NEW YORK (Reuters) - Private equity giant TPG, fresh from two major financial services deals in recent weeks, is actively targeting investment opportunities at banks and brokerages, people familiar with the matter said on Thursday.
On Monday, for instance, senior officials of TPG TPG.UL, including co-founder David Bonderman, met with John Thain and Greg Fleming, the CEO and president of Merrill Lynch & Co Inc MER.N, to discuss investment proposals, these people said.
Among the topics at the Merrill meeting was the possibility of a capital infusion into the bank, an offer Merrill rebuffed. But the meeting was one of a number TPG has held in recent months at financial institutions as it seeks to deploy some $20 billion in “dry powder,” or unused funds, sources said.
TPG, with more than $50 billion of assets under management in dozens of companies, is expected to close on a new buyout fund that is expected to top $16 billion, some of which will be deployed in financial services.
In previous years, buyout firms like TPG, Blackstone Group (BX.N), Kohlberg Kravis Roberts & Co KKR.UL and others would mostly confine themselves to deals involving controlling stakes in companies.
But with the buyout market all but stalled by the credit crunch, TPG in particular aims to position itself as one willing and able to put up capital for minority stakes in financial institutions, especially those hit by credit travails that have swamped the finance world since last summer.
TPG, formerly Texas Pacific Group, forged a deal this month to invest $2 billion in Washington Mutual Inc (WM.N), a deal that also gives Bonderman a seat on the board at one of the largest U.S. thrift banks and one hit hard by subprime losses.
TPG last week also bought a portion of some $12 billion in so-called “leveraged loans” from Citigroup Inc (C.N). Other buyers of the loans, which financed leveraged buyout deals, included Apollo Group and Blackstone, sources said last week.
Representatives of TPG and Merrill declined to comment.
News of the Merrill-TPG meeting was reported earlier in the Financial Times.
Reporting by Dane Hamilton and Dan Wilchins in New York; Editing by Braden Reddall