TPG Capital, the San Francisco-based private equity firm, is making a “significant” minority investment in Creative Planning, the $375 billion firm led by Peter Mallouk.
The two sides announced the deal on Monday, and terms were not disclosed. Under the deal, TPG will join existing investor General Atlantic (which will retain its minority stake) to “provide additional resources and expertise to help Creative Planning continue to enhance its service offerings and trajectory of growth”.
Mallouk will remain on board as president and CEO, retaining his majority stake in the company. In a statement about the deal, Mallouk said TPG Capital's investment was indicative of Creative Planning's “growth and expansion opportunities.”
“We are excited to partner with a trusted investor like TPG, with a well-known global reputation, who shares our vision to leverage our planning-led approach and people-first culture to better serve customers at every stage of their financial life.” said Mallouk.
Goldman Sachs acted as financial advisor to Creative Planning on the deal, while JP Morgan Securities and RBC did the same for TPG Capital. Paul Weiss and Davis Polk provided legal advice to Creative Planning and TPG, respectively.
Based in New York General Atlantic took its minority stake in the company in February 2020, although Mallouk said at the time that his majority ownership would not change (according to SEC filings, Mallouk owned at least 75% of the firm at the time). In 2021, Mallouk opened its own capital for Creative Planning employees, with 10% of the workforce at the time becoming part owners.
At the time, Mallouk differentiated the deal, noting that while most RIA firms were “buyout equity-owned,” he still owned Creative Planning. According to Mallouk, General Atlantic was determined to maintain its minority, non-controlling investment for a long period of time.
The Creative Planning/TPG deal comes just days after TPG announced it would buy a minority stake in Homrich Bergan Atlanta-based RIA integrator with approximately $18 billion in assets.
The firm sold TPG Growth, TPG's middle market and capital growth platform. Homrich Berg was previously backed by a minority investment from New Mountain Strategic Equity, an affiliate of PE firm New Mountain Capital (the firm retained its investment in the TPG deal).
According to the firm's CEO Thomas Carroll, the TPG partnership enabled Homrich Berg to “continue to provide exceptional service and advice” through its fee-only model.
“It also allows HB to remain the largest shareholder group, with our management team retaining operational control, ensuring our mission to be a trusted financial guide to our clients remains intact,” he said.
Creative Planning made its first acquisition of the year in April when acquired ML&R Wealth Managementan 18-person RIA based in Texas with nearly $1.8 billion in AUM, including 676 households and 15 institutions as clients. This followed several successful deals near the end of 2023, including the acquisition Mesirow's retirement services business AND Goldman Sachs Personal Financial Management, formerly United Capital.