TPG talking to Merrill

Private-equity firm TPG is looking to play a bigger role in the financial sector. The firm, which earlier this month led a group that invested $7 billion in Washington Mutual (WM), has been discussing closer ties with Merrill Lynch (MER), the Financial Times reports. Merrill chief John Thain has said Merrill doesn’t need new capital, but TPG is “hoping to get the first call” if that changes, the FT reports. Merrill has also talked with TPG and others about being co-investors in the firm’s private-equity ventures, The Wall Street Journal reports.

TPG isn’t limiting its discussions to Merrill, however. Reuters reports that the private equity firm, run by David Bonderman, has held a number of discussions with other financial institutions in recent months as it seeks to put $20 billion in “dry powder” to work. TPG was among the buyers of $12 billion of leveraged loans from Citi (C) last week, Reuters reports. It adds that TPG “aims to position itself as one willing and able to put up capital for minority stakes in financial institutions” as firms tally up the damage from the credit crunch. With Goldman Sachs analysts predicting this week that Ambac (ABK) and MBIA (MBI) alone will need to raise $3.4 billion each, it seems clear that there will be plenty of opportunity for firms like TPG to make their mark.