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Here Are The Allocators That Invested With Charged TPG Exec’s Rise Fund
No key man clause has been tripped by fund co-founder Bill McGlashan's leave of absence following news of his charges related to the alleged college admissions cheating scandal, a source familiar with the matter said.
Public pension funds including the San Francisco Employee’s Retirement System and the Washington State Investment Board are among those affected by the revelation that Bill McGlashan was allegedly involved in the college admissions cheating scandal.
Bill McGlashan, founder and managing partner at TPG Growth and co-founder of The Rise Fund, a social and environmental impact fund, was accused of allegedly paying bribes to facilitate his children's admission to colleges, federal prosecutors said. He was placed on indefinite administrative leave from TPG late Tuesday after he was charged earlier in the day.
SFERS and WSIB had invested with the Rise Fund in 2017, meeting minutes from the time show. The New Jersey State Investment Council was also considering whether to invest in the second Rise Fund, a memo from the council shows. The Rise Fund II is targeting $3 billion and is still in the process of being raised, a source familiar with the matter said Wednesday.
It is unclear at this time how the three allocators plan to deal with McGlashan’s involvement in The Rise Fund and its successor. A spokesperson for WSIB said in a statement that the fund is currently seeking more information and will be “closely monitoring TPG’s handling of this situation.”
“The Washington State Investment Board has had a long and successful investment relationship with TPG since 1999,” the spokesperson said. “Our board and staff were deeply disappointed and concerned to learn of allegations that point to serious legal, ethical and integrity issues involving a TPG principal. Our investment partners understand that the WSIB places integrity among the highest possible priorities in our investment program.”
Spokespeople from SFERS and the New Jersey State Investment Council did not respond to phone calls and emails seeking comment in time for publication.
McGlashan is listed as a key investment professional in New Jersey’s memo on The Rise Fund. A source familiar with the matter said Wednesday that no key man clauses have been tripped.
A New Jersey State Investment Council memo from November 2018 proposed that the state invest up to $125 million in the second Rise Fund. It’s unclear at present whether that investment was made.
The memo highlighted that one of the attractive things about investing with the Rise Fund was its “experienced and stable team.” According to the memo, McGlashan is considered a “key investment professional” at the fund.
According to meeting minutes from September 2017, the Washington State Investment Board committed $200 million to the Rise Fund’s cap of $2 billion.
The San Francisco Employees’ Retirement System contributed $50 million to the Rise Fund in March 2017, meeting minutes show.
McGlashan serves on several corporate and nonprofit boards, including Brava, Common Sense Growth, e.l.f. Cosmetics, and Fender Musical Instruments. A spokesperson for Common Sense Growth declined to comment on his future on the board. Spokespeople for Brava, e.l.f., and Fender did not respond to requests for comment.
Jim Coulter, co-CEO of TPG, has been named interim managing partner of TPG Growth and The Rise Fund and will lead all investment work for both going forward, TPG said in the statement late Tuesday.
McGlashan allegedly conspired to bribe Donna Heinel, the senior associate athletic director at the University of Southern California, to facilitate his son’s admission as a recruited athlete, according to court documents. One of the cooperating witnesses allegedly created a fake athletic profile for McGlashan’s son.
McGlashan wasn’t the only defendant to allegedly bribe college athletic coaches and administrators to designate their children as athletic recruits, the court documents show. Other defendants allegedly bribed college entrance exam administrators to help students score better on those exams, either by providing correct answers or by posing as the student, court documents show.
Other financiers were also ensnared by the admissions bribery scandal. Gordon Caplan, the co-chairman and partner in Willkie Farr & Gallagher's private equity practice; Manuel Henriquez, founder and chief executive officer of venture capital firm Hercules Capital; Douglas Hodge, former chief executive officer of PIMCO; Bruce Isackson, president at WP Investments; John Wilson, president and CEO of Hyannis Port Capital and a trustee of the Franklin Funds at Franklin Templeton; and Robert Zangrillo, founder and CEO of venture capital firm Dragon Global were also implicated in the scheme, court documents show.
[II Deep Dive: TPG Growth Founder Among Financiers Charged in College Bribery Scandal]
Henriquez stepped down from his role as chairman and CEO at Hercules, the firm said Wednesday. Caplan has been placed on a leave of absence from Willkie Farr & Gallagher and will have no further management responsibilities, a spokesperson for the firm confirmed via email Wednesday. Wilson is no longer a trustee of the Franklin Funds, a Franklin Templeton spokesperson said Wednesday.
Hodge self-reported to court Wednesday, court documents show.