P10(US:PX)2023-08-12 08:06Financial Data and Key Metrics Changes - Revenue for the second quarter was $62.5 million, representing a 34% increase compared to the second quarter of 2022 [32] - Adjusted net income (ANI) was $26.7 million, a 15% increase from $23.2 million in the same quarter last year [33] - Fee-paying assets under management (AUM) reached $22.2 billion, a 20% year-over-year increase [14] Business Line Data and Key Metrics Changes - Private equity strategies added over $863 million to fee-paying AUM during the quarter [6] - TrueBridge raised $288 million across several funds, including over $100 million for its flagship Fund VIII [7] - Credit strategies contributed $71 million to fee-paying AUM, with strong demand in NAV lending and venture debt [25] Market Data and Key Metrics Changes - The company reported a significant increase in fundraising and capital deployment despite macroeconomic challenges [110] - The impact business raised and deployed $49 million in the quarter, indicating steady growth [111] - The company noted a flight to quality from institutional investors, enhancing its market position [7] Company Strategy and Development Direction - The company aims to introduce premier strategies to a growing global institutional and retail investment community [8] - A new multi-year target is expected to be laid out alongside the Q4 2023 earnings call [12] - The company is focused on maintaining its unique position in the middle and lower middle market, avoiding competition with larger firms [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate macroeconomic headwinds, with expectations for continued double-digit growth in revenue and adjusted EBITDA [57] - The company anticipates that rising interest rates, currently a headwind, will eventually become a tailwind as cash generation and deleveraging occur [33] - Management highlighted the importance of raising capital to support niche strategies, which are expected to generate strong returns [123] Other Important Information - The company declared a quarterly dividend of three cents per share, payable on September 28, 2023 [16] - Operating expenses increased by 68% year-over-year to $52.1 million, primarily due to compensation and stock-based compensation related to acquisitions [60] - The company has an outstanding debt balance of $271.2 million and $98.5 million available on its credit facility [16] Q&A Session Summary Question: How is the company seeing the aggregation of various investment capabilities leading to attracting bigger LPs? - Management noted that they are thrilled to have hit their $5 billion fundraising target ahead of schedule, indicating strong demand for their investment strategies [66] Question: What are the expectations for stepdowns in 2023? - Management acknowledged that 2023 is unusual due to specific stepdowns and indicated that they expect stepdowns to normalize in future years [67][68] Question: What opportunities does the company see in the current market environment? - Management highlighted opportunities in NAV lending and small business lending, particularly in the lower-middle market [43][44] Question: How does the company view its M&A strategy? - Management stated that they do not need to pursue M&A to grow but remain open to opportunities that align with their strategic focus [112][100] Question: What is the company's approach to capital allocation? - Management emphasized the importance of balancing stock buybacks, debt repayment, and maintaining liquidity for potential M&A opportunities [106][107]