Q4 2025 Market Insights WealthCo/TPG Growth
Part 1
This month’s discussion focuses on the WealthCo Alternative Growth Fund investments managed by TPG. TPG has managed assets on behalf of WealthCo investors since 2021. We posed a few questions to Dave Makarchuk, Chief Investment Officer for WealthCo, followed by a few to Matt Hobart, Co-Managing Partner at TPG Growth.
Q1: Dave, let’s start with an overview of WealthCo’s Alternative Growth Fund.
Sure. Broadly speaking, our WealthCo Alternative Growth Fund seeks to generate long-term returns in excess of public equity markets by principally investing in alternative private market securities where returns are generated via capital gains more often than income distributions. The portfolio consists of allocations to alternative investments including Private Equity, Real Estate Equity, Infrastructure Equity, as well as more liquid assets with similar exposures. The portfolio is well diversified by asset type, sector, geography and asset class. Some investments within the fund will be privately issued and may be relatively illiquid to enhance long-term returns.
Q2: Dave, how do the TPG Growth mandates fit within the Alternative Growth Fund?
Our investments in the TPG Growth Funds V and VI provide diversified exposure to Growth Private Equity in North America and India. Private Equity is a key component of our WealthCo Alternative Growth Fund, with a target allocation of 40% of fund assets. We have been building our Private Equity positions over the last few years and have reached the 40% target. We are optimistic about future returns within the asset class.
Q3: Dave, why is TPG a good fit for WealthCo and its investors?
TPG is amongst the largest private equity growth managers in the world and has demonstrated strong performance over multiple funds since the 1990s. TPG Growth focuses on middle market growth equity investments with an emphasis on profitable growth. We like their commitment to innovative Technology and Healthcare initiatives and their commitment to be actively involved in the companies they invest in. Downside mitigation is also a key priority for TPG Growth. That’s important to us.
Q4: Matt, how would you describe the overall investment strategy for TPG Growth?
TPG Growth is distinctively positioned to invest at the intersection of traditional growth equity and middle market buyout opportunities. The strategy seeks to capture the upside of traditional growth equity investing while providing the structure and protections of the traditional middle market buyout toolkit. Our Growth fund invests primarily in North America, as well as India, where we have a 15+ year track record of investing in companies helping drive India’s growth.
Q5: From your perspective, how does your strategy differ from those of other Growth Private Equity funds?
In an increasingly competitive and crowded market for growth equity products, TPG Growth separates itself through its breadth and depth of experience. Launched in 2007 as one of the first dedicated growth equity funds at a large cap private equity firm, TPG has a long track record of success in meeting the differentiated needs of growth-stage companies, specifically growth buyouts and specialty capital.
Founders and portfolio companies benefit from TPG Growth's intellectual capital, global network, business building capabilities, and the resources and expertise of the broader TPG platform. Beyond capital, we work with founders and management teams to transform companies, striving to drive value by connecting fragmented marketplaces in an innovative, strategic, and integrated way.
Our growth platform takes a thematic approach to investing, meeting with companies in the space and building relationships with founders and CEOs. We prefer meaningful ownership stakes in a select number of companies in our core sectors, positioning our teams to actively manage and add value. Six out of seven investments in our most recent fund are control buyouts, allowing us to engage closely with management.
Pre-investment, we work with counterparties to create bespoke deal structures that provide flexibility and shared success. Once invested, TPG portfolio companies have access to ~50 firmwide resources focused on value creation. Our dedicated operations team delivers business-building engagement (go-to-market optimization, human capital recruitment / management, supply chain, capital markets expertise, ESG, and other operational best practices), deep industry expertise, and creative problem-solving. This hands-on approach enables us to drive transformation and generate alpha, even in volatile times.
We have always tried to emphasize profitable growth, and that has increased in importance in recent years. Collectively, our portfolio companies have generated annual revenue growth of ~24% since our investment, and 100 percent of our current fund’s portfolio companies are either profitable or funded to profitability at the time of our investment.
Q6: Tell us a bit more about each of the 4 sectors you invest in.
Absolutely. At TPG Growth, our sector focus is a foundational element of our investment approach, allowing us to leverage deep expertise, identify outsized opportunities, and drive value through cycles. Let me walk you through the four key sectors that are central to our strategy:
1. Software & Enterprise Technology (SET):
This sector sits at the heart of today’s digital transformation. We invest in companies that are enabling the shift toward cloud, automation, cybersecurity, and data-driven decision-making across industries. These businesses often have strong recurring revenue, high growth potential, and provide mission-critical solutions to their customers. Our team’s deep operational and thematic knowledge helps us identify the leaders in this space and support them as they scale.
2. Internet, Digital Media & Communications (IDMC):
The way people consume content, connect, and transact continues to evolve rapidly. In IDMC, we focus on platforms that are shaping the digital consumer economy—streaming, e-commerce enablement, and digital media, among others. We look for companies with durable moats and innovative models that can adapt as consumer preferences shift. Our track record includes investments in iconic names such as Uber, Spotify, AirBnB, and Musixmatch that have defined their categories.
3. Healthcare:
TPG’s healthcare strategy is distinguished by its breadth, scale, and long-term commitment to the sector. TPG has invested over $30 billion in healthcare globally, making it one of the most active and experienced investors in the space. The firm brings together deep operational capabilities, specialized investment teams, and a network of senior advisors and CEOs.
Our focus is broad, covering healthcare services, pharma services and IT, digital enablement, and the ongoing shift to value-based care. We seek out companies that improve access, quality, and efficiency—whether that’s through technology, better service models, or innovative products. Our global platform and strong network of healthcare executives help us to both source and support differentiated opportunities.
4. Business Services:
This sector is about the essential functions that enable the broader economy to operate more efficiently. We invest in companies providing outsourced services, human capital solutions, logistics, and infrastructure support. These businesses often benefit from recurring revenue models, secular growth trends such as digitization and specialization, and operational improvement opportunities. Our experience allows us to identify areas where technology and scale can unlock significant value.
Over 15 years, we’ve built a successful track record by pursuing sectors where we have a differentiated investment approach. Our sector focus is not static; it’s informed by constant market observation, thematic research, and our global network. By concentrating our efforts in these thematic areas, we’re able to bring not only capital, but also deep sector expertise, relationships, and operational resources to our portfolio companies—driving growth, resilience, and ultimately, value for our investors.
Q6: How do you identify new investment opportunities for the funds?
For us, finding new investment opportunities is about being proactive and building relationships long before a transaction is on the table. We start by focusing deeply on themes and sectors where we see long-term growth, like healthcare, software, digital media, and business services. Our teams spend a lot of time researching trends, talking to industry experts, and understanding how markets are evolving. This lets us spot companies that are positioned to benefit from those shifts.
We are active, long-term partners in helping entrepreneurs, founders, and management teams grow and scale their businesses. The best opportunities come from long-standing relationships, often connecting with founders and CEOs before they're seeking capital. We share ideas, offer insights, and get to know their businesses. That way, when they are ready to take the next step, they see us as a natural partner. Within the growth equity space, TPG Growth is positioned as the “partner of choice” for entrepreneurs and founders. 10 out of the 12 deals made out from our most recent fund are founder-led companies. Our ability to partner with business leaders allows us to create unique and proprietary deal opportunities, which is critical in an increasingly competitive market.
We also lean heavily on the broader TPG network. Our platform spans multiple sectors and geographies, and we have a large pool of senior advisors, portfolio company executives, and functional experts.
At the end of the day, we’re looking for situations where we can bring more than just capital. We want to be true partners, helping companies grow, solve challenges, and realize their potential. Our sourcing is thematic, relationship-driven, and leverages all TPG resources. It’s a hands-on, people-first approach, and it’s worked well for us and our investors.
Q7: How do you decide when to sell a position within the fund? How long is a typical holding period?
At TPG Growth, our decision to exit a position is guided by a combination of strategic, operational, and market-based factors. We don’t adhere to a rigid formula or a timeline; instead, we focus on value creation and alignment with our investment thesis.
Typically, our holding period ranges from four to six years, but that can vary depending on the nature of the business, the pace of transformation, and external market conditions. We aim to partner with companies through meaningful phases of growth—whether that’s scaling operations, expanding into new markets, or driving digital transformation.
When evaluating an exit, we ask ourselves: Has the company reached a point where it can sustain its trajectory independently or with a different partner? We also consider whether our continued involvement adds incremental value or if the timing is optimal for realizing returns for our investors.
Our goal is to be thoughtful and flexible stewards of capital, balancing patience with agility, and always prioritizing long-term impact over short-term gains.
Q8: How would you describe the current environment for Growth Private Equity? What is your outlook?
From our perspective, the environment for Growth Private Equity has undergone a fundamental shift. We’ve moved past the era of “growth at all costs,” where companies chased top-line expansion regardless of profitability due to low interest rates and easy access to capital. Today, there’s a clear shift toward building businesses that are not only growing, but are also profitable and resilient. There’s much greater discipline in the market, and the ability to generate positive cash flow is more important than ever.
For us, this means we are much more selective about where we invest. We believe in taking concentrated ownership stakes in a focused set of companies with strong unit economics and cash flow profiles within sectors we understand deeply, so we can actively add value through operational expertise and business building.
Looking ahead, we’re optimistic about the opportunities in growth private equity for disciplined investors. The recent market reset has opened up some great opportunities to partner with strong companies at attractive entry points. With the right approach, prioritizing profitability, leveraging sector expertise, and engaging as active partners, we believe we can generate outsized returns and drive meaningful transformation.
Q9: Among TPG Growth’s notable investments, what are the key ways TPG partners with portfolio companies to drive value and support their development?
In growth stage investing, some firms can bring capital and board-level monitoring to their portfolio companies but generally take a passive ownership approach. TPG Growth’s objective is to help each of its portfolio companies build scale and improve operations in order to drive earnings growth, generate increased cash flow, and garner multiple expansion at the time of exit. This type of operational improvement through active ownership and portfolio monitoring has been at the core of TPG’s investment strategy since inception. In certain cases, such as the companies you mentioned above, this involves supporting great management teams through outsized governance and active board involvement. In other cases, TPG Growth takes meaningful ownership stakes in our companies or maintains outsized governance rights in addition to board representation, thereby positioning TPG Growth to add value via operational expertise.
TPG was the first private equity firm to have a dedicated operations group, and today, the TPG Ops team comprises approximately 50 professionals with both sector and functional expertise. This team is tasked with driving shareholder value creation by engaging in the investment due diligence process and identifying and executing revenue growth, operational effectiveness and profit enhancement initiatives. Our ops professionals bring collective industry experience in senior executive positions at companies across a variety of sectors and geographies with functional specialties encompassing customer, product, channel, sales and go-to-market strategy, sales effectiveness, traditional and digital marketing, business process optimization, human capital, finance, e-commerce, legal, and compliance. Most TPG Growth investment theses and underwriting cases involve some degree of assumed operational improvement. Some examples include:1
GoHealth Urgent Care
GoHealth develops and operates small-box urgent care facilities through JVs with leading health system partners. At TPG Growth’s investment in March 2014, GoHealth had a total of five centers. We have since helped the business expand to 385 centers in 13 markets across the U.S., resulting in annual revenue growth of ~45% since 2018. TPG Growth has helped GoHealth identify and sign JV partnerships with 11 leading health systems and expand beyond in-center care to virtual visits, direct-to-employer care, and behavioral and primary care. These growth initiatives have resulted in a ~60x increase in patient count since our investment ins. TPG Growth has also helped GoHealth strategically add key personnel, including VP of Strategic Finance, CHRO, CMO, CTO, COO, CRO, and GC, as well as three independent board directors.
Medical Solutions
Medical Solutions is a leading provider of temporary staffing solutions to health systems across the U.S. During TPG Growth’s ownership (2017-2021), TPG Growth helped Medical Solutions build an industry-leading management team (including the addition of five C-Suite executives and three independent board members), launched a new managed services business line, and completed two transformative acquisitions (which expanded the company’s footprint into post-acute and allied staffing). In November 2021, TPG Growth sold Medical Solutions to Centerbridge Partners and CDPQ.
Resource Label Group
Resource Label Group is a leading designer and manufacturer of pressure sensitive and shrink labels with production facilities across North America. Resource Label Group services ~6,000 customers across consumer‐focused end‐markets, including food and beverage, pharma, and personal care. During the TPG Growth’s ownership (2018-2021), the TPG Growth Business Building Group drove an effort to enhance talent and build out the C-Suite, which resulted in hiring a new CEO, CFO, and SVP of Sales. We then helped Resource Label Group complete a robust go-to-market strategy, market segmentation, and re-alignment of the sales organization, which resulted in ~20% organic EBITDA growth during our ownership. We further augmented strong organic growth with 11 acquisitions. In July 2021, Ares Management Corporation purchased Resource Label Group.
Uber
We invested in Uber in August 2013 through a structured, downside protected security, at a discount to other investors in the Series C round. Uber owns a proprietary mobile smartphone application that connects passengers with drivers of vehicles. Given TPG’s global network of relationships and experience with regulatory issues, we believed we were distinctively positioned to help Uber scale as it expanded internationally. During our investment, Uber expanded to more than 650 additional cities and net revenue grew ~13x. Following meaningful board and active company engagement during a highly transitional period, including collaboration with TPG’s Capital Markets group through one of the largest tech public offerings, TPG Growth fully realized its investment in Uber in February 2020.
Azoff Music Company
Azoff Music is a high-growth music platform founded in 2013 by Irving Azoff, a legendary artist manager and entertainment industry executive. Azoff Music’s segments include: (i) Global Music Rights (“GMR”), a performance rights organization that licenses intellectual property and collects performance royalties on behalf of songwriters and publishers with an extensive roster including Drake, Bruno Mars, and Post Malone; (ii) FullStop Management, a leading music management group representing top artists, including The Eagles, Harry Styles, and John Mayer, among others; (iii) Iconic Artists Group, a start-up focused on acquiring and monetizing the intellectual property of “legacy” artists, leveraging Irving’s extensive network and expertise as a successful music manager; and (iv) a nascent record label concept. TPG Growth’s investment was fully proprietary in nature and comes after several years of pursuing opportunities and developing thematic work in the music space. We also leveraged our investments in Creative Artists Agency (via TPG Capital) and Spotify for differentiated angles and insights. During our ownership, GMR (largest segment of Azoff Music) grew EBITDA ~4.5x and TPG Capital Markets helped facilitate a dividend recap, returning a significant portion of our cost basis. In December 2024, TPG sold GMR to Hellman & Friedman.
Examples of investments referenced above are for illustrative purposes only and are not intended to represent all investments made by TPG or those held within the WealthCo Alternative Growth Fund. Not all investments were profitable and past investments are not indicative of future results.
Certain examples may reflect investments made by TPG funds more broadly and may not be held directly by the WealthCo Alternative Growth Fund. Not all investments were profitable and past investments are not indicative of future results. Investments in private markets involve additional risks, including illiquidity, valuation uncertainty, and longer investment horizons, and may not be suitable for all investors.
We believe our active management and value creation initiatives position our companies for flexibility when evaluating exit opportunities. In addition to the company sales mentioned above, we have historically had significant success existing companies through public markets including: Uber (IPO on NYSE in May 2019); Spotify (direct listing on NYSE in April 2018); C3.ai (IPO on NYSE in December 2020); Nykaa (IPO on Indian exchanges in October 2021); and OneSource (IPO on Indian exchanges in January 2025).
Disclaimers:
Statements above represent the subjective views of TPG and cannot be independently verified.
Case studies are for illustrative purposes only. There can be no assurance TPG will continue to make similar investments or that other portfolio companies will perform similarly to those reflected above. See Appendix and Disclosures for important performance and other information.
This article is for informational purposes only. The information contained herein (A) is subject to change without notice, (B) is not, and may not be relied on in any manner as legal, tax or investment advice, and (C) may include “forward-looking statements,” which can be identified by the use of forward looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe,” or the negatives thereof or other comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of any investment product may differ materially from those reflected or contemplated in such forward-looking statements. Past performance is no guarantee of future results.
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