Hello, and welcome to the P10 Fourth Quarter 2024 Conference Call. My name is Lateef and I will be coordinating your call today. Currently, all participants are in a listen-only mode. After the speaker 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 and Chief Administrative Officer. Mark, Please go ahead.

Thank you, operator and thank you all for joining us. On today's call, we will be joined by Luke Sarsfield, Chairman and Chief Executive Officer; and Amanda Coussens, EVP and Chief Financial Officer. Additionally, in the room with us today is Arjay Jensen, EVP, Head of Strategy and M&A and Sarita Jairath, EVP, Global Head of Client Solutions. 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. The forward-looking statements included are made only as of the date hereof. We undertake no obligation to update or otherwise 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 future performance. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release and our filing with the SEC. I will now turn the call over to Luke.

Thank you, Mark. Good morning, everyone and thank you for joining our fourth quarter and full year 2024 earnings call. We are extremely encouraged by what our team accomplished in 2024 and we are very well positioned to advance our strategy further in the quarters ahead. On today's call, I will provide an overview of our financial highlights for the quarter and the year, reflect on our record performance, review our five year guidance, share our 2025 outlook, update you on the Qualitas Funds acquisition, and discuss ongoing strategic imperatives that will support our growth plan. Amanda will also provide additional detail on our financial performance for the quarter and the year and key considerations for the year ahead. In the fourth quarter, P10 made meaningful and demonstrable progress around our strategic initiatives, including adding key members to the leadership team to position P10 to drive growth. We ended the year in a position of strength exceeding the financial and operating guidance we provided in February of 2024 in which we committed to deliver over $2.5 billion in gross fundraising, double-digit revenue growth, margins in the mid 40% range and a reinvigorated M&A process. To put some numbers around our outperformance, for the full year 2024, fee paying AUM increased by 10%, revenues increased by 23%, adjusted EBITDA rose by 17% and we generated $3.8 billion in gross fundraising, notably Bonaccord Capital Partners. Our GP stake strategy closed Fund II with a record $1.6 billion. It is our first fund to attract more than $1 billion in capital and we believe LP interest speaks to the attractiveness of our differentiated middle market focus. Additionally, fee related revenue grew by 14% excluding the effects of direct and secondary catch up fees, while full year FRE margins were 48.8%. In early 2024,…

Thank you, Luke. During the quarter, fee paying assets under management were $25.7 billion, a 10% increase on a year-over-year basis. In the fourth quarter $905 million of fundraising and capital deployment was offset by $152 million in step downs and expiration. I think it’s worth reminding everyone, our fourth quarter gross fundraising total excludes approximately $300 million of fee paying commitments that closed earlier than expected and were included in our third quarter financials. Fundraising during the fourth quarter was driven by the successful close of Bonaccord II, which added $506 million in the quarter, RCP Multi-Strat II, which raised $75 million, and RCP Fund XIX, which added $51 million. As Luke mentioned earlier in the call, for 2025 we expect step downs and expirations to be in the range of 5% to 7% of fee paying assets under management in line with our historical numbers. In 2025 we expect about two-thirds of the step downs and expirations to occur in the first half of the year. Revenue in the fourth quarter was $85 million, a 35% increase over the fourth quarter of 2023. Year-over-year revenue increased from $241.7 million to $296.4 million, up 23%. Average fee rate in the fourth quarter was 133 basis points in total with an average fee rate of 105 basis points, excluding the impact of secondary and direct catch up fees. For the full year, average fee rate was 120 basis points with an average fee rate of 107 basis points, excluding the impact of secondary and direct catch up fees. In 2025, we expect the core fee rate to average 103 basis points reflecting our expectation for fewer catch up fees in the year. In the fourth quarter we had 12 commingled funds in the market and saw broad participation across our…

[Operator Instructions] Our first question comes from the line of Ken Worthington of JPMorgan. Your line is open, Ken.

Hi, good morning. Thanks for taking my question. As we look ahead to the next couple of quarters, where is your sales team focusing? So what are the bigger funds in market? So you mentioned 19 funds, I think in market in 2025, which of those are sort of the biggest and most important for the sales and marketing team to get right to kind of hit your $4 billion hit or exceed I'll say that your $4 billion target?

Hey Ken. It's Luke Sarsfield. Thanks for the question. And as we mentioned, you're right. We think we'll have 19 funds in total in the market at different times in 2025. Not necessarily all at the same time, but at different times throughout the year. And in particular, four of those will come from Qualitas. And obviously those will be things we'll focus on once we close the acquisition. And as we said, we continue to expect to close the acquisition later here in the first quarter. We're really excited about the product offering that we have in market in 2025 at our RCP strategy. We have a number of funds in the market, including our co-investment strategy, including our secondary strategy, including our primary fund of fund strategy, small and emerging managers. And we see real momentum across that. And I think that's probably reflective of some of the momentum we're seeing generally in the private equity space. Our TrueBridge business has a number of strategies in the market that we're really excited about, particularly the blockchain and the Seed & Micro Strategy five points is going to be out raising a new credit strategy. We're really excited about that. We'll probably be back out in the market later this year with a number of other credit strategies, more news to come on that. And then finally, as we mentioned on Bonaccord, we're excited about the momentum in that business and I think we'll have some news to announce there as we get later in the year. So we think a lot of really interesting things in the market. Just to remind everybody, we think one of the really compelling things about our platform is the diversity of our business, the diversification of our fundraising. And I think we're really, really excited about the momentum and the outlook for 2025.

Great. Thank you very much.

Thank you. Our next question comes from the line of Ben Budish of Barclays. Your question please, Ben.

Hey, good morning. This is Nick Benoit on the call for Ben this morning. So I want to ask about the progress being made on your goals to broaden across new vehicles and different channels and maybe just how we would think about the investments that are going to be made in 2025. And I know last quarter you provide some color on SMA fundraising. So maybe just an update on maybe what SMA fundraising was in the quarter and then any updates on progress being made on that kind of vehicle? Thanks.

Thanks, Nick. And it's Luke again. That's a great question. And as we mentioned at Investor Day, one of our key areas of focus is going to be really about meeting our clients where they are and being a solution oriented provider to them, as we've always frankly aspired to be. And certainly a part of that is continuing to have the broadest diversification in terms of product offerings to meet them where they want to go, but also to have it in the right wrappers. And so you're right, we think about a number of potential alternatives from SMAs that are helping our clients achieve their goals to different kinds of pooled vehicles we can use. We've looked at in the past and had some various different rated feeder funds. And we think that that's an exciting place. We think about kind of commingling some of our different strategies into kind of single point product offerings for our clients. And that's an opportunity. And so under Sarita’s leadership, we are looking at a number of different ways to access that, to access different kinds of clients, whether it's in the RIA channel, whether it's in the high net worth channel, whether it's in the institutional channel, and that work continues in earnest I would say. You're right. Last quarter we did talk about some of the momentum we had in the SMA parts of the business. I think we're not going to get into necessarily just disclosing kind of by product type every quarter. But one thing we do is when we do have notable progress and notable success, we're going to make it a point obviously to note that for you. So you can see our progress against those initiatives that we laid out at Investor Day. And so my guess is as we get into 2025, you'll hear us talk about our progress, very specifically around some of these initiatives, not the least of which will be SMAs.

Great. Thank you. If I could sneak in a follow-up question, I also wanted to ask about the M&A pipeline. So obviously we have the Qualitas acquisition expected to close here in the quarter, but looking later in the year in 2025, just kind of like what looks attractive in the current pipeline. What do you see in terms of pricing? And then how are some of these initiatives under Arjay in terms of more recurring M&A starting to come through – and come through this year? Thanks.

Thanks, Nick. So maybe what I'll do is I'll start and frame it. And seeing as Arjay sitting here right next to me, I will turn it over to him to give a few thoughts. But I would say, look, one of the things we talked about at Investor Day and I think we've been very successful at prosecuting, is building what I would call a disciplined and programmatic approach to M&A. And a key part of that is building out a pipeline that is one that we are consistently monitoring, one that we are consistently executing on one that we have different potential opportunities in different stages of the funnel. And so I think that that's really important. I think we feel really good about both the state of the pipeline, but also the feedback we're hearing from potential partners around our attractiveness as a place where they want to be, they want to work and they want to partner with. And so with that, Arjay, maybe you want to add a few thoughts.

Yes, I would just say – thank you, Luke. I would just say that, look, we're working very hard at working an active pipeline. We think we have interesting opportunities across the areas and asset classes that we laid out at Investor Day, including focusing on private credit, direct lending, asset backed. I think those are really important areas for us. I think interestingly we talked about at Investor Day the one step, two step, we think with Qualitas now that opens up interest in Europe with respect to direct lending and asset backed. So we're very focused on those things. We think there are interesting things we're looking at and we're optimistic about the forward [ph].

Thank you. Our next question comes from the line of Chris Kotowski of Oppenheimer & Company. Please go ahead, Chris.

Yes. Good morning. Thank you. I was just wondering, I think I heard Amanda say you expected an average fee rate of 103 basis points for ex catch-up fees, but the last year was 107 basis points. I know it's a little small difference, but just wondering why it would go down quite by that magnitude?

Thank you, Chris, for the question. So I'm going to frame my response around catch-up fees first in general. So as a reminder, we view our catch-up fees in two distinct categories. We have core fees from our primary funds which occur on a more regular rate basis. They tend to be smaller in nature given a shorter duration of the fundraise. We also have direct and secondary fund catch-up fees that are episodic in nature because they raise bigger funds less frequently. It can be difficult to predict in size and frequency. So during 2024 our catch-up fees were significantly elevated relative to historical levels as a result of the funds that we had in the market, particularly our extraordinary results within Bonaccord II fundraise that we do not expect to be repeated in the future as we said. We do expect catch-up fees to be approximately $4 million to $5 million in 2025, which including our core fee rate ex secondary catch-up fees should remain stable at about 103 basis points for 2025.

And Chris, I think it's just important to note if you look back over the history of our business, we've been at that pretty consistently at that core fee rate. If you look in the kind of slide show we put out every quarter, you see 2021, we were at 100 basis points. 2022, we were at 103 basis points. 2023, we were at 103 basis points. 2024 was a little bit of a higher rate at 107 basis points. And so when we look at kind of a guidance in the, for 2025 in the 103 basis points level, that's very much in line with the historical kind of trajectory of the fee rate in the business and we think kind of reflects the momentum.

Okay. All righty. Thank you.

Thank you. Our next question comes from the line of Aidan Hall of KBW. Please go ahead, Aidan.

Great. Good morning, everyone. Thanks for taking my question. I just wanted to follow-up on the FRE margin commentary. Heard the thoughts around remaining in the mid-40s for 2025 and also some of the incremental fundraising coming from less scaled managers and a little bit of a headwind? But at the same time, you guys just closed one of your largest funds with Bonaccord II, which is usually a tailwind to the margin. So just wanted to hear how you're thinking about maybe the trajectory from here in 2025. Is it the puts and takes there remain stable? Is it still striving for expansion in 2025? Or should we kind of be thinking about it contracting near-term before going towards your longer term goals that you laid out at Investor Day?

So good question and I just start by saying the guidance we gave at Investor Day is unchanged, right? We continue to believe in the near and intermediate term, the core kind of FRE margin rate will be in the mid-40s. And given the dynamics we see in our business, we think that will expand closer to 50% in the out year. So that guidance, that thinking, that trajectory, that momentum of margin is absolutely unchanged from what we thought back in September and what we continue to believe here today. I'd make a few observations. The first is as you can imagine, as Amanda talked about, we had meaningful catch up fees in 2024. Those will tend to come at a higher margin and some of just what I would call regular way FRR management fees. And as a result, they will have some positive accretive impact on margin. And when we get those, it's great and they will have a transitory benefit of driving margin higher. But when you look at kind of the core of the business, we really think about being in that mid-40s, as we said, in the near and intermediate term and then seeing that accretion from there. I'd say two things. One, and you'll see it, we've talked about it. We're still continuing to build out particularly in our client solutions team focused on distribution. We think it will have ROI. We think it's going to be a really positive growth driver and one momentum creator for our business. But the work is not done there yet, right? Remember, Sarita only started in September. And so we're still very early days on this. Obviously, we're going to do that in a balanced and prudent way. And so everything is factored into our margin guidance. The second thing I would note is, and we've talked about this, it is the impact of the mix shift in our business impacting margin. And so again, we have some strategies that are growing faster that tend to be at lower core margins because of the nature – inherent nature of their businesses. And that will have some impact on margin relative to some of our larger higher margin businesses that tend to grow a little bit slower. And then I would just point out as well, and I think you heard this in my part of the script, we did mention that we factored it into our margin guidance. But we think in 2025, again, in that vein of different strategies having different kind of core margin profiles, Qualitas, which we're acquiring will have a modest kind of downward pressure on margin, factored into our core guidance, still factored into that guidance of kind of mid-40s right now. But again, that's part of this whole mix shift conversation that we're having.

Thanks for the color, Luke. I'll leave it there.

Thank you. Our next question comes from Michael Cyprys of Morgan Stanley. Your question please, Michael.

Hey, good morning. This is Stephanie on for Mike. Just hoping to get an update on Qualitas. What are some of the lower hanging fruits in terms of integration or synergies? And then maybe longer term, what sort of opportunities do you see around cross selling new product development or maybe potentially leveraging additional datasets?

So thank you, Stephanie. Great question, and I think something we are really, really excited about. We actually just spent the last few days at a management off-site and we actually had even though the transaction hasn't officially closed yet, we had the opportunity to have the senior leadership team, the managing partners, Eric and Sergio from Qualitas join us. I will tell you the enthusiasm in the room was just absolutely palpable. As we mentioned, they're already working closely and well known to two of our strategies, right? They've been working with our RCP strategy for years. Their core strategy is a European middle and lower middle market fund to fund strategy. Obviously, RCP has effectively the identical strategy in the U.S. market. And so when they get together, one is their compelling vision for what we can build on a global basis as a product offering focused on the middle and lower middle market. Second thing, we spent a lot of time on is they have a tremendous data set and data attribute that they bring around their kind of analysis of that European market. We have something you saw at Investor Day through GPScout that's very similar in the U.S. And I think the opportunity to combine that rich data set and be able to be a real solution provider for clients now on a global basis or at least North America plus EMEA basis is really, really compelling. The other thing I think that they bring to us is real know how and how to design products and wrappers in Europe, right? So they've been very successful getting licensed in different European jurisdictions. They obviously have big throwaway in the private bank channel in Europe, that's one of the things they've sold very successfully on a lot of large private bank platforms. And so that sort of distribution knowledge, that product wrapper knowledge, that synergy is really, really compelling. They also do a lot – they are building and they've successfully raised a first fund in the NAV lending space, working closely with our Hark strategy. That's a place where we've been at that business for an incredibly long time, one of the pioneers in that business as you know. And so just watching the dynamic that we're seeing there is that is a big, big opportunity in Europe. It's still a big opportunity in the U.S. by the way, but it's much more advanced and mature in the U.S. than it is in Europe. And so the opportunity to combine their relationship network, their distribution throwaway, their relationships with GPs, with our core credit underwriting expertise, our knowledge of that NAV lending market is, we think really differentiated. And we think we're just right now scratching the surface of that opportunity, but a lot more to come on that in the quarters and years ahead.

Great. Thanks so much for that. And maybe just a follow-up for me. I know you guys just had a successful close for Bonaccord II, but I think the deployment and investment pipeline has been pretty active. So what can we expect in terms of timing and potential for the successor fund Bonaccord III to come back to market faster and scale? Thank you.

Again, another great question. And just stepping back, I think it's really been amazing to watch the momentum that the Bonaccord team has in this GP stake space. Clearly, I think from an LP and prospective LP appetite, there's been enormous focus on where we play, which is the middle and lower middle market. The opportunity set there is incredibly robust. The team has is seeing so many different opportunities. I think the broad acceptance of the product, both from a GP perspective and then from an LP perspective, looking to invest in the strategy, given some of the attributes that the near-term yield, the long-term equity upside with the carry participation is really compelling. And so we're seeing a lot of enthusiasm and excitement around kind of that GP stakes broadly written in particular our GP stakes strategy, which is middle and lower middle market focused where we think there's just a massive opportunity and we have a real head start relative to any of the competition. Obviously, we're really proud of what we accomplished with BCP2. It was a fundraising outcome that was very positively unexpected, I would say, and I think highlights the strength and momentum in that business and the investor appetite for that business. You're absolutely right. We have – there are a lot of really attractive opportunities out there in the world. I think the team has done an extraordinary job of putting capital to work in a very positive way. We've had some really, really positive developments of some of our – some of the GPs within the portfolio that we're excited about, but I think creates momentum for the business. And to your point, I think we're really excited about the prospects of BCP3. And I think as I mentioned, we should be in a position to talk about it more here as we roll into 2025.

Okay, great. Thanks for taking my questions.

Thank you. I would now like to turn the conference back to Luke Sarsfield for closing remarks. Sir?

Well, thank you, operator, and thanks to everyone for joining our call today. Following a truly transformational 2024, we believe we have the infrastructure in place to accelerate growth and drive operational efficiencies for the benefit of our strategies and our shareholders in 2025. We very much look forward to updating you on our first quarter 2025 financial results in May. Have a good morning.

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