March 14, 2019 / 9:59 PM / 6 months ago

TPG Rise founder leaves firm in wake of U.S. college admissions scandal

NEW YORK (Reuters) - TPG Capital senior executive Bill McGlashan on Thursday left the private equity firm after he was charged in connection with a U.S. college fraud scheme that has ensnared Hollywood celebrities and corporate elite.

A plaque is pictured at University of Southern California in Los Angeles, California, U.S., March 13, 2019. REUTERS/Mario Anzuoni

It is the latest fallout from a U.S. federal case charging wealthy parents, including McGlashan as well as actors Felicity Huffman and Lori Loughlin, in what authorities say was a $25 million scam to help their children get into elite universities.

McGlashan, one of TPG’s highest-profile figures, helped lead investments in companies such as Uber Technologies Inc and Airbnb Inc, and brought celebrity investors such as Bono into the firm’s Rise Fund.

In a statement via a spokesman, McGlashan said he was resigning from the TPG Rise Fund, which he founded and was chief executive, and TPG Growth, where he was managing partner.

“I will be focused on addressing the allegations that have been presented, and there are aspects of the story that have yet to emerge that I wish I could share,” he said.

In a separate statement, TPG said it had fired McGlashan.

“We believe the behavior described to be inexcusable and antithetical to the values of our entire organization,” TPG said in a statement.

Regarding the conflicting statements, a spokeswoman for McGlashan provided an email exchange which she said was between McGlashan, TPG co-CEOs Jon Winkelried and Jim Coulter, and Chairman David Bonderman. The exchange suggests McGlashan resigned around an hour before he was told TPG had terminated his employment.

In the email exchange, Winkelried wrote that the firm was preparing to send McGlashan his notice of termination when he sent his resignation note.

TPG declined to comment further.

CHANCE TO WITHDRAW

To stem the fallout, TPG has offered investors in its Rise Fund II the chance to withdraw, a source familiar with the matter said on Thursday. [nL8N21181Y]

TPG made the offer to investors who participated in the first round of fundraising. TPG decided to do this given the change in circumstances this week and not because it was triggered by McGlashan’s departure, the source said.

A spokesman for TPG’s Rise Fund declined to comment.

TPG raised $2 billion for the first Rise fund in 2017, a fund focused on impact investing which aims to benefit society while delivering financial returns.

TPG is aiming to raise up to $3.5 billion for its second Rise Fund, according to documents from the State Investment Council of New Jersey, which has committed up to $125 million in the fund.

The Rise Fund is a small part of the $103 billion in assets that TPG has under management, but it is a high-profile area due to the growing appetite for impact investing.

TPG has said Jim Coulter will take over managing partner responsibilities for TPG Growth and Rise.

Reporting by Joshua Franklin in New York, editing by Rosalba O'Brien, Lisa Shumaker and Richard Chang

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