Q2 2024 P10 Inc Earnings Call
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Lateef: Hello, and welcome to the P-10 second quarter 2024 conference call. My name is Lateef, and I will be coordinating your calls today. Currently, 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 call is being recorded. I will now hand the call over to your host, Mark Hood, EVP, Chief Administrative Officer. Mark, please go ahead.
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Lateef: Hello and welcome to the P-10 second quarter 2024 conference call. My name is Lateef and I will be coordinating your calls today. Currently, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session.
Speaker Change: As a reminder, today's conference call is being recorded.
Mark Hood: I will now hand the call over to your host, Mark Hood, EVP, Chief Administrative Officer. Mark, please go ahead.
Mark Hood: Thank you, operator. On today's call, we will be joined by Luke Sarsfield, Chairman and Chief Executive Officer, Amanda Coussens, EVP, Chief Financial Officer, and Chief Compliance Officer. Additionally, in the room with us today is RJ Jensen, our EVP and Head of Strategy at M&A. 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.
Speaker Change: Thank you operator. On today's call, we will be joined by Luke Sarsfield, Chairman and Chief Executive Officer, Amanda Coussens, EVP, Chief Financial Officer and Chief Compliance Officer. Additionally, in the room with us today is our agency, our EVP and Head of Strategy and MNA.
Mark Hood: 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. The forward-looking statements included herein are made only as of the date hereof.
Speaker Change: Before we begin, I'd like to remind everyone that this conference call, as well as the presentation slides, may constitute forward-looking statements
Mark Hood: 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.
Mark Hood: Actual results for future periods made differently 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 Hood: 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 could be useful in evaluating the company's performance. A reconciliation of these measures to the most 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 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.
Mark Hood: During the call, we will also discuss certain non-gap measures which we believe can be useful in evaluating the company's performance. A reconciliation of these measures to the most comparable gap measure is available in our earnings release and our filing for the SEC.
Luke Sarsfield: Thank you, Mark. Good afternoon, everyone, and thank you for joining us today. Our second quarter performance demonstrates the strong momentum we have in our business, underscores our ability to execute the strategic plan we laid out at the beginning of the year, and, we believe, positions P10 well for the second half of 2024 and beyond. We raised and deployed $844 million in gross new fee-paying AUM and delivered record revenue of $71 million, representing 14% year-over-year growth.
Mark Hood: I will now turn the call over to Luke.
Luke: Thank you, Mark. Good afternoon, everyone, and thank you for joining us today.
Luke: Our second quarter performance demonstrates the strong momentum we have in our business, underscores our ability to execute the strategic plan we laid out at the beginning of the year, and, we believe, positions P-10 well for the second half of 2024 and beyond.
Speaker Change: We raised and deployed $844 million in gross new fee-paying AUM and delivered record revenue of $71 million, representing 14% year-over-year growth.
Luke Sarsfield: We delivered fee-related revenue, or FRR, of $68.3 million, a 12% increase compared to the prior year period, and generated approximately $33.6 million of fee-related earnings, or FRE, a 3% decrease from Q2 2023. This represents an FRE margin of 49%.
Mark Hood: We delivered fee-related revenue, or FRR, of $68.3 million, a 12% increase compared to the prior year period, and generated approximately $33.6 million of fee-related earnings, or FRE, a 3% decrease from Q2 2023.
Luke Sarsfield: Amanda will provide additional detail on our second quarter financial performance shortly. We have continued to gain traction with clients in the second quarter. We have 12 commingled funds in the market, providing multiple avenues to meet the particular investment objectives of our clients and achieve our organic growth goals. I want to take a minute to highlight some of our momentum on the fundraising front. Our NAV lending strategy, Park Capital, closed Fund 4 at $645 million, meaningfully exceeding its target of $500 million. Fund 4 received strong re-ups from existing investors, as well as significant new commitments, and represented more than a 60% increase compared to its predecessor fund.
Luke: This represents an FRE margin of 49%.
Luke: Amanda will provide additional detail on our second quarter financial performance shortlist.
Speaker Change: We have continued to gain traction with clients in the second quarter, we had 12 co-mingled funds in the market, providing multiple avenues to meet the particular investment objectives of our clients and achieve our organic growth goals. I want to take a minute to highlight some of our momentum on the fundraising front.
Speaker Change: Our NAV lending strategy, Hart Capital, closed Fund 4 at $645 million.
Speaker Change: meaningfully exceeding its target of $500 million.
Speaker Change: The fund received strong re-ups from existing investors, as well as significant new commitments.
Luke Sarsfield: As a credit strategy, HARC's fees are generated as capital is deployed, which means we will see the revenue contribution over time. Our venture lending manager, WTI, closed the second quarter with $321 million of fee-paying assets in Fund 11, which remains in the market and continues to raise capital. Bond Accord, our strategy that provides growth capital to alternative asset managers through non-controlling equity interests, ended the second quarter with $890 million in capital raised for BCP Fund 2, which we expect to close later this year.
Speaker Change: and represent in more than a 60% increase compared to its predecessor fund. As a credit strategy, Mark's fees are generated as capital is deployed, which means we will see the revenue contribution over time.
Speaker Change: Our venture lending manager, WTI, closed the second quarter with 321 million of fee paying assets in front of 11, which remains in the market and continues to waste capital.
Speaker Change: Bond Accord, our strategy that provides growth capital to alternative asset managers through non-controlling equity interests, ended the second quarter with $890 million in capital raised per BCP Fund 2, which we expect to close later this year.
Luke Sarsfield: Given the robust investing opportunities that we are seeing in this business, we continue to expect to launch BCP Fund 3 in 2025. Screwbridge, our venture capital strategy, closed its flagship fund at $880 million, exceeding its target of $750 million.
Speaker Change: Given the robust investing opportunities that we are seeing in this business, we continue to expect to launch BCP Fund 3 in 2025.
Speaker Change: Screwbridge, our venture capital strategy, closed its flagship fund at 880 million dollars, exceeding its target of 750 million dollars.
Luke Sarsfield: Truebridge expects to launch additional funds this year, including Blockchain 2 and Secondaries 2. RCP is positioned to deliver strong performance heading into the second half of the year. They recently launched Direct Fund 5 and anticipate launching Secondary Fund 5 later this year. We are excited about the investing opportunities that we are seeing and anticipate strong LP demand. Through two quarters, we've achieved 61% of our 2024 goal to organically raise and deploy $2.5 billion of gross new assets.
Speaker Change: For a bridge expects to launch additional funds this year, including blockchain 2 and secondaries 2.
Speaker Change: RCP is positioned to deliver strong performance heading into the second half of the year. They recently launched Direct Fund 5 and anticipate launching Secondary Fund 5 later this year. We are excited about the investing opportunities that we are seeing and anticipate strong LP demand.
Speaker Change: Through two quarters, we've achieved 61% of our 2024 goal to organically raise and deploy $2.5 billion of gross new assets.
Luke Sarsfield: We remain confident in meeting or exceeding this target and the financial guidance we provided to the market in February. With the number of funds in the market scheduled to increase as the year goes on, we expect continued strength in the second half of the year. Next, I want to highlight the ongoing progress around our key strategic initiatives. We remain steadfast in our commitment to the corporate imperatives we laid out in February. We're creating value through doubling down on focus areas that are performing, eliminating ancillary processes, and implementing world-class systems that are set to yield tangible results. I will now run through some of the key second quarter highlights and comment on the progress we've made.
Speaker Change: We remain confident in meeting or exceeding this target and the financial guidance we provided the market in February . With the number of funds in the market scheduled to increase as the year goes on, we expect continued strength in the back half of the year.
Speaker Change: Next, I want to highlight the ongoing progress around our key strategic initiatives.
Speaker Change: We remain steadfast in our commitment to the corporate imperatives we laid out in February. We're creating values for doubling down our focus areas that are performing, eliminating ancillary processes, and implementing world-class systems that are set to yield tangible results.
Speaker Change: I will now run through some of the key second quarter highlights and comment on the progress we've made.
Luke Sarsfield: First, I'm thrilled to share that last week we announced the appointment of Sarita Narsan Jairath as Executive Vice President and Global Head of Client Solutions, effective in mid-September. Sarita brings more than two decades of client-facing experience in the alternative space at firms such as Blackstone, J.P. Morgan, and Goldman Sachs. She will be integral in developing a comprehensive framework to serve our growing investor base. Therefore, Rita will help define the strategy and execution of our organic growth initiatives by expanding our client relationships and developing new products and offerings.
Speaker Change: First, I'm thrilled to share that last week we announced the appointment of Sureta Narsin Jairath as Executive Vice President in Global Head of Climate Solutions, effective in mid-September.
Speaker Change: So Rita brings more than two decades of quiet facing experience in the alternative space at firms such as Blackstone, JP Morgan and Goldman Sachs.
Speaker Change: She will be integral in developing a comprehensive framework to serve our growing investor base.
Speaker Change: Further, the reader will help define the strategy and execution of our organic growth initiatives by expanding our client relationships and developing new products and offerings. We look forward to her leadership at the firm as we advance the platform's long-term growth strategy.
Luke Sarsfield: We look forward to her leadership at the firm as we advance the platform's long-term growth strategy. As you will recall, when I released our Steady State P10 Senior Organizational Structure in February, I contemplated a structure that would have four executive vice president-level roles reporting directly to me and focused on four critical vectors: one, finance and compliance; two, administration and operations. 3.
Speaker Change: As you will recall, when I led out our Steady State P-10 Senior Organizational Structure in February , I contemplated a structure that would have four Executive Vice President-level roles reporting directly to me and focused on four critical vectors.
Speaker Change: One, finance and compliance.
Luke Sarsfield: Strategy and Corporate Development, and 4. Client Solutions and Capital Formation. With the appointment of Sarita, we have now established a world-class senior team.
Speaker Change: Two, administration and operations.
Speaker Change: 3. Strategy and Corporate Development, and 4. Client Solutions and Capital Formation.
Luke Sarsfield: I'm really excited to have the opportunity to partner with these extraordinary professionals and take P-10 to the next level. I also want to highlight that we have named Tracy Benford as our lead independent director. This new role enables additional effective oversight support from our experienced, diverse board. As PTEN's chairman, I cannot be more excited about the opportunity to work with Tracy. Next, we continue to execute on a disciplined and process-driven approach to inorganic growth.
Speaker Change: With the appointment of Sarita, we have now established a world-class senior team. I'm really excited to have the opportunity to partner with these extraordinary professionals and take P-10 to the next level.
Speaker Change: I also want to highlight that we named Tracy Benford as our lead independent director. This new role enables additional effective oversight support from our experienced diverse board. As P10's chairman, I cannot be more excited about the opportunity to work with Tracy.
Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.
Speaker Change: Next, we continue to execute on a disciplined and process-driven approach to inorganic growth.
Luke Sarsfield: R.J. Jensen and his team are doing a fantastic job as they build an inorganic growth engine and pipeline. We are encouraged by the opportunities we're evaluating, and we remain on track to announce a strategic transaction in the calendar year. Of course, we will remain selective as we seek to execute on the right transaction at the right terms.
Speaker Change: R.J. Jensen and his team are doing a fantastic job as they build an inorganic growth engine and pipeline.
Speaker Change: We are encouraged by the opportunities we are evaluating, and we remain on track to announce a strategic transaction in the calendar year. Of course, we will remain selective as we seek to execute on the right transaction at the right terms.
Luke Sarsfield: On that front, as we announced earlier this week, we increased our total borrowing capacity from our credit facilities from $359 million to $500 million. The larger facilities provide us greater financial and strategic flexibility and, importantly, extend maturities to August 2028. We want to thank our financial partners and our bank syndicate, which is made up of new and existing lenders, many of whom increased their commitment. Finally, as I addressed in our summary of Q2 results, we are pleased with the reception for the new KPIs we introduced to our reporting structure.
Speaker Change: On that front, as we announced earlier this week, we increased our total borrowing capacity from our credit facilities from $359 million to $500 million.
Speaker Change: The larger facilities provide a greater financial and strategic flexibility and importantly, extends maturity to August 2028.
Speaker Change: We want to thank our financial partners and our bank syndicate, which is made up of new and existing lenders, many of whom upsize their commitment.
Speaker Change: Finally, as I addressed in our summary of Q2 results, we are pleased with the reception around the new KPIs we introduced to our reporting structure.
Luke Sarsfield: As our Investor Day approaches in September, we will look for additional opportunities to increase transparency for the investment community. Before I hand the call off to Amanda, I want to touch on our capital allocation efforts, which remain focused on creating value for shareholders. We continue to believe our stock presents a compelling entry point for investors who are looking for access to a diversified alternative platform focused on the lower and core middle market.
Speaker Change: As our investor day approaches in September, we will look for additional opportunities to increase transparency for the investment community.
Speaker Change: Before I hand the call off to Amanda, I want to touch on our capital allocation efforts, which remain focused on creating value for shareholders.
Speaker Change: We continue to believe our stock presents a compelling entry point for investors who are looking for access to a diversified alternative platform focused on the lower and core middle market.
Luke Sarsfield: In the second quarter, we purchased 1,533,800 shares at an average price of $8.12. That takes the total quantum of shares purchased since the beginning of 2024 to $42.5 million. Since the inception of our repurchase program in 2022, we have repurchased a total of 8.2 million shares at an average price of $8.70. As of June 30, 2024, we had approximately $8 million remaining in the program. After the quarter, our Board of Directors authorized an additional repurchase in the amount of $12 million, bringing the total available for repurchases to approximately $20 million. With that, I'll hand the call over to Amanda. Thank you, Luke.
Speaker Change: In the second quarter, we were purchased 1,533,800 shares at an average price of $8.12.
Speaker Change: That takes the total quantum or shares repurchase since the beginning of 2024 to $42.5 million.
Speaker Change: Since the inception of our repurchase program in 2022, we have repurchased a total of 8.2 million shares at an average price of $8.70.
Speaker Change: As of June 30, 2024, we had approximately $8 million remaining on the program.
Speaker Change: After the quarter, our Board of Directors authorized an additional repurchase in the amount of 12 million dollars, bringing the total available for repurchases to approximately $20 million.
Amanda Coussens: Thank you, Luke. P10 delivered strong financial results in the second quarter, as our strategies continue to benefit from ongoing improvements to our corporate level organizational structure. During the second quarter, fee-paying assets under management were $23.8 billion, an 8% increase on a year-over-year basis. In the second quarter, $844 million of fundraising and capital deployment was offset by $855 million in step downs and expirations. As we mentioned at the start of the year, we expect step-downs and expirations for the full year to be approximately $1.5 billion, with most of the step-downs and expirations having occurred in Q2, and the remaining approximately $500 million distributed across Q3 and Q4. As anticipated, most of the second quarter step-downs and expirations are attributable to RCP Fund 9, a 2014 vintage, and TrueBridge Fund 2, a 2010 vintage.
Speaker Change: With that, I'll hand the call over to Amanda.
Amanda: Thank you, Luke. P10 delivered strong financial results in the second quarter, as our strategies continue to benefit from ongoing improvements to our corporate-level organizational structure.
Amanda: During the second quarter, fee-paying assets under management were $23.8 billion, an 8% increase on a year-over-year basis.
Speaker Change: In the second quarter, $844 million of fundraising and capital deployment was offset by $855 million in step-downs and expirations.
Amanda: As we mentioned at the start of the year, we expect step-downs and expirations for the full year to be approximately $1.5 billion, with most of the step-downs and expirations having occurred in Q2.
Amanda: and the remaining approximately 500 million distributed across Q3 and Q4.
Amanda: As we anticipate it, most of the second quarter step-downs and expiration are attributable to RCP SunDine, a 2014 vintage, and true-bridge fund too, a 2010 vintage.
Amanda Coussens: Revenue in the first quarter was $71.1 million, a 14% increase over the second quarter of 2023. Average fee rate in the second quarter was 115 basis points, which was driven by higher fee rates from direct strategies becoming a larger part of our fee-paying AUM mix, as well as higher catch-up, As Luke mentioned, we had 12 commingled funds in the market and saw broad participation across our investment platform, our private equity strategies raised and deployed $302 million, our venture solution raised and deployed $159 million, our credit strategies added $368 million to fee-paying assets under management, and our impact strategy added $15 million to fee-paying assets under management.
Speaker Change: Revenue in the first quarter was $71.1 million, a 14% increase over the second quarter of 2023.
Speaker Change: averaged B-rate in the second quarter with 115 basis points, which was driven by higher C-rate from direct strategies becoming a larger part of our fee paying A-win mix as well as higher catch up fees.
Speaker Change: As Luke mentioned, we had 12 commingled funds in the market and saw broad participation across our investment platform.
Luke: Our private equity strategies raised in deployed 302 million. Our venture solution raised in deployed 159 million.
Speaker Change: Our credit strategies added $368 million to fee-paying assets under management, and our impact strategy added $15 million to fee-paying assets under management.
Amanda Coussens: The performance of P10 strategies is reflective of our diverse global investor base, comprised of family offices and wealth managers, public pensions, endowments, and foundations, as well as our seasonal deal teams, who continue to execute on best-in-class investments and generate durable outcomes.
Speaker Change: The Performance of P-PEN Strategies.
Speaker Change: is reflective of our diverse global investor base comprised of family offices and wealth managers, public pensions and endowments and foundations, as well as our season deal teams who continue to execute on best-in-class investments and generate durable alpha.
Amanda Coussens: In the second quarter, catch-up fees were $6 million, bringing the total for the year to $13.7 million. Touch-up fees are driven by the timing of fund closings. And in the second quarter, the fees were primarily attributable to closings related to Bon Accord II, RCP Fund 18, and RCP Multi-Strat II. Based on the projected solar closings that may occur in the second half of 2024, our catch-up fees could exceed our previously stated annual guidance of $16 million. Operating expenses in the second quarter were $54.2 million, a 4% increase over the same period a year ago. The increase was primarily driven by compensation expense and placement fees.
Speaker Change: In the second quarter, catch-up fees were $6 million, bringing the total for the year to $13.7 million.
Speaker Change: Touch-up fees are driven by the timing of fund closings, and in the second quarter, the fees were primarily attributable to closings related to Bon Accord II, RCP Fund 18, and RCP Multi-Strat II.
Speaker Change: based on the projected sun closings that may occur in the second half of 2024. Our catch-up these could exceed our previously stated annual guidance of 16 million.
Speaker Change: Operating expenses in the second quarter were $54.2 million, a 4% increase over the same period a year ago. The increase was primarily driven by compensation expense and placement fees.
Amanda Coussens: Gap net income in the second quarter was $7.4 million, an increase compared to $2.1 million in the comparable period a year ago. Suggested EBITDA in the second quarter was $35.4 million, an increase of 2% from the second quarter of 2023. For the quarter, our adjusted EBITDA margin was 50%. Our margin came in a bit higher than expected due to the strength of our direct strategies and product. We still expect margins for the year to be in the mid-40s as we continue to make key investments that we believe will deliver clear ROI.
Speaker Change: Gap net income in the second quarter was $7.4 million, an increase compared to $2.1 million in the comparable period a year ago.
Speaker Change: The deficit EBITDA in the second quarter was $35.4 million, an increase of 2% from the second quarter of 2023.
Speaker Change: For the quarter, our adjusted EBITDA margin was 50%. Our margin came in a bit higher than expected due to the strength of our direct strategies and product banks.
Speaker Change: We still expect margins for the year to be in the mid-40s as we continue to make key investments that we believe will deliver clear ROI.
Amanda Coussens: For the second quarter, Adjusted Net Income, or ANI, was $28.8 million, an 8% increase over the second quarter of 2023, and fully diluted ANI EPS was $0.24 per share, an increase of 9% on a year-over-year basis. As discussed in our first quarter 2024 earnings results, we've included the following metrics for increased transparency and to help the investment community draw better apples-to-apples comparisons Fee-Related Revenue or FRR, Fee-Related Earnings or FRE, and the complimentary FRE mark. FRR in the quarter was 68.3 million, representing a 12% annual increase, and FRE was 33.6 million, representing a 3% decrease. Our FRE margin was 49% in the second quarter.
Speaker Change: For the second quarter, Adjusted Net Income, or ANI, was $28.8 million, an 8% increase over the second quarter of 2023.
Speaker Change: Fully diluted ANI EPS was $0.24 per share, an increase of 9% on a year-over-year basis.
Speaker Change: As discussed in our first quarter 2024 earnings results, we've included the following metrics for increased transparency and to help the investment community draw better apples-to-apples comparisons with the asset management landscape at large.
Speaker Change: Fee-Related Revenue, or FRR, Fee-Related Earnings, or FRE, and Complementary FRE Margin.
Speaker Change: FRR in the quarter was 68.3 million, representing a 12% annual increase, and FRE was 33.6 million, representing a 3% decrease. Our FRE margin was 49% in the second quarter.
Amanda Coussens: Cash and Cash Equivalents at the end of the second quarter were $31 million. At quarter end, we had an outstanding debt balance of $303 million and $56 million available on the Revolver. Today, we have an outstanding debt balance of $325 million, and $175 million available on the Revolver. We are pleased to have amended and extended our credit facility, which positions P10 for enhanced flexibility as we continue to evaluate potential transactions in the market. Our syndicate increased to 14 lenders with many upsizing their commitments. I am exceptionally thankful to all our banks who participated, especially our joint lead arrangers, JPMorgan Chase Bank, KeyBank Capital Markets, and Texas Capital Bank.
Speaker Change: Cash and cash equivalents at the end of the second quarter were $31 million.
Speaker Change: At quarter end, we had an outstanding debt balance of $303 million and $56 million available on the revolver. Today, we have an outstanding debt balance of $325 million and $175 million available on the revolver.
Speaker Change: We are pleased to have amended and extended our credit facility, which positions P10 for enhanced flexibility as we continue to evaluate potential transactions in the market.
Speaker Change: Our syndicate increased to 14 lenders, with many upsizing their commitments. I am exceptionally thankful to all our banks who participated, especially our joint lead arrangers.
Speaker Change: JPMorgan Chase Bank, Key Bank Capital Market, and Texas Capital Bank.
Amanda Coussens: We've worked with many of our lenders for years and appreciate their confidence in the company's ability to execute on our strategic growth plan. We enter the second half of the year with a strengthened balance sheet while maintaining relatively modest leverage levels, which we believe is prudent in the current environment. We also continue to pay our quarterly dividend for Class A and Class B common stock. Today, we declared a quarterly cash dividend of 3.5 cents per share, payable on September 20, 2024, to stockholders of record as of the close of business on August 30, 2024. Finally, as of June 30, 2024, our Class Day shares outstanding were $53,471,354, and Class B Shares outstanding were 58,207,544.
Speaker Change: We've worked with many of our lenders for years and appreciate their confidence in the company's ability to execute on our strategic growth plan. We enter the second half of the year with a strengthened balance sheet while maintaining relatively modest leverage levels, which we believe is prudent in the current environment.
Speaker Change: We also continue to pay a quarterly dividend, or class A and class B common stock.
Speaker Change: Today, we declared a quarterly cash dividend of 3.5 cents per share, payable on September 20, 2024, to stockholders of record as of the close of business on August 30, 2024.
Speaker Change: Finally, as of June 30, 2024, our clock day shares up standing for 53,471,354, and clock B shares up standing for 58,277,544.
Amanda Coussens: Last month, we announced our Investor Day will be taking place on September 19, 2024, at the New York Stock Exchange. Additional details can be found on the investor relations page of our website. We invite you to join us and hear directly from our management team and affiliated managers on our financial outlook, growth levers, and strategic vision. Formal presentations will be followed by a Q&A session, all of which will be webcast on our Investor Relations website.
Speaker Change: Last month, we announced our Investor Day will be taking place on September 19, 2024 at the New York Stock Exchange.
Speaker Change: Additional details can be found on the investor relations page of our website. We invite you to join us and hear directly from our management team and affiliated managers on our financial outlook, growth levers, strategic vision, and investment thesis.
Speaker Change: formal presentations will be followed by Q&A session, all of which will be webcasts and our investor relations website. We look forward to updating the street on our growth plan and meeting with our investment community in person in September.
Amanda Coussens: We look forward to updating the street on our growth plan and meeting with our investment community in person in September. Thank you for your time today. We look forward to updating you on our continued progress in the second half of the year as we execute against our growth initiative. I'll now pass the call over to the operator to begin the Q&A session.
Speaker Change: Thank you for your time today. We look forward to updating you on our continued progress in the second half of the year as we execute against our growth initiative. I'll 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 11 on your telephone. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ben Budish of Barclays.
Speaker Change: [inaudible]
Speaker Change: Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again.
Speaker Change: Our first question comes from the line of Ben Budish of Barclays.
Ben Budish: Hi. Good evening, and thanks for taking the question.
Ben Budish: Hi, good evening and thanks for taking the question. I guess maybe to start just on the fun raising, Luke, you mentioned you're 60% of the way to your full-year target.
Ben Budish: I guess maybe to start just on the fundraising, you know, Luke, you mentioned you're 60% of the way to your full year target. You know, it sounds like there's a lot of momentum you feel good about. I guess just from a messaging perspective, why not raise the target? I guess there's still a couple quarters left to report, but I was just curious about what the upside to that might look like if there's any more color you could give there.
Ben Budish: It sounds like there's a lot of momentum, you feel good about, I guess, just from a messaging perspective, why not raise the target, I guess there's still a couple quarters left to report, but just curious about what the upside to that might look like if there's any more quality you could give there.
Luke Sarsfield: Thanks, Ben. Well, as you recall, I think when we did the 61%, that was obviously off the 2 12 billion, but our guidance was, as you recall, 2 12 billion or more. And I think we're feeling really good about the or more. I think we really have clear momentum to be able to organically raise and deploy 2 12 billion or more. As we mentioned, we had 12 funds in the market last quarter.
Speaker Change: Thanks, Ben. Well, as you recall, I think when we did the 61%, that was obviously off the $2.5 billion, but our guidance was, as you recall, $2.5 billion or more.
Speaker Change: And I think we're feeling really good about the or more. I think we really have, you know, clear momentum to be able to organically raise and deploy, you know, two and a half billion or more. As we mentioned, we had 12 funds in the market last quarter. We think those numbers are going to expand as we get into it.
Luke Sarsfield: We think those numbers are gonna expand as we get into it, as we get into the second half. And when you look at some of the individual strategies, we think we have a lot of momentum, right? So you look at Truebridge closing its flagship fund at 880, up from the target of 750. You look at Hart closing fund four at 645 ahead of the 500 target. You look at the initial success of WTI, and we're still in the market raising.
Speaker Change: as we get into the second half.
Speaker Change: And when you look at some of the individual strategies, we think we have a lot of momentum, right? So you look at Troubridge closing the flagship fund at $880, up from the target of $750. You look at Hart closing fund four at $645, ahead of the $500 target.
Luke Sarsfield: You look at the ongoing momentum in Bonacord and that we're still raising money, and then I think we're really going into an exciting fundraising cycle at RCP. So I think we feel really good about the number and, frankly, beyond. We're obviously gonna talk a lot more about the longer-term fundraising momentum and the client activity that we're seeing at our investor day. But I think we feel really, really good about our ability to meet and exceed the targets.
Speaker Change: You look at the initial success of WTI, and we're still in the market raising, you look at the ongoing momentum and bond record, and that we're still raising, and then I think we're really going into an exciting fundraising cycle and RCP. So I think we feel really good about the number, you know, in the back half and frankly beyond. We're obviously going to talk a lot more about the longer term fundraising momentum and the client activity that we're seeing at our investor day. But I think we feel really, really good about our ability to meet and achieve the targets we let out.
Ben Budish: Got it. How helpful!
Ben Budish: And then maybe just thinking about the deployment environment, you know, we saw sort of a mix of performance from some of your larger cap peers, but a number of them showed very meaningful step-ups quarter over quarter in deployment, and yours stepped down a little bit quarter over quarter. Now you operate in some, you know, different markets and probably go head to head a bit less than I think some might expect.
Speaker Change: Got it. How helpful. And then maybe just thinking about the deployment environment, you know, we saw sort of a mix of performance from some of your larger cap peers, but a number of them showed like very meaningful step-ups quarter over quarter in deployment. And yours stepped down a little bit quarter over quarter. Now you operate in some, you know, different markets and probably go to head-to-head a bit less than I think some might expect. So just could you comment on what you expect for the back half of the year there? Any sort of nuances about the markets in which you operate that, you know, would be less obvious from what we're seeing from some of your peers?
Ben Budish: So just could you comment on what you expect for the back half of the year there? Any sort of nuances about the markets in which you operate that, you know, would be less obvious from what we're seeing from some of your peers?
Luke Sarsfield: No, look, I think, and again, I can't comment on our peers, but just on us, I think we continue to see a really attractive investing environment across many of our businesses. Recall that a lot of our businesses, when we report, we report on committed capital, and so that's what you're seeing in the fundraising. The big place, I think, where we're really charging on deployed is in our NAV lending strategy, and I think we're seeing some really, really robust opportunities to deploy capital there.
Speaker Change: No, look, I think, and again, I can't comment on our peers, but just on us, I think we continue to see a really attractive investing environment across many of our businesses.
Speaker Change: I recall that a lot of our businesses, when we report, we report on committed capital, and so that's what you're seeing in the fundraising. The big place, I think, where we're really charging undeployed is in our NAV lending strategy.
Luke Sarsfield: We just raised a larger fund. I think we're obviously given some of the stresses and strains that the buyout market is under, you know, where we're a lender to many of those funds. Whether it's to be able to do portfolio add-ons, whether it's to be able to, you know, sort of stretch and do new strategic transactions within the funds, we're really affording our underlying clients the ability We think that it continues to be a really robust environment.
Speaker Change: and I think we're seeing some really, really robust opportunities to deploy capital there. We just raised the larger fund. I think we're obviously given some of the stresses and strains that the buyout market is under, you know, where we're a lender to many of those funds, whether it's to be able to do portfolio add-ons, whether it's to be able to sort of sort of stretch and do news strategic transactions within the funds. We're really affording our underlying clients, the ability to do that. That we think that continues to be a really robust environment. We're obviously going to be, it is a credit strategy and a credit strategy. We're going to be very prudent about risk underwriting. Obviously we want to generate great returns for our LPs.
Luke Sarsfield: We're obviously going to be, it is a credit strategy, and in credit strategies, we're going to be very prudent about risk underwriting. Obviously, we want to generate great returns for our LPs, and so we're going to be balanced. We're going to be measured. When we think there's an opportunity to lean in, we'll lean in, but we're very comfortable with our pace.
Speaker Change: And so we're going to be balanced, we're going to be measured, when we think there's an opportunity to lean in, we'll lean in, but we're very comfortable with our pace of deployment right now.
Ben Budish: Okay. Now if I could squeeze in one more just kind of detail question. Your other revenue has been, you know, quite a bit higher in the first half of this year versus prior years and higher in Q2 than Q1. Could you just remind us what's in that exactly and why it has been going up? And is this like an okay run rate to think about for the rest of the year?
Speaker Change: understood. Now, if I could squeeze in one more, just kind of, Luke, that detail question. Your other revenue has been, you know, it's quite a bit higher in the first half of this year versus prior years in hiring Q2 and Q1. Could you just remind us what's in that exactly and why has it been going up? And is this like an okay to run right to think about for the rest of the year?
Amanda Coussens: Amanda, do you want to take this?
Amanda Coussens: Yes, I think in general, in the second quarter in particular, we had a bit of incentive fees that came through other revenue that is not typical for our, you know, start our model, as you're aware.
Speaker Change: Amanda, do you want to take that? Yes.
Amanda: In general, in the second quarter in particular, we had a bit of incentive fees that came through for other revenue that is not typical for our, you know,
Amanda Coussens: And really, these incentive fees are earned based on the performance and structure of the specific investment. The incentive fees you're seeing in the financials this quarter, in particular, are the result of just one client at RCP. And so we feel like disclosing FRR, FRE, and FRE margin certainly makes it easier to appreciate the nature of our business model, which is built upon leading carry with the underlying strategies, as we've said in the past. There is a bit of ongoing revenue, but I would say, you know, in general, it's pretty good.
Speaker Change: Strike our model as you're aware.
Amanda: and really, it's been, it's been a piece, get our based on performance and structure of the specific investment. The incentive piece you're seeing in this financial discord particular are the results of just one client at RCT.
Amanda: And so, we feel like disclosing FRR, FRE, and FRE margin certainly make it easier to appreciate the nature of our business model, which is built upon leading carry with the underlying strategy, as we've said in the past.
Speaker Change: There is a bit of ongoing revenue but I would say you know in general it's fairly minimal.
Ben Budish: Okay, all right, great, thank you. And maybe if I could just add one thing to that, that is... Times like these are expressly the reason we wanted to give you what I would call a more apt and easy comparison with our peers. And so this is why we rolled out the KPIs, like FRA and FRE, so that you could take out sort of any volatility in any given quarter, obviously positive volatility in this case.
Speaker Change: Alright, great thinking. And maybe if I could just add one thing to that, that is...
Speaker Change: Times like these are expressly the reason we wanted to give you what I would call a more apt and easy comparison with our peers. And so this is why we rolled out the KPIs like FRR and like FRE, so that you could take out sort of any volatility in any given quarter, obviously positive volatility in this case, and we're happy to have it. We're really excited about that relationship that we have and the client that we have there, and the success we've had for them, which ultimately generated that incremental incentive fee revenue. But on the long run, we want to really make sure we're giving you the apples to apples comparison, and that's why we did move to FRR and FRE.
Kenneth Worthington: Our next question comes from the line of Kenneth Worthington of J.P. Morgan.
Speaker Change: I understood that. Thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Kenneth Worthington of J.P. Morgan.
Alexander Bernstein: Hi, it's Alex Bernstein from Arford County. Thanks so much for taking our question. For my first question, I wanted to double-click on the theories. I know they stepped up quite a bit, even when we're comparing on an ex-catch-up feed basis. You mentioned there are some direct strategies coming online that are driving these. How should we think about theory on a go-forward basis and, say, for a reasonable timeline maybe the rest of this year and next year, to the extent you're able to comment?
Speaker Change: Hi, it's Alex Bernstein, Arnford County. Thanks so much for taking our questions.
Alex Bernstein: For our first question, I wanted to double click on C-Rays. I know they steps up quite a bit, even when we're comparing on an X-Catch of Feet Bases.
Speaker Change: You mentioned there are some direct strategies coming online or driving these. How should we think about fury on a go-forward basis and say for a reasonable timeline, maybe the rest of this year and next year, take sent your opinion comment.
Amanda Coussens: Yes, thank you for the question. Our core fee rate, ex-catch-up fees, should be approximately 105 basis points for 2024, as we've been, you know, as we've guided in the past. Our average all-in fee rate in the second quarter of 115 basis points was really driven by higher fee rate direct strategies becoming a larger part of our fee-paying AUM mix, as well as higher catch-up fees in the quarter. We look forward to unpacking our dynamics around our fee rate, catch-up fees, and growth framework across our various strategies at our upcoming investor day.
Speaker Change: Yes, thank you for the question. Our core fee rate, X catch-up fee, should be approximately 105 basis points for 2024 as we've been, you know, as we've had it in the past.
Speaker Change: Our average all-in fee rate in the second quarter of 115 basis points was really driven by higher fee rate direct strategies, becoming a larger part of our fee-paying AUM mix, as well as higher catch-up fees in the quarter.
Speaker Change: We look forward to unpacking our dynamics around our fee rate, catch-up fees, and growth framework across our various strategies at our upcoming Investor Day.
Alexander Bernstein: Thanks so much. Maybe to ask a bigger picture question, you mentioned the M&A topic again. It definitely seems like an area of focus. You mentioned that you're planning on announcing a deal at some point this year. What areas are you looking at specifically, or where are you seeing interesting opportunities? There's obviously been quite a bit of M&A in the broader alternative asset management space. Are you thinking of a geographic expansion? Would it be a certain type of strategy that you're currently potentially missing that you want to add to the fold? Just more and more commentary on your strategy there that you can provide.
Speaker Change: Thanks so much. Maybe to ask a bigger picture question, you mentioned the M&A topic again. Definitely seems like an area of focus.
Speaker Change: You mentioned that you're planning on announcing a deal at some point this year.
Speaker Change: What areas are you looking at specifically or where are you seeing interesting opportunities? There's obviously been quite a bit of M&A in the broader Alzheimer's or Bass Management States.
Speaker Change: Are you thinking of a geographic expansion? Would it be a certain type of strategy that you're currently...
Speaker Change: is essentially missing that you want to add to the fold. Just more and more commentary on your strategy there to succeed. You can provide it. Thank you.
Luke Sarsfield: Sure Alex, happy to, and obviously, as you mentioned, M&A is an important part of our business model, and it has been, and it will continue to be, and we think that ability to drive organic growth is really valuable to us. We also think that, ultimately, it's valuable to our LPs, and that's why we engage in it. And I just want to say a few things. One is, you know, when we think about what we want to accomplish, one is we want it to be additive to the whole of P10. We want it to be, you know, simpatico and symbiotic with our other strategies. That's really important.
Alex Bernstein: Sure, Alex, happy to. And obviously, as you mentioned, you know, M&A is an important part of our business model. It has been, and it will continue to be. And we think, you know, that ability to drive inorganic growth is really valuable. It's valuable to us. We also think that ultimately it's valuable to our LPs, and that's why we engage in it.
Speaker Change: and I'd just say a few things. One is...
Speaker Change: You know, when we think about what we want to accomplish, one is we want it to be additive to the whole of P-10.
Speaker Change: We want it to be simpatico and symbiotic with our other strategies. That's really important.
Alex Bernstein: And obviously, we're only going to do transactions that we believe make both strategic and economic sense for P10 and for our shareholders. And so those are kind of the constraints as we think about it.
Alex Bernstein: When we look out in the broader environment, I'd really highlight kind of
Alex Bernstein: four areas or four different kinds of M&A transactions that we're evaluating at any point in time.
Alex Bernstein: One is what I would call
Alex Bernstein: What you think of as both ons to existing strategies, tuck oners to things we already do. You know, we have seven market-leading strategies that doesn't mean that there aren't things that we could tuck up or tuck under those individual strategies.
Luke Sarsfield: We're always on the lookout for those, and the good news is we often run into them because our strategies are out there in the market every day doing business, and they're seeing and running into some of these other smaller institutions, and so if there's an opportunity to do something that fits very nicely and tucks under and adds a capability or some sort of investing acumen to one of our existing strategies, we're always open to doing it I would then say, to your point, there are three areas we really think about as broadening our remit and our footprint. First, as you mentioned, was geography.
Alex Bernstein: We're always on the lookout for those, and the good news is we often run into them because our strategies are out there in the market every day doing business, and they're seeing and running into some of these other smaller institutions, and so if there's an opportunity to do something that fits very nicely and tucks under and adds a capability or some sort of investing acumen to one of our existing strategies, we're always open to do it.
Alex Bernstein: I would then say to your point, there are three areas we really think about as broadening a remit in our footprint.
Luke Sarsfield: Generally, our business is predominantly a North American business at this point, and we think some of the strategies we execute on very ably in North America have analogs outside the U.S., in Europe, in Asia, and so being able to deliver on a global basis for our clients is something that is really important to us. We can obviously do that synthetically right now, but if we could do it with proprietary P-10 investment strategies, that would be even better, and so we really look at what might be out there in the geographic landscape.
Alex Bernstein: First, you mentioned it was geography, you know, certainly our business is predominantly a North American business at this point, and we think some of the strategies we execute on very ably in North America have analogs outside the U.S., in Europe , in Asia.
Alex Bernstein: And so being able to deliver on a global basis for our clients is something that is really important to us. We can obviously do that synthetically right now, but if we could do it with proprietary P-10 investment strategies, that would be even better. And so we really look at what might be out there in the geographic landscape.
Luke Sarsfield: And then, to your other point, we also look at capabilities and what are some of the capabilities that we may not have in a broad-based way and that we're also hearing loud and clear from our LPs that they would like and that they would like to have from us. And so I think there are two areas to think about there. We have a number of private credit strategies, but in the vibrant middle of the private credit spectrum, whether it's direct lending, whether it's asset-based lending, we don't really have a full broad-based strategy there, and so if there was something we could do that would leverage our ecosystem in the middle and lower middle market around private credit, we'd be very excited about that.
Alex Bernstein: And then to your other point, we also look at capabilities, and what are some of the capabilities that we may not have in the broad-based way, and that we're also hearing loud and clear from our LPs that they would like, and they would like to have from us.
Alex Bernstein: and so I think two areas to think about there. We have a number of private credit strategies.
Alex Bernstein: but in the vibrant middle of the private credit spectrum, whether it's direct lending, whether it's acid-based lending.
Alex Bernstein: We don't really have a full broad-based strategy there, and so if there was something we could do that would leverage our ecosystem in the middle and lower middle market around private credit, we'd be very excited about that.
Luke Sarsfield: And then I think the other place that we frankly get a lot of LP inquiries about is real assets, and I think that's both real estate and infrastructure. But I think, particularly, many of our clients are looking for infrastructure exposure, and they've asked us, you know, we think P-10 would be a great partner to help provide that. Is that something you would think about over time? And, of course, the answer is absolutely yes if we could find the right strategy and the right platform.
Alex Bernstein: and then I think the other place that we frankly get a lot of LP inquiry about is real assets.
Alex Bernstein: And I think that's both real estate and infrastructure, but I think particularly many of our clients are looking for infrastructure exposure, and they've asked us, you know, we think P-TEM would be a great partner to help provide that. Is that something you would think about over time? And of course, the answer is absolutely yes, if we could find the right strategy and the right platform.
Luke Sarsfield: And so that's kind of the quick road map of the things we're looking at. I would say that, you know, RJ and his team have done an absolutely fantastic job of building out a framework, an approach, a process, one that's replicable, and one that really focuses on, you know, not just reacting to what comes to us but focusing on what are the right platforms for us that we want to own and what the engagement and cultivation strategy should be with those platforms such that when they do decide the time has come for some And so we're really focused on that as well.
Alexander Bernstein: It's very helpful. Thank you so much for the detailed answer.
Alex Bernstein: And so those, that's kind of the quick roadmap of the things we're looking at, I would say that, you know, RJ and his team have done just an absolutely fantastic job of building out a framework and approach a process, one that's replicable and one that really focuses on, you know, not just reacting to what comes to us.
Alex Bernstein: but focusing on what are the right platforms for us that we want to own and what the engagement of cultivation strategy to be with those platforms such that when they do decide the time has come for some evolution in their own ship structure, we're at the top of the list, and so we're really focused on that as well.
Speaker Change: It's very helpful to thank you so much for being till the answer.
Stephanie Ma: Our next question comes from the line of Stephanie Ma of Morgan Stanley.
Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Stephanie Ma of Morgan Stanley.
Stephanie Ma: Hey, thanks for taking my question. Maybe just want to follow up on the M&A question. Can you just give us an update on how you think about uses of capital here as the balance is growing and you increase your total load barring capacity, how you think about share by bags, potential M&A, and piece of the pie at this point.
Stephanie Ma: Hey, thanks for taking my question. Maybe just one follow-up on the M&A question. Can you just give us an update on how you think about uses of capital here as the debt balance is growing and you increase your total borrowing capacity? How are you thinking about share buybacks, potential M&A, and pace of debt paydown at this point?
Luke Sarsfield: Great. Well, let's start here.
Speaker Change: Great. Well, let's start here. So, first and foremost, our capital allocation priorities have not changed, right? And they remain the same, they will remain the same. So, as we've always said, number one is that we're going to maintain our dividend and presumably, over time, grow our dividend at a reasonable pace, consistent with our historic practice.
Luke Sarsfield: So, first and foremost, our capital allocation priorities have not changed, right? And they remain the same. They will remain the same.
Luke Sarsfield: So, as we've always said, number one is that we're going to maintain our dividend and, presumably, over time, grow our dividend at a reasonable pace consistent with our historic practice. Our next two priorities then, and this will obviously depend, it'll be conditioned on where our share price is, where are the opportunities in the broader M&A market, but it's always going to be, you know, share or purchase and M&A And you can see, again, we highlighted some of the activities we've taken on share or purchase when we see an opportunity and we think our stock price, for whatever reason, is dislocated, we're going to lean in there.
Speaker Change: Our next two priorities then, and it will obviously depend and it will be conditioned on where is our share price, where are the opportunities in the broader M&A market, but it's always going to be, you know, share or purchase.
Speaker Change: and M&A. And you can see, again, we highlighted some of the activities we take and share or purchase when we see an opportunity and we think our stock price, for whatever reason, is dislocated, we're going to lean in there, and I think we did that particularly in the first and second quarters of the year, and obviously to the extent
Luke Sarsfield: And I think we did that, particularly in the first and second quarters of the year, and obviously, to an extent, touch wood, it didn't. But if it were to happen again, we would be very focused on it and continue to lean in. And you saw that we increased the authorization under our share repurchase program to do share repurchases back up to $20 million.
Luke Sarsfield: And then M&A is a really important strategic priority for us, as we've talked about. We want to do a deal, we want to do many deals, but we want them to be the right deals over time. That is, I've talked before about this approach of crawl, walk, run.
Speaker Change: Touch wood it doesn't, but if it were to happen again, we would be very focused on it and continue to lean in, and you saw that we increased the authorization to do shareware purchases back up to $20 million.
Speaker Change: And then M&A is a really important strategic priority for us, as we've talked about. We want to do a deal. We want to do many deals, but we want them to be the right deals over time, that is.
Luke Sarsfield: And so we're going to be really thoughtful about the kind of M&A that we do. And we want to make sure that we've really built the M&A and the inorganic muscle in the right way so that we can execute on it, integrate on it, and then deliver the, you know, IRR or ROI out of the M&A deal in the right way that we think our shareholders demand. And so those are going to be, you know, probably the next two priorities. And obviously, at any point in time, maybe the relative positioning of them changes, but they're very close.
Speaker Change: I've talked before about this approach of crawl, walk, run, and so we're going to be really thoughtful about the kind of M&A that we do and we want to make sure that we've really built the M&A and the inorganic muscle in the right way so that we can execute on it, integrate on it, and then deliver the, you know, IRR or ROI out of the M&A deal in the right way that we think our shareholders demand. And so those are going to be, you know, probably the next two priorities and obviously at any point in time, maybe the relative positioning of them changes, but they're very close.
Luke Sarsfield: And then debt paydown is going to be kind of the last priority. One of the things I would note here is, as a factor of the fact that we did this new facility and we upsized the credit facility, we haven't yet started to amortize that. When it does start to amortize, we'll obviously pay it down. And so whenever we have excess cash, we're generally not going to hold that cash; we're going to use it for one of our four priorities that I outlined there.
Speaker Change: And then debt pay down is going to be kind of the last priority. One of the things I would note here is as a factor of the fact that we did this new facility, and we upsized, you know, the credit facility,
Speaker Change: We haven't yet started. That hasn't yet started to amortize. When it does start to amortize, we'll obviously pay it down. And so whenever we have excess cash, we're generally not going to hold that cash. We're going to use it for one of our four priorities that I outlined there. But we may just be for a minute at a moment in time where our ability to pay down any of our debt is a little bit constrained because we put a new facility in place and there's nothing actually drawn on the revolver right now.
Luke Sarsfield: But we may just be for a minute at a moment in time where our ability to pay down any of our debt is a little bit constrained because we put a new facility in place, and there's nothing actually drawn on the revolver right now.
Luke Sarsfield: We also have an accordion feature on the facility. So we have increased from three hundred and fifty nine million to five hundred million of availability, but also have an additional one hundred and twenty five million potentially as an accordion. So we have a lot of room.
Speaker Change: We also have an accordion feature on the facility, so
Speaker Change: We increased from 359 million to 500 million of availability.
Speaker Change: but also have an additional $125 million potentially as an accordion.
Stephanie Ma: Great, thanks for all that, Collar.
Speaker Change: Coussens.
Coussens: A lot of room.
Fish Shinsa: for Fish Shinsa.
Stephanie Ma: Yeah, and maybe just a broader question on data, BlackRock's recent acquisition of Pre-clin, that's brought the value of private markets data to the forefront, but even just talk to you about how you see your data sets as differentiated in your approach to leveraging data as a private market solution provider.
Speaker Change: Great, thanks for all our color
Speaker Change: Yeah, yeah, and maybe just a broader question on data, black rocks, recent acquisition of preclined, that's brought the value of private markets data to the forefront, but you can just talk to how you see your data sets as differentiated and your approach to leveraging data as a private market solution provider.
Luke Sarsfield: So, Stephanie, that's an outstanding question, and I will give you a very high-level answer here, but I will tell you there is going to be a whole module at our Investor Day on September 19th where we're going to talk about how we utilize data in our business and actually give a demo of our proprietary data set, and so I think that'll be really exciting, and I know you'll be there, but I encourage everybody to look out for that, and that'll be something that'll be on our website afterwards, so if folks want to do a deeper dive on our data, they'll be able to, but to come to the point, we think data is kind of the currency of the kingdom in this business at some level, and it's what makes you better at what you do in almost every aspect of your business. Certainly it's critical in capital raising.
Coussens: So Stephanie, that's an outstanding question, and I will give you a very high-level answer here, but I would tell you...
Speaker Change: There is going to be a whole module at our Investor Day on September 19th.
Speaker Change: We're going to talk about how we utilize data in our business and actually give a demo of our proprietary data set. And so I think that'll be really exciting and I know you'll be there, but I encourage everybody to look out for that and that'll be something that'll be on our website afterwards, so I'll folks want to do a deeper dive on our data that they'll be able to.
Speaker Change: but to come to the point.
Speaker Change: We think data is...
Speaker Change: kind of the currency of the kingdom in this business at some level and it's what makes you better at what you do in almost every aspect of your business. Certainly it's critical in capital raising. We capture a lot of data around capital raising around clients and hopefully we use that data at the better informed next best actions.
Luke Sarsfield: We capture a lot of data around capital raising for clients, and hopefully, we use that data to better inform next best actions, and then, obviously, in our investing processes, in our sourcing processes, in our execution processes, data is incredibly important. We're very lucky because of our footprint and presence in the middle and lower middle market.
Speaker Change: And then, obviously, in our investing processes, in our sourcing process, in our execution process, data is incredibly important. We're very lucky, because of our footprint and presence in the middle and lower middle market, we have data longitudinally going back decades.
Luke Sarsfield: We have data going back decades, and our ability to leverage that data to glean insight around types of transactions that we're contemplating, investments that we're considering is really differentiating, and it really, I think it's one of the other reasons that really informs, frankly, the raison d'etre of P10, because this stretches across all our strategies, right? The access to that data can inform a decision to become an LP It could inform a decision to take a minority stake in Bonacourt.
Speaker Change: and our ability to leverage that data to glean insight around types of transactions that we're contemplating, investments that we're considering, is really differentiating. And it really, I think it's one of the other reasons that really informs, frankly, the raison d'etre of P-10, because this stretches across all our strategies, right? The access to that data can inform, you know, a decision to become an LP, an RCP, it can inform a decision to take a minority stake in Bonacourt, it can inform an ability to make an Avalon in Hark. And so that data is really foundational to what we're doing across the platform. And as I said, we'll talk a lot more about it and actually share a demo of how that data works and how we.
Luke Sarsfield: It can inform an ability to make a NAV loan in HARC, and so that data is really foundational to what we're doing across the platform, and as I said, we'll talk a lot more about it and actually share a demo of how that data works and how we apply it at the investment level.
Stephanie Ma: We'll stay tuned. Thank you.
Speaker Change: and apply it at the investor day.
Chris Kaczkowski: Thank you. Our next question comes from the line of Chris Kaczkowski of Oppenheimer.
Speaker Change: We'll stay tuned, thank you.
Speaker Change: Thank you. Our next question comes from the line of Chris Kaczkowski of Oppenheimer and Company.
Chris Kaczkowski: Yeah, good. Good afternoon, thanks.
Chris Kaczkowski: Most of mine were asked, but I just wanted to follow up on the fundraising side about the RCP secondaries and co-investment funds. I'm curious, how long is the marketing period for those? Typically, you know, between the first and the final close, you know, what should we be expecting there? And I don't know if you've shared the target size for those funds, or if you can give an indication of that.
Chris Kaczkowski: Yeah, good afternoon, thanks.
Chris Kaczkowski: Most of mine were asked, but I just wanted to follow up on the fundraising side about the RCP secondaries and co-investment funds. I'm curious, how long was the marketing period for those?
Speaker Change: Typically, you know, between the first and the final close, you know, what should we be expecting there? And I don't know if you've shared the target size for those funds, or if you can, give an indication of that.
Luke Sarsfield: Yeah, I would say so. I'll ask you a couple questions.
Speaker Change: Yeah, I would say so I'll take a couple questions. So first observation, you asked about our RCP cone investment fund, we call it our direct fund, and it's direct five by the way, and then our second area is fund, we call it SLS for second areas. So just some sense, you know, generally I would say, and again, it will obviously depend on the environment, it will depend on the momentum, it will depend on a lot of things.
Luke Sarsfield: So, first observation: you asked about our RCP co-investment fund. We call it our direct fund, and it's direct five, by the way. And then our secondaries fund, we call it, you know, SLF or secondaries.
Luke Sarsfield: And so just some sense, you know, generally, I would say, and again, it will obviously depend on the environment. It will depend on the momentum. It will depend on a lot of things.
Luke Sarsfield: But usually, we're in the market for somewhere between three and six quarters with these strategies, right? And I think my guess this time would be similar. So think of it as a year to a year and a little bit of a plus.
Speaker Change: but usually we're in the market for somewhere between three and six quarters with these strategies, right? And I think my guess is that I would be similar, so think of it as a year to a year and a little bit of the plus.
Luke Sarsfield: I don't actually, I want to be a little careful here. I don't know what we've said in terms of sizing publicly, and so I want to be just a little bit careful about that.
Speaker Change: I don't actually I want to be a little careful here I don't know what we've said in terms of sizing publicly and so I want to be just a little bit careful on it But obviously anything we can share we can share but I will tell you
Speaker Change: As a directional kind of thought, you know, you've seen what we did in the last of those strategies, right, in terms of direct four and secondaries for both of these strategies.
Luke Sarsfield: But obviously, anything we can share, we can share. But I will tell you, as a directional kind of thought, you know, you've seen what we did in the last of those strategies, right? In terms of direct four and secondaries for both of these strategies, I think they are very timely and very responsive to the LP base. And so I think it'd be very reasonable to assume that there's a lot of momentum in those strategies. And we think that will lead to successful outcomes. Okay.
Speaker Change: I think, are very timely and very resonant with the LP base, and so I think it'd be very reasonable to assume that there's a lot of momentum in those strategies, and we think that will lead to, you know, successful outcomes.
Chris Kaczkowski: Okay, great. That's it for me. Thank you.
Speaker Change: Okay, great, that's it for me, thank you.
Luke Sarsfield: Thank you. I would now like to turn the conference back to Luke Sarsfield for his closing remarks.
Speaker Change: Thank you. I would now like to turn the conference back to Luke Sarsfield's foreclosing remarks, sir.
Luke Sarsfield: Well, thank you, Lateef. And thank you so much to everybody for joining us today. To close, we are extremely proud of the demonstrable progress that we've made in the first half of the year as our team thoughtfully structures the platform for continued growth. In addition, we are confident we have the right strategy in place to deliver long-term value for all of our shareholders. I look forward to seeing many of you at our Investor Day in New York on September 19th, and I wish you all a happy and healthy end to the summer.
Luke Sarsfield: Well, thank you, Lateef, and thank you so much to everybody for joining us today. To close, we are extremely proud of the demonstrable progress that we've made in the first half of the year as our team thoughtfully structures the platform for continued growth. Further, we are confident we have the right strategy in place to deliver long-term value for all of our shareholders.
Luke Sarsfield: I look forward to seeing many of you at our invested in New York in September 19th and I wish you all a happy and healthy close to the summer
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Thank you.
Speaker Change: This concludes today's conference call. Thank you for participating. You may now disconnect.
Ben Budish: And we're happy to have it. We're really excited about that relationship that we have with the client that we have there, and in the success we've had for them. We've ultimately generated that incremental incentive to revenue. But on the long run, we want to really make sure we're giving me the apples to apples comparison, and that's where we did move to FRA and FRA. Understood. Thank you for taking my question
Luke Sarsfield: And obviously, we're only going to do transactions that we believe make both strategic and economic sense for P10 and for our shareholders. And so that is kind of a constraint, as we think. When we look out in the broader environment, I'd really highlight four areas or four different kinds of M&A transactions that we're evaluating at any point in time. One is what I would call what you'd think of as bolt-ons to existing strategies, tuck-unders to things we already do. We have seven market-leading strategies. That doesn't mean that there aren't things that we could tuck away or tuck under those individual strategies.