TPG has agreed to acquire Angelo Gordon, an alternative investment firm focused on credit and real estate, in a cash and equity deal worth about $2.7bn.

As per the terms of the agreement, the US-based Angelo Gordon will receive approximately $970m in cash and up to 62.5 million common units of the TPG Operating Group as well as TPG’s restricted stock units.

Besides, the transaction involves an earnout worth up to $400m which is based on Angelo Gordon’s financial performance in the future.

Established in 1988, Angelo Gordon is a fully integrated and scaled multi-strategy platform that has over 650 employees. It has 12 offices located in the US, Europe, and Asia.

The firm’s credit platform provides scaled and various offerings across the credit investment spectrum, such as corporate credit, direct lending, and structured credit. Its real estate platform manages focused value-added real estate strategies.

Angelo Gordon co-CEO and credit head Josh Baumgarten said: “This is a terrific partnership that provides Angelo Gordon with the scale to capitalise on the growing opportunity set we see in the credit and real estate markets, the diversification to create new solutions for our clients across the risk spectrum in all market conditions, and the opportunity to share our collective expertise, insights, and knowledge.”

Following the closing of the deal, TPG will manage assets across a wide range of investment strategies, including impact, private equity, real estate, credit, and market solutions.

Through the acquisition of Angelo Gordon, the Nasdaq-listed global alternative asset management firm expects to expand into credit investing and establish additional levers to bolster organic growth.

Besides, the transaction is expected to further extend the breadth, diversification, and reach of the TPG platform.

TPG CEO Jon Winkelried said: “This strategic transaction meaningfully expands our investing capabilities and broadens our product offering. The addition of Angelo Gordon also underscores our continued focus on growing and scaling through diversification, while driving long-term value for our shareholders.

“Following more than a year of building relationships between the leadership teams of both organisations, we are confident the combination represents a strong strategic and cultural fit and will create additional opportunities for employees of both firms.”

The transaction, which is subject to customary conditions, regulatory approvals, and other client and third-party consents, is anticipated to close in Q4 2023.