Dry Powder: The Private Equity Podcast Competitive Advantages and Carve-Outs w/ TPG’s Steve Ellis
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Sep 16, 2025 Steve Ellis, co-managing partner of TPG's Rise Fund, dives into the dynamic world of impact investing and carve-out deals. He reveals how integrating an impact lens enhances deal sourcing and execution. The conversation spans the growth potential in sectors like healthcare and education, highlighting the shift towards sustainable investments. Ellis discusses the critical strategies for navigating carve-outs, showcasing how they can unlock hidden value and create both financial returns and social impact, particularly in underserved communities.
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NextTracker Carve-Out Success
- Steve Ellis describes NextTracker as a high-performing solar-tracking business trapped inside Flextronics and undervalued by the parent.
- TPG executed a carve-out, took NextTracker public, and it traded at a meaningful premium to its prior valuation.
Carve-Outs Demand Full-Stack Execution
- Carve-outs are often more complex than they appear and require end-to-end expertise from sourcing through exit.
- Repeating execution across many deals builds the nuanced capabilities needed to avoid common carve-out pitfalls.
Align Sourcing, Structuring, And Exit Plans
- Use proprietary sourcing, careful structuring, and operational support to unlock value in corporate assets.
- Align exit plans with corporate partners and co-investors to preserve value through lifecycle events.