Seeding, Staking, and Building the Alts Firm of the Future: Perspectives from TPG COO Anilu Vazquez-Ubarri

In our latest edition of The TPG Take, we sit down with TPG COO Anilu Vazquez-Ubarri, who shares her perspective on the dynamics of building and growing the operational backbone of TPG as well as her outlook on seeding and staking through the lens of TPG NEXT, the firm’s strategy focused on backing the next generation of alternative asset managers.

Growing in a Dynamic Market: "I am very bullish about the future of alts and the role that TPG can play in it. We have all the ingredients to really accelerate our growth, to expand our contributions to this industry, and to do so by growing a team of very talented people who are better for having worked with us.

There is everything from growing the current strategies that we’re involved in – that organic growth – to?partnering with TPG Angelo Gordon now. They have an excellent credit business. They have built real estate businesses. They are in geographies that we were not. So it is a very good way, provided that you have the right cultural fit, to expand and to get to your goals faster.

I think that we have worked really hard to position ourselves with a toolkit that allows us to take advantage of this current market, which is very dynamic. Part of what allows us to do that is our culture because we collaborate and we communicate extensively. When you have that, and you have a diverse team of people who see things from different perspectives, you find that gem. You find that idea that is probably a combination of the thoughts of multiple, not only people, but also teams, and seeing them through their lens and what their world looks like every day. The power of TPG is that we bring that together, and we are very authentic about how we deliver that to the market."

Building the GPs of the Future: "On the investing side, my area of focus is seeding and staking. We are a strategic partner, both for firms that want to come together that need strategic capital as well as new firms that want to jump in.

TPG NEXT is the cutting-edge idea of bringing new GPs to the market and accelerating their growth, focusing on the diverse manager landscape. There's a lot of talent and a mismatch in terms of capital allocation. TPG NEXT seeks to seed, stake, make secondary investments, and co-invest. We do LP investments as part of that as well. But what we do is business-build the GPs of the future.

We prefer what we call “pre-launch” funds, because that's where we can contribute the most. We bring the experience of over 30 years of TPG not only building itself, but also building different businesses alongside us. So all of that goes with with that: how to build the best team, how to compensate them, how to fundraise, how to really set your strategy and communicate it. We like to be part of the sausage-making with them. And we're in the trenches. We're partners for the long haul."

The Future of Seeding and Staking: "We're in an exciting part of our journey at TPG NEXT. We started as a balance sheet strategy. Now we're lucky enough to have third party capital. There's a diversity of strategies that are coming to the market. It's very exciting to be alongside people who are that talented and have a vision for the future.

We think that there's a lot of applicability to seeding and staking more broadly, and we think that there's a big opportunity for TPG NEXT to be the model for how the seeding and staking models of the future will look. We are ultimately a solutions strategy. We adapt, we evolve, and we grow with our GPs.

I think that seeding and staking will become mandatory. People will seek it alongside a number of tools – same as what happened with the secondaries market – because it is a very smart way to accelerate your growth and be able to get to a diversified strategy. What we're really seeing is that the GPs that are coming to us, they might be starting with a single strategy, but what they really want to be is a TPG. They want to be an alts firm. It has taken us 30 years to be as diversified as we are, and they're not waiting 30 years. I'm sure that we're funding people now who are going to come up with things that we haven't even thought of or heard of, and that's very exciting."

Building the Alts Firm of the Future: "A very important part of my role is to continue to build the operational framework and the backbone of the firm. And that backbone doesn't look like it should have looked ten years ago. It looks modern. It looks very technology-oriented. It looks data intensive, but data without analysis is nothing, it’s just data. So we need to be very front-footed. Everyone talks about AI, but the reality is, that is only part of the toolkit. We have to have systems that enable the growth of the business and that allow our people to focus on the strategic thinking – on the execution part – not on the administrative part of their job."

In Other News & Views...

We also want to "circle back" to share other recent insights from our ecosystem, senior leaders, and investing professionals that you might have missed.

In our series Partnerships in Focus, we hear directly from leaders across the TPG portfolio and ecosystem. In this episode, we hear from Calm CEO David Ko as he discusses what drew him to Calm’s mission and how TPG and our ecosystem have helped Calm tackle the mental health crisis.

Earlier this summer, we announced our partnership with Aareon Group. Following that announcement , from our Investment Insights series, TPG Partner Flavio Porciani discusses the growing trend towards digitalization and dynamics driving software investing in Europe.

Finally, TPG’s middle market direct lending business, TPG Twin Brook, recently closed its fifth and largest fund at $3.9 billion in commitments. It is a testament to the dedication of the team and support from clients across the globe, and highlights the strong demand for diverse exposure to U.S. lower middle market direct lending opportunities. In this video, learn more about the business from TPG Twin Brook’s Managing Partner, Trevor Clark.

Thank you to all of our followers and readers for joining us for another edition of The TPG Take. Please share the newsletter with anyone you think would be interested and we look forward to being back in your inboxes soon.