Q4 2023 P10 Inc Earnings Call

Operator: Hello, and welcome to the P10 fourth quarter and year-end 2023 conference call. My name is Josh, and I will be coordinating your call today. At this time, all participants are in a listen-only mode.

Hello, and welcome to the P 10 fourth quarter and year end 2023 conference call. My name is Josh and I'll be coordinating your call today at this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

Operator: After the speaker's presentation, there will be a question and answer session. As a reminder, today's conference call is being recorded. I will now hand the call over to your host, Mark Hood, EVP of Operations and Chief Administrative Officer. Mark, please go ahead.

As a reminder, today's conference call is being recorded I will now hand, the call over to your host Mark Hood EVP of operations and Chief administrative officer Mark. Please go ahead.

Mark C. Hood: Good afternoon, and welcome to the P-10 fourth quarter in year-end 2023 conference. Today, we will be joined by Luke Sarsfield, Chief Executive Officer, and Amanda Coussens, Chief Financial Officer. Before we begin, I'd like to remind everyone that this conference call, as well as the presentation slides, may constitute forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current plans, estimates, and expectations and are inherently uncertain. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risk factors and uncertainties that are described in greater detail in our earnings release and in our periodic reports filed from time to time with the FCC. The forward-looking statements included are made only as of the date hereof.

Good afternoon, and welcome to the <unk> fourth quarter and year end 2023 conference call.

Today, we will be joined by Luxe, Hartsfield, Chief Executive Officer, and Amanda Cousins, Chief Financial Officer.

Before we begin I'd like to remind everyone that this conference call as well as the presentation slides may constitute forward looking statements within the meaning of the federal Securities laws.

The private Securities Litigation Reform Act of 1995.

Forward looking statements reflect management's current plans estimates and expectations and are inherently uncertain.

Actual results for future periods may differ materially from those expressed or implied by these forward looking statements due to a number of risk factors and uncertainties that are described in greater detail in our earnings release and in our periodic reports filed from time to time with the SEC.

Forward looking statements included are made only as of the date hereof, we undertake no obligation to update or revise any forward looking statements as a result of new information or future events.

Luke A. Sarsfield: We undertake no obligation to update or advise on any forward-looking statements as a result of new information or future events, except as otherwise required by law. During the call, we will also discuss certain non-GAAP measures which we believe can be useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release and our filings with the SEC. I will now turn the call over to you. Thank you, Mark. Good afternoon to everyone, and thank you for joining us.

Seth as otherwise required by law.

During the call. We will also discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release and our filings with the SEC.

I will now turn the call over to Luke.

Thank you Mark good afternoon to everyone and thank you for joining us on.

Luke A. Sarsfield: On our call today, I'm going to provide an overview of our 2023 performance, share some key observations from my first four months as CEO, and lay out our plan for the year ahead. P10 delivered strong fourth quarter and full year operating results in 2023, which demonstrated the strength of our strategies and our position as a leading specialized private market solutions platform. In 2023, we generated double-digit top-line growth and strong profitability. For the full year, fee-paying AUM increased by 10%, revenues increased by 22%, and adjusted EBITDA rose by 16%.

On our call today I'm going to provide an overview of our 2023 performance share. Some key observations from my first four months as CEO and lay out our plan for the year ahead.

<unk> delivered strong fourth quarter and full year operating results in 2023, which demonstrated the strength of our strategies and our position as a leading specialized private market solutions platform.

In 2023, we generated double digit topline growth and strong profitability for the full year fee paying AUM increased by 10% revenues increased by 22% and adjusted EBITDA rose by 16%.

Luke A. Sarsfield: It bears repeating, P-10 surpassed its two-year gross fundraising expectations of $5 billion six months early, and by the end of 2023, we had raised an incremental $2 billion above our original target. Despite the underlying strength of our platform and our positive financial results since going public in 2021, we continue to face pressure on our valuation. Across most metrics, we trade at a meaningful discount to our alternatives peer group.

It bears repeating <unk> surpassed its two year gross fundraising expectations of $5 billion six months early and by the end of 2023, we had raised an incremental $2 billion.

Above our original target.

Despite the underlying strength of our platform and our positive financial results since going public in 2021, we continue to face pressure on our valuation.

Cross most metrics, we trade at a meaningful discount to our alternatives peer group.

Luke A. Sarsfield: While we believe this presents a compelling entry point for investors, today, we are focused on closing that relative valuation gap through strategic execution underscored by transparent communication. We believe that as we articulate and execute on our new strategic initiatives, the market will take notice and reward shareholders. When we talk about our ownership base, it's important to note that P-10 employees make up the largest ownership position in our shareholder register.

We believe this presents a compelling entry point for investors today, we are focused on closing that relative valuation gap through strategic execution underscored by transparent communication.

We believe that as we articulate and execute on our new strategic initiatives the market will take notice and reward shareholders.

When we talk about our ownership base, it's important to note that <unk> employees make up the largest ownership position and our shareholder Register.

Luke A. Sarsfield: This is a reflection of our collective conviction in the intrinsic value of our platform. We are firm believers that this ownership stake results in strong alignment between the company and our broader shareholder base. During the fourth quarter, we bought back 859,600 shares at an average share price of $9.74.

This is a reflection of our collective conviction and the intrinsic value of our platform.

We are firm believers that this ownership stake results and strong alignment between the company and our broader shareholder base.

During the fourth quarter, we bought back 859600 shares at an average share price of $9 74.

Luke A. Sarsfield: Further, our Board of Directors has approved a $40 million expansion of P10's current share repurchase program. With $10.6 million remaining on our previous $20 million buyback authorization, we now have over $50 million available for repurchases. We have never been more confident in the franchise and its future, and we are evaluating every possible avenue to deliver long-term value for our shareholders. Since being appointed CEO in October, I have had the opportunity to holistically engage in almost every aspect of P-10's operations. That has allowed me to gain a deeper understanding of the organization. It was important for me to get to know our teams, and equally as critical for them to get exposure to me.

Further our board of directors has approved a $40 million expansion of <unk> current share repurchase program with $10 $6 million remaining on our previous $20 million buyback authorization. We now have over $50 million available for repurchases, we have never been more confident in the franchise.

And its future and are evaluating every possible avenue to deliver long term value for our shareholders.

Since being appointed CEO in October I have had the opportunity to holistically engaged in almost every aspect of <unk> operations.

It has allowed me to gain a deeper understanding of the organization.

It was important for me to get to know our teams and equally as critical for them to get exposure to me.

Luke A. Sarsfield: I spent the last two months of 2023 on a listening tour across a broad array of important constituencies, visiting with them in person, hearing their perspectives, gaining insights as to what P10 does well, and learning how we can continue to enhance the organization and its processes. In addition to visiting with each of our strategies in person and engaging with our employees, I had the privilege of spending time with many of our clients and limited partners, both current and prospective, as well as our investors and analysts. With the benefit of that insight, I can say with confidence that P10 is a world-class business made up of the leading minds in the middle market alternative investment space. Moreover, our managers all have a world-class track record of investing excellence that has resulted in high levels of trust with our LPs. Trust is not something we can buy or create in the short term.

I spent the last two months of 2023 on a listening tour across a broad array of important constituencies visiting with them in person hearing their perspectives and gaining insights as to what <unk> does well and learning how we can continue to enhance the organization and its processes.

In addition to visiting with each of our strategies in person and engaging with our employees.

I had the privilege to spend time with many of our clients and limited partners, both current and perspective as well as our investors and analysts.

With the benefit of that insight I can say with confidence that <unk> is a world class business made up of the leading mines in the middle market alternative investment space. Moreover, our managers all have a world class track record of investing excellence that has resulted in high levels of trust with our Lps.

Just is not something we can buy or create in the short term I take that trust very seriously and we plan to build on the immense credibility our managers have achieved in this next chapter of our growth.

Luke A. Sarsfield: I take that trust very seriously, and we plan to build on the immense credibility our managers have achieved in this next chapter of our growth. The solid foundation that has been built to date will form the basis of our success going forward. As we look to 2024 and beyond, our strategic priorities are as follows. First, institutionalize our platform and optimize our corporate-level organizational structure. Second, drive increased organic growth by expanding our existing client franchise through programmatic cross-selling and strategic partnerships. Third, implement a robust, disciplined, and process-driven approach to inorganic growth.

The solid foundation that has been built to date will form the basis of our success going forward as.

As we look to 2024 and beyond our strategic priorities are as follows.

First institutionalize, our platform and optimize our corporate level organizational structure.

Second drive increased organic growth by expanding our existing client franchise through programmatic cross selling and strategic partnerships.

Third implement a robust disciplined and process driven approach to inorganic growth.

Luke A. Sarsfield: Fourth, generate operational efficiencies through incentivizing collaboration and leveraging data insights. And finally, enhance our shareholder communications with an eye to greater visibility and transparency. These priorities set the stage for an exciting 2024 as we invest to accelerate profitable growth in 2025 and beyond. We have aggressive goals with a road map to achieve them. Executing on our plan will not occur overnight, but progress will be evident as we report each quarter.

Fourth generate operational efficiencies through Incentivising collaboration and leveraging data insights and finally enhance our shareholder communications with an eye to greater visibility and transparency.

These priorities set the stage for an exciting 2024, as we invest to accelerate profitable growth in 2025 and beyond.

We have aggressive goals with a roadmap to achieve them executing.

Executing on our plan will not occur overnight, but progress will be evident as we report each quarter. We also plan to share more about our long term strategy at <unk> first investor day in the fall of this year.

Luke A. Sarsfield: We also plan to share more about our long-term strategy at P10's first Investor Day in the fall of this year. As I said at the beginning of the call, P-10 employees are firmly aligned with our shareholder base. When we execute on this strategy, all P-10 stakeholders benefit. Now, let's dive a bit deeper into each of our priorities.

As I said at the beginning of the call P. 10 employees are firmly aligned with our shareholder base when we execute on this strategy all <unk> stakeholders benefit.

Now, let's dive a bit deeper on each of our priorities.

Luke A. Sarsfield: First, we are going to institutionalize our platform and optimize our corporate-level organizational structure. In a trust and performance business, our people are our greatest asset, and we must set up an appropriate structure to drive success and accountability in this next phase of our growth. With that in mind, I would like to thank our retiring Chief Operating Officer, Fritz Souder, for his contributions to P-10. He was a founding partner at RCP and has done an outstanding job for our limited partners, our shareholders, and our employees. We thank Fritz for all he has done and wish him the very best.

First we are going to institutionalize, our platform and optimize our corporate level organizational structure.

In a trust in performance business, our people are our greatest asset.

And we must set up an appropriate structure to drive success and accountability in this next phase of our growth.

With that in mind I would like to thank our retiring chief operating officer Fritz Souder for his contributions to <unk>.

He was a founding partner at RCP and has done an outstanding job for our limited partners, our shareholders and our employees. We thank Fritz for all he has done and wish him the very best.

Luke A. Sarsfield: Our go forward corporate level organizational structure has four key functional areas, each led by a senior executive vice president-level leader reporting directly to me. Our outstanding EVP, CFO, and CCO, Amanda Coussens, will continue to lead the finance, audit, accounting, legal, and compliance team. Amanda's contributions to P-10 cannot be overstated, as she has helped build the strong financial and compliance functions that have positioned P-10 for continued organic and inorganic growth. To further augment our legal and compliance framework, she will lead the external search to identify and recruit a General Counsel and Chief Compliance Officer to further enhance our P-10 control framework. Mark Hood has been elevated to the role of EVP of Operations and Chief Administrative Officer.

Our go forward corporate level organizational structure has four key functional areas. Each led by a senior executive Vice President level leader reporting directly to me.

Our outstanding EVP, CFO and CCL, Amanda cousins will continue to lead the finance audit accounting legal and compliance teams amanda's contributions to <unk> cannot be overstated as she has helped build a strong financial and compliance functions that have positioned <unk> for continue.

Organic and inorganic growth.

To further augment our legal and compliance framework. She will lead the external search to identify and recruit a general counsel and chief compliance officer to further enhance our P 10 control framework.

Mark Hood has been elevated to the role of EVP of operations and Chief administrative officer in this newly created role Mark will oversee our operations data and technology human resources public relations and communications and he will continue in his oversight of our Investor relations function.

Luke A. Sarsfield: In this newly created role, Mark will oversee our operations, data, and technology, human resources, public relations, and communications, and he will continue in his oversight of our investor relations function. Mark has been foundational to P-10 since its IPO, and I'm incredibly excited about his expanded role.

Mark has been foundational to <unk> since its IPO and I am incredibly excited about his expanded role.

Luke A. Sarsfield: I am thrilled to report that we have hired a world-class professional to serve as our EVP, Head of Strategy and M&A. R.J. Jensen is an incredibly talented seasoned professional with over 20 years of experience at Goldman Sachs, Guggenheim Securities, and Perella Weinberg Partners. RJ will oversee our corporate strategy and lead our corporate development and M&A activities. Inorganic growth will be a core growth driver for

Next.

I am thrilled to report that we have hired a world class professional to serve as our EVP head of strategy and M&A.

RJ Jensen is an incredibly talented seasoned professional with over 20 years of experience at Goldman Sachs Guggenheim Securities and Perella Weinberg partners.

RJ will oversee our corporate strategy and lead our corporate development and M&A activities inorganic growth will be a core growth driver for <unk> RJ will be instrumental in building a scalable M&A blueprint identifying key strategic opportunities for <unk> and executing on M&A transactions.

Luke A. Sarsfield: RJ will be instrumental in building a scalable M&A blueprint, identifying key strategic opportunities for P10, and executing on M&A transactions. Additionally, we are going to continue to invest in our client franchise. To lead this effort, we are seeking an experienced industry veteran. This person will oversee our client organization, including client relationships, distribution, marketing, and product development, and will work closely with client leaders across our various strategies. As we scale the platform, we're going to build a best-in-class distribution network for our products across strategies. We strongly believe the head of distribution will be critical to maximizing the value of each client relationship.

Additionally, we are going to continue to invest in our client franchise to lead. This effort, we are seeking an experienced industry veteran.

This person will oversee our client organization, including client relationships distribution marketing and product development and will work closely with client leaders across our various strategies.

As we scale the platform, we're going to build a best in class distribution network for our products across strategies. We strongly believe the head of distribution will be critical to maximizing the value of each client relationship.

Luke A. Sarsfield: Given the importance of finding the right person for this role, we have retained a leading recruiting firm with deep expertise in this area, and we are working closely with them in earnest to find the right leader for this function. Second, we plan to drive increased organic growth by expanding our existing client franchise through programmatic cross-selling and strategic partnerships. P-10 is fortunate to have a large and growing global LP base, and we need a scalable and replicable process for expanding our influence with current and prospective LPs. Our new head of distribution will be responsible for building this framework to demonstrate progress against our goals. We intend to provide additional details on this topic throughout 2024, culminating at P-TEN's inaugural Investor Day this fall. Third, we are implementing a robust, disciplined, and process-driven approach to inorganic growth. My background is in dealmaking and alternative asset management.

Given the importance of finding the right person for this role we have retained a leading recruiting firm with deep expertise in this area and we are working closely with them in earnest to find the right leader for this function.

Second we plan to drive increased organic growth by expanding our existing client franchise through programmatic cross selling and strategic partnerships.

<unk> is fortunate to have a large and growing global LP base, and we need a scalable and replicable process for expanding our influence with current and prospective Lps.

Our new head of distribution will be responsible for building this framework to demonstrate progress against our goals. We intend to provide additional details on this topic throughout 2024, culminating at P times inaugural Investor Day. This fall.

Third we are implementing a robust disciplined and process driven approach to inorganic growth.

My background is in dealmaking, and an alternative asset management.

Luke A. Sarsfield: I've spent decades doing those two things at the highest level and strongly believe that we are positioned to execute deals on a global scale. We plan to increase our footprint, which will also enhance our relationship network. This will mean navigating new jurisdictions and regulations, and that's where we're going to be selective but opportunistic in this pursuit.

Decades doing those two things at the highest level and strongly believe that we are positioned to execute deals on a global scale.

We plan to increase our footprint, which will also enhance our relationship network. This will mean navigating new jurisdictions and regulations and that's why we're going to be selective but opportunistic in this pursuit.

Luke A. Sarsfield: As our head of M&A, R.J. Jensen will leverage his vast experience to re-accelerate our M&A engine. Fourth, we plan to drive operational efficiencies through incentivizing collaboration and leveraging data insights. As we focus on accelerated growth in 2025, we need to ensure our operational structure is optimized and designed to encourage efficiency and collaboration across our strategies. We also plan to share more data with the investment community in a format more aligned to our peers.

As our head of M&A RJ Jensen will leverages vast experience to Reaccelerate, our M&A engine.

Fourth we plan to drive operational efficiencies through Incentivising collaboration and leveraging data insights as.

As we focus on accelerated growth in 2025, we need to ensure our operational structure is optimized and designed to encourage efficiency and collaboration across our strategies. We also plan to share more data with the investment community in a format more aligned to our peers. We will communicate how we are leveraging the collective strengths of our platform.

Luke A. Sarsfield: We will communicate how we are leveraging the collective strengths of our platform more regularly. Finally, we plan to meaningfully enhance our shareholder communications with an eye to greater visibility and transparency. I believe that in order to assess the progress we are making on these previous four initiatives, the investment community needs a clear and understandable framework through which to evaluate P10's performance, both on an absolute and a relative basis.

More regularly.

Finally, we plan to meaningfully enhance our shareholder communications with an eye to greater visibility and transparency.

I believe that in order to assess the progress we are making against these previous four initiatives the investment community needs, a clear and understandable framework through which to evaluate <unk> performance, both on an absolute and a relative basis.

Luke A. Sarsfield: As such, we are going to begin rolling out KPIs that allow our key stakeholders to get their arms around the huge opportunity we're capitalizing on. We will have more to report in future quarters as we work through specific details with our audit partners and audit committee, and we look forward to updating you accordingly. Now, let's turn to our outlook for 2024.

As such we are going to begin rolling out kpis that allow our key stakeholders to get their arms around the huge opportunity. We're capitalizing on we will have more to report in future quarters as we work through specific details with our audit partners and audit Committee and we look forward to updating you appropriately.

Now, let's turn to our outlook for 2024.

Luke A. Sarsfield: Starting with fee-paying AUM, we anticipate we will organically raise more than $2.5 billion of gross new assets across the platform. We expect double-digit revenue growth that is driven both by this fundraising activity as well as positive fee rate dynamics. We also hope that in 2024, we will announce at least one strategic transaction. As it relates to adjusted EBITDA margin, we expect margins to average in the mid 40s, excluding the effect of acquisitions.

Starting with fee paying AUM, we anticipate we will organically raised more than $2 5 billion of gross new assets across the platform.

We expect double digit revenue growth that is driven both by this fundraising activity as well as positive fee rate dynamics.

We also hope that in 2024, we will announce at least one strategic transaction.

As it relates to adjusted EBITDA margin, we expect margins to average in the mid <unk>. Excluding the effect of acquisitions. There are two dynamics at play here that I'd like to highlight.

Luke A. Sarsfield: There are two dynamics at play here that I'd like to highlight. The first is an ongoing makeshift within our existing portfolio of strategies. As we have previously noted, some of our newer and faster-growing businesses, such as Bonacord, Hark, and WTI, have lower core adjusted EBITDA margins than other parts of our business, and the overall margin will continue to reflect this evolution. The second influence on margins is the critical and foundational human capital investments we are making in the business. We expect these investments to drive core growth and provide a high ROI for investors. As we move into the new year, we will begin using the common descriptor F.R.E.

The first is an ongoing mix shift within our existing portfolio of strategies. As we have previously noted some of our newer and faster growing businesses, such as Bon Accord Park and <unk> have lower core adjusted EBITDA margins than other parts of our business and the overall margin will continue to reflect this evolution.

Yeah.

The second influence on margins is the critical and foundational human capital investments, we are making in the business. We expect these investments to drive core growth and provide a high ROI for investors.

As we move into the new year, we will begin using the common descriptor F. R E or fee related earnings in our financial reporting.

Luke A. Sarsfield: or fee-related earnings in our financial reporting. Before I hand the call over to Amanda, I want to acknowledge some of the recent noise in the marketplace regarding a previously disclosed related party transaction with Crossroads. In step with enhanced transparency, we want to speak directly and clearly on this matter. The transaction was reviewed, approved, and disclosed in keeping with the appropriate governance controls P-10 has in place. P-10 did not invest any capital in Crossroads.

Before I hand, the call over to Amanda I want to acknowledge some of the recent noise in the marketplace regarding a previously disclosed related party transaction with crossroads.

In step with enhanced transparency, we want to speak directly and clearly on this matter.

The transaction was reviewed approved and disclosed in keeping with the appropriate governance controls P 10 has in place.

<unk> did not invest any capital and crossroads.

Luke A. Sarsfield: The institutional investors who did invest in Crossroads did so on a non-discretionary basis and conducted their own rigorous due diligence. The transition of our founders and former co-CEOs had absolutely nothing to do with the related party transaction. Robert Alpert and Clark Webb will continue in their current roles as Executive Chairman and Executive Vice Chairman, respectively. And finally, a committee of our independent directors commissioned Wilkie, Farr, and Gallagher, a third-party law firm, to conduct a comprehensive investigation of the transaction. The committee, the broader board, and the law firm all found that our governance provisions were properly followed.

The institutional investors, who did invest in crossroads did show on a non discretionary basis and conducted their own rigorous due diligence.

The transition of our founders and former co Ceos had absolutely nothing to do with the related party transaction, Robert Alpert and Clark Web will continue in their current roles as executive Chairman and executive Vice Chairman respectively.

Finally, a committee of our independent directors commissioned Willkie Farr and Gallagher, a third party law firm to conduct a comprehensive investigation of the transaction the <unk>.

Committee, the broader board and the law firm all found our governance provisions were properly followed.

Luke A. Sarsfield: To close, I want to remind shareholders that the fundamentals of P10's business remain exceptionally strong. While we view this year as a table-setting year ahead of acceleration in 2025 and beyond, we are a world-class platform that has momentum across world-class strategies. We are committed to transparency and delivering our investors transparency. With that, I'll turn the call over to Amanda to further review our financial results. Thank you, Luke.

To close I want to remind shareholders that the fundamentals of <unk> business remain exceptionally strong.

While we view this year as a table setting year ahead of acceleration in 2025 and beyond we are a world class platform that has momentum across world class strategies, we are committed to transparency and delivering our investors transparent disclosure.

With that I'll turn the call over to Amanda to further review our financial results.

Amanda Nethery Coussens: In the fourth quarter, fee-paying assets under management were $23.3 billion, a 10% increase on a year-over-year basis. In the fourth quarter, $860 million of fundraising and capital deployment was offset by $297 million in step-downs and expirations. For the first half of 2024, we estimate $1.2 billion in step downs and expirations. For the second half of 2024, we estimate an additional $300 million. Revenue in the fourth quarter was $63.1 million, an 8% increase over the fourth quarter of 2022. Year-over-year revenue increased from $198.4 million to $241.7 million, up 22%.

Thank you Luke and then fourth quarter fee paying assets under management were $23 3 billion.

At 10% increase on a year over year basis.

In the fourth quarter $860 million that fundraising and capital deployment with that thank.

<unk> hundred $97 million and step downs in exploration.

And the first half of 'twenty 'twenty, four we estimated $1 2 billion.

<unk> exploration in the second half of 2024, we estimate an additional $300 million.

Revenue in the fourth quarter was $63 1 million, an 8% increase over the fourth quarter of 2020.

Year over year revenue increase from $198 4 million.

$141 7 million up 22%.

Amanda Nethery Coussens: The average fee rate in the fourth quarter was 109 basis points, driven by higher fee rates and direct strategies becoming a larger part of our fee-paying AUM net. Before I continue with our results, I'd like to provide insight into a one-time event that impacted the performance of our venture equity strategy, Truebridge, in the fourth quarter. If not for this event, we would have recognized an additional $3.1 million of revenue and $2.7 million of adjusted EBITDA. Truebridge Global Premier One, or TGP One, was raised in 2022 with the objective of investing in all funds raised by an undisclosed manager's global platform across two vintages. 2022 and 2024-2025. Truebridge closed PGP-1 with a total of $275 million of external LP capital, $250 million we were confident of deploying, and $25 million for research. PGP only charged management fees on the $250 million at a 1% rate.

Average fee rate in the fourth quarter with 109 basis points.

And by higher E rate direct strategy, becoming a larger part of our fee paying AUM mix.

Before I continue with our results I'd like to provide insight into a one time event that impacted the performance of our adventure equity strategy three brands in the fourth quarter. If not for this event, we would have recognized an additional $3 $1 million of revenue and $2 7 million of adjusted EBITDA.

Sure Rich global Premier one or T. J P. One was raised in 2020 with the objective of investing and all have been raised by an undisclosed managers global platform across key advantages.

22, and 2020 for 2025.

<unk> closed <unk>, one with a total of $275 million and external LP capital $250 million, we were confident of decline and $25 million for research.

CGP only charge management fees on the $250 million at a 1% rate.

Amanda Nethery Coussens: PGP-1 deployed just under 40% of its total fund size and the 2022 ventages, with the remaining 60% planned for 2024-2025 Vintages and Reserves. In late 2023, the undisclosed manager announced it would be separating its global platform by sending out its India and China operations into their own independent firms. The TGP-1 mandate did not allow investments in these new independent firms.

<unk> deployed just under 40% of the total fan site and the 2022 vintages.

With the remaining 60% planned for 2020 for 2025 vintages and was there.

In late 2023, the undisclosed manager announced it would be separating global platform by spinning out of India, and China operations and to their own independent firms.

The PGP one mandate did not allow investments in these new independent firms.

As a result, we recommended that LTE <unk> LTE <unk> LTE from their Uninvested capital and we distributed a consent election to that effect.

Amanda Nethery Coussens: As a result, we recommended that LPs vote to release LTGP-1 LPs from their uninvested capital, and we distributed a consent election to that effect. The management fee from inception will be revised based on this new smaller fund size. In addition, to preserve goodwill with our limited partners, we have waived 50 percent of the recalculated management fee from inception June 2022 to December 2023. Turning now to our other strategy. In the quarter, we had 12 funds in the market and saw broad participation across our platform. Our private equity strategies raised and deployed $324 million.

The management fee from inception will be revised based on this new smaller funds side. In addition to preserve goodwill with our limited partners. We have waived 50% of the recalculated management fee from inception in 2020 to December 2023.

Turning now to our other strategies.

In the quarter, we had 12 funds in the market and thought broad participation across our platform, our private equity strategies raised and deployed $324 million.

Our venture equity strategy raised $299 million or credit Libre and deployed $209 million impact team contributed $28 million.

<unk> continues to benefit from strategy with long track record of generating durable alpha and offering best in class investment opportunity to our global investors.

Amanda Nethery Coussens: Our venture equity strategy raised $299 million. Our credit sleeve raised and deployed $209 million, while our impact team contributed $28 million. P10 continues to benefit from strategies with long track records of generating durable alpha and offering best-in-class investment opportunities to our global investors. Operating expenses in the fourth quarter were $57.7 million, a 10% increase over the same period a year ago.

Operating expenses in the fourth quarter with $57 7, million% to 10% increase over the same period a year ago.

For the full year 2023 operating expenses were $228 8, million% to 43% increase over 2022.

The increase was primarily driven by additional compensation benefits and noncash stock based compensation expense related to the acquisition of backward Hark and WTS.

Amanda Nethery Coussens: For the full year 2023, operating expenses were $228.8 million, a 43% increase over 2022. The increase was primarily driven by additional compensation, benefits, and non-cash stock-based compensation expense related to the acquisitions of Thonacore, Hark, and WTI. Gap's net loss in the fourth quarter was $1.9 million, a 139% decrease when compared to the year-ago period.

GAAP net loss in the fourth quarter was $1 9 million.

139% decrease when compared to the year ago period.

On a year over year basis, GAAP net income decreased.

$9 4 million to a net loss of $7 8 million.

GAAP net loss is primarily attributable to compensation expense and noncash stock based compensation related to the CEO transition and the acquisition of Bon Accord heart and WTS.

Amanda Nethery Coussens: On a year-over-year basis, GAAP net income decreased from $29.4 million to a net loss of $7.8 million. The GAAP net loss is primarily attributable to compensation expense and non-cash stock-based compensation related to the CEO transition and the acquisitions of Bonacord, Hark, and WTI. Adjusted EBITDA in the fourth quarter was $30.7 million, in line with $30.8 million in the fourth quarter of 2022. For the year, Adjusted EBITDA grew from $106.8 million to $123.6 million, a 16% increase. For the quarter, our adjusted EBITDA margin was 48.7%, and for the full year, it was 51.1%. For the fourth quarter, Adjusted Mid-Income, or ANI, was $25.5 million, a 7% decrease over the $27.3 million reported in the fourth quarter of 2022. For the year, A&I increased from $97.9 million to $102 million, equaling a 4% increase. Fully diluted ANI EPS on a year-over-year basis grew 2% to $0.82 per share. Cash and cash equivalents at the end of the fourth quarter were $30.5 million.

Adjusted EBITDA in the fourth quarter with $30 7 million in line with $38 million in the fourth quarter of 2022 for.

For the year adjusted EBITDA grew from $106 8 million to $123 6, million% to 16% increase.

For the quarter, our adjusted EBITDA margin was 48, 7%.

And for the full year was 51, 1%.

For the fourth quarter, adjusted net income or Eni with $25 5 million.

1% decrease over the $27 $3 million reported in the fourth quarter of 2022.

For the year Eni increased from $97 9 million to 102 million equaling a 4% increase.

Fully diluted EPS on a year over year basis grew 2% to ADT per share.

Cash and cash equivalents at the end of the fourth quarter were $30 5 million at December 31, 2023, we had an outstanding debt balance of $292 6 million and $71 $8 million available on our revolver.

As of today, we have $273 6 million, an outstanding debt with $98 million available on our credit facility.

We also continue to pay our quarterly dividend for class, a and class B common stock we have declared a dividend of three and a quarter cents per share payable on March 26, 2024 to stockholders of record as of the close of business on March 11 2024.

Amanda Nethery Coussens: At December 31, 2023, we had an outstanding debt balance of $292.6 million and $71.8 million available on the revolver. As of today, we have $273.6 million in outstanding debt with $90.8 million available on the credit facility. We also continue to pay our quarterly dividends for Class A and Class B common stock. We have declared a dividend of three and a quarter cents per share, payable on March 26, 2024, to stockholders of record as of the close of business on March 11, 2024. Finally, as of December 31, 2023, our Class A shares outstanding were $57,622,895 and Class B shares outstanding were $58,474,267.

Finally as of December 31, 2023 class a shares outstanding were $57 million 622895.

<unk> B shares outstanding were $58 million or 174267.

Thank you for your time today, and we look forward to building strong momentum in 2024, as we seek to accelerate growth in 2025, I will now pass the call over to the operator to begin the Q&A session.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.

Yes.

Our first question comes from Michael Cyprus with Morgan Stanley You May proceed.

Great. Thank you good afternoon. Good evening, Thanks for taking the question Luca hoping to come back to your commentary on the listening tour I was hoping you might be able to elaborate on some of the key takeaways that you had from your listening tour over the past couple of months curious what stood out what areas could.

Operator: Thank you for your time today, and we look forward to building strong momentum in 2024 as we seek to accelerate growth in 2025. I'll now pass the call over to the operator to begin the Q&A session. Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.

Could you enhance the organization in terms of processes and as you think about accelerating growth what do you see some of the key levers to pull where do you where are you looking to lean in and invest more as you look out over the next couple of years for Pizza hut. Thank you.

Operator: One moment for questions. Our first question comes from Michael Cyprys with Morgan Stanley. You may proceed. Great, thank you. Good afternoon. Good evening.

Thanks, Michael I. Appreciate the question. So I would say is as I mentioned in the script I think from the listening to our perspective, the first and most compelling thing that came away almost universally was the incredible strength of our investing franchises and the incredible kind of talent that we have in every one of our investing.

Michael J. Cyprys: Thanks for taking the question. Luke, I'm hoping to come back to your commentary on the listening tours, hoping you might be able to elaborate on some of the key takeaways that you had from your listening tour over the past couple of months. Curious what stood out, and what areas could you enhance the organization in terms of processes?

<unk> strategies that was first and foremost the second thing I would say it was kind of the trust and confidence that lp's have and continue to place in us and our ability to continue to drive and grow that LP base is really compelling and the third I would say is the broad base desire and alignment across our organization.

Michael J. Cyprys: And as you think about accelerating growth, what do you see as some of the key levers to pull? Where are you looking to lean in and invest more as you look out over the next couple of years?

<unk> to do the foundational work that we've talked about here and obviously with the hope that the end result of that will be a meaningful uplift in our share price over time as we talked about in sort of the dimunition or the elimination frankly, if that discount that we've had relative to the peers.

Luke A. Sarsfield: Thank you. Thanks, Michael. Appreciate the question. So I would say, as I mentioned in the script, I think from the listener's perspective, the first and most compelling thing that came away almost universally was the incredible strength of our investing franchises and the incredible kind of talent that we have, you know, in every one of our investing strategies. That was first.

So as we think about the growth perspective, right just sort of fundamentally there are two main areas, where we want to drive fundamental growth one is organic and as I mentioned, we're going to be leaning in hard in terms of being able to do that in a more comprehensive way and we really need kind of a foundational leader to work with me to.

Luke A. Sarsfield: The second thing I would say is the kind of trust and confidence that investors have and continue to place in us, and our ability to continue to drive and grow that LP base is really compelling. And the third thing I would say is the broad-based desire and alignment across our organization to do the foundational work that we've talked about here and, obviously, with the hope that the end result of that will be, you know, a meaningful uplift in our share price over time as we talked about and, you know, sort of the diminution or the elimination, frankly, of that discount that we've had relative to the peers. And so, as we think about the growth perspective right, just sort of fundamentally, there are two main areas where we want to drive fundamental growth. One is organic.

Help us do that and so as I mentioned, we're out aggressively looking in recruiting for a head of marketing ahead of distribution, that's going to help us drive that and then I think from there probably will continue to evaluate how we do that in the best most impactful and highest ROI way, but I think really having a key leader in that effort is foundational and critical.

And then you heard me talk about Inorganically, how we really want to drive the machine.

And really kind of live up to the promise that we made at the time of the IPO that we would do the right appropriate value enhancing strategic deals and obviously I have a background in that I'm thrilled that we were able to recruit a world class talent like RJ to help with that and I think collectively we're going to drive that and then I think the third place we're going to continue to look at.

Luke A. Sarsfield: And as I mentioned, we're going to be leaning in hard in terms of being able to do that in a more comprehensive way, and we really need kind of a foundational leader to work with me to help us do that. And so, as I mentioned, we're out aggressively looking and recruiting for a head of marketing, and a head of distribution that's going to help us drive that. And then I think from there, I will probably continue to evaluate how we do that in the best, most impactful, and highest ROI way, but I think really having a key leader in that effort is foundational and critical. And then you heard me talk about inorganically how we really want to drive the machine and really kind of live up to the promise that we made at the time of the IPO that we would, you know, do the right, appropriate value-enhancing And, you know, obviously, I have a background in that. I'm thrilled that we were able to recruit world-class talent like RJ to help with that.

Just across the breadth of our platform. Obviously, we have the benefit of scale breadth and we want to leverage those economies and we want to use that in a way that's sort of enhancing for each of our individual strategies and also for the <unk> platform at a hole, but those are kind of my high level takeaways and those are kind of the high level things as I mentioned on the call that we're going to do.

To really invest to reaccelerate growth.

Great. Thanks, So just a follow up question on fund raising I think you mentioned $2 5 billion dollar expectation for fund raising here in 'twenty four I, just hoping you could help unpack some of the key contributors for that what are you expecting in terms of funds scaling at this point any sort of contribution at this point from SMA that youre expecting.

Acting embedded in that $2 5 billion number and then what can we expect in terms of deployment that I imagine would be incremental to that two and a half relative to current dry powder levels. Thank you. Yes. So so all good questions and so just to give a little more flavor on that right. We are out in the market with a broad based group of funds this year.

Luke A. Sarsfield: And I think collectively we're going to drive that. And then I think the third place we're going to continue to look for is just across the breadth of our platform. Obviously, we have the benefit of scale and breadth, and we want to leverage those economies, and we want to use that in a way that's, you know, sort of enhancing for each of our individual strategies and also for the P10 platform as a whole. But those are kind of my high-level takeaways, and those are kind of the high-level things, as I mentioned on the call, that we're going to do to really Great, thanks.

Here is we are most years right and so we're kind of out with a fund in virtually all of our strategies I think actually this year in all of our strategies 15 funds in total.

Some cases were raising one large flagship fund in other cases, we're raising multiple funds targeted across the platform and I would tell you.

Michael J. Cyprys: So just a follow-up question on fundraising. I think you mentioned the two and a half billion dollar expectation for fundraising here in 24. I just hope you can help unpack some of the key contributors to that.

Although I think it's probably too early to call. The turn I think the dynamic in the marketplace among Lps.

Feels a little bit better right now than it probably has over the last couple of years.

Michael J. Cyprys: What are you expecting in terms of funds scaling at this point? Any sort of contribution at this point from SMA that you're expecting embedded in that two and a half billion number? And then what can we expect in terms of deployment that, I imagine, would be incremental to that two and a half billion relative to current dry powder levels? Thank you.

I think that's both a recognition that there are some attributes of the space. We play that are protected and attractive probably also just a broader view on the capital markets generally are doing better and so that probably leads into.

Kind of a better fund raising environment, but we're really excited.

About what we're going to be out with <unk>.

Luke A. Sarsfield: Yeah, so all good questions. And so just to give a little more flavor on it, right? We are out in the market with a broad-based group of funds this year, as we are most years, right? And so we're kind of out with a fund in virtually all of our strategies. I think actually this year, across all of our strategies, 15 funds in total. In some cases, we're raising one large flagship fund, and in other cases, we're raising, you know, multiple funds targeted across the platform. And I would tell you, although I think it's probably too early to call the turn, I think the dynamic in the marketplace among LPs feels a little bit better right now than it probably has over the last couple years.

We do think to your specific question.

That there is really an ability of ours to do.

On a broader base things across the platform and whether that comes to your question on SMA format or otherwise.

The specific form to be determined, but I think the opportunity to engage more broadly with more Lps and a more diverse way across the <unk> platform is a big opportunity set for us it's something we're really orienting ourselves towards and I think the whole idea of how you measure our success on that Michael we're going to be coming back out as we mentioned.

With what I would call augmented enhanced kpis, so that you and we can measure monitor and track that progress.

Great and just any views on the scaling of funds in 'twenty, four and views on deployment, which is that incremental potentially the two and a half.

Luke A. Sarsfield: I think that's, you know, both a recognition that there are some attributes of the space we play in that are protected and attractive and probably also just a broader view on, you know, that the capital markets generally are doing better. And so that probably leads into, you know, kind of a better fundraising environment. But we're really excited about what we're going to be out with.

Yes look I would say look we always think about opportunities to scale things.

And as you know many of our funds, we recognize an uncommitted, but some we recognize on deployed and so obviously, if we find ourselves in.

Luke A. Sarsfield: We do think, in relation to your specific question, you know, that there is really an ability of ours to do, you know, kind of broader things across the platform. And whether that comes to your question in SMA format or otherwise, you know, the specific form to be determined. But I think the opportunity to engage more broadly with more LPs in a more diverse way across the P10 platform is a big opportunity set for us. It's something we're really orienting ourselves towards. And I think the whole idea of how you measure our success on that, Michael. We're going to be coming back out, as we mentioned, with what I would call augmented enhanced KPIs, so that you and we can measure, monitor, and track that progress. Great.

More robust deployment environment that will create some upside as it might in any scenario I would say look I don't think our orientation to deployment as fundamentally changed.

We are very focused on being smart and opportunistic and to the extent that there are dislocated opportunities and we see things that we can take advantage of we're clearly going to lean in on those clearly some of our strategies are also what I would say somewhat too.

Tuned to the type of market environment. We're in I think about some of our credit strategies I think of our GP stake strategy is clearly things that are.

Secondary strategy as well as clearly things that are very attractive in terms of the market opportunities. We are seeing and in those cases, we're obviously not going to be shy about appropriately deploying capital in a way that generates value for our Lps.

Luke A. Sarsfield: And just any views on the scaling of funds in 24 and views on deployment, which is that potentially incremental to the two and a half? Yeah, look, I would say, look, we always think about opportunities to scale things. And as you know, many of our funds are recognized on committed, but some are recognized on deployed. And so obviously, if we find ourselves in a more robust deployment environment, that will create some upside, as it might in any scenario. I would say, look, I don't think our orientation to deployment has fundamentally changed. We are very focused on, you know, being smart and opportunistic.

Great. Thank you very much.

Thank you.

One moment for questions.

Our next question comes from Kenneth Worthington with Jpmorgan you May proceed.

Hi, good afternoon, and thanks for taking the question.

Maybe to first for Amanda one on the fee rate for your rate was 109 basis points. This quarter. I think you mentioned some mix changes influence the fee rate here given the funds kind of rolling on and rolling off what is sort of the range of fee rate, we could likely expect for 2024.

I believe that the fee rate that we're continuing to guide towards about 100 basis points.

Luke A. Sarsfield: And, you know, to the extent that we can, and to the extent that there are dislocated opportunities, and we see things, you know, that we can take advantage of, we're clearly going to lean in on those. Clearly, some of our strategies are also, I would say, somewhat attuned to the type of market environment we're in. I think about some of our credit strategies, I think of our GP stake strategy, as clearly things that are, you know, a secondary strategy, as well as clearly things that are very attractive in terms of the market opportunities we're seeing. And in those cases, we're obviously not going to be shy.

Okay. So so no change here, despite the pop up in the fourth quarter, yes.

Yes.

Okay, and then you mentioned.

The $1 $5 billion of step downs in 'twenty, four that's not that different than the.

Level of step Downs, we saw last year and I think last year was negatively impacted by the stepped out of like the older. The more recent vintage of <unk>. So I guess why so large in 'twenty four and is this really kind of the right pace for step downs as we look forward into the future.

Luke A. Sarsfield: about appropriately deploying capital in a way that generates value for our LPs. Great, thank you very much. Thank you. One moment for questions. Our next question comes from Kenneth Worthington with J.P. Morgan. You may proceed. Hi, good afternoon, and thanks for taking the question. Maybe two first for Amanda, one on the fee rate. The fee rate was one hundred nine basis points this quarter.

Sure.

And we would expect overall that our step downs will be about <unk>.

Five 3%.

Which.

For 2024 versus the seven 1% of overall <unk>.

For 2023.

That helps explain the difference.

Kenneth Brooks Worthington: I think you mentioned some mixed changes influenced the fee rate here. Given the fund kind of rolling on and rolling off, what is the sort of range of fees we could likely expect for 2024? I believe that the fee rate that we're continuing to guide towards is about $100,000. Okay, so no change here despite the pop-up in the fourth quarter.

Okay and is five 3% sort of the right pace.

Generally more or less into perpetuity or is there anything unusual good or bad about the pace in 'twenty four.

No I believe that it does.

Correct.

Yes.

Okay, and then one last one for Luke So you started or in your prepared remarks, you mentioned the stock had struggled.

Kenneth Brooks Worthington: Okay. And then you mentioned the $1.5 billion of step downs in 2024. That's not that different from the level of step downs we saw last year. And I think last year was negatively impacted by the step down of the older, more recent vintage of WTI.

I guess this is in part due to the perception of crossroads by P. 10 investors to what extent has crossroads made its way into conversations with your investment customers. So like the customers of RCP and hark in <unk> and sort of the individual managers is it Jeff.

Kenneth Brooks Worthington: So I guess, why so large in 2024? And is this really kind of the right pace for step downs as we look forward into the future? So we would expect overall that our step downs will be about 5.3%, which for 2024 versus the 7.1% of overall fee-paying AOM for 2023, that should explain the difference. Okay, and is 5.3% sort of the right pace? generally more or less into perpetuity, or is there anything unusual, good or bad, about the patient 24? No, I believe that is the correct page. Okay. And then there was one last one for Luke.

Just kind of a public shareholder issue or is this also kind of coming up and the.

Fund raising or relationship conversations you have with your customers.

Just so I understand the question you mean has it come up in our dialogue with the underlying Lps of our various strategies is that yes.

Yes, that's what I was really trying to say I just I asked it poorly.

I don't know you asked if I got the point.

Look I would say thankfully in many ways. It really hasnt come up we had I would say a couple inquiries around it that we responded to in a way that was very consistent with the way that we responded to another.

Kenneth Brooks Worthington: So you started, in your prepared remarks, you mentioned the stock had struggled. I guess this is in part due to the perception of crossroads by P10 investors. To what extent has crossroads made its way into conversations with your investment customers? So, like the customers of RCP and Hark and WTI and sort of the individual managers. Is it just kind of a public shareholder issue?

Firms, including with our public investors and I think the good news is our Lps have known us for a long time.

They put a lot of trust in us.

And I think they really know our individual managers and in most cases have been with us for a long time across multiple years across multiple vintages and so I think they know that we do world class business and a world class way and they're focused on that.

Kenneth Brooks Worthington: Or is this also kind of coming up in the fundraising or relationship conversations you have with your customers? And just so I understand the question, do you mean has it come up in our dialogue with the underlying LPs of our various strategies? Is that the question? Yeah, that's what I was really trying to say. I just asked it poorly.

So I think again.

That's it really has not in large part Ken and I hope to goodness it stays that way.

Great. Thank you.

Thank you.

One moment for questions.

Our next question comes from Mike Brown with <unk> you May proceed.

Great. Thank you for taking my questions.

I wanted to expand on the capital allocation strategy here, so I'm trying to parse through the buyback and the M&A commentary.

Kenneth Brooks Worthington: No, no, no. You asked it fine. I got the point. Look, I would say, thankfully, in many ways, it really hasn't come up.

Luke A. Sarsfield: We had, you know, I would say a couple of inquiries around it that we responded to in a way that was very consistent with the way that we responded to it in other forums, including with our public investors. And I think, you know, the good news is that our LPs have known us for a long time. They put a lot of trust in us, and I think they really know our individual managers and, in most cases, have been with us for a long time, across multiple years, across multiple vintages. And so I think they know that we do world-class business in a world-class way, and they're focused on that. And so I think, again, you know, it really has not, in large part, Ken, and I hope, with all my goodness, it stays that way.

I guess my question would be how do you get back into the M&A market at your current valuation level does that effectively on hold until you start to narrow the discount that you mentioned versus versus peers and I guess, if that's the case does that mean, you'll be leaning on the buybacks more significantly near term.

Term.

And I guess, what would be kind of the right point, where you feel like your currency is back to a level that.

It could be more effective for M&A.

Well, let me I'll start if I could Mike. Thanks for the question I'll start just with on what I would call a broader M&A philosophy, and then I'll turn it over to Amanda to go through sort of how we would think about the capital allocation waterfall.

But your question is the right one does our current valuation impact our ability to do M&A and I would say I think it would in certain instances, but it would not in many other instances right and so the good news is one we have broad and robust access to capital equity capital is one part of that but we have.

Kenneth Brooks Worthington: Great, thank you. Thank you. One moment for questions. Our next question comes from Mike Brown with KVW. You may proceed. Great, thank you for taking my question. I wanted to expand on the capital allocation strategy here. So I'm trying to parse through the buyback and the M&A comment. I guess my question would be, how do you get back into the M&A market at your current valuation levels?

As Amanda went through meaningful access on the revolver and I think just meaningful credit capacity more broadly that's untapped at this point and so that would create our ability to do M&A I would say the second thing is not all M&A is necessarily going to come at valuations that are going to be somehow prohibitive to us I suspect.

Michael C. Brown: Is that effectively on hold until you start to narrow the discount that you mentioned versus peers? And I guess if that's the case, does that mean you'll be leaning on the buybacks more, near term, and I guess what would be kind of the right point, feel like your currency is back to a level that and more Well, let me start, if I could, Mike, thanks for the question. I'll start just with what I would call the broader M&A philosophy, and then I'll turn it over to Amanda to go through sort of how we would think about the capital allocation waterfall. But your question is the right one. Does our current valuation impact our ability to do M&A? And I would say I think it would in certain instances, but it would not in many other instances.

There are parts of the M&A market, given how robust it's gotten in the alternative space, where that would be more of an impediment, but I think we're looking broadly we're really focused I think there are places where that would not be the case as much and we think we will have ability to execute there I also think it sort of depends on the size of the M&A deal Youre looking at.

And so.

We may look at larger deals, but we may also look at a string of targeted kind of string of pearls acquisitions that would allow us to really drive incremental value in ways, where we wouldn't have to pay into that kind of frothy part of the market and so I want to be clear. We are really focused on doing M&A, but we're really focused on doing it in the room.

Luke A. Sarsfield: Right. And so the good news is, point one, we have broad and robust access to capital. Equity capital is one part of that. But we have, you know, as Amanda went through, meaningful access on the revolver, and I think just meaningful credit capacity more broadly that's untapped at this point.

<unk> value ROIC, creating way for our shareholders, we're not going to do something frivolous with our harder capital, we're going to be really disciplined but we do think there are opportunities out there in the near term, even given where we trade and with that I'll turn it to Amanda just to hit on some of the kind of broader capital allocation points.

Luke A. Sarsfield: And so that would create our ability to do M&A. I would say the second thing is that not all M&A is necessarily going to come at valuations that are going to be somehow prohibitive to us. I suspect there are parts of the M&A market, given how robust it's gotten in the alternative space, where that would be more of an impediment. But I think, you know, we're looking broadly; we're really focused. I think there are places where that would not be the case as much.

Yes.

In general our priorities of capital allocation remain our priorities for cash flow remain the same first dividend.

M&A.

Hi back and then paying down on the revolver to free up capital for future M&A.

Luke A. Sarsfield: And we think we will have the ability to execute there. But I also think, you know, it sort of depends on the size of the M&A deal you're looking at. Right. And so, you know, we may look at larger deals, but we may also look at, you know, a string of targeted kind of string of pearls acquisitions that would allow us to really drive incremental value in ways where we wouldn't have to pay into that kind of frothy part of the market. And so I want to be clear, we are really focused on doing M&A, but we're really focused on doing it in the right value-creating way for our shareholders. We're not going to do something frivolous with our hard-earned capital. We're going to be really disciplined.

As we said as of today, we have $98 million on our revolver available.

Given our free cash flow profile, we really are comfortable with a higher leverage ratio.

Today as well.

Okay, great. Thank you.

And then maybe another one.

You Amanda on the.

Margin outlook.

<unk> came in at 51% for the year, if I heard correctly you guys are guiding to a mid forty's adjusted EBIT margin for 2024, so it sounds like.

A pretty large delta there and it sounds like you guys are considering maybe some more infrastructure investments, but I was wondering if you could maybe just put a little finer point on that delta, what what's driving that difference.

Amanda Nethery Coussens: But we do think there are opportunities out there in the near term, even given where we trade. And with that, I'll turn it to Amanda just to hit on some of the kind of broader capital allocation. So, in general, our priorities for capital allocation remain, our priorities for cash flow remain the same: M&A, Buy Backs, and then Paying Down on the Revolver, and Defraying Capital for future M&A.

Yes.

So really there is an ongoing mix shift within our existing portfolio of strategies some of our newer and faster growing businesses, such as <unk> have a lower core adjusted EBITDA margin than other parts of our business and the overall margin will continue to reflect the evolution.

Michael C. Brown: And as we said, as of today, we have $90.8 million on the revolver available. And given our free cash flow profile, we really are comfortable with a higher leverage ratio than we. Okay, great. And then maybe another one for you, Amanda.

The second influence on margin is the critical and foundational human capital investments, we are making in the business. We expect these investments to drive our core growth and provide a high ROI for our investors.

So it's really.

Michael C. Brown: On the margin outlook, you know, margin came in at 51% for the year. If I heard correctly, you guys are guiding to a mid-40s adjusted EBITDA margin. So it sounds like there's a pretty large delta there, and it sounds like you guys are considering... infrastructure investments, but I was wondering if you could maybe put a little finer point on that delta, what's driving it. Yeah, so really, there's an ongoing mixed shift within our existing portfolio of strategies. Some of our newer and faster growing businesses, such as Bonacore, TARC, and WTI, have a lower core adjusted EBITDA margin than other parts of our business, and the overall margin will continue to reflect this evolution. I would say the second influence on margins is the critical and foundational human capital investments we're making in the future. We expect these investments to drive our core growth and provide a high ROI for our investors. It's really a mix of those two.

A mix of those two factors.

I guess is there a point at.

A certain point as you continue on your growth trajectory, where the margin.

We'll actually begin to inflect higher again.

Well.

Answer it this way and I would say it depends and it depends on a few things one is obviously it would depend on M&A. This all presumes that we're running the platform as it is for the foreseeable future as we've talked about we imagine that will probably not be the case and so anything we did from an M&A perspective would obviously have.

Some impact largely likely to be at least initially a margin dilutive impact I would say it also then depends on this question of relative growth rates right and so the question then becomes how is that relative growth rate on the one hand, you want your fast growing businesses to grow faster and growth as Val.

<unk>, even if that comes at a relatively relatively lower but still high margin.

The wider world and the wider opportunity set we do think I want to be clear that some of the foundational investments, we're making obviously they will be most impactful in the first year that you make them and then over time, you will see the accretive benefit of those investments bearing fruit. The question then will be.

Luke A. Sarsfield: I guess, is there a point at a certain point as you continue on your growth trajectory where the margin, Well, I'd answer it this way. And I'd say it depends, right. And it depends on a few things.

Luke A. Sarsfield: One is, obviously, it would depend on M&A; this all presumes that we're running the platform as it is for the foreseeable future. As we've talked about, we imagine that will probably not be the case. And so anything we did from an M&A perspective would obviously have some impact and be largely likely to be at least initially a margin diluted. I would say it also depends on this question of relative growth rates, right? And so the question then becomes, how is that relative growth rate? On the one hand, you want your fast-growing businesses to grow faster, and growth is valuable even if that comes at, you know, a relatively lower but still high margin versus the wider world and the wider opportunity set.

That accretive benefit relative to the ongoing mix shift that will still be happening on the forward. How does that trade off I don't know frankly today that we have perfect visibility on that some of it will depend on the relative growth rates and we're investing to grow everywhere and so in some places we're looking to reaccelerate growth and so look.

I would tell you I think the foundational investments, we're making are going to be highly accretive to the franchise highly ROI generally for the franchise and will help us drive accelerating growth and margin on the forward with some of the offsets I just noted.

Okay, great. Thank you for taking my questions.

Okay.

Thank you.

One moment for questions.

Our next question comes from Benjamin <unk> with Barclays. You May proceed.

Luke A. Sarsfield: We do think, I want to be clear, that some of the foundational investments we're making, obviously, will be most impactful in the first year that you make them. And then, over time, you will see the accretive benefit of those investments bearing fruit. The question then will be, that accretive benefit relative to the ongoing mix shift that will still be happening on the forward, how does that trade off? I don't know, frankly, today that we have perfect visibility on that.

Hi, good evening and thanks for taking the question I was hoping to revisit the revenue guidance. If we could just wanted to make sure I kind of have the details right. So it sounds like $2 5 billion plus of gross assets $1 5 billion of step downs. So that's about $1 billion of net fee paying AUM growth with maybe some upside from deployment. So that's like a little less than 10%.

And it sounds like if the fee rate in aggregate can be 105 could you just kind of maybe explain how the work out the double digit revenue growth maybe to start.

Michael C. Brown: Some of it will depend on the relative growth rates, and we're investing to grow everywhere. And so in some places, we're looking to re-accelerate growth. And so, look, I would tell you, I think the foundational investments we're making are going to be highly accretive to the franchise, highly ROI-generate for the franchise, and will help us drive accelerating growth and margin on the forward with some of the offsets I just noted. Okay, great, thank you for taking my call. Thank you. One moment per question.

I'm, sorry can you repeat that.

Sorry.

Sure with the with the gross.

Gross raising a two and a half and the outflows of one and a half over the course of the year. It looks like about a 1 billion from Q4 to Q4 of our fee paying AUM growth. So maybe like a little under 10% in terms of average fee paying AUM growth and I know that you mentioned earlier that the average fee rate should be about the same year over year. So I'm just trying to foot from that.

Benjamin Elliot Budish: Our next question comes from Benjamin Budish with Barclays; you may proceed. Hi, good evening, and thanks for taking the question. I was hoping to revisit the revenue guidance, if we could just want to make sure I kind of have the details, right? So it sounds like two and a half billion plus of growth assets, one and a half billion a step down. So that's about a billion dollars of net fee-paying AUM growth, with maybe some upside from deployment. So that's like a little less than 10%.

If I have that right to the double digit revenue growth you're expecting.

Yes, I think the difference is.

Catch up fees.

We have some funds in the market that we would expect.

On larger catch up fees in 2020 plan.

Got it that makes sense and then any any details on in terms of like pace of debt Paydown I think you've talked about M&A, obviously being at the top capital priority, but just thinking about getting from the topline to the bottom line you've talked about the EBITDA margin. So just wondering what the interest rate or interest expense outlook looks like and maybe anything you can share on your expected cash.

Benjamin Elliot Budish: But and it sounds like if the fee rate in aggregate is going to be 105. Can you just kind of maybe explain how you work out the double digit revenue growth, maybe to start? I'm sorry, Ben, can you repeat that?

Benjamin Elliot Budish: That's the last part of your question. Sure. With the gross, you know, gross raising of two and a half and the outflows of one and a half over the course of the year, it looks like about a billion from Q4 to Q4 of fee-paying AUM growth. So maybe a little under 10% in terms of average fee-paying AUM growth. And Amanda, you mentioned earlier that the average fee rate should be about the same year over year. So I'm just trying to extrapolate from that, if I have that right, to the double digit revenue growth you're expecting. Yeah, I think then the difference is in ketchup.

Right.

Yes, I would expect our cash tax rate to be very similar to what it has been in 2023 and <unk>.

Generally I would say for interest.

Other than additional M&A I would expect our interest to be.

A bit lower of course, it depends on how.

How much were how much stock buyback we have during the year.

But otherwise.

Sure.

Right would be the only thing ultimately impacting and.

And that buyback.

Got it okay. Thanks for the clarification I appreciate it.

Thank you.

One moment for questions.

Amanda Nethery Coussens: We have some funds in the market that we would expect, larger catch-up feeds. Got it. That makes sense. And then any details in terms of like the pace of debt pay down?

Our next question comes from John Campbell with Stephens You May proceed.

Hey, guys good afternoon.

Benjamin Elliot Budish: I think you talked about M&A obviously being a top capital priority, but just thinking about getting from the top line to the bottom line. You've talked about EBITDA margin. So just wondering what the interest rate or interest expense outlook looks like, and maybe anything you can share on your expected cash tax rate. Yeah, I would expect our cash tax rate to be very similar to what it was in 2023.

I just wanted to go back to the catch up fees.

By my math, I'm, Sean maybe a $10 million benefit or so from 2023 to 22.

Obviously, that's 500 points or so of growth 500 bps of growth.

Pretty big impact on margins as well.

So first I guess is that math correct and then secondly, Amanda.

Amanda Nethery Coussens: And, generally, I would say for interest, you know, other than additional M&A, I would expect our interest to be a bit lower. Of course, it depends on how much stock buyback we have during the year. Rate would be the only thing ultimately impacted, and Dr. Got it. Okay. Thanks for the clarification.

You talked to the expectation that it would be a bit higher I don't catch up fees will be a bit higher in 'twenty four obviously going to see if that was relative to Q1, 'twenty three or if that is relative to kind of historical averages.

Yes, John Yes, you are correct in the $10 million and just to be really clear I think we typically state that catch up fees for the quarter, which they were $4 6 million for this quarter.

Benjamin Elliot Budish: Appreciate it. Thank you. One moment for questions. Our next question comes from John Campbell with Stevens. You may proceed. Hey, guys, good afternoon. Just wanted to go back to the catch-up fees.

For Q4.

And then for 2024.

<unk>.

We expect.

Them to be.

John Robert Campbell: By my math, I'm showing maybe a $10 million benefit or so from 2023 to 22. Obviously, that's 500 points or so growth, or 500 bps of growth. Pretty big impact on margins as well.

$16 million.

Did you say six or <unk>.

<unk>.

Okay.

That would seem to be pretty impactful to margins I guess given your.

The commentary about some.

Some pressure on margins this year on mix shift I guess, it's not going to be mix from from the catch up fees I guess, that's just product mix and then.

John Robert Campbell: So first, I guess, is that math correct? And then secondly, Amanda, you talked to expectation that it would be a bit higher, you know, catch-up fees would be a bit higher in 2024. I was going to see if that was relative to, you know, 2023, or if that's relative to some kind of historical average. So John, yes, you are correct in the 10 million. And just to be really clear, I think we typically state the catch-up fees for the quarter, which were $4.6 million for this quarter, for Q4, and then for 2024. We expect them to be about 16 million.

To some extent or maybe its to a larger extent just their investments across the board is that the right way to think about it.

Yes, that's correct.

Okay, and then one more quick one for me I don't know if you have this on hand, I think you guys do typically put this in the 10-K, but what was your weighted average duration of remaining AUM exiting the year.

About about seven years.

Okay. So a step up from about six last year, okay, great. Thank you.

Thank you.

Thank you I would now like to turn the call back over to Luke Sarsfield for any closing remarks.

Well, thank you and thank you all for joining us today, and we really appreciate the opportunity to be with you as we tried to underscore in this call. We're building upon <unk> solid foundation to deliver accelerated growth in the coming years, you've heard about our strategic priorities on today's call and we look very much forward to updating you on our progress.

Amanda Nethery Coussens: Did you say 6 or 16? Okay, so that would seem to be pretty impactful to margins, I guess, given your commentary about some pressure on margins this year on mixed shifts, I guess it's not going to be mixed from the catch-up fees, I guess that's just product mix. And then, you know, to some extent, or maybe it's to a larger extent, just through investments across the board, is that the right way to think about it?

Incrementally throughout the year I want to thank our entire team at <unk>, our employees, our managers and ultimately our Lps, who all contribute to making this a world class platform. We're incredibly excited for what's to come and we very much look forward to speaking with all of you in may Thank you.

John Robert Campbell: Yeah. Okay, and then one more quick one for me. I don't know if you have this on hand. I think you guys typically put this in the 10k, but what was your weighted average duration of remaining AUM exiting the year? About seven years.

Okay.

Thank you for your participation you may now disconnect.

Okay.

John Robert Campbell: Okay, so this is a step up from about six last year. Okay, great. Thank you. Thank you. Thank you. I would now like to turn the call back over to Luke Sarsfield for any closing remarks.

[music].

Okay.

Yes.

Okay.

Okay.

Okay.

[music].

Okay.

Luke A. Sarsfield: Well, thank you, and thank you all for joining us today. We really appreciate the opportunity to be with you. As we've tried to emphasize in this call, we're building upon P-10's solid foundation to deliver accelerated growth in the coming years. You heard about our strategic priorities on today's call, and we look very much forward to updating you on our progress gradually throughout the year. I want to thank our entire team at P-10, our employees, our managers, and ultimately our LPs, who all contribute to making this a world-class platform. We're incredibly excited for what's to come, and we very much look forward to speaking with all of you in May. Thank you. Thank you for your participation. You may now disconnect. Outro Music

Uh huh.

Okay.

[music].

Sure.

Sure.

Yes.

[music].

Okay.

Yeah.

Okay.

Yeah.

Okay.

Okay.

Okay.

Okay.

[music].

Okay.

Sure.

Yes.

[music].

No.

Dan.

[music].

Okay.

[music].

Yes.

Okay.

Okay.

[music].

Okay.

[music].

Sure.

Okay.

[music].

Okay.

Okay.

Okay.

Okay.

Okay.

[music].

Okay.