P10(PX) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the full year 2024, fee paying AUM increased by 10% to $25.7 billion, revenues increased by 23$296.4 million, and adjusted EBITDA rose by 17% to $144.5 million [10][30][37] - The company generated$3.8 billion in gross fundraising, with a notable close of Fund II at a record $1.6 billion [10][11] - GAAP net income for Q4 was$5.7 million, compared to a net loss of $1.9 million in the prior year [37] Business Line Data and Key Metrics Changes - Private equity strategies raised and deployed$712 million, venture capital raised $28 million, and private credit strategies added$165 million to fee paying AUM [34] - Fee related revenue grew by 14% excluding direct and secondary catch up fees, with full year FRE margins at 48.8% [11][39] Market Data and Key Metrics Changes - The company expects step downs and expirations to be in the range of 5% to 7% of fee paying AUM in 2025, consistent with historical numbers [32] - The average fee rate for 2025 is expected to be 103 basis points, reflecting fewer catch up fees compared to 2024 [33][71] Company Strategy and Development Direction - The company aims to double fee paying AUM from $23.8 billion to$50 billion by 2029, primarily through organic growth and strategic M&A [12][13] - The acquisition of Qualitas Funds is a key strategic move to enhance the company's European presence and product offerings [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding five-year goals, with a 2025 gross fundraising target of at least $4 billion, a 60$8.88, totaling $59.1 million [28] - A quarterly cash dividend of$0.035 per share was declared, payable on March 20, 2025 [42] Q&A Session Summary Question: Focus of the sales team for upcoming quarters - Management highlighted that the sales team will focus on 19 funds in 2025, particularly those from Qualitas and various strategies within RCP [45][46] Question: Progress on broadening new vehicles and channels - Management emphasized the importance of diversifying product offerings and meeting clients' needs through various investment vehicles, including SMAs [53][56] Question: Update on M&A pipeline - Management confirmed an active M&A pipeline with a disciplined approach, focusing on private credit and direct lending opportunities [61][66] Question: Expected average fee rate for 2025 - Management explained that the expected average fee rate of 103 basis points reflects a return to historical levels, with catch-up fees expected to decrease [69][71] Question: FRE margin trajectory for 2025 - Management reiterated that FRE margins are expected to remain in the mid-40s for 2025, with potential for expansion in the long term [78][84] Question: Update on Qualitas integration and synergies - Management expressed excitement about the integration with Qualitas, highlighting opportunities for cross-selling and leveraging data sets [88][92]