TPG Inc. (TPG) stock intrinsic value fair value estimate & owner earnings analysis

TPG is a global alternative asset manager. It earns recurring management fees (about 1.16% of fee-earning assets in 2025) on private equity, growth, impact, real estate, credit and market-solutions funds, and it earns performance allocations (carried interest) when those funds sell investments. In 2025 fee-earning assets grew by $28.8 billion, driven by $22.1 billion of newly raised fee-paying capital (TPG X, Growth VI, Rise Climate II, a second Market Solutions fund) and the July 2025 acquisition of Peppertree, against $13.0 billion of realizations. Revenue from contracts rose from $1.53 billion in 2023 to $2.09 billion in 2024 and $2.42 billion in 2025, helped by the November 2023 Angelo Gordon acquisition. How we measured earnings. We start from operating cash flow, which includes cash from realized carried interest and the co-investment sales that are a normal part of this business, remove timing swings in amounts due to and from affiliates and payables, then deduct equity-based compensation in full and a small maintenance capital spend (about $22 million a year; TPG is asset-light). Equity-based compensation is very large ($814 million in 2025, $1.0 billion in 2024, against operating cash flow of $1.03 billion and $0.53 billion), so it takes most of the cash the business generates. Per fully diluted share, the resulting owner earnings were $2.64 (2022), $1.27 (2023), -$1.53 (2024) and $0.69 (2025). To value the business before its lenders we add back cash interest ($92 million in 2025), giving $0.94 per share for 2025. We used 2023 to 2025 as the window because the Angelo Gordon deal changed the business; the middle of those three years, about $0.94 per share, is the starting level. 2022 was excluded as the IPO year with a different business mix and 2024 is treated as the weak end of the range rather than the norm. Acquired management-contract intangibles ($660 million at year-end 2025, including Peppertree and Angelo Gordon) amortize away; we did not adjust the earnings level for that, and instead carry the wasting of these contracts in the slow growth path and in the bear case. Growth check: owner earnings rose from -$1.53 to $0.69 per share in 2025, which is a swing from a negative base rather than a meaningful growth rate; the base case assumes only 4% in year one, below that. Base case: the business is worth about $20.00 per share, it owes about $3.89 net, leaving about $16.12. Growth of 4% a year for five years and 2% for the next five comes from capital already raised and not yet fully earning fees (TPG X activated in Q3 2025, Growth VI final close in Q2 2025, Rise Climate II closings, Peppertree) and management fees that run over ten-year fund lives; it is well below the 2025 fee revenue growth of 16% and below the first-half 2026 rate (+19%). After year ten we hold earnings flat rather than growing them, because TPG's multi-decade record of raising successor funds is the only evidenced reason cash flows continue, and it supports maintaining, not growing, the level. We gave no credit for new products, market expansion, margin gains, or a bigger realizations cycle. Bear case: the business is worth about $2.62 per share, it owes about $3.89, leaving about -$1.27; the company appears to owe more than it is worth in this case. We start at $0.40 per share (a level between 2024's loss and 2025) and let it shrink about 6% a year for 15 years, then end it, reflecting the amortization of acquired contracts, fund realizations ($13.0 billion in 2025) outrunning fundraising, and equity compensation staying heavy. Business cash flow of roughly $150 million a year would barely cover roughly $145 million of interest. Bull case: the business is worth about $31.18 per share, it owes about $3.89, leaving about $27.29. It starts from $1.15 per share (the median of 2022 to 2025) and grows 8% a year for five years and 4% for five more, if the 2025 pattern of raising more fee-paying capital than is realized continues, then holds flat. Debt. Debt rose from $1.72 billion at the end of 2025 to $2.34 billion at June 30, 2026, including a $400 million borrowing in February 2026 to buy 4.7 million Jackson Financial shares in a strategic partnership, and cash was $945 million. We net the Jackson shares at roughly their cost, and about $445 million of cash beyond operating needs, giving net debt of about $1.5 billion or $3.89 per share. The debt is mostly fixed at about 5.3% to 7% (senior notes due 2034 and 2036, $400 million of 6.95% subordinated notes due 2064, $250 million of secured notes due 2038), close enough to 6% that we made no adjustment; no near-term maturity is material. Unrealized carried interest already on the balance sheet is not valued separately because its future cash is what the earnings stream captures; outside investors' share in consolidated vehicles could not be separated from the filings. Some cash-flow statement lines were not fully visible in the extracted filings, so a portion of the reconciliation between net income and operating cash flow ($72 million in 2025) could not be traced line by line; we relied on the reported operating cash flow total. What would make this wrong. Realizations are lumpy (proceeds from investments were $1.46 billion in 2024 and $2.29 billion in 2025); weaker exits would push toward the bear case, while a sustained fall in equity compensation would raise all three cases. First-half 2026 operating cash flow was $524 million against $584 million a year earlier, a decline we have not treated as a change in level.