TPG to return $20 million in fund fees: source

NEW YORK (Reuters) - Private equity firm TPG has told investors that it plans to return $20 million in fees paid on its $19 billion buyout fund, a source familiar with the situation said on Wednesday.

The firm told investors about its plans, reported earlier by the Wall Street Journal, at its annual conference this week, the source said.

"We took this proactive step in order to share the economic cost of a deal market that has been slower than anyone anticipated," the WSJ quoted James Coulter, co-founder of TPG, saying.

TPG could not be immediately reached for comment by Reuters.

Private equity firms have had a tough time finding new investments since the credit crisis shut off the availability of easy financing.

They have also struggled to keep investments healthy as the economy suffered. Fundraising for new funds has also become very difficult, as investors have been hard hit by the slump in global equity markets.

Investors originally committed about $20 billion to the TPG VI fund, but TPG later allowed them to reduce their commitments, a source told Reuters in December, which brought the size down to about $19 billion. TPG, formerly Texas Pacific Group, is one of the largest private equity firms in the world.

Its founding partner, David Bonderman, is considered one of the most influential figures in the U.S. private equity industry. (Additional reporting by Michael Erman in New York; Editing by Muralikumar Anantharaman)