FROM: Don Pierce, Chief Investment Officer
SUBJECT: TPG Credit - Essential Housing IV
RECOMMENDATION:
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Recommend that the Board approve $150 million commitment to TPG Credit - Essential Housing Fund IV, subject to finalization of legal documents.
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BACKGROUND:
TPG Credit's Essential Housing Fund IV ("EHF4" or the "Fund") is a growing business platform that provides homebuilders in the United States with off-balance sheet financing for land inventory. The fund focuses on land inventory with discrete attributes - namely, short-duration and close-to-production land that typically is in the final stages of development or held for imminent construction.
SBCERA has been investing in the Essential Housing Fund series from TPG Credit (formerly known as TPG Angelo Gordon) since 2024, with an initial commitment of $150 million to Fund III. TPG, a firm with over $300 billion of assets under management, is a global multi-strategy alternative assets platform founded in 1992. The organization currently has over 1,900 employees spread across 25 offices globally and is active across public and private markets.
The genesis of this strategy began in 2020 through conversations with one of the largest publicly-held US homebuilders. That firm was seeking a financing partner as part of their overall strategy to evolve to an "asset-light" business model - a strategic shift to enhance the company's overall operational and financial efficiency. Since that time, multiple additional homebuilders have mirrored this strategy and have become partners of the Fund.
Staff and NEPC believe that EHF4 is a compelling opportunity for SBCERA for the following reasons:
- Shared philosophical alignment and unified vision.
o For homebuilders, EHF4 offers a dependable and institutionally scaled solution that is a key part of their overarching corporate strategy (i.e., shift to asset-light model with greater off-balance sheet financing).
o For EHF4, this strategy allows for...
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