10:01 AM EDT, 05/10/2024 (MT Newswires) -- TPG (TPG) has an attractive growth opportunity in the private market industry that is complemented by an expected rebound in capital markets, Morgan Stanley said in a note on Friday.

The outlook is in the context of "an attractive $14 trillion private markets industry that we expect to grow at a low double digit clip over the next [five] years," Morgan Stanley said, adding that it will be driven by rising investments from institutions, insurance and retail channels.

TPG's "high quality, capital light business model" of distributing earnings through an approximately 85% variable dividend will allow the company to play with these opportunities, Morgan Stanley analysts wrote. Additionally, the recent acquisition of credit and real estate investor Angelo Gordon is a growth point for credit and infrastructure opportunities.

The company is also expected to benefit from a recovery in capital markets activity, Morgan Stanley said, estimating a 42% year-on-year increase in transaction fees.

Morgan Stanley raised its rating on the stock to overweight from equal-weight, and adjusted the price target to $52 from $43.

Price: 45.07, Change: +2.14, Percent Change: +4.98