division of he French utility Engie — TPG embraced two of the biggest finance obsessions in 2020: SPACs and climate-focused investing. Top executives from the investment giant spoke with DealBook about how the $1.4 billion deal wasn’t an accident, but years in the making.
Business & Economy
Dec. 18, 2020, 12:25 p.m. ET
TPG has been in the SPAC business since 2015, long before the blank-check funds became widespread. The company wanted to get into more kinds of deals, aside from leveraged buyouts and growth investing, according to Jim Coulter, its co-C.E.O. The “companies that needed a SPAC execution” wouldn’t have fit the criteria for the firm’s buyout portfolio, he said.
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Karl Peterson, a senior partner, was named to lead what has become TPG Pace, a division focused on blank-check funds and other specialized deal vehicles.
It has also invested in climate-focused deals for years, as the finance world became more interested in environmental, social and corporate governance, or E.S.G., investing. In 2016, TPG created its first Rise Fund, a big entrant in social impact investing. The firm’s executives became interested in the electric vehicle industry — “we think the market consensus for electric vehicles is understated,” Mr. Peterson said — but with a lot of attention on vehicle makers such as Nikola and Fisker, it sought a different way into the space. The answer was vehicle charging.
The two came together quickly. TPG Pace Beneficial, a SPAC focused on E.S.G. opportunities, raised $350 million in October — and had its eye on Engie’s division. The French utility was initially interested in a more traditional investment, but TPG executives convinced Engie that taking a minority stake in the division wasn’t the best way to boost the business’s growth. A standard leveraged buyout of the division, piling on debt in the process, wouldn’t have been right either.
TPG has high hopes for the deal (and others like it). Mr. Coulter likened the charging business, since renamed EVBox, to the trendy at-home exercise bike company Peloton, since its value lies in its software and subscription-based model. And he hinted that more climate deals were in the offing: “EVBox is the tip of a very large iceberg at TPG.”
In the papers
Some of the academic research that caught our eye this week, summarized in one sentence:
How to rethink the U.S.-China relationship
Among President-elect Joe Biden’s most pressing priorities when he takes office next month is resetting Washington’s relations with Beijing, after years of tit-for-tat escalation under President Trump. In the eighth and final debate in our DealBook D.C. Policy Project, we brought together academics, executives and other experts to discuss the state of the U.S.-China relationship, and where it goes from here. It was moderated by Rebecca Blumenstein, The Times’s deputy managing editor.
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