Exclusive-TPG is leading the way to buy shares in Creative Planning at a $15 billion valuation, sources told Reuters

By Milana Vinn and David French

(Reuters) – Buyout firm TPG has emerged as the frontrunner to take a $2 billion minority stake in Creative Planning, in a deal that could value the wealth management firm at more than $15 billion, they said Saturday people familiar with the matter.

The deal would mark TPG’s second such bet on a wealth manager in a week and underlines growing demand for deal-making in the sector that generates lucrative fee income for managers. On Thursday, TPG completed an agreement to buy a minority stake in Homrich Berg.

San Francisco-based TPG is set to prevail in a bid for the stake in Creative Planning, which has attracted interest from other buyout firms including Permira, the sources said, requesting anonymity because the talks are confidential. The deal could be announced in the coming days, the sources added.

If the talks are successful, TPG would become one of the wealth manager’s owners, alongside private equity firm General Atlantic, which acquired a minority stake in Creative Planning in 2020.

TPG and Permira declined to comment. Creative Planning did not immediately respond to requests for comment.

Wealth managers have traditionally attracted strong interest from private equity firms that like to back companies that generate steady cash flows. The fragmented nature of the wealth management industry also means that companies can grow quickly through acquisitions of rivals.

Creative Planning, based in Overland Park, Kansas, provides services including financial and tax planning, retirement planning and financial consulting for businesses and had more than $300 billion in assets under management at the end of 2023, according to its website.

Last year, Creative Planning agreed to buy Goldman Sachs’ personal finance unit after the Wall Street bank undertook a strategic overhaul at its wealth management unit to focus on high-net-worth individuals following the exit from the consumer lending activity.

Founded in 1992 by private equity executives Jim Coulter and David Bonderman, TPG had about $229 billion in assets under management at the end of June, up 65 percent from a year earlier. The firm, which is currently led by Jon Winkelried, saw a 60% increase in asset management fee income in its most recent quarter.