The company also is allowing investors in its second social impact fund to withdraw their commitments, according to a person familiar with the matter. The vehicle, known as The Rise Fund II LP, is still aiming to close this year with $3 billion.

McGlashan, who led TPG’s business focused on social good and founded its growth investing platform, was named with other parents in an indictment detailing schemes that involved paying coaches and college administrators to get children into top colleges. The government said clients paid $25 million in bribes from 2011 to 2018. McGlashan discussed paying at least $250,000 to get his son into University of Southern California, according to the criminal complaint.

“Bill McGlashan has been terminated for cause from his positions with TPG and Rise effective immediately,” a TPG spokesman said in an emailed statement. “After reviewing the allegations of personal misconduct in the criminal complaint, we believe the behavior described to be inexcusable and antithetical to the values of our entire organization.”

McGlashan, in a note to board members Thursday, said he resigned and that he’s “deeply sorry this very difficult situation may interfere with the work to which I have devoted my life.” He added that “there are aspects of the story that have yet to emerge that I wish I could share.”

Washington, New Jersey

Existing investors in Rise Fund II, which held a first close in February, are Washington State Investment Board, New Jersey Division of Investment, and San Francisco Employees’ Retirement System, according to data compiled by Bloomberg. The fund’s initial hard cap was $3.5 billion, according to filings, but was lowered in December to $3 billion, said the person familiar with the matter, who asked not to be identified because the information isn’t public.

Jim Coulter, who co-heads the firm, is taking over managing partner responsibilities for Rise and TPG Growth, which McGlashan founded in 2007.

Some of the biggest clients of the growth business include public pension plans, which typically shy away from negative news, known as headline risk.

New Mexico State Investment Council, for example, will look at the next growth fund with more scrutiny before it makes a decision on investing, according to a person with knowledge of that matter. The pension fund is a longtime investor with TPG, and participated in its second, third and fourth growth equity funds and first impact-investing pool, according to data compiled by Bloomberg.

Fast Growth

TPG Growth is one of the firm’s fastest-growing businesses, with $13.2 billion in assets under management. It has delivered strong returns with a two times multiple and close to 1.4 times multiple on its 2012 and 2015 funds, respectively, according to documents from the New Jersey Division of Investment.

The strategy has focused on investing in fast-growing companies such as Uber Technologies, which is preparing to go public, along with Airbnb and music-streaming company Spotify Technology. TPG’s technology team—and specifically David Trujillo, rather than McGlashan—sourced the firm’s investments in those companies.

Bono, John Kerry

Still, McGlashan expanded the business in 2017 to include social impact investing, and drove fundraising for the firm’s inaugural Rise Fund, which, at $2 billion, is the largest social-impact pool of its kind. He also recruited high-profile philanthropists, business leaders and activists to be part of the effort. Musician-turned-investor Bono sits on the board of the Rise Fund, and former Secretary of State John Kerry helps advise portfolio companies across a number of sectors, with a focus on renewable energy.

TPG plans to launch fundraising for its fifth growth fund, which would likely exceed its $3.7 billion predecessor fund, early next year, the person said. The firm had told investors that it intended to start raising it this year. Its fourth fund is presently only about 50% invested.

Investors in any of TPG’s funds, including its debut social-impact fund or growth pools, can sell stakes on the secondary market, which often trade at a discount.

This isn’t the first time that TPG has attracted headline risk. In 2017, co-founder David Bonderman resigned from the board of Uber after he made a sexist comment during a meeting.