P10(US:PX)2022-05-13 01:18Financial Data and Key Metrics Changes - The company reported $17.6 billion in fee-paying assets under management, a 34% year-over-year increase, with a 27% organic growth rate on a pro forma basis [6][15] - Year-over-year revenue increased by 32%, while GAAP net income rose by 188% [6][16] - Adjusted EBITDA increased by 31%, with an adjusted EBITDA margin of 52% for the quarter, and a full-year expectation of maintaining a 55% margin [16][42] - Adjusted net income was $22.3 million, reflecting an 84% increase compared to the same quarter in 2021 [16] Business Line Data and Key Metrics Changes - The separately managed account (SMA) business saw gross fee-paying assets under management increase by $720 million, with a third of that from the venture capital vertical [10][11] - The company launched Hark Fund IV and Bonaccord Fund II, expecting both to have a first close in the first half of 2022 [10] Market Data and Key Metrics Changes - The company is preparing to open a Dubai office to enhance global engagement and capitalize on capital-raising opportunities outside the U.S. [10] - Demand for funds remains strong despite public market turmoil, particularly in the middle and lower middle market segments [10][12] Company Strategy and Development Direction - The company aims to raise approximately $5 billion over 2022 and 2023, with a focus on private equity, venture capital, private credit, and impact investing [7][8] - The board approved a regular cash dividend of $0.03 per share and a $20 million stock repurchase program, reflecting strong free cash flow and capital returns [9][17] - The company emphasizes its unique market position and diversification across four distinct verticals, which helps mitigate competition with larger peers [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving fundraising goals despite a crowded market, citing a unique niche in lower middle market investments [21][24] - The company believes it is well-positioned to navigate economic cycles and capitalize on structural trends, particularly in impact investing [12][14] Other Important Information - Cash and cash equivalents at the end of Q1 were $23.7 million, with options for allocation including acquisitions, dividends, and stock repurchases [17] - The company has a strong pipeline for M&A opportunities, focusing on strategic acquisitions within existing verticals and expanding into new regions [26][28] Q&A Session Summary Question: Fundraising goals and market impact - Management reiterated confidence in the $5 billion fundraising goal, citing a protected niche in their verticals and ongoing discussions with LPs [20][21][24] Question: M&A activity in a volatile market - Management indicated that M&A discussions are ongoing, with a full pipeline and a focus on strategic marriages rather than traditional acquisitions [25][26] Question: Venture capital market dialogue - Management noted that while there is increased conversation about market pressures, their focus on early-stage investments has not hindered capital raising or deployment [30][32] Question: Expense trends and guidance - Management confirmed that adjusted EBITDA margins are expected to average 55% for 2022, with potential for higher margins in non-investment years [42][45] Question: Dividend and share repurchase strategy - Management stated that the $0.03 dividend is sustainable and does not impact M&A strategies, emphasizing the flexibility of their free cash flow [40][41] Question: Tax rate sustainability - Management explained that they expect to maintain a structurally lower tax rate due to significant tax assets and potential amortization benefits from future acquisitions [58][59]