P10's History of Growth and Expansion
P10, Inc. (PX) is a leading multi-asset class private markets solutions provider in the alternative asset management industry. The company's mission is to provide its investors differentiated access to a broad set of solutions and investment vehicles across highly attractive asset classes and geographies that generate superior risk-adjusted returns.
P10 was founded in 1992 as a Texas corporation and reincorporated in Delaware in 2000. The company underwent a significant transformation in November 2016 when it completed the sale of substantially all its assets, liabilities, and operations to Langley Holdings plc, a United Kingdom public limited company. Following this sale, the company changed its name from Active Power, Inc. to P10 Industries, Inc. and became a non-operating company focused on monetizing its retained intellectual property and acquiring profitable businesses.
In March 2017, P10 filed for reorganization under Chapter 11 of the Federal Bankruptcy Code, using a prepackaged plan of reorganization. The company emerged from bankruptcy on May 3, 2017, and changed its name from P10 Industries, Inc. to P10 Holdings, Inc. in December 2017.
P10 then began expanding its alternative asset management business through a series of strategic acquisitions. In October 2017, the company closed on the acquisition of RCP Advisors 2.0, LLC and entered into a purchase agreement to acquire RCP Advisors 3.0, LLC, which closed in January 2018, establishing itself as a prominent player in the private markets ecosystem. In April 2020, P10 completed the acquisition of Five Points Capital, a leading lower middle market alternative investment manager. This was followed by the acquisitions of TrueBridge Capital Partners in October 2020 and Enhanced Capital Group in December 2020.
In September 2021, P10 made two additional strategic acquisitions – Bonaccord Capital Advisors, an alternative asset manager focusing on acquiring minority equity interests in alternative asset management companies, and Hark Capital Advisors, which provides senior secured financing to early-stage and emerging stage life sciences and technology companies. Most recently, in 2022, the company formed P10 Advisors, a wholly-owned subsidiary, to manage investment opportunities that are sourced across the P10 platform but do not fit within an existing investment mandate.
Diversified Private Markets Solutions
P10's private market solutions are comprised of three main segments: Private Equity Solutions (PES), Venture Capital Solutions (VCS), and Private Credit Solutions (PCS).
PES makes direct and indirect investments in middle and lower-middle market private equity across North America, with a team of 43 investment professionals with an average of 26 years of experience. As of September 30, 2024, PES managed $13.4 billion in Fee-Paying Assets Under Management (FPAUM). The PES investment team has deep and long-standing relationships with over 2,120 investors, 285 fund managers, 550 private market funds, and 5,100 portfolio companies. PES occupies a differentiated position in the private markets ecosystem, helping investors access, perform due diligence, analyze and invest in attractive middle and lower-middle market private equity opportunities. P10 is further differentiated by the scale, depth, diversity, and accuracy of its proprietary private markets database.
VCS invests in venture capital funds across North America and specializes in targeting high-performing, access-constrained opportunities. The 15-member VCS investment team has an average of 24 years of experience and managed $6.4 billion in FPAUM as of September 30, 2024. VCS has cultivated relationships with over 1,900 investors, 90 fund managers, 95 direct investments, 385 private market funds, and 13,100 portfolio companies over the past 14 years. VCS is differentiated by its innovative strategic partnerships and its vantage point within the venture capital and technology ecosystems, maximizing advantages for its investors. Additionally, since 2011, P10 has partnered with Forbes to publish the Midas List, a ranking of the top value-creating venture capitalists.
PCS primarily makes debt investments across North America, targeting lower middle market companies owned by leading financial sponsors, and also offers certain private equity solutions. PCS is differentiated by its relationship-driven sourcing approach, providing capital solutions for growth-oriented companies. As of September 30, 2024, PCS managed approximately $5.1 billion in FPAUM. The PCS investment team has deep relationships in the private credit market, cultivated over the past 22 years, including 420 investors across 50 active investment vehicles and 1,800 portfolio companies with $9.8 billion capital deployed. PCS is further strengthened by the PES network of fund managers, characterized by more than 655 credit opportunities annually.
In addition to its private markets solutions, P10 has a presence in the impact investing space through its subsidiary, Enhanced Capital, which has raised a total of $6.3 billion since its inception in 1999, with $4.2 billion invested in over 950 projects and businesses across 40 states, Washington DC, and Puerto Rico. Enhanced Capital focuses on investments targeting renewable energy development, historic building renovation projects, and providing capital to small businesses that are women or minority-owned or operating in underserved communities.
Strong Financial Performance and Outlook
P10 has delivered impressive financial results, with revenue increasing by 23% to $296.4 million in 2024 compared to the prior year. The company's Fee-Paying Assets Under Management (FPAUM) grew by 10% year-over-year to $25.7 billion as of September 30, 2024.
Adjusted EBITDA, a key profitability metric, increased by 17% to $144.5 million in 2024, with an Adjusted EBITDA margin of 48.7%. Adjusted Net Income (ANI), which reflects the company's underlying cash flows, grew by 18% to $120.2 million, or $1.00 per diluted share, for the full year 2024.
In the most recent quarter, P10 reported revenue of $85,014,000, representing a year-over-year growth of 34.8%. This growth was driven by organic expansion across the company's strategies, including Bonaccord, Enhanced, RCP, and WTI. Net income for the quarter was $5,280,000, with operating cash flow of $27,712,000 and free cash flow of $26,773,000.
Looking ahead, P10 has provided guidance for 2025, expecting gross fundraising of at least $4 billion, which would represent a 60% increase over 2024 levels. The company also anticipates double-digit revenue growth, excluding the impact of direct and secondary catch-up fees, and maintaining FRE margins in the mid-40% range. P10 expects to have 19 commingled funds in the market at various times, including 4 Qualitas funds, and projects step-downs and expirations of 5-7% of fee-paying AUM, in line with 2024.
Inorganic Growth through Strategic Acquisitions
In addition to its organic growth initiatives, P10 has been actively pursuing strategic acquisitions to further strengthen its platform and expand its capabilities. In September 2024, the company announced the acquisition of Qualitas Funds, a leading European private equity fund of funds manager based in Madrid. The transaction, which is expected to close in the first quarter of 2025, will provide P10 with a foothold in the European market and opportunities to cross-sell products and leverage Qualitas' expertise in alternative investment structures and distribution channels.
Enhancing Shareholder Value through Capital Allocation
P10 has demonstrated a commitment to enhancing shareholder value through disciplined capital allocation. In 2024, the company repurchased 6.6 million shares at an average price of $8.88, totaling $59.1 million. In February 2025, the Board of Directors authorized an additional $40 million for share repurchases, bringing the total available for repurchases to approximately $43.5 million.
Furthermore, P10 has consistently paid a quarterly cash dividend, most recently declaring a $0.035 per share dividend payable on March 20, 2025 to stockholders of record as of February 28, 2025.
Financials
P10's financial performance has been strong, with revenue growing 23% to $296.4 million in 2024. The company's FPAUM increased by 10% year-over-year to $25.7 billion as of September 30, 2024. Adjusted EBITDA rose by 17% to $144.5 million in 2024, with an Adjusted EBITDA margin of 48.7%. Adjusted Net Income (ANI) grew by 18% to $120.2 million, or $1.00 per diluted share, for the full year 2024.
In the most recent quarter, P10 reported:
- Revenue: $85,014,000
- Net income: $5,280,000
- Operating Cash Flow: $27,712,000
- Free Cash Flow: $26,773,000
The company's year-over-year revenue growth was 34.8%, driven by organic growth across its strategies.
Liquidity
P10 has demonstrated strong liquidity management through its share repurchase program and dividend payments. In 2024, the company repurchased 6.6 million shares for $59.1 million, and an additional $43.5 million is available for future repurchases. The company also maintains a quarterly cash dividend, with the most recent declaration of $0.035 per share payable on March 20, 2025.
As of the most recent reporting period:
- Debt/Equity ratio: 0.980907728785696
- Cash: $67,500,000
- Available credit line: $175,000,000
- Current ratio: 1.535219363169664
- Quick ratio: 1.535219363169664
The company has a revolving credit facility of $175 million and a term loan of $325 million.
Business Overview and Strategy
P10 operates as a leading multi-asset class private markets solutions provider with five key strategies: Private Equity Solutions, Venture Capital Solutions, Private Credit Solutions, GP Stakes, and NAV Lending. The company has a diversified global investor base and long-standing relationships with fund managers.
In 2024, P10 made key hires to strengthen its leadership team and corporate structure, including Arjay Jensen as Head of Strategy and M&A, Sarita Jairath as Global Head of Client Solutions, and Melodie Craft as General Counsel and Chief Compliance Officer. The company also appointed Tracy Benford as its first lead Independent Director.
P10 remains focused on driving organic growth, accelerating M&A, generating operational efficiencies, and enhancing shareholder communications. The company sees continued strong demand for private markets solutions and expects to more than double its fee-paying AUM to $50 billion over the next five years, driven by both organic growth and strategic acquisitions.
Risks and Considerations
While P10 has a strong track record of growth and performance, the company faces several risks that investors should consider. These include:
1. Competitive Landscape: P10 operates in a highly competitive alternative asset management industry, where it must continually adapt to evolving client preferences and maintain its differentiated position.
2. Regulatory Environment: The complex regulatory and tax environment could restrict the company's operations and subject it to increased compliance costs and administrative burdens.
3. Dependence on Key Personnel: P10's success is heavily dependent on the continued service of its experienced investment professionals and senior management team.
4. Integration Risks: The successful integration of acquired businesses, such as Qualitas Funds, is critical to realize the expected benefits and synergies from these transactions.
Conclusion
P10, Inc. (PX) is a diversified alternative asset manager that has established a strong presence in the middle and lower middle market private markets. Through its comprehensive suite of private equity, venture capital, and private credit solutions, the company has delivered impressive financial results and positioned itself for continued growth.
With a focus on organic initiatives, strategic acquisitions, and disciplined capital allocation, P10 is well-positioned to capitalize on the burgeoning demand for private markets exposure and further solidify its position as a leading provider of differentiated investment solutions. As the company continues to execute on its strategic priorities, investors should closely monitor P10's progress and its ability to navigate the evolving competitive and regulatory landscape.