Q1 2024 P10 Inc Earnings Call

Lateef: Hello, and welcome to the P10 first quarter 2024 conference call. My name is Lateef, and I will be coordinating your call today.

Lateef: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. As a reminder, today's conference 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.

Hello, and welcome to the Pizza in first quarter 'twenty 'twenty four or conference call. My name is let's seats and I will be coordinating your call today.

Mark C. Hood: This time, all participants are in a listen only mode.

Mark C. Hood: Speaker presentation, there will be a question and answer session.

Speaker Change: As a reminder, today's conference is being recorded I would now.

Lateef: I'll hand, the call over to your host Mark Hood E V. P of operations and Chief administrative officer Mark. Please go ahead.

Mark C. Hood: Good afternoon, and welcome to the P-10 first quarter 2024 conference call. Today we will be joined by Luke Sarsfield, Chief Executive Officer, and Amanda Coussens, EVP, Chief Financial Officer, and Chief Compliance Officer. Additionally, in the room with us today is RJ Jensen, EVP, Head of Strategy at M&A.

Mark C. Hood: Good afternoon, and welcome to the first quarter 'twenty 'twenty four conference calls today, we will be joined by Luxe Hartsfield, Chief Executive Officer, and Amanda Cousins, EVP, Chief Financial Officer, and Chief compliance Officer.

Mark C. Hood: In the room with US today is the RJ Jensen EVP head of strategy and M&A.

Mark C. Hood: 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 risks 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.

Mark C. Hood: 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.

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

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

Mark C. Hood: The forward-looking statements included are made only as of the date hereof, and we undertake no obligation to update or revise 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 Luke.

Mark C. Hood: The 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, except as otherwise required by law.

Luke: 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.

Luke A. Sarsfield: Thank you, Mark. Good afternoon, everyone, and thank you for joining us today.

Luke: Thank you Mark good afternoon, everyone and thank you for joining us today during.

Luke A. Sarsfield: During the first quarter of 2024, T-PEN generated strong financial results and, importantly, advanced the strategic initiatives we laid out on our last call in late February. Our strategies continue to perform well, generating strong and consistent returns for our LPs, and we raised nearly $670 million in gross new fee-paying AUM in this quarter alone. With Q1 marking my first full quarter as CEO, I can say with conviction that we are building a world-class platform that provides clients with unrivaled access to opportunities across the lower and core middle markets.

Luke A. Sarsfield: During the first quarter of 2024.

Luke A. Sarsfield: And generated strong financial results and importantly advance the strategic initiatives, we laid out on our last call in late February.

Luke: Our strategies continue to perform well generating strong and consistent returns for our Lps and we raised nearly $670 million in gross new fee paying AUM in this quarter alone.

Luke A. Sarsfield: With Q1, marking my first full quarter as CEO I can say with conviction that we are building a world class platform that provides clients with unrivaled access to opportunities across the lower and core middle markets.

Luke A. Sarsfield: On our call today, I'm going to provide an overview of our first quarter financial results, offer some perspectives on the market environment, and discuss the operational progress we've made this year. I'll start by providing a brief financial overview. P-10 delivered record revenues of $66 million in the first quarter, representing solid 15% top-line growth year over year.

Speaker Change: On our call today I'm going to provide an overview of our first quarter financial results offer some perspectives on the market environment and discuss the operational progress we've made this year.

Luke A. Sarsfield: Additionally, we enhanced our bottom-line performance, earning $5 million in net income compared to $800,000 in the prior year. As we mentioned on our last call, one of the key pillars of our new strategy is greater transparency. As such, we believe it is important to introduce new metrics that allow the investment community to more easily compare us to other alternative assets. To that end, we delivered fee-related revenue, or FRR, of $65 million, a 16% increase compared to the prior year period. And we generated approximately $31 million of fee-related earnings, or FRE, a 9% increase from Q1 2023. This represents an FRE margin of 47%.

Luke: I'll start by providing a brief financial overview.

Luke A. Sarsfield: <unk> delivered record revenues of $66 million in the first quarter, representing solid 15% topline growth year over year.

Luke A. Sarsfield: Additionally, we enhanced our bottom line performance, earning $5 million and net income compared to $800000 in the prior year period.

Luke A. Sarsfield: As we mentioned on our last call one of the key pillars of our new strategy is greater transparency.

Luke A. Sarsfield: As such we believe it is important to introduce new metrics that allow the investment community to more easily compare us to other alternative asset managers.

Luke A. Sarsfield: And we.

Luke A. Sarsfield: We delivered fee related revenue or F. R. R of $65 million, a 16% increase compared to the prior year period.

Luke A. Sarsfield: And we generated approximately $31 million of fee related earnings or FRE, a 9% increase from Q1 2023.

Luke A. Sarsfield: This represents an FRE margin of 47% we continue to anticipate margin to remain in the mid Forty's for the year ahead, which puts this performance slightly ahead of annual expectations.

Luke A. Sarsfield: We continue to anticipate margin to remain in the mid-40s for the year ahead, which puts this performance slightly ahead of annual expectations. We are pleased with our ability to generate strong results as we implement transformative strategic initiatives that seek to accelerate growth in the near to medium term. Our first quarter performance gives us the confidence to reiterate guidance we laid out on our fourth quarter call.

Luke A. Sarsfield: We are pleased with our ability to generate strong results as we implement transformative strategic initiatives.

Luke A. Sarsfield: That seek to accelerate growth in the near to medium term, our first quarter performance gives us the confidence to reiterate guidance, we laid out on our fourth quarter call.

Luke A. Sarsfield: As a reminder, we expect to organically raise and deploy more than $2.5 billion of gross new assets. We expect double-digit revenue growth that is driven both by this fundraising activity as well as positive fee rate dynamics, and we expect to announce a strategic transaction during the calendar year. Zooming out slightly, PPenn continues to benefit from a focus on the lower and core middle markets. As we have said previously, these markets have been insulated from some of the macro dynamics at the upper middle market levels, such as a meaningfully slower M&A environment, greater reliance on leverage, and a more competitive backdrop for deals. In our view, the lower and core middle markets offer risk mitigation from these trends and have equally shown sustained resilience despite the current rate environment and inflationary pressure.

Luke A. Sarsfield: As a reminder, we expect to organically raise and deploy more than $2 5 billion of gross new assets.

Luke A. Sarsfield: We expect double digit revenue growth that is driven both by this fund raising activity as well as positive fee rate dynamics, and we expect to announce a strategic transaction in the calendar year.

Luke A. Sarsfield: Zooming out slightly he penned continues to benefit from our focus on the lower in core middle markets. As we have said previously these markets have been insulated from some of the macro dynamics at the upper middle market levels, such as a meaningfully slower M&A environment, greater reliance on leverage and a more competitive backdrop for deals.

Luke A. Sarsfield: In our view the lower in core middle markets offer risk mitigation from these trends and have equally shown sustained resilience. Despite the current rate environment and inflationary pressures.

Luke A. Sarsfield: In addition, our strategies have an exceptional track record of delivering returns across economic cycles. Our GPs are strong fundraisers and even better portfolio managers. Whether it's through launching and optimizing industry-leading products or forging strategic relationships with underlying portfolio companies, our strategies have established a differentiated reputation with clients, investment managers, and intermediaries. T-PEN's managers have earned trust at every level of the investment value chain, and this trust underpins the strategic initiatives that we laid out on our last call.

Luke A. Sarsfield: Further our strategies have an exceptional track record of delivering returns across economic cycles.

Luke A. Sarsfield: Our Gpus are strong fund raisers, and even better portfolio managers.

Luke A. Sarsfield: Whether it's through launching in optimizing industry, leading products or forging strategic relationships with underlying portfolio companies. Our strategies have established a differentiated reputation with clients investment managers and intermediaries.

Luke A. Sarsfield: He turns managers have earned trust at every level of the investment value chain and mistrust underpins the strategic initiatives that we laid out on our last call today I want to share some of the progress we've made in driving organic growth initiatives, establishing a robust M&A pipeline and institutionalizing our platform for the long term.

Luke A. Sarsfield: Today, I want to share some of the progress we've made in driving organic growth initiatives, establishing a robust M&A pipeline, and institutionalizing our platform for the long term. First, we are making strides to drive organic growth; we see a clear and compelling opportunity to deepen and expand our already robust client franchise. In the first quarter, we launched 10 commingled funds in the market, providing multiple avenues to meet the particular investment objectives of clients and achieve our organic growth goals.

Luke A. Sarsfield: First we are making strides to drive organic growth.

Luke A. Sarsfield: We see a clear and compelling opportunity to deepen and expand our already robust client franchise.

Luke A. Sarsfield: In the first quarter, we had 10 co mingled funds in the market, providing multiple avenues to meet the particular investment objectives of clients and achieve our organic growth goals I want to take a moment to share some of the momentum we are producing on the fundraising front.

Luke A. Sarsfield: I want to take a moment to share some of the momentum we are producing on the fundraising front. In the first quarter, our VC strategy, ThruBridge, achieved its $750 million target in fund aid. Today, the fund is on pace to hold a final close in the second quarter at a total fund size in excess of $850 million. In private credit, Park4 has now achieved over $500 million, surpassing its target and putting it on track to hold a final close in the second quarter.

Luke A. Sarsfield: In the first quarter, our VC strategy through bridge achieved at $750 million target and funded today. The fund is on pace to hold a final close in the second quarter at a total fund size in excess of $850 million.

Luke A. Sarsfield: And private credit <unk> has now achieved over $500 million.

Luke A. Sarsfield: Surpassing its target and putting it on track to hold a final close in the second quarter.

Luke A. Sarsfield: Staying in credit, WTI is positioned to turn on fees for its Fund 11 in the second half of the year, and we are seeing strong interest around its portfolio. Moving to private equity, Monocord will hold a final close on BCP Fund 2 later this year, and we will look to launch BCP Fund 3 in short succession.

Luke A. Sarsfield: Staying in credit <unk> is positioned to turn on fees for its fund 11 in the second half of the year and we are seeing strong interest around its portfolio.

Luke A. Sarsfield: Moving to private equity Monochord will hold the final close of BCP fund to later in this year and we will look to launch BCP fund III and short succession.

Luke A. Sarsfield: Finally, we expect to launch RCP Direct Fund 5 in the coming weeks. In addition, RCP is on track to launch SOF5, a secondary fund, in late 2024, which will set the stage for strong momentum in 2025. These funds have historically garnered a strong following from LPs, not only for their performance, but because of the demand for these solutions in the market today. We are pleased with the totality of our fundraising efforts, which resulted in a gross raise of approximately $670 million in the first quarter.

Luke A. Sarsfield: Finally, we expect to launch RCP direct fund five in the coming weeks further RCP is on track to launch Sof five secondary fund in late 2024, which will set the stage for strong momentum in 2025. These.

Luke A. Sarsfield: These funds have historically garnered a strong following from Lps not only for their performance, but because of the demand for these solutions in the market today.

Luke A. Sarsfield: We are pleased with the totality of our fundraising efforts, which have resulted in a gross rates of approximately $670 million in the first quarter.

Luke A. Sarsfield: Our organic growth will always be enabled by our core strategies, and these fundraising levels demonstrate the diversity of demand from our clients. Moving now to our inorganic growth strategy. On our last call, we announced the appointment of R.J. Jensen to our leadership team as head of strategy and M&A. Since then, RJ has been hard at work developing our M&A infrastructure, leading the charge for us on situations that we are working to advance, as well as doing the work on opportunities we are seeing in the market. I want to provide a few high-level observations about the level of activity we are seeing. I would say the M&A market in the alternative asset management sector has picked up.

Luke A. Sarsfield: Our organic growth will always be enabled by our core strategies and these fund raising levels demonstrate the diversity of demand from our client base.

Luke A. Sarsfield: Moving now to our inorganic growth strategy.

Luke A. Sarsfield: On our last call, we announced the appointment of RJ Jensen to our leadership team as head of strategy and M&A.

Luke A. Sarsfield: Since then <unk> has been hard at work developing our M&A infrastructure.

Luke A. Sarsfield: Leading the charge for us on situations that we are working to advance as well as doing the work on opportunities we are seeing in the market.

Luke A. Sarsfield: I want to provide a few high level observations about the level of activity we are seeing.

Luke A. Sarsfield: First.

Luke A. Sarsfield: I would say the M&A market in the alternative asset management sector has picked up.

Luke A. Sarsfield: We see that in the announcements in the marketplace generally, and we see it in the number of opportunities we see directly. The pipeline we have developed to date is reasonably balanced between private equity, credit, and distribution-oriented opportunities. These are investments that we believe are actionable in the near term and represent a diverse mix from a geographic standpoint across both domestic and international deals. Throughout all our dialogue around prospective transactions, we have received positive feedback from potential partners who find the P10 business model and our transaction framework to be differentiating and compelling.

Luke A. Sarsfield: You see that in the announcements in the marketplace generally and we see it in the number of opportunities we see directly the.

Luke A. Sarsfield: The pipeline, we have developed to date is reasonably balanced between private equity credit and distribution oriented opportunities.

Luke A. Sarsfield: These are investments that we believe are actionable in the near term and represent a diverse mix from a geographic standpoint across both domestic and international deals.

Luke A. Sarsfield: Throughout all of our dialogue around prospective transactions. We have received positive feedback from potential partners, who find the pizza business model and our transaction framework to be differentiating and compelling.

Luke A. Sarsfield: We anticipate announcing a deal this year, and I also think it is most likely that near-term successes will be more string of pearls in nature. We continue to think that geographic expansion, where we have larger strategies as well as smaller natural adjacencies and potential tuck-ins, would make sense. Additionally, we are focused on situations that have an interesting distribution component.

Luke A. Sarsfield: We anticipate announcing a deal this year and I also think it is most likely that near term successes will be more string of pearls in nature. We continue to think that geographic expansion, where we have larger strategies as well as smaller natural adjacencies and potential tuck ins would make sense.

Luke A. Sarsfield: Additionally, we are focused on situations that have an interesting distribution component to them. Please note that we will be disciplined around valuation seeking accretive opportunities positioned to unlock long term value for our shareholders.

Luke A. Sarsfield: Please note that we will be disciplined around valuation, seeking accretive opportunities positioned to unlock long-term value for our shareholders. Turning now to our focus on optimizing our corporate-level organizational structure. As you can see from the traction RJ has already achieved, our efforts to institutionalize the PPEN platform are taking hold. Since our last call, we have made several key appointments, enhanced our governance profile, and set ourselves up to conclude our search for senior-level talent in the first half of the year.

Luke A. Sarsfield: Turning now to our focus on optimizing our corporate level organizational structure.

Luke A. Sarsfield: As you can see with the traction RJ has already achieved our efforts to institutionalize the pizza and platform are taking hold.

Luke A. Sarsfield: Since our last call. We have made several key appointments enhanced our governance profile and set ourselves up to conclude our search for senior level talent in the first half of the year.

Luke A. Sarsfield: In April, we appointed Tracy Benford to the board as an independent director who will participate in all three of our governance committees. Tracy is a remarkable leader with deep alternative asset expertise and experience stewarding iconic institutions in the financial sector. She brings an independent, diverse perspective to our board. Robert Alpert informed the Board of Directors of his decision to step down as Executive Chairman effective June 14th, the date of our annual meeting.

Luke A. Sarsfield: In April we appointed Tracy Benford to the board as an independent director, who will participate in all three of our governance committees Tracey has a remarkable leader with deep alternative asset expertise and experienced stewarding iconic institutions in the financial sector. She brings an independent diverse perspective to our board.

Luke A. Sarsfield: His time as Executive Chairman was intended to help me and our senior team affect a successful leadership transition, and he now feels that transition is complete. He will continue to serve on the Board as a Director. The board voted to appoint me to the role of chairman, also effective June 14th, and it intends to appoint a lead independent director at our annual meeting. I want to thank Robert for his time as Executive Chairman and his leadership since founding PTED.

Luke A. Sarsfield: Robert Alpert informed the board of directors of his decision to step down as executive Chairman effective June <unk>. The date of our annual meeting.

Luke A. Sarsfield: As time as executive Chairman It was intended to help me and our senior team effect of successful leadership transition and he now feels that transition is complete we will continue to serve on the board as a director.

Luke A. Sarsfield: The board voted to appoint me to the role of Chairman also effective June 14th and intends to appoint a lead independent director at our annual meeting.

Luke A. Sarsfield: I want to thank Robert for his time as executive Chairman and his leadership since founding <unk>, Ted I look forward to continuing to work with him on the board.

Luke A. Sarsfield: I look forward to continuing to work with him on the board. The board also determined that the company's stockholder rights plan is no longer necessary for the preservation of federal income tax benefits and voted to terminate the rights plan, which was set to expire in October of 2024.

Luke A. Sarsfield: The board also determined that the company's stockholder rights plan is no longer necessary for the preservation of federal income tax benefits and voted to terminate the rights plan effective today.

Luke A. Sarsfield: Our plan was set to expire in October of 2024.

Luke A. Sarsfield: In parallel, we are augmenting our management team for future growth. To that end, I am pleased to report that we have brought on Melody Craft as general counsel to bolster our senior leadership team. Melody has an impressive long-standing track record as a leader in the financial services sector, with alternative asset management expertise and deep experience leading M&A transactions through requisite legal processes and post-close integration activities. Her experience perfectly aligns with our operational goals and will be beneficial to PPEN as we embark on our next chapter of growth.

Luke A. Sarsfield: In parallel we are augmenting our management team for future growth.

Luke A. Sarsfield: To that end I am pleased to report that we brought on melodie craft as general counsel to bolster our senior leadership team.

Luke A. Sarsfield: <unk> has an impressive long standing track record as a leader in the financial services sector with alternative asset management expertise and deep experience, leading M&A transactions through requisite legal processes and post close integration activities for.

Luke A. Sarsfield: Her experience perfectly aligns with our operational goals and will be beneficial to <unk> as we embark on our next chapter of growth.

Luke A. Sarsfield: While we remain in the early innings of these strategic initiatives, we've been extremely pleased with the partnership we're seeing across strategies and management. There is immense opportunity in our existing platform, and we look forward to sharing specific examples in the coming quarter. I'll close with an update on our efforts to return value to shareholders through capital allocation. Last quarter, we shared that we had a total share of purchase authorization of over $50 million.

Luke A. Sarsfield: While we remain in the early innings of these strategic initiatives. We've been extremely pleased with the partnership we're seeing across strategies and managers. There is immense opportunity in our existing platform and we look forward to sharing specific examples in the coming quarters.

Luke A. Sarsfield: I'll close with an update on our efforts to return value to shareholders through capital allocation last quarter. We shared that we had a total share repurchase authorization of over $50 million.

Luke A. Sarsfield: In the first quarter, we bought back about 3.7 million shares at an average price of $8.15 per share. We currently have approximately $21 million remaining on our authorization. Additionally, we continue to pay quarterly cash dividends to shareholders, declaring a 3.5 cent distribution today, which represents an 8 percent increase. Our annual dividend now stands at 14 cents per share.

Luke A. Sarsfield: In the first quarter, we bought back about $3 7 million shares at an average price of $8 15 per share.

Luke A. Sarsfield: We currently have approximately $21 million remaining on our authorization.

Luke A. Sarsfield: Additionally, we continue to pay quarterly cash dividends to shareholders, declaring a $3 five distribution today, which represents an 8% increase our annual dividend now stands at 14 <unk> per share.

Luke A. Sarsfield: As a reminder, E10 employees make up the largest ownership position in our shareholder register, which is indicative of our collective conviction in the intrinsic value of our business. This ownership stake demonstrates our alignment with the broader shareholder base and should underscore our dissatisfaction with the current valuation pressure we face in the public market. We have been opportunistic in repurchasing shares of our stock and believe that the current trading levels present a compelling entry point for investors.

Luke A. Sarsfield: As a reminder, <unk> 10 employees make up the largest ownership position in our shareholder Register which is indicative of our collective conviction in the intrinsic value of our business.

Luke A. Sarsfield: This ownership stake demonstrates our alignment with the broader shareholder base and should underscore our dissatisfaction with the current valuation pressure, we faced in the public market.

Luke A. Sarsfield: We have been opportunistic in repurchasing shares of our stock and believe that the current trading levels present, the compelling entry point for investors.

Luke A. Sarsfield: As our strategy continues to gain momentum, the growth profile of P-10 expands and accelerates. We believe the market will appreciate this potential in due time. The fundamentals of our business remain exceptionally strong, and we have the right strategy in place to deliver long-term value to shareholders. Before I turn the call over to Amanda, I want to take a moment to invite you all to mark your calendars for our Inaugural Investor Day, which will be held on Thursday, September 19th in New York City.

Luke A. Sarsfield: As our strategy continues to gain momentum.

Luke A. Sarsfield: The growth profile of P 10 expands and accelerates we.

Luke A. Sarsfield: We believe the market will appreciate this potential in due time.

Luke A. Sarsfield: Fundamentals of our business remain exceptionally strong we have the right strategy in place to deliver long term value to shareholders.

Luke A. Sarsfield: The day will serve as a deep dive into our various strategies, and we will offer more details on our strategic progress to date. We look forward to sharing more details as the event approaches.

Luke A. Sarsfield: Before I turn the call over to Amanda <unk>.

Luke A. Sarsfield: Want to take a moment to invite you all to Mark your calendars for our inaugural Investor Day, which will be held on Thursday September 19th in New York City. The day will serve as a deep dive on our various strategies and we will offer more details on our strategic progress to date, we look forward to sharing more details as the event approaches.

Luke A. Sarsfield: With that I'll hand, the call over to Amanda.

Amanda Nethery Coussens: Thank you, Luke. P10 continues to deliver strong results amidst implementing the transformative strategic initiatives the management team laid out on the fourth quarter earnings call. In the first quarter, fee-paying assets under management were $23.8 billion, a 10% increase on a year-over-year basis. In the first quarter, $667 million of fundraising and capital deployment was offset by $81 million in step-downs and expirations. As we mentioned on the Q4 call, we expect stepdowns and expirations for 2024 to be approximately $1.5 billion, $200 million less than for 2023.

Amanda: Thank you Luke and continue to deliver strong results.

Amanda Nethery Coussens: The transformative strategic initiatives the management team laid out on the first quarter earnings call.

Amanda Nethery Coussens: The first quarter fee paying assets under management were $23 8 billion.

Amanda Nethery Coussens: A 10% increase on a year over year basis.

Amanda Nethery Coussens: In the first quarter $667 million of fundraising and capital deployment was offset by $81 million and step downs and exploration.

Amanda Nethery Coussens: We mentioned on the Q4 call, we expect step downs in exploration for 2024 to be approximately $1 $5.200 billion less than 2023.

Amanda Nethery Coussens: Most of the step-downs and expirations will occur in Q2, where we expect a billion dollars, leaving $400 million generally evenly split across the third and fourth quarters. Most of the second quarter step-downs and expirations are expected to be attributable to RCP Fund 9, a 2014 vintage, and Truebridge Fund 2, a 2010 vintage.

Amanda Nethery Coussens: Most of the step downs and expirations will occur in Q2, where we expect $1 billion, leaving $400 million generally evenly split across the third and fourth quarters.

Amanda Nethery Coussens: Most of the second quarter step downs and exploration are expected to be attributable to RCP Fund 982014 vintage and show you a bridge until a 2010 vintage.

Amanda Nethery Coussens: Record revenue in the first quarter was $66.1 million, a 15% increase over the first quarter of 2023. Average fee rate in the first quarter was 110 basis points, driven by higher fee rate direct strategies becoming a larger part of our fee-paying AUM mix, as well as higher catch-up. Turning now to our strategy, we had 10 funds in the market and saw broad participation across our investment platform.

Amanda Nethery Coussens: Record revenue in the first quarter was $66 1, million% to 15% increase over the first quarter of 2023.

Amanda Nethery Coussens: Average fee rate in the first quarter was 110 basis points driven by higher fee rate direct strategy, becoming a larger part of our fee paying AUM mix as well as higher catch up fees.

Amanda Nethery Coussens: Turning now to our strategy.

Amanda Nethery Coussens: In the quarter, we had 10 funds in the market and saw broad participation across our investment platform, our private equity strategies raised and deployed $213 million or venture solution raised and deployed $339 million and our credit strategies added $99 million to fee paying assets under management.

Amanda Nethery Coussens: Our private equity strategies raised and deployed $213 million, our venture solution raised and deployed $339 million, and our credit strategies added $99 million to fee-paying assets under management. Of note in the quarter, Truebridge-8 raised $233 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 clients.

Amanda Nethery Coussens: Of note in the quarter <unk> eight raised $233 million.

Amanda Nethery Coussens: <unk> continues to benefit from strategies with long track records of generating durable alpha and offering best in class investment opportunities to our global clients.

Amanda Nethery Coussens: Catch-up fees were $7.7 million in the first quarter. Operating expenses in the first quarter were $54 million, a 3% increase over the same period a year ago. The increase was primarily driven by additional compensation benefits and non-cash stock-based compensation expense related to the acquisitions of Bon Accord, HARC, and WTI. Gap net income in the first quarter was $5.2 million, an increase compared to $800,000 in the comparable period a year ago. Adjusted EBITDA in the first quarter was $30.8 million, an increase of 9% from the first quarter of 2023.

Amanda Nethery Coussens: Catch up fees were $7 7 million in the first quarter.

Amanda Nethery Coussens: Operating expenses in the first quarter were 54, million% to 3% increase over the same period a year ago.

Amanda Nethery Coussens: Increase was primarily driven by additional compensation benefits and non cash stock based compensation expense related to the acquisition of Bon Accord Park and WTS.

Amanda Nethery Coussens: GAAP net income in the first quarter was $5 2 million, an increase compared to 800000 in the comparable period a year ago.

Amanda Nethery Coussens: Adjusted EBITDA in the first quarter was $30 8 million, an increase of 9% from the first quarter of 2023.

Amanda Nethery Coussens: For the quarter, our adjusted EBITDA margin was 47 percent. For the first quarter, Adjusted Net Income, or ANI, held flat at $25.4 million when compared to the first quarter of 2023. Fully deleted ANI EPS remained at $0.21 per share on a year-over-year basis.

Amanda Nethery Coussens: For the quarter, our adjusted EBITDA margin was 47%.

Amanda Nethery Coussens: For the first quarter adjusted net income our Eni held flat at $25 4 million when compared to the first quarter of 2023.

Amanda Nethery Coussens: Fully diluted Eni EPS remained at 21 cents per share on a year over year basis.

Amanda Nethery Coussens: As Luke noted, we have added transparency in the quarter and are introducing the following metrics: Fee-Related Revenue, or FRR, Fee-Related Earnings, or FRE, and Complementary FRE Margin. FRR in the quarter was $65 million, representing a 16% annual increase, and FRE was $30.7 million, representing a 9% increase. Our average margin was 47% in the first quarter. Since this is the first time we have reported these metrics, I want to provide more information on how we define each term. E-related revenue is calculated as total revenue less any incentive fees.

Amanda Nethery Coussens: As Luke noted we have added transparency in the quarter and are introducing the following metrics.

Amanda Nethery Coussens: Fee-related earnings is a non-GAAP performance measure used to monitor our baseline earnings, less any incentive fee revenue, and excluding any incentive fee-related expenses. We believe this additional disclosure will help the investment community draw better apples-to-apples comparisons with a broader alternative asset management landscape. You can find additional details and definitions in our earnings presentation on our Investor Relations website. Cash and cash equivalents at the end of the first quarter were $29 million

Amanda Nethery Coussens: <unk> related revenue our F. R R.

Amanda Nethery Coussens: <unk> earnings are F R E and complementary FRE margin.

Amanda Nethery Coussens: <unk> in the quarter with $65 million, representing a 16% annual increase.

Amanda Nethery Coussens: And FRE with $30 7 million, representing a 9% increase.

Amanda Nethery Coussens: Our FRE margin with 47% in the first quarter.

Amanda Nethery Coussens: This is the first time, we have reported these metrics I want to provide more information on how we define each term.

Amanda Nethery Coussens: Fee related revenue is calculated as total revenue less any incentive fee.

Amanda Nethery Coussens: Fee related earnings is a non-GAAP performance measure used to monitor our baseline earnings.

Amanda Nethery Coussens: Any incentive fee revenue and excluding any incentive fee related expenses.

Amanda Nethery Coussens: We believe this additional disclosure will help the investment community dropped better apples to apples comparison with the broader alternative asset management landscape.

Amanda Nethery Coussens: You can find additional details in definition in our earnings presentation on our Investor Relations website.

Amanda Nethery Coussens: Cash and cash equivalents at the end of the first quarter were 29 million at quarter end, we had an outstanding debt balance of $316 million and $45 million available on the revolver.

Amanda Nethery Coussens: At quarter end, we had an outstanding debt balance of $316 million and $45 million available on the revolver. As of today, we have an outstanding debt balance of $298 million and $63 million available on the revolver. We will also continue to pay our quarterly dividend for Class A and Class B common stock. As Luke mentioned, we are increasing our dividend by 8 percent. Today, we declared a quarterly cash dividend of three and a half cents per share, payable on June 20, 2024, to stockholders of record as of the close of business on May 31, 2024.

Amanda Nethery Coussens: Today, we have an outstanding debt balance of $298 million and $63 million available on our revolver.

Amanda Nethery Coussens: We also continue to pay our quarterly dividend.

Amanda Nethery Coussens: Class, a and class B common stock.

Amanda Nethery Coussens: Luke mentioned, we are increasing our dividend by 8%.

Amanda Nethery Coussens: We declared a quarterly cash dividend of $3.05 per share payable on June 22024.

Amanda Nethery Coussens: Holders of record as of the close of business on May 31, 2024.

Amanda Nethery Coussens: Finally, as of March 31, 2024, our Class A shares outstanding were $54,582,698 and Class B shares outstanding were $58,439,363. Before I close, I'd like to highlight that next week we expect to file a required registration statement that registers shares owned by founders and insiders. These shares were part of the shares issued during the IPO process. But, we want to be clear; the company is not selling shares to raise capital. With over 3 million shares purchased last quarter, we think management's view on the stock's intrinsic value is clear. Thank you for your time today. 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.

Amanda Nethery Coussens: Finally as of March 31, 2020 for our class a shares outstanding.

Amanda Nethery Coussens: $54 million 582698.

Amanda Nethery Coussens: B shares outstanding were $58 million 439363.

Amanda Nethery Coussens: Before I close I'd like to highlight that next week, we expect to file our required registration statement that registers shares owned by founders and insiders.

Amanda Nethery Coussens: These shares were part of the shares issued during the IPO process.

Amanda Nethery Coussens: Want to be clear the company is not selling shares to raise capital with over 3 million shares purchased last quarter, We think managements view on the stock's intrinsic value is clear.

Speaker Change: Thank you for your time today, we look forward to building strong momentum in 2024, as we seek to accelerate growth in 2025.

Amanda Nethery Coussens: I will now pass the call over to the operator to begin the Q&A session.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kenneth Worthington of J.P. Morgan.

Amanda Nethery Coussens: Okay.

Operator: Yes.

Kenneth Brooks Worthington: Thank you as a reminder to ask a question you will need to press star one on your telephone to remove yourself from the queue. You May press star one again.

Operator: Please standby, while we compile the Q&A roster.

Kenneth Brooks Worthington: Our first question comes from the line of.

Kenneth Brooks Worthington: Kenneth Worthington of Jpmorgan.

Alex Bernstein: Hi, this is Alex Bernstein on behalf of Ken. Thanks so much for taking my question and congratulations on the quarter. Just noticed that this quarter, if you remove the impact of catch-up fees, looks like we're seeing a nine handle on the fee rate for the first time in at least a while. Just wanted to double-click on that and see if you have any explanations around what drove that, how we could think about the fee rate moving forward from an ex-catch-up fee perspective, and then also what the framework is more broadly. I appreciate it.

Operator: Hi, This is Alex Bernstein on for Ken. Thanks, So much for taking my question and congratulations on the quarter.

Alex Bernstein: Just noticed that this quarter, if you remove the impact of catch up fees. It looks like we're seeing a nine handle on this fee rate for the first time in at least a while just wanted to double click on that and see if you have any explanations around what drove that and how we could think about the fee rate moving forward from an ex catching fee perspective.

Alex Bernstein: And then also what the framework is more broadly I appreciate it.

Amanda Nethery Coussens: Hi Alex. Yes, we started seeing the impact of the step downs that we mentioned, the step downs and expirations that we mentioned that will occur in the second quarter. This does not change our annual guidance of 105 basis points for the year, though.

Speaker Change: Hi, Alex Yes.

Speaker Change: We started seeing the impact revenue of the step down that we mentioned the step downs and explorations that we mentioned that will occur in the second quarter.

Speaker Change: This does not change our annual guidance of 105 basis points for the year, though.

Luke A. Sarsfield: God, I'd appreciate it. And maybe to ask a second question, this time speaking more broadly, you spoke about the robust M&A opportunities, and you also pointed to distribution. Having had the benefit of seeing a number of your larger peers report now, there's definitely some specific areas from a distribution perspective that a lot of folks are after, namely insurance and retail come to mind. I noticed you did disclose some of your current AUM makeup, and something like insurance is not really a large part of it. Is that more a factor of the size of the market and the type of markets you play in? And is that an area that you potentially look to target via M&A or otherwise? I'd appreciate it.

Speaker Change: Guys I appreciate it and maybe to ask the second question. This time speaking more broadly you spoke about the robust M&A opportunities and you also pointed to distribution.

Luke A. Sarsfield: Having had the benefit of seeing a number of your larger peers report now there's definitely some specific areas from a distribution perspective that a lot of folks are after namely insurance and retail come to mind.

Luke A. Sarsfield: I noticed you did disclose some of your current <unk>.

Luke A. Sarsfield: Cup in something like insurance is not really a large part of it is is that more a factor of the size of the market and in certain markets. You plan and is that an area that you potentially look to target via M&A.

Luke A. Sarsfield: M&A or otherwise I appreciate it.

Luke A. Sarsfield: Thanks, Alex. Great question. And I would say a few things. We do disclose, as you can see, kind of every quarter, our kind of LP distribution by channel type. And it's generally remained pretty consistent across the cycle.

Speaker Change: Thanks, Alex Great question, and I would say a few things we do disclose as you can see kind of every quarter or kind of LP distribution by channel type and it's generally remained pretty consistent across the cycle I'd say a few things number one I think we do have to your question on retail I do think retail broadly defined is a really big opportunity.

Luke A. Sarsfield: Number one, I think we do have, you know, to your question on retail. I do think retail, broadly defined, is a really big opportunity. And when you look at where we are in terms of family offices and wealth managers, we think we have, you know, meaningful penetration in that channel and meaningful momentum in that channel. To your question on insurance, I think you're exactly right. It is a question of product mix.

Luke A. Sarsfield: And when you look at where we are in terms of family offices wealth managers.

Luke A. Sarsfield: We have meaningful penetration in that channel and meaningful momentum in that channel to your question on insurance I think youre exactly right. It is a question of product mix and I think increasingly though we do have products that are very relevant for the insurance channel I would note hark for instance, as a product offering and the Nab lending space that's incredibly.

Luke A. Sarsfield: And I think increasingly, though, we do have products that are very relevant for the insurance channel. I would note Hark, for instance, as a product offering in the NAB lending space that's incredibly relevant to insurance. And we've actually seen some very, very nice momentum of late in terms of real traction with Hark in that channel. Remember, Hark is focused on being deployed. The way we recognize revenue is on deployed capital, not on committed capital.

Luke A. Sarsfield: Relevant for insurance and we've actually seen some very very nice momentum of late in terms of real traction with <unk> in that channel Remember Park is focused on deployed the way we recognize revenue as on deployed capital not on committed capital. So it takes a little longer to come through the come through the P&L, but I think insurance is a re.

Luke A. Sarsfield: So it takes a little longer to come through the P&L. But I think insurance is a real opportunity for us with our broad range of credit offerings, in particular with Hark. And it's a place that we're incredibly focused on increasing our footprint. I appreciate the answer. Thanks.

Luke A. Sarsfield: Opportunity for us.

Luke A. Sarsfield: With our broad range of credit offerings in particular with heart and it's a place that we're incredibly focused on increasing our footprint.

Alex Bernstein: I appreciate the answer. Thanks again.

Speaker Change: I appreciate the answer thanks again.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Benjamin Budish of Barclays. Your line is open. The next question comes from Ben Budish of Barclays. Your line is open.

Speaker Change: Thank you for standby for our next question.

Operator: Okay.

Benjamin Elliot Budish: Our next question comes from the line of Benjamin Bowdish of Barclays. Your line is open.

Benjamin Elliot Budish: Next question comes from Ben <unk> of Barclays. Your line is open.

Benjamin Elliot Budish: Thanks for taking the question. I wanted to ask about the fundraising trajectory for the year. It looks like in Q1 you raised a little over 25% of your full-year target. Now, I know it's $2.5 billion plus or more than $2.5 billion, so I was wondering if you had any other color.

Speaker Change: Apologies there I was had it on mute.

Benjamin Elliot Budish: Thanks for taking the question I wanted to ask about the fund raising trajectory for the year. It looks like in Q1, you raised a little over 25% of the full year target I know, it's $2 5 billion plus or more than two 5 billion. So I was wondering if you have any other color.

Benjamin Elliot Budish: Q1 tends to be seasonally slow, and that's sort of what we've heard from some of the other publicly traded alts. You guys are a bit different in that you have many, many funds in the market that come back frequently rather than every several years. So just wondering, you talked about some of the upcoming closes, but how does the nearly $700 million this quarter compare to what you expect in the next several quarters? If there's any help you can give us around what the plus sign might mean, it would be helpful. Thank you. Thanks, Ben.

Benjamin Elliot Budish: Q1 tends to be seasonally slow that's sort of what we heard we've heard from some of the other publicly traded all you guys are a bit different in that you have many many funds in the market that come come back frequently rather than every four years. So just wondering you talked about some of the upcoming closes, but how does the nearly $700 million this quarter compared to what you expect for the next several quarters.

Ben: Help you can give us around like what the plus might mean.

Luke A. Sarsfield: Thanks, Ben. I want to be a little careful here because I don't want to get into kind of giving quarterly guidance, but I'll say a few things. You know, number one, we talked about how we had 10 funds in the market in the first quarter, and I think we referenced last time that we thought we would have 15 funds in the market over the course of the year. So, obviously, we will have more funds in the market as we go into, you know, the meat of the year and the back half of the year.

Benjamin Elliot Budish: Would be helpful. Thank you.

Ben: Thanks, Pat I don't want I want to be a little careful here, because I don't want to get into kind of giving quarterly guidance, but I will say a few things.

Luke A. Sarsfield: Number one we've talked about how we had 10 funds in the market in the first quarter and I think we referenced last time that we thought we would have 15 funds in the market over the course of the year. So obviously.

Luke A. Sarsfield: That we will have more funds in the market as we go into the meat of the year in the back half of the year. The second thing I would note is some of the great momentum, we're seeing I mentioned the momentum we're seeing in terms of Trowbridge in terms of park, we have some very big closes coming up with some of our strategies later this year, notably upon a cord and then as I meant.

Luke A. Sarsfield: The second thing I would note is some of the great momentum we're seeing. I mentioned the momentum we're seeing in terms of Truebridge and HARC. We have some very big closes coming up with some of our strategies later this year, notably Bon Accord, and then, as I mentioned, a number of funds that are going to be launched at RCP.

Luke A. Sarsfield: <unk> a number of funds that are going to be launched at RCP I would say the following I think like to your point.

Luke A. Sarsfield: I think, to your point, I do think we are seeing increasing momentum generally in terms of our dialogue with the broad swath of LPs. You know, I think people, even in light of, you know, some of the macro pressures, are clearly, you know, starting to lean in a little bit more, and that feels good. And so, as I said, we're really pleased with the first quarter activity. We think we have really strong momentum. And, again, we're reiterating the guidance that we think we will organically raise and deploy more than $2.5 billion of gross new assets this year. We feel very good about that.

Luke A. Sarsfield: Do think we are seeing increasing momentum.

Luke A. Sarsfield: Generally in terms of our dialogue with the broad swath of Lps.

Luke A. Sarsfield: I think people even in light of some of the macro pressures are clearly starting to lean in a little bit more and that feels good and so as I said, we're really pleased with the first quarter activity. We think we have really strong momentum.

Luke A. Sarsfield: And again, we're reiterating the guidance that we think we will organically raise and deploy more than $2 5 billion of gross new assets. This year, we feel very good about that.

Luke A. Sarsfield: Okay.

Benjamin Elliot Budish: Appreciate that. Maybe one more question on capital allocation. So you bought back a lot of stock in the quarter, and based on the share price performance, it's not surprising why, especially based on, you know, what you've indicated is your conviction in the business. Just any color, you know, what would it take to raise the repurchase authorization? Is that something that could happen quickly?

Speaker Change: I appreciate that maybe one more question on capital allocation.

Benjamin Elliot Budish: So you bought back a lot of stock in the quarter and based on that the share price performance, if not surprising why especially based on what you've indicated is your conviction in the business just any color.

Benjamin Elliot Budish: What would it take to raise the repurchase authorization is that something that could happen quickly. What's your appetite to continue repurchasing shares and then on the dividend side can you just remind us I can't remember if you've communicated in the past, but any sort of higher level philosophy around being like a regular dividend raise or having a track to FRE or anything like that could you just remind us what you've communicated there in the past. Thank you.

Amanda Nethery Coussens: What's your appetite to continue repurchasing shares? And then on the dividend side, can you just remind us of any sort of higher-level philosophy around being like a regular dividend raiser or having a track to FRE or anything like that? Just remind us what you've communicated.

Amanda Nethery Coussens: In terms of our general capital allocation, we still have $20.5 million available for the buyback. We did increase the dividend by about a penny per share, which is at the same pace that we increased the dividend last year.

Amanda Nethery Coussens: Sure in terms of our in terms of our just general capital allocation.

Amanda Nethery Coussens: We still have $25 million available.

Amanda Nethery Coussens: For the buyback.

Amanda Nethery Coussens: We did increase the dividend by about a penny per share which is at the same pace that we increase the dividend last year, so likely speaks to our dividend overall policy.

Luke A. Sarsfield: So that likely speaks to our overall dividend policy. And then, in addition to the dividend, we really intend to allocate capital towards M&A. I would expect, with $20.5 million remaining on the buyback, that that is part of our capital allocation policy or will continue to be a priority. And then the remainder will be a pay down on the revolver to free up capital for future M&A. So I would say our capital allocation policy really has not changed, or the priorities have not changed from last quarter.

Amanda Nethery Coussens: And then in addition to the dividend.

Luke A. Sarsfield: We really intend to.

Luke A. Sarsfield: Allocate capital towards M&A.

Luke A. Sarsfield: I would expect with $25 million remaining on our buyback that that that is part of our capital allocation policy. We will continue to be a priority and then remainder will be pay down on the revolver to free up capital for future M&A. So I would say our capital allocation policy really has not changed so the priorities have not changed from last quarter.

Luke A. Sarsfield: The only thing I would add is we need to have a lot of conviction around where we think the share price ought to be. You see that in our insider ownership, where we have substantial skin in the game. You see that in the $30 million we roughly deployed to share repurchase last quarter, and so we're obviously big fans of the shares right here, and I think we'll take that into. All right, I think we'll take that.

Luke A. Sarsfield: Only thing I would add is alright, we didn't need to have a lot of conviction.

Luke A. Sarsfield: Around where we think assuming we execute on the plan and we are laser focused on executing where we think the share price ought to be you see that in our insider ownership, where we have substantial skin in the game you see that in the $30 million roughly we deployed to share repurchase last quarter and so we're obviously big fans of the shares right here and.

Luke A. Sarsfield: And I think we will.

Luke A. Sarsfield: Take that into account as part of an overall capital allocation philosophy.

Benjamin Elliot Budish: All right, thanks for the responses.

Speaker Change: Alright, thanks for the responses.

Speaker Change: Thank you.

Operator: Our next question comes from the line of Adam Beatty of UBS.

Benjamin Elliot Budish: Our next question comes from the line of Adam Beatty of UBS.

Adam Quincy Beatty: Thank you, and good afternoon. I just wanted to get an update on the outlook for expense growth this year, maybe, and next year. I know, Luke, you have a pretty clear idea around reinvesting in the business and building for future growth. So just wanted to know if, you know, kind of the trajectory of expenses for this year or next has changed at all and what you expect the cadence of that to be. Thanks.

Adam Quincy Beatty: Alright, Thank you and good afternoon.

Adam Quincy Beatty: I just wanted to get an update on the outlook for expense growth. This year, maybe next year.

Adam Quincy Beatty: No look do you have a pretty clear idea around reinvesting in the business and then building for future growth. So just wanted to know if kind of the trajectory of expenses again for this your next has changed at all and what you expect the cadence of that to be thank you.

Adam Quincy Beatty: Yes.

Amanda Nethery Coussens: Adam, I'll take that question. So, in general, we're confident in our ability to manage expenses while still delivering strong financial performance. If you look at our operating expenses of $54 million, which was a 3% increase year-over-year compared to our record revenue of $64 million, which was a 15% increase year-over-year, we believe our right hires will enhance financial performance incrementally and demonstrate the value that we are creating. In terms of our overall margin, we do expect margins to average in the mid-40s, excluding the effective acquisitions.

Luke: Adam I'll take that question, so I would say in general.

Amanda Nethery Coussens: We're confident in our ability to manage expenses, while still delivering strong financial performance.

Amanda Nethery Coussens: If you look at our operating expenses of $54 million, which was a 3% increase year over year compared to our record revenue of $64 million.

Amanda Nethery Coussens: A 15% increase year over year.

Amanda Nethery Coussens: We believe our right hires will enhance financial performance incrementally and demonstrate the value that we're creating.

Amanda Nethery Coussens: Hi.

Amanda Nethery Coussens: In terms of our overall margin, we do expect margin to average in the mid 40 <unk>, excluding the effect of acquisition.

Amanda Nethery Coussens: As we said in the prior quarter, this is an ongoing mixed shift with our existing portfolio strategies. Some of our newer and faster-growing businesses, such as Bon Accord, Hark, and WTI, have lower core adjusted EBITDA margins than other parts of our business. And so the overall margin will continue to reflect this evolution. I would say the second influence on margins is our critical and foundational human capital investments that we're making in the business. We expect the investments to drive core growth and provide a high ROI for our investors.

Amanda Nethery Coussens: As we said in the prior quarter. This is an ongoing.

Amanda Nethery Coussens: Mix shift with our existing portfolio strategy, some of our newer and faster growing businesses, such as Bon Accord Clark and WTO Capoeira core adjusted EBITDA margin.

Amanda Nethery Coussens: And then other parts of our business.

Amanda Nethery Coussens: The overall margin will continue to reflect this evolution.

Amanda Nethery Coussens: I would say the second influence on margins are.

Amanda Nethery Coussens: Critical and foundational human capital investments that we're making in the business. We expect the investments to drive core growth and provide a high ROI for our investors.

Adam Quincy Beatty: Okay, sounds good. No, I appreciate the different ways of angling the margin, which is basically what I was after. And then turning to kind of the underlying investments and investment environment, and maybe, you know, some of the look through to the portfolio companies, you know, mid-market obviously has great opportunities for alpha generation. You have that good chart in there about, you know, how much capital is chasing larger companies versus mid-market. So clearly, an opportunity there, but just wondering, in uncertain times, sometimes folks are concerned about mid-market companies, you know, kind of being more vulnerable, as it were, to the economic environment. So if there's any updates on, you know, maybe the kinds of revenue growth or other fundamentals you're seeing across the portfolio, that'd be great.

Speaker Change: Okay sounds great no I appreciate the different ways of valuing the margin, which is basically what I was after.

Adam Quincy Beatty: And then turning to kind of the underlying investments and investment environment.

Adam Quincy Beatty: And maybe some of the look through to the portfolio companies mid market. Obviously has great opportunities for Alpha generation you have that good chart in there about how much capital is chasing larger companies versus versus mid market. So clearly an opportunity there, but just wondering.

Adam Quincy Beatty: Uncertain times, sometimes folks are concerned about.

Adam Quincy Beatty: Mid market companies kind of.

Adam Quincy Beatty: Being more vulnerable as it were to the economic environment. So if theres any updates on.

Adam Quincy Beatty: Maybe the kinds of revenue growth or under other fundamentals, you're seeing across the portfolio that'd be great.

Luke A. Sarsfield: Yeah, look, a great question and something we are focused on, you know, and I know you're right: the conventional wisdom is that, you know, there's, you know, when the large market sneezes, the mid market catches a cold. But our lived experience is quite contrary to that, actually.

Speaker Change: Yes look great question and something we are focused on and I know you are right. The conventional wisdom is that.

Luke A. Sarsfield: When the large market sneezes, the mid market catches a cold or lived experience is quite contrary to that actually and I think it's due to a number of things number one as we noted on the dialogue. It's just a less competitive market environment and we are one of the clear differentiated market leaders and I think that really gives us opportunity.

Luke A. Sarsfield: And I think it's due to a number of things. Number one, as we noted in the dialogue, it's just a less competitive market environment. And we are one of the clear differentiated market leaders. And I think that really gives us an opportunity.

Luke A. Sarsfield: Second is I would.

Luke A. Sarsfield: The second is, I would tell you, I think, unlike in the large market opportunity, where there are, you know, a large number of competitors and large pools of capital going after the opportunity set, it's simply more limited in the middle market. And that provides, I would say, a margin of safety. The third is, you know, the reality of things like leverage utilization. Leverage utilization is much, much higher in the upper part of the market.

Luke A. Sarsfield: I'd tell you I think unlike in the large market opportunity, where there are a large number of competitors in large pools of capital going after the opportunity set it simply more limited in the middle market and that provides I would say margin of safety. The third is the reality of things like leverage utilization.

Luke A. Sarsfield: <unk> leverage utilization is much much higher in the upper part of the market and obviously in a rising rate environment that has real consequence leverage levels generally in our part of the market are much lower and so even though rising rates will impact the overall interest expense on portfolio companies. They do so through a much.

Luke A. Sarsfield: And obviously, in a rising rate environment, that has real consequences. Leverage levels generally in our part of the market are much lower. And so, even though rising rates will impact, you know, the overall interest expense on portfolio companies, they do so to a much smaller degree. And so, and I think when we put that all together, the net effect is we continue to think the middle and lower middle market is an unbelievably attractive place to be.

Luke A. Sarsfield: Smaller degree and so when I think when we put that all together.

Luke A. Sarsfield: The net effect is we continue to think the middle and lower middle market is an unbelievably attractive place to be we continue to think it is insulated, but not immune from some of the larger from some of the larger macro trends going on and we think that emblematic of that has been our ability to generate generate differentiated investment alpha across the cycle.

Luke A. Sarsfield: We continue to think it is, you know, insulated but not immune from some of the larger macro trends going on. And we think that, you know, emblematic of that has been our ability to generate, you know, differentiated investment alpha across the cycle.

Adam Quincy Beatty: That's good context. Thanks very much. I appreciate it.

Adam Quincy Beatty: That's a good context. Thanks very much.

Speaker Change: That's good context, thanks very much appreciate it.

Speaker Change: Thank you.

Speaker Change: Our next question.

Operator: comes from the line of Stephanie Ma, Morgan Stanley.

Adam Quincy Beatty: Comes from the line of Stephanie Ma.

Stephanie Ma: Morgan Stanley.

Stephanie Ma: Great. Good afternoon. This is Stephanie on for Mike Cyprys. Our first question is from Luke. Now that you've spent the first few months in the CEO seat and now with the expanded role, I'm curious if you can just give us an update on the strategy and maybe reflect on some of the progress that you've made so far. What were you focused on in your first few months at PCN versus where you may be turning your attention now?

Stephanie Ma: Great. Good afternoon. This is Stephanie on for Mike Cyprus.

Stephanie Ma: First question is for Luc now that you've spent the first few months in the CEOC now at the extended role curious if you can just give us an update on the strategy and maybe reflect on some of the progress that you've made so far what are you focused on in your first few months of pizza and versus where you may be turning your attention to now.

Luke A. Sarsfield: Thanks, Stephanie. And that's a great question.

Speaker Change: Thanks, Stephanie and Thats, a great question I love talking about it so.

Luke A. Sarsfield: I love talking about it. So, as I mentioned, I came in with a real kind of strategic focus on doing a few things. The first was understanding the business. And as you recall, on the fourth-quarter call, I talked about how I really spent the tail end of 2023 out on a listening tour. You know, then you'll recall on the February call, we talked about the kind of five strategic pillars. And just to remind everybody, strategic pillar one was to institutionalize our platform and optimize our organizational structure.

Luke A. Sarsfield: So as I mentioned I came in with a real kind of strategic focus on doing a few things. The first was understanding the business and as you recall on the fourth quarter call I talked about how I really spent the tail end of 2023 out on a listening tour.

Luke A. Sarsfield: Then youll recall on the February call, we talked about kind of the five strategic pillars, and just to remind everybody strategic pillar one was to institutionalize our platform and optimize our organizational structure pillar two was to drive increased organic growth through our client franchise and strategic partnerships pillar three was.

Luke A. Sarsfield: Pillar two was to drive increased organic growth through our client franchise and strategic partnerships. Pillar three was implementing a robust, disciplined, and process-driven approach to M&A and inorganic growth. Pillar four was generating operational efficiencies through incentivizing collaboration and leveraging our data platform. And pillar five was enhancing our shareholder communications, you know, with an eye to greater visibility and accelerating growth and profitability in 2025 and beyond. I will tell you, and I think we started the call on this, I think in every instance, we've made real progress against those, yes.

Luke A. Sarsfield: And so if you take the organic growth pillar, we talked about, you know, the fundraising environment and the momentum we're seeing with our funds. If you take the inorganic growth pillar, you heard me talk about, you know, the pipeline, the conversations, and the fact that our model and our structure are responding to a broad swath of potential partners.

Luke A. Sarsfield: Renting a robust disciplined and process driven approach to M&A and inorganic growth pillar for was generating operational efficiencies instead.

Luke A. Sarsfield: Incentivizing collaboration and leveraging our data platform and pillar five was enhancing our shareholder communications with an eye to greater visibility and accelerating growth and profitability in 2025 and beyond I will tell you and I think we started the call and this I think in every instance, we've.

Luke A. Sarsfield: We've made real progress against those right and so if you take the organic growth pillar, we talked about the fundraising environment of the momentum we're seeing with our funds. If you take the inorganic growth pillar you heard me talk about the pipeline the conversations and the fact that our model and our structure is resonating.

Luke A. Sarsfield: You know, I mentioned, obviously, and you've seen the press releases on the progress we've made in terms of the leadership team, you know, adding RJ Jensen to lead strategy and M&A, adding Melody Kraft as our great new GC, and then some of the board moves that we talked about. And obviously, we'll continue to advance that we continue to be very aggressively out in the market looking for, you know, ahead of distribution and clients.

Luke A. Sarsfield: Broad swath of potential partners I mentioned, obviously and you've seen the press releases on the progress we've made in terms of the leadership team.

Luke A. Sarsfield: Adding RJ Jensen to lead strategy and M&A, adding melodie craft is a great new GC and then some of the board are moves that we talked about and obviously, we will continue to advance that and we continue to be very aggressively out in the market looking for a head of distribution and clients, we talked about some of the systems and processes and we're doing a lot.

Luke A. Sarsfield: We talked about, you know, some of the systems and processes, and we're doing a lot of work around data and analytical initiatives, including AI, in terms of how we can drive, you know, greater data utilization and greater data insight. And then we talked about enhanced transparency. And as you've seen on this call, we introduced, you know, fee-related revenue, fee-related earnings, FRA margins, and we gave more detail in terms of, you know, fund-level fundraising.

Luke A. Sarsfield: Lot of work around data and analytical initiatives, including AI in terms of how we can drive.

Luke A. Sarsfield: Greater data utilization and greater data insight and then we talked about enhanced transparency and as you've seen on this call. We introduced fee related revenue fee related earnings FRE margins.

Luke A. Sarsfield: Given more detail in terms of fund level fund raising.

Luke A. Sarsfield: And I think we're really, really focused on building that shareholder momentum through investor day, where we're going to continue to share even more. I would say my focus right now is a relentless focus on We've put the plan in place. We feel really good about the team we're building.

Luke A. Sarsfield: And I think we're really really focused on building that shareholder momentum through the Investor day, where we're going to continue to share even more.

Luke A. Sarsfield: I'd say my focus right now.

Luke A. Sarsfield: As our relentless focus on execution, we put the plan in place we feel really good about the team we're building and now we've got to go execute and execute in a world class way and so we're really focused on that execution. We're really focused on accountability, we're really focused on tracking kpis related to that execution, but if I had to give you one watchword it would be execution.

Luke A. Sarsfield: And now we've got to go execute and execute in a world-class way. And so we're really focused on that execution. We're really focused on accountability. We're really focused on tracking KPIs related to that execution. But if I had to give you one watchword, it would be execution.

Stephanie Ma: That's great. Thanks for all that color, Luke. And then, just maybe, one more from us.

Speaker Change: That's great. Thanks for all that color and then just maybe one more from us turning to VC seems to be an area that's been out of favor and perhaps could be reinvigorated with the latest AI trends. So maybe you can just give us an update on your performance in the VC business does AI helps support that portfolio in any way and maybe how has.

Speaker Change: Investor appetite or demand evolves around that space lately. Thank you.

Luke A. Sarsfield: Great question. I'd say a few things.

Luke A. Sarsfield: Turning to VC seems to be an area that's been out of favor and perhaps could be reinvigorated with the latest AI trends. So maybe you can just give us an update on your performance in the VC business. Does AI help support that portfolio in any way? And maybe how has investor appetite or demand evolved around that space lately?

Luke A. Sarsfield: Thank you. Great question. I'd say a few things. Number one,

Speaker Change: Question, I'd say, a few things number one I think youll recall I noted that wed actually seen real momentum.

Luke A. Sarsfield: Number one, I think you'll recall I noted that we'd actually seen real momentum in our core fundraising around Truebridge and their core fund. Obviously, that's our marquee venture capital strategy. I think it's emblematic of a few things.

Luke A. Sarsfield: Our core fund raising around Trowbridge in their core fund obviously, that's our marquee venture capital strategy I think it's emblematic of a few things number one is there a consistent track record of investment in Alpha generation Thats really profound across cycles across markets number two is the fact that they really are.

Luke A. Sarsfield: Number one is their consistent track record of investment and alpha generation that's really profound across cycles and across markets. Number two is the fact that they really are an access-constrained strategy with access to really top, top world-class managers that I think many find very hard to access outside of Truebridge. We can provide that access. I think venture capital is a place where, if you look at the dispersion of returns, it's not an 80-20 rule. It's like a 95-5 rule in venture capital.

Luke A. Sarsfield: Our access constrained strategy with access to really top top world class managers that I think many find very hard to access outside of Trowbridge and we can provide that access and I think venture is a place where if you look at.

Luke A. Sarsfield: Kind of dispersion of returns there.

Luke A. Sarsfield: The good news is we're on the right side of that. Then I would say the last thing is that we've always been great believers in data and analytics across our platform. Clearly, we're seeing the AI trend accelerate the investing landscape for a lot of venture managers. As I mentioned, we're trying to use data and, ultimately, artificial intelligence to gain greater insights into our business, into our investing capabilities, into our portfolio management capabilities, and into our dealings with a lot of our LPs and clients.

Luke A. Sarsfield: It's not an 80 20 rule looks like a $95 five rule adventure and the good news is we're on the right side of that.

Luke A. Sarsfield: And then I would say the last thing is we've always been great believers in data and analytics across our platform clearly we are seeing the AI trends both accelerating the investing.

Luke A. Sarsfield: Land scape for for a lot of venture managers, but as I mentioned, we're trying to use data and ultimately artificial intelligence to gain greater insights into our business and are investing capabilities into our portfolio management capabilities into our dealings with a lot of our Lps and clients and so thats going to provide our business in every way.

Luke A. Sarsfield: That's going to pervade our business in every way. I would tell you personally, I'm incredibly excited about the opportunities in venture. I think coming off what was the last cycle and now going into a new cycle of growth and opportunity, we're really excited about that.

Luke A. Sarsfield: But I would tell you personally I am incredibly excited.

Luke A. Sarsfield: The opportunities in venture I think coming off what was the last cycle and now going into a new new cycle of growth and opportunity. We're really excited about that franchise.

Speaker Change: Great. Thanks, Scott.

Speaker Change: Thank you.

Luke A. Sarsfield: I would now like to turn the conference back to Luke Sarsfield for his closing remarks, sir.

Luke A. Sarsfield: I would now like to turn the conference back to Luke's ourselves FERC closing remarks, Sir.

Luke A. Sarsfield: Thank you, and thank you to all of you for joining us today. As you've heard today, P10 is positioned to build upon the world-class alternative asset management solutions that the investment community has come to know and respect. We're creating an operating team that partners with and provides critical support to our existing managers and strategies. Moreover, we're a business made up of P10 shareholders, extraordinarily aligned with all of you that are listening today. I'm confident that the initiatives we're pursuing will deliver enhanced long-term returns for our team and for all our fellow shareholders. We look forward to speaking with you all in August and to seeing you in New York City on Thursday, September 19th for our inaugural Investor Day. Thank you, and good evening.

Luke A. Sarsfield: Thank you and thanks, all of you for joining us today as you've heard today <unk> is positioned to build upon our world class alternative asset management solutions that the investment community has come to know and respect we're overlaying an operating team that partners with and provides critical support to our existing managers and strategies. Moreover.

Luke A. Sarsfield: We are a business made up of <unk> shareholders extraordinary aligned with all of you that are listening today I am confident that the initiatives. We are pursuing will deliver enhanced long term returns for our team and for all of our fellow shareholders. We look forward to speaking with you all in August and to seeing you in New York City on Thursday September 19th for our inaugural.

Luke A. Sarsfield: Investor Day, Thank you and good evening.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: [music].