P10(US:PX)2022-03-01 17:24Financial Data and Key Metrics Changes - The company concluded 2021 with $17.3 billion in fee-paying AUM, a 36% increase from the beginning of the year, with a 29% annual organic growth rate [5][18] - Revenue increased from $67.4 million in 2020 to $150.5 million in 2021, representing a 123% increase [6][18] - Adjusted EBITDA rose from $34.8 million to $83.1 million year-over-year, while adjusted net income increased from $23.9 million to $62.8 million [6][22] - GAAP net income for Q4 was $1.5 million, down from $20.6 million in the same period last year, primarily due to non-cash expenses related to debt refinance and acquisitions [21][22] - Operating expenses in Q4 were $33.3 million, an 8.34% increase year-over-year, driven by compensation and benefits expenses from acquisitions [20][22] Business Line Data and Key Metrics Changes - The company expanded its product offerings by adding mad lending with Hark Capital and GP Stakes with Bonaccord Capital Partners [7][8] - Cross-selling efforts in Q4 led to meaningful incremental fee-paying AUM across P10 affiliates [12] Market Data and Key Metrics Changes - The company focused on the middle and lower middle market, where there are significantly more opportunities compared to large company investments [9][10] - The company reported strong fund performance, which has attracted new global capital seeking exposure to private markets [11] Company Strategy and Development Direction - The company aims to strengthen its position as a premier specialized private market solution provider, focusing on expanding market presence and product offerings [7][8] - The company does not require M&A to achieve long-term goals of sustainable double-digit growth and extraordinary returns on capital [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain growth momentum, supported by strong fund performance and cross-selling opportunities [11][12] - The company expects to raise approximately $5 billion over 2022 and 2023, with a focus on follow-on funds from new members [14][16] Other Important Information - The company closed a $250 million credit facility to retire its old credit facility, improving its leverage profile [27][28] - The company has a net operating loss of $220 million and $321 million in tax amortization, which will be utilized over future years [24][25] Q&A Session Summary Question: What were the bigger contributors to the $900 million of fee-paying AUM raised in Q4? - The contributions came from private equity, venture capital, and private credit verticals, primarily from funds rather than separate accounts [32] Question: How should we think about catch-up fees and stepdowns in 2022? - There is a small amount of stepdowns expected, but the impact should be minimal due to the growing business and the nature of the funds rolling off [35] Question: How does the company view M&A opportunities moving forward? - M&A is seen as episodic and opportunistic, focusing on acquiring best-in-class performance managers with a long-term view [41][42] Question: What is the potential for margin expansion beyond 2022? - The company plans to maintain a 55% adjusted EBITDA margin, with fluctuations expected based on fund closings and capital deployment [50][51] Question: What is the current tax amortization benefit and cash usage strategy? - The expected tax amortization is about $50 million a year, with cash usage focused on debt paydown, potential M&A, and possibly dividends or stock buybacks [59][60]