Operator: The next question comes from Craig Siegenthaler with Bank of America. Please go ahead.
Craig Siegenthaler: Thanks. Good morning everyone. We wanted to focus on the growth capital business.
Jack Weingart: Good morning, Craig.
Craig Siegenthaler: Good morning, Jack. So TPG has almost $9 billion of unrealized value across growth 1 5. So we’re curious how are those portfolio companies performing against the higher rate backdrop? And if you have any fresh data points like revenue or EBITDA trends to date that would be helpful to.
Jack Weingart: Sure. I mean, I talked about the overall portfolio performance across our private equity portfolios in my comments Greg in growth the same dynamics apply still strong revenue growth kind of probably mid-teens in the growth portfolio strong EBIT — stronger EBITDA growth. So we’re actually seeing margin expansion in the growth portfolio. So the portfolio health is quite good. The broader growth equity market is very interesting and we continue to feel like we’re very well positioned there. It was obviously the market that saw the biggest spike in activity towards the end of 2021 and kind of the most active part of the market. As you know from looking at our results, we were relatively patient in that environment.
Now with the IPO market becoming more difficult, some of those companies needing to raise follow-on capital with our position as kind of a solution provider adding more than just capital. We’re pretty well positioned to capitalize on that disruption in the market. And you see that in both our growth and TTAD funds. I mentioned that we accelerated the first close process and growth, because we’re seeing a pickup in investment activity. So that happened after the end of the third quarter. So we’ll be talking about it in the fourth quarter earnings call, our progress in starting to raise the next growth fund. But the reason we’re accelerating it, is because of the new investment activity we’re seeing. And likewise in TTAD, we’re now over half deployed in the relatively new TTAD fund.
Operator: The next question comes from Ken Worthington with JPMorgan. Please go ahead.
Ken Worthington: Hi. Good morning. Thanks for taking the question. TPG generated meaningful carry and the continuation on the United Artists this quarter. And John, you mentioned that you see opportunities to leverage continuation funds as we look forward. So maybe first, are there more opportunities like United Artists in your portfolios? And is that something we can expect if the PE environment actually remains challenging? And then second, last quarter I think you mentioned TPG back continuation vehicles in India, Germany and the US. So are there different ways for TPG to participate in continuation funds, either by asset class or regions as we look forward?
Jon Winkelried: Yeah. Let me take a shot at it. The — I think first of all the continuation vehicle market and the evolution of that within private equity, I would say continues to become a more and more important part of the toolkit that firms like TPG or other firms for that matter have. The — clearly, I think you’ve seen an environment where exit activity, exit volume is lower. I think that for what it’s worth, I think we would expect generally that trend to continue. I think that given what’s going on in terms of volatility in the market valuations, we already talked about multiple compression and the — just overall — the overall kind of dynamics of the exit environment. I think you should expect that to continue to be less active.
And in that context, I think there’s still a tremendous amount of pressure within our industry to find ways of returning capital to LPs. And I think as you know LPs are somewhat constrained as a result of a number of factors but one of the clear factors is a slowdown and exit activity. So, I think that the continuation vehicle market has become I think better understood and more and more accepted in the market. I think that frankly going back several years ago, I think there was some level of hesitation on the part of LPs generally to understand what was going on with continuation vehicles and how that would affect their ability to both get capital out but also the dynamics of assets moving from one fund to new vehicles and things like that.
And I think over time it’s become a much better understood part of the market. So, in that respect, I think that we will strategically look at using continuation vehicles for our own portfolio where it makes sense. I would say that it’s a I still expect it to be sort of the exception not the rule in terms of the level of activity in terms of exits. But I do think that there are — there is a place for it in the market. And obviously CAA is a great example of the type of company where by virtue of our partnership with the management team for a very long time by virtue of having a view that there was a significant amount of growth still in front of the company. And having been held in a fund that had essentially timed out. And so the desire that we had to try to return some capital, but also continue to be able to benefit from the growth made it a perfect example of why one might use a continuation vehicle.
So, we’ll use — I think we’ll continue to be — and by the way the success in the CAA vehicle I think gives us a tremendous amount of credibility with respect to the sources of capital in that part of the market. On the other — on the flip side, obviously, the reason that we have stood up and are now fundraising for TGS, which is our GP solution strategy, is exactly the same dynamic, which is that we continue to see more and more sponsors looking to partner with capital sources that understand how to value companies can be can really provide evaluation in the process of the CD that LPs can rely on. And frankly, in some cases you have sponsors coming to TPG for GP solutions because they also know that we have deep sector expertise across a number of these different sectors.
So, we view ourselves as being in an excellent position strategically in order to be a partner of choice in that market. And you mentioned a number of the deals we did, but there has been really no abatement in terms of the level of deal flow that we’re seeing in that market. And so ultimately I think it’s important that it’s absolutely a strategy we believe can be scaled over time. And it — among the markets in private equity that we deal in very few markets are undercapitalized. This is one of them in terms of the capabilities of the firms that are active in the space. So we would expect it to continue to be a very good opportunity to form capital around.
Operator: The next question comes from Michael Cyprys with Morgan Stanley. Please go ahead.
Michael Cyprys: Hey. Good morning. I wanted to ask on the real estate credit strategy checkout. I was just hoping you can update us on the build-out of the platform there where you’re seeing some of the most compelling opportunities to put capital to work now in the real estate credit marketplace the types investments? And then, how are you thinking of building out this platform as you look out over the next three to five years, just in terms of how you’re thinking about enhancing your origination capacity? Thank you.
Jon Winkelried: Mike thanks for the question. I think first of all, we’re waiting with to leverage our origination capability that comes out of our public REIT. So that was obviously pre-existing. So we’re already well seeded into the market in terms of flows with respect to some of the real estate credit opportunities. Check is really broader frankly in terms of the types of opportunities that we’ll pursue. So over time, we’ll continue to add to our origination capabilities. We feel like we’re well connected to the sources of flow, if you look across both the banks in particular that are systemically under pressure looking to shed assets in certain cases. That’s a clear opportunity for us in this market. If you look at financing solutions, that certain real estate players have in the market right now.
