TPG is giving its investors a chance to sharply reduce their commitments to its specialised financial fund, highlighting the difficulties that private equity firms seeking to buy distressed banks are facing in the wake of the financial crisis, people familiar with the matter said.
TPG Financial Partners originally received commitments for a $6bn fund in February 2008. TPG cut back the size of the fund to $4.6bn in January, and is now offering investors the chance to scale back their commitments to $2.5bn.
One person with knowledge of the matter said TPG's troubles in finding financial investments stemmed from US government efforts to recapitalise banks and to regulate investments in the sector made by private equity firms. Buy-out executives say they face a competitive disadvantage because they are required to maintain a higher capital ratio at the banks they control than other investors.