TPG's approach to investing helps us recognize value – or the potential for value – where others cannot see it. This contrarian philosophy has delivered consistent and outstanding performance because we dedicate the right mix of capital, time, and management, and operational expertise, to make successful investments out of challenging situations.
Some of TPG's most noteworthy accomplishments have been in situations involving complicated structures, cyclical and regulatory risk, and distressed and turnaround situations. We maintain a mid to long-term perspective on investments to help companies grow to meet their full potential.
Examples of our differentiated investment philosophy include:
Continental Airlines: In 1993, TPG's founders David Bonderman and James Coulter were alone in believing that an investment opportunity existed with Continental, which was in the middle of its second bankruptcy in a decade and mired in labor and other problems. As Coulter explains, "One of the reasons we were interested is few other folks were." They brought Continental out of bankruptcy and spearheaded its turnaround – and in the process created TPG.
Oxford Health Plans Inc.: Oxford was a highly successful HMO with more than two million members when, in 1998, overextended and outdated data systems generated severe losses and public investors deserted the stock. But TPG saw a company with an excellent customer base and a need for new operational processes and technology. Oxford returned to profitability within a year of TPG's investment.
Korea First Bank: In 2000, TPG acquired a 51 percent stake in one of South Korea's oldest and largest banks. This represented the first foreign acquisition of a Korean bank. TPG rebuilt the failed franchise by creating new financial controls and risk assessment tools, and repositioning it as a retail bank.
MEMC Electronic Materials: This U.S.-based producer of silicon wafers for the semiconductor industry set the standard in what became a highly competitive international commodity business. In 2001, TPG took advantage of a failed auction and used its own proprietary model to generate significant returns on a relatively nominal investment.
Elevance Renewable Sciences: TPG Growth and TPG Biotech jointly founded Elevance alongside a team of world-class specialty chemicals executives and innovators in 2007. TPG and management recognized the opportunity to produce and market a variety of specialty chemicals and intermediate chemical building blocks derived from renewable plant feedstocks that directly replace or enhance products typically derived from natural gas, petroleum and natural oils. Since identifying and acquiring an under-utilized Nobel Prize-winning chemical conversion technology from Cargill, TPG and management have built the world’s largest renewable specialty chemicals business with 200 million gallons per year of global production capacity and a multiyear plan to reach 1 billion gallons per year of production capacity.
MI Energy: TPG Growth invested in MI Energy in July 2009, one of the largest independent onshore upstream E&P oil companies in China. Since the investment, TPG has led many value-enhancing initiatives, including the recruitment of key management and Directors; facilitating access to bank financing; the completion of Hong Kong IPO in December 2010; and supporting M&A activities which resulted in the acquisition of Kazakhstan oil field Emir in 2011. Since September 2011, MI Energy has also been included of in the Hang Seng Composite Index and MSCI China Index.