SCHEDULE: Activist Gratia Capital Takes 5.6% Stake in TPG RE Finance

Gratia Capital and Steve Pei have disclosed a 5.6% beneficial ownership in TPG RE Finance Trust, Inc., intending to engage management on strategic initiatives and dividend increases.

Summary

• Gratia Capital, LLC and Steve Pei (collectively, the "Reporting Persons") have filed a Schedule 13D, disclosing beneficial ownership of TPG RE Finance Trust, Inc. (the "Issuer") Common Stock.
• Steve Pei beneficially owns 4,351,196 shares, representing 5.6% of the Issuer's outstanding Common Stock.
• Gratia Capital, LLC beneficially owns 4,234,768 shares, representing 5.4% of the Issuer's outstanding Common Stock.
• The Reporting Persons acquired their shares for investment purposes, believing the Issuer's share price does not accurately reflect its short and long-term prospects.
• They intend to engage in positive and supportive discussions with the Issuer's management regarding dividend increases, broader strategic initiatives, and positioning within the mortgage REIT universe.
• Funds for the share purchases came from the working capital of private funds and separately managed accounts advised by Gratia, as well as personal funds of Steve Pei and other affiliates.
• The outstanding shares figure of 78,261,346 was reported in the Issuer's 10-Q filed on October 28, 2025.

Sentiment

Score: 7

Explanation: The filing indicates an activist investor has taken a significant stake, believing the issuer's share price is undervalued and intends to engage management to unlock shareholder value through strategic initiatives and dividend increases. This typically signals potential for positive change, though the outcome is not guaranteed.

Positives

• An activist investor has taken a significant stake, indicating a belief in the Issuer's underlying value and potential for improvement.
• The Reporting Persons intend to engage management in discussions aimed at increasing shareholder value, including potential dividend increases and strategic enhancements.
• The acquisition of shares was funded by working capital and personal funds, with no borrowed funds used for the purchase, indicating financial strength of the Reporting Persons.

Negatives

• The Reporting Persons believe the Issuer's current share price does not accurately reflect its short and long-term prospects, implying a current undervaluation or underperformance.
• The need for activist engagement suggests that current management or strategic direction may not be fully optimizing shareholder value.

Risks

• The Reporting Persons reserve the right to take further actions with respect to their investment, which could include proposing significant corporate changes or transactions, potentially leading to management disagreement or corporate disruption.
• Future actions by the Reporting Persons are dependent on various factors, including the Issuer's financial position, share price levels, and general market conditions, introducing uncertainty.
• There is no guarantee that discussions with management will lead to the desired outcomes, such as dividend increases or strategic changes, or that such changes will ultimately create shareholder value.

Future Outlook

The Reporting Persons intend to continuously review their investment and engage with the Issuer's management and Board on topics such as dividend increases, broader strategic initiatives, and the Issuer's positioning within the mortgage REIT sector. They reserve the right to take further actions to create shareholder value, subject to market conditions and applicable securities laws.

Management Comments

• "The Reporting Persons believe that the Issuer's share price does not accurately reflect the Issuer's short and long-term prospects."
• "The Reporting Persons look forward to positive and supportive discussions with the Issuer's management on a number of topics including dividend increases, broader strategic initiatives, and positioning of the Issuer within the mortgage REIT universe."
• "The Reporting Persons have been and may continue to be in contact with members of the Issuer's management, Board, other significant shareholders and others regarding alternatives that the Issuer could employ to create significant additional shareholder value over time."

Industry Context

The filing positions TPG RE Finance Trust, Inc. within the broader mortgage REIT universe, suggesting that the Reporting Persons' strategic initiatives may involve optimizing the company's operations and capital structure in comparison to industry peers.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value through dividend increases and strategic initiatives if the Reporting Persons' engagement is successful.
• Management/Board: Will likely face increased scrutiny and pressure to address the concerns raised by the activist investor.

Next Steps

• Reporting Persons will continue to review their investment in the Issuer.
• Reporting Persons intend to engage in discussions with the Issuer's management and Board.
• Reporting Persons may take further actions with respect to their investment, including open-market or privately negotiated transactions, to effect changes or transactions.

Key Dates

Recommendation

Gratia Capital's significant stake and stated intent to engage TPG RE Finance Trust's management on value-enhancing initiatives, such as dividend increases and strategic positioning, introduces a catalyst for potential share price appreciation. However, the success of these engagements and the actual implementation of changes remain uncertain. Therefore, a 'hold' recommendation is appropriate to observe the developments and outcomes of this activist involvement before making a more definitive investment decision.

Keywords

TPG RE Finance Trust, Gratia Capital, Steve Pei, Schedule 13D, Activist Investor, Beneficial Ownership, Mortgage REIT, Dividend Increase, Strategic Initiatives, Corporate Governance