FROM: Don Pierce, Chief Investment Officer
SUBJECT: TPG Angelo Gordon - Essential Housing III
RECOMMENDATION:
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Approve a $150 million commitment to TPG Angelo Gordon - Essential Housing Fund III, subject to completion of operational due diligence and finalization of legal documents.
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BACKGROUND:
TPG Angelo Gordon's Essential Housing Fund III ("EHF3" 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 very discrete attributes tailored to a specific point of the homebuilding cycle - namely, short-duration and close-to-production land that typically is in the final stages of development or held for imminent construction.
The fund is being offered by TPG Angelo Gordon, which is a firm with over $220bn of assets under management. Angelo Gordon was founded in 1988 and is comprised of two main platforms - credit and real estate. The firm had approximately $70bn of assets under management when it was acquired by TPG (a global $140bn multi-strategy alternative assets platform founded in 1992) in November 2023 to complement TPG's existing private equity, growth equity, impact and market solutions strategies. The combined organization currently has over 1,800 employees spread across 31 offices globally and is active across public and private markets.
The genesis of this strategy began in 2020 through conversations with Lennar,1 who was seeking a financing partner as part of their overall strategy to evolve to an "asset-light" business model. As a result of this shift, Lennar is increasingly shifting towards holding less land inventory on their balance sheet (additionally, other homebuilders are increasingly adopting this model as well - there are currently over 10 homebuilder partners now participating in the fund strategy). This strategic move enhances the efficiency for these companies, both from an operatio...
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