Some are looking at this as sort of a part of some LPs have this innovation pool of capital and they’re looking — they’re starting their allocation of capital from the innovation pool. And then ultimately, we’ll sort of mainstream it into their private equity allocations. This is too important in area and too big an area for most large pools of capital now to ignore. And so as a result of that, we’re seeing, as Jack had mentioned before, I mean we’re seeing really strong engagement here, really strong engagement. I think Jack mentioned that we’ll expect to raise more capital, as we move into climate to an infrastructure one that we’ll expect to raise more capital than we did the first time. And everything that we’re seeing from LP so far, I think suggest that that is in fact the case and we expect a pretty strong level of engagement from our LPs. On the infrastructure side, what I would say too is that – and I think Jack alluded to this, when he said that think of these things as sort of in some respects kind of joined at the hip.
What we’re seeing in the market is that as the climate – as climate technologies and the capital requirements continue to evolve in a fairly rapid way, we’re seeing kind of a natural trend that you’ve seen over time, over the history of this business you’ve seen this as an example in assets like real estate, which starts with opportunistic and it moves down the cost of capital spectrum to things like cores plus or core. But we’re seeing some of those trends in this market, where some of the capital requirements and therefore, the cost of capital required to fund these build-outs of different parts of the industry are quite large. And so we’re seeing infrastructure capital move to it in a fairly aggressive way. But what we’re finding is that the relationship between the private equity pool of capital and an infrastructure pool of capital provides a flexibility and puts us in a position to create solutions for good companies and different partners that’s really differentiated because of our knowledge base across the sector generally.
So I think that this is going to be one of the more interesting areas to watch. We’re in a very differentiated position. And I expect that the capital allocated to the sector is going to continue to meaningfully increase.
Jack Weingart: Yes, Brian. I would only add just to amplify Jon’s comments that the breadth of LPs interested in this area has expanded significantly. If you think about the last – the first Rise Climate fund we raised was two or three years ago. And certainly since the first Rise fund we raised seven – six, seven years ago, the awareness among our LP base of the investment opportunity, the capital needed in these areas has expanded significantly. So while it may be the case that any one LP is more capital constrained today than they were two or three years ago, I think as we embark upon this next wave of fundraising across climate generally, the number of LPs around the world who have identified this as an important investment area for them has increased significantly.
Operator: The next question comes from Adam Beatty with UBS. Please go ahead.
Adam Beatty: Thank you and good afternoon. I appreciate your staying on making time for us. I want to follow up on real estate. Thanks, Jack. On real estate maybe a little bit more on the equity side. I was intriguing what Jon said before about potential sort of multi-decade opportunity. So right now TPG is positioned in some of the more resilient real estate subsectors, certain areas of housing, light industrial life sciences. Just wondering whether you’re thinking about deepening the involvement and investment in those areas or maybe seeing opportunities in some of the less favored real estate sectors like office or retail? And then, if you could maybe just a quick thumbnail, what Angelo Gordon brings in the areas of value-add and Triple Net. Thanks very much.
Jon Winkelried: Yeah. I think — I would say that, we are very sector focused, as you know. And that’s been sort of a core underpinning our strategy. And I would say sort of what’s got us here, in terms of being very deliberate about, where we’re investing capital and how we’re investing it. And so with respect to your question on maybe do we look at some of the less favorite areas? I would say, in general, one of the things that’s kind of marched our approach to investing on the equity side is that we have looked at different sectors overtime, done our work on them. And if we felt like the opportunity wasn’t quite there yet either from a valuation perspective or a fundamentals perspective, sort of wait until that opportunity is upon us.
And we did that actually by the way in sectors like for instance, hospitality. We have not really been involved much in hospitality until, we got through COVID and we saw an opportunity to actually make a couple of investments in that space. With respect to office and retail right now, I think we view the market as sort of sufficiently dislocated and efficiently uncertain, that I think in the near-term we probably don’t see compelling enough opportunities there. But obviously we continue to watch it. But right now our office exposure, on the TPG side is I think 2% of our portfolio. So it’s probably not an area that we’re going to go anytime soon. I think the — what’s more interesting about the market right now is, sort of what I said in my prepared remarks which is that, we’re seeing things that really kind of need to happen right now because of certain investors’ desire and need for liquidity and capital.
And as a result of that, it’s creating a dynamic where we’re seeing larger discrete actionable opportunities in core sectors that we know very, very well. And we still like fundamentally kind of the — we still like the fundamentals in those sectors. So the Take-private that we’re doing in Europe right now as an example, is about sort of 80% industrial, 20% office. They’re exiting the office exposure that’s within that portfolio. And they’ve been in the process of doing that. So it’s really an industrial play. And it’s a part of the market that we’ve been watching for a while. It’s really the sort of industrial corridor between water dam and the ports down into Germany. And so, it’s an area that we’ve watched for a while. Harder to enter, harder to get access to it, but this gave us basically an entry point that we thought was compelling.
