TPG: Strategically Transformative Jackson Partnership Supports Long-Term Credit Growth but Current Valuation Warrants Hold Rating

Morgan Stanley analyst Michael Cyprys maintained a Hold rating on TPG yesterday and set a price target of $63.00.

Michael Cyprys has given his Hold rating due to a combination of factors tied to both strategic progress and current valuation. He views the new long-term, non-exclusive partnership with Jackson Financial as an important strategic milestone that strengthens TPG’s foothold in the insurance channel and should accelerate the expansion of its credit franchise over time. The agreement, which ramps from managing at least $4 billion after two years to a minimum of $12 billion within five years (with potential to reach $20 billion), is expected to add durable, recurring fee revenues and deepen TPG’s role as a solutions provider across the risk–return spectrum. In addition, management’s indication of raising roughly $20 billion in credit capital for full-year 2025, well ahead of prior expectations, underscores meaningful growth momentum in the credit platform.

At the same time, Cyprys characterizes the Jackson transaction as more strategically than financially transformative in the near term, with incremental earnings accretion that is positive but not dramatic. The partnership fits TPG’s balance sheet–light growth model and enhances origination capabilities, but the market has already recognized much of this upside in the share price, limiting near-term risk/reward. He also notes that while insurance-related flows and consolidation of GP relationships should benefit TPG over the long run, execution on scaling the mandate and delivering strong performance will be key. Taken together, these elements support a more constructive view on the business trajectory, yet do not, in his assessment, provide sufficient upside versus current levels to justify a Buy rating, leading him to maintain a Hold stance on TPG.

In another report released yesterday, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $74.00 price target.