Financial Data and Key Metrics Changes - The company reported total fee-paying assets under management (AUM) of $28.9 billion, representing a 21% year-over-year increase [7][32] - Organic gross new fee-paying AUM raised and deployed in Q2 was $1.9 billion, marking the second consecutive quarter of record organic growth [5][32] - GAAP net income for Q2 was $4.2 million, down from $7.4 million in the prior year [35] - Adjusted net income (ANI) was $26.7 million, a decrease of 7% from the previous year [35] - The average core fee rate in Q2 was 104 basis points, with expectations to average 103 basis points for the year [33] Business Line Data and Key Metrics Changes - Private equity strategies raised and deployed $1.25 billion, while venture capital solutions raised and deployed $114 million [33] - The credit business contributed $568 million to fee-paying AUM, with significant growth in secondary products [10][33] - RCP's Secondary Fund V raised nearly $1 billion as of June 30, demonstrating strong momentum in the secondary space [9] Market Data and Key Metrics Changes - The company noted strong fundraising momentum, particularly in the middle and lower middle market segments, which are less competitive than larger sponsor markets [12][13] - The market opportunity is characterized by approximately 1,000 general partners managing $3 trillion, indicating a larger and less competitive environment [13][14] Company Strategy and Development Direction - The company is focused on increasing distribution capabilities and expanding product offerings both domestically and internationally [21][25] - There is a strategic emphasis on collaboration across the platform to enhance fundraising and deal flow [11][19] - The integration of Qualitas Funds is expected to enhance the company's capabilities and product offerings [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential, citing structural advantages and secular tailwinds in their target markets [19][12] - The company anticipates continued strong demand for its strategies, although it does not expect the same volume of fundraising in Q3 [8][19] - Management highlighted the importance of maintaining financial capacity while balancing share buybacks and potential acquisitions [42][44] Other Important Information - The company repurchased approximately 2.5 million shares at an average price of $10.49 during Q2, with a total of over 3.7 million shares repurchased for the year [30] - A quarterly cash dividend of $3.5 per share was approved, payable on September 19, 2025 [36] Q&A Session Summary Question: Financial capacity for additional acquisitions - Management emphasized a disciplined approach to M&A, focusing on strategic and cultural fit while maintaining financial capacity for potential deals [39][40][42] Question: Evergreen Fund targeting - The Evergreen Fund is aimed at both the wealth channel and existing client base, providing an open-ended format for credit investors [47][48][49] Question: Future capital deployment at HARC - Management indicated that the elevated capital deployment at HARC may not persist at the same level, as it is influenced by repayments and successful fundraising in other credit strategies [59][60][62] Question: Qualitas Funds flagship funds and cross-sell opportunities - Qualitas's previous primary fund was Fund 6 at $250 million, with expectations for Fund 7 to be a natural step up [73][74] Question: Consideration of alternative M&A structures - Management is open to various forms of partnerships and strategic alliances, as long as they align with the company's model and strategic goals [77][79][80]
P10(PX) - 2025 Q2 - Earnings Call Transcript