TPG Closes $2.1B Real Estate Credit Fund
The fund exceeded its fundraising target by more than $600 million and is investing mainly in broken multifamily and industrial
By Brian Pascus November 4, 2025 3:12 pm
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TPG is joining the widening, and lucrative, fray of commercial real estate debt fundraising strategies.
The private equity firm announced during Tuesday’s third-quarter earnings call the closing of its new opportunistic real estate credit investing strategy, TPG Real Estate Credit Opportunities (TRECO) fund, with $2.1 billion in commitments.
The closing exceeds the fund’s goal of $1.5 billion, which is more than one-third the target set by the firm less than two years ago.
Doug Bouquard, head of TPG Real Estate Credit, told CO that the fully integrated structure of TPG Real Estate’s $19 billion debt and equity real estate investment platform, which include multiple strategies across the firm that ultimately complement one another, helped generate investor interest in the fundraise.
“The investing market is very familiar with TPG, as a real estate investor, given the depth and breadth of our franchise,” he said. “And where we were able to garner substantial capital was with the integrated nature of our debt and equity platform, and the investment performance of the seed portfolio.”
The TRECO fund is structured to invest in credit strategies supported by high-yield senior and subordinate loans, which will make up the bulk of the fund’s investment strategy, as well as some preferred equity positions in capital stacks and real estate-related debt securities such as commercial mortgage-backed securities (CMBS) and collateralized loan obligations (CLO).
Bouquard told CO that the strategy behind TRECO is to capitalize on the evolution within real estate capital markets, as commercial banks are now pulling back on their CRE lending, after historically being the largest provider of debt capital to the market.
“We view this current cycle, akin to what’s happened within corporate credit, really does relate to nonbanks being more active in lenders into today’s market,” he said. “In terms of TRECO, we have a very broad and flexible mandate across real estate loans and securities, which allows us to serve the borrower market more completely.”
The fund has already deployed $426 million of equity investments into 17 U.S. real estate assets, mainly in multifamily and industrial deals, which make up 80 percent of the investments.
“These are high-quality assets faced with broken capital structures that need new debt capital,” said Bouquard. “We are stepping in to fix these capital structures in a tailored way.”
During an earnings call Tuesday, Jon Winkelried, CEO of TPG, noted that the firm identified early on the benefits from investing into real estate credit due to the recent contraction in valuations and rise in interest rates providing additional leverage.
“We’re seeing our thesis prove out, with the fund outperforming its initial return projections and generating double-digit cash-on-cash yields,” said Winkelried. “TRECO is an important extension of our investment capabilities in both real estate and credit, and we expect to scale this strategy over time.”
The TRECO fund is just one arm of the larger TPG CRE investment strategy. TPG Real Estate has invested $15 billion in equity and originated $20 billion in debt since it launched the platform in 2009.
TPG’s real estate business is broker into four strategies, with the two equity strategies being TPG Real Estate Partners as the firm’s equity strategy that focuses on investing into property-rich platforms and TPG Thematic Advantage Core-Plus (TAC+), it’s core-plus strategy, while the firm’s debt investing lines include TRECO and TPG RE Finance Trust, a publicly traded mortgage REIT that originates senior mortgages.
“The integrated nature of our real estate platform, combined with the performance of the existing investment portfolio, was, frankly, a big driver of our fundraising success,” said Bouquard.
Brian Pascus can be reached at bpascus@commercialobserver.com.
