Executive Summary / Key Takeaways

• The Middle Market Moat: P10's exclusive focus on middle and lower-middle market private equity creates a durable competitive advantage through proprietary data, deep GP relationships spanning three decades, and access to oversubscribed funds that larger competitors cannot efficiently replicate. This positioning delivers structural benefits—lower entry valuations, reduced leverage, and higher growth potential—that translate into superior risk-adjusted returns and sticky institutional client relationships.

• Platform Integration Inflection: The Qualitas Funds acquisition and concurrent launch of cross-selling initiatives like Qualitas US I signal P10's evolution from a collection of strategies into an integrated platform. This shift enables network effects across geographies and asset classes, with management raising its 2025 organic fundraising target to $5 billion, demonstrating accelerating momentum despite modest near-term margin pressure.

• Financial Resilience with Operating Leverage: Third quarter results show a 47% fee-related earnings margin and stable 103 basis point core fee rate, evidencing the scalability of P10's model. While revenue growth of 2% appears modest, it masks underlying strength in organic fundraising and capital deployment, with step-downs driven by early credit paydowns that reflect portfolio quality rather than weakness.

• Valuation at an Inflection Point: At $9.84 per share, P10 trades at 48 times free cash flow and 4.87 times enterprise value to revenue—metrics that embed expectations for execution but offer a compelling entry point relative to larger peers like Hamilton Lane (HL) and StepStone (STEP), particularly given the company's targeted market positioning and 17% year-over-year growth in fee-paying assets.

• Critical Execution Variables: The investment thesis hinges on two factors: successful integration of Qualitas to deliver promised cross-selling synergies, and maintenance of the company's disciplined underwriting standards as it scales its credit and secondaries businesses. Failure on either front would erode the margin advantage that defines P10's middle market strategy.

Setting the Scene: The Private Markets Middle Market Opportunity

P10, Inc. began its corporate journey in 1992 as Active Power, Inc., a Texas-based manufacturer of uninterruptible power supply products. The company's transformation began in November 2016 when it divested its legacy operations and rebranded as P10 Industries, pivoting toward monetizing intellectual property and acquiring profitable businesses. This strategic reset set the stage for a rapid expansion into alternative asset management starting in late 2017, when P10 acquired RCP Advisors and began assembling what would become a multi-asset class private markets platform.

Today, P10 operates as a specialized private market solutions provider with $42.5 billion in total assets under management and $29.1 billion in fee-paying AUM as of September 2025. The company focuses exclusively on the middle and lower-middle market segments—an area management describes as "larger and less competitive than the large sponsor market segment." This positioning addresses a fundamental inefficiency in private markets: while approximately 1,000 GPs manage roughly $3 trillion in middle market strategies, this segment receives disproportionately less attention from large institutional platforms that concentrate on mega-cap opportunities.

The industry structure reinforces P10's opportunity. Accelerating demand for private markets solutions is driven by a fundamental shift away from public markets, with fewer companies choosing to list and more seeking private capital. Simultaneously, investors are consolidating manager relationships in a flight to quality, favoring strategies with long track records and deep industry relationships. P10's 30-year history of GP relationships, combined with its proprietary data platform, positions it to capture this consolidation trend. The company's middle market focus offers structural advantages: consistently lower upfront valuations by 1 to 3 turns compared to broader private equity, and approximately 2 turns less financial leverage—characteristics that have proven durable across economic cycles.

P10's competitive positioning sits between large-scale platforms like Hamilton Lane, with $141 billion in discretionary AUM and global reach, and specialized players like AlTi Global (ALTI), which focuses on ultra-high-net-worth advisory. Hamilton Lane's scale enables superior operating margins in the high 30-40% range, but its broad focus creates inefficiencies in the middle market where P10's specialized data and relationships yield better access to oversubscribed funds. StepStone's explosive 118% revenue growth reflects its success in private wealth solutions, but its reliance on performance fees introduces volatility that P10's stable management fee model avoids. AlTi's personalized approach serves family offices well but lacks the scalable platform P10 has built for institutional and wealth management channels.

Technology, Products, and Strategic Differentiation: The Platform Effect

P10's core competitive advantage lies in its proprietary data platform and the network effects generated by its integrated ecosystem. The company's strategy operates across three segments—Private Equity Solutions, Venture Capital Solutions, and Private Credit Solutions—each reinforcing the others through shared insights and cross-selling opportunities. This platform approach transforms P10 from a collection of fund-of-funds into a comprehensive private markets operating system for its limited partners.

The Private Equity Solutions segment, anchored by RCP Advisors and bolstered by the recent Qualitas Funds acquisition, demonstrates the power of this integration. RCP's Secondary Fund V closed at $1.26 billion in just 13 months, surpassing its $1 billion target and demonstrating strong LP demand for secondary products. The predecessor fund took 25 months to close $797 million, indicating accelerating capital formation that management attributes to the platform's growing reputation. The Qualitas acquisition, completed in April 2025 for $73.8 million, established a European presence and immediately enabled new product development. Qualitas US I, launched in July 2025, allows European investors to access U.S. lower-middle market private equity through a joint venture structure where Qualitas handles distribution and RCP manages portfolio construction. This cross-pollination creates value beyond simple AUM addition—it leverages existing capabilities to access new capital pools without duplicating infrastructure.

The Venture Capital Solutions segment, led by TrueBridge Capital Partners, shows signs of stabilization after a market reset. While organic fundraising of $12 million in Q3 2025 appears modest, management observes "very heartening signs in the venture market environment," indicating the segment is positioned for recovery. TrueBridge's launch of Secondaries Fund II in Q2 2025 broadens product offerings at a time when venture secondaries present compelling opportunities. The WTI venture debt strategy, which reached its first earnout hurdle triggering a $35 million payment, provides floating rate exposure that benefits from the current interest rate environment—a structural advantage over fixed-rate strategies.

Private Credit Solutions represents P10's most innovative growth vector, comprising $7.5 billion in AUM with $4.5 billion in impact assets across over 1,000 projects. The segment's focus on NAV lending through Hark Capital has reached an inflection point, with management noting a "real moment and a real opportunity" as the strategy becomes broadly accepted among the GP community. Hark deployed twice as much capital in the first half of 2025 compared to the prior year, and the planned launch of Hark V later in 2025 will capitalize on this momentum. Enhanced Capital's first evergreen fund, launched with over $100 million, offers an open-ended format that attracts institutional, wealth manager, and high-net-worth investors seeking stable, tax-advantaged income. This product innovation creates recurring revenue streams with lower fundraising costs than traditional closed-end funds.

The platform's technological differentiation extends beyond product structure to underwriting discipline. Management emphasizes a "time-tested and rigorous underwriting process" that involves continuous re-underwriting of portfolio companies and engagement with third-party evaluators. This explains the quality of P10's credit portfolio—management explicitly states they are "not seeing deterioration" despite broader market concerns about private credit. The early paydowns that drove increased step-downs in Q3 2025 are framed not as a negative but as evidence of underwriting quality, with management noting these represent "recyclable capital" that can be redeployed into new opportunities.

Financial Performance & Segment Dynamics: Evidence of Platform Scalability

P10's third quarter financial results provide crucial evidence of whether the platform strategy is delivering scalable economics. Total revenues of $75.93 million increased 2% year-over-year, a figure that requires context to understand properly. The modest headline growth masks underlying strength in management and advisory fees, which rose 2% to $74.3 million, driven by successful fundraising, capital deployment, and the Qualitas acquisition. The decline in other revenues by $1.5 million for the nine-month period reflects a non-recurring $1.9 million carried interest income from a pre-acquisition legacy fund in 2024, not a deterioration in core operations.

The fee-related earnings margin of 47% in Q3 2025, while consistent with the prior year, represents peer-leading performance in the alternative asset management space. This margin level demonstrates the operating leverage inherent in P10's model—incremental AUM can be added with minimal additional overhead, particularly as the platform integrates acquisitions like Qualitas. Management's commitment to maintaining mid-40s% FRE margins despite "modest downward pressure" from the Qualitas acquisition signals confidence in eventual margin expansion as integration costs normalize.

Segment-level dynamics reveal the engine driving P10's growth. Private Equity Solutions commands $24.2 billion in AUM with $17.2 billion in fee-paying assets, representing the core of the platform. The segment's organic fundraising of $711 million in Q3 2025, while down from $1.25 billion in Q2 due to timing shifts, demonstrates consistent capital formation capability. RCP's 19th primary fund closed with $314 million in Q2 2025, and Bonaccord Fund III launched in Q3, building on the record $1.6 billion closing of Bonaccord Fund II in Q4 2024. These fundraising successes generate catch-up fees—management expects $4-5 million in 2025, with expansion in 2026-2027 as commingled funds mature.

Venture Capital Solutions, with $10.8 billion in AUM, represents P10's smallest segment but offers significant upside optionality. The stabilization in venture markets following a prolonged reset period positions TrueBridge to capture renewed LP allocations as venture capital performance recovers. The segment's $12 million in Q3 organic fundraising appears modest, but the launch of Secondaries Fund II and the WTI earnout achievement indicate the segment is gaining traction.

Private Credit Solutions, at $7.5 billion in AUM, is P10's fastest-growing innovation engine. The segment's $192 million in Q3 organic fundraising reflects strong demand for NAV lending and impact strategies. Management's commentary that private credit represents "less than 20% of fee-paying AUM today" but offers a "meaningful opportunity set" highlights the strategic importance of this segment. The ability to deliver "strong, stable performance and attractive risk-adjusted returns" through disciplined underwriting differentiates P10 from competitors chasing yield in riskier segments.

The balance sheet supports continued platform investment. With $325 million outstanding on its term loan at a 6.85% SOFR rate and $72.5 million drawn on its revolver at 6.73%, P10 maintains manageable leverage with a debt-to-equity ratio of 1.07. The company entered into an interest rate collar agreement in September 2025, hedging $211.3 million of variable-rate exposure with a 4.25% cap and 2.31% floor through August 2028. This demonstrates prudent risk management amid rate uncertainty, protecting margins from potential increases while allowing participation if rates decline.

Capital allocation priorities reflect management's confidence in the platform. The company has spent $131 million on share repurchases since program inception, with $26 million remaining under authorization. The dividend yield of 1.52% and payout ratio of 111.54% indicate a commitment to returning capital, though the elevated payout ratio suggests dividends may be prioritized less than buybacks and value-enhancing M&A. The $35 million WTI earnout payment and $2.2 million Bonaccord contingent consideration settlement represent tangible costs of past acquisitions, but also signal that earnout hurdles are being achieved, validating the acquisition strategy.

Outlook, Management Guidance, and Execution Risk

Management's guidance framework, established at the September 2024 Investor Day, serves as the "North Star" for evaluating P10's trajectory. The company aims to more than double fee-paying AUM to $50 billion by 2029, primarily through organic growth complemented by value-creating M&A. This long-term vision underpins near-term guidance and reflects confidence in the platform's scalability.

The most significant development in Q3 2025 was management's decision to raise the full-year organic gross fundraising target to approximately $5 billion, up from the initial $4 billion guidance. This upward revision demonstrates accelerating momentum despite a portion of Q3 commitments being pulled forward into Q2. Luke Sarsfield, Chairman and CEO, explicitly stated the company has "exceeded our annual organic gross fundraising guidance" and is "well on our way to achieving the long-term guidance." This confidence is supported by secular tailwinds in private markets, including the consolidation of manager relationships and increasing allocations from institutional and wealth management channels.

The macro environment appears to be shifting in P10's favor. Management observes "a more benign and accommodative macro environment than we have for probably at least a few years," which would accelerate deployment opportunities in credit businesses and amplify returns across the private equity ecosystem. This suggests P10's "all-weather" strategies—particularly NAV lending and venture debt—are positioned to benefit from both rising and falling rate environments, while traditional private equity strategies would gain from increased M&A activity and capital markets reopening.

Execution risks center on integration of the Qualitas acquisition and scaling of newer strategies. The "modest downward pressure" on 2025 margins from Qualitas is already factored into mid-40s% guidance, but successful cross-selling will determine whether the acquisition delivers its strategic promise. The Qualitas US I joint venture, where Qualitas handles European distribution while RCP manages U.S. investing, represents a template for future collaboration. If this model proves effective, it could be replicated across other strategy combinations, creating a powerful network effect.

Product innovation continues across the platform. TrueBridge's Secondaries Fund II launch, Enhanced Capital's first evergreen fund with over $100 million, and the planned Hark V successor fund demonstrate P10's ability to introduce new vehicles that meet evolving LP demands. Management's indication that "we will be focusing on additional ways for investors to interact with us outside of traditional commingled vehicles" suggests further innovation in fund structures, potentially including more evergreen or separately managed account solutions that offer greater flexibility and stickier revenue.

The venture capital segment's outlook has improved materially. After a prolonged reset period, management sees "very heartening signs" of stabilization and forward movement. This positions venture capital as P10's highest-beta segment, offering significant upside if the market recovery accelerates. TrueBridge's ability to access "high-performing, access-constrained opportunities" positions it to capture disproportionate value as LP allocations to venture increase.

Risks and Asymmetries: What Could Break the Thesis

The most material risk to P10's investment thesis is execution failure on the Qualitas integration. While management has clearly telegraphed "modest downward pressure" on margins and the strategic rationale is sound, cross-border acquisitions in asset management frequently stumble on cultural integration and systems alignment. If the promised synergies—particularly data sharing between RCP and Qualitas for a "global solution offering"—fail to materialize, the acquisition could become a drag on margins rather than an accelerant of growth. Investors should monitor Qualitas US I fundraising progress and any commentary on European client receptivity to joint products.

Middle market concentration, while a competitive advantage in stable conditions, becomes a vulnerability during regional economic downturns. P10's U.S.-centric model—73% of long-lived assets are domestic—exposes it to potential slowdowns in American middle market M&A activity. While management argues this segment is "less sensitive to IPO market conditions" because portfolio companies are typically sold in trade sales, a broad economic contraction would still impact valuations and exit opportunities. The company's observation that DPI has declined less in the lower-middle market than the upper market provides some comfort, but this remains a key cyclical risk.

Leverage and interest rate sensitivity present quantifiable financial risks. With $325 million in term loans and $72.5 million in revolver borrowings, P10 carries a debt-to-equity ratio of 1.07. Management estimates each 100 basis point increase in rates would raise interest expense by $1.4 million annually. While the interest rate collar mitigates some risk, the company remains exposed to higher rates, which would pressure margins at a time when Qualitas integration costs are already elevated. The weighted average SOFR rate of 6.85% on the term loan and 6.73% on the revolver reflect current market conditions that could persist longer than anticipated.

Competitive pressure from larger platforms could erode P10's market share, particularly in secondaries and co-investments where Hamilton Lane and StepStone have scale advantages. Hamilton Lane's 27% revenue growth and StepStone's 118% surge demonstrate their ability to capture market share through global reach and technology investment. While P10's specialized focus provides differentiation, a concerted push by these competitors into the middle market—leveraging their superior resources—could pressure P10's fundraising pace and fee levels. The company's smaller scale means it has less bargaining power with both GPs and LPs, potentially limiting access to the most oversubscribed funds.

The WTI earnout situation illustrates both the opportunity and risk of performance-based acquisitions. While achieving the first $35 million hurdle validates the venture debt strategy, management's determination that subsequent EBITDA hurdles are "no longer expected to be achieved" led to a $3.5 million expense reversal. This demonstrates the discipline of P10's acquisition accounting, but also highlights that not all acquired strategies will meet initial expectations. Future acquisitions will face heightened scrutiny from investors regarding earnout achievability.

Valuation Context: Positioning at $9.84

At $9.84 per share, P10 trades at a market capitalization of $1.08 billion and enterprise value of $1.47 billion, reflecting an EV-to-revenue multiple of 4.87 times based on trailing twelve-month revenue of $296.45 million. This valuation multiple sits below Hamilton Lane's 9.77 times and StepStone's 5.11 times, suggesting the market assigns a discount for P10's smaller scale and middle market focus. The price-to-free-cash-flow ratio of 48.15 times appears elevated, but reflects the company's growth investments in platform integration and product development.

The balance sheet provides a mixed picture. The debt-to-equity ratio of 1.07 is manageable but higher than Hamilton Lane's 0.32 and StepStone's 0.32, reflecting P10's acquisition-driven growth strategy. The current ratio of 2.46 and quick ratio of 2.10 indicate strong liquidity, while the 1.52% dividend yield offers income despite a payout ratio of 111.54% that suggests dividends may be secondary to buybacks and growth investments. With $26 million remaining on the $157 million share repurchase authorization, management has capacity to support the stock if they believe it remains undervalued.

Profitability metrics reveal P10's operational efficiency. The operating margin of 30.31% and gross margin of 55.55% compare favorably to AlTi Global's negative margins, though they trail Hamilton Lane's 41.76% operating margin—a gap that reflects scale disadvantages. Return on assets of 6.75% and return on equity of 4.46% appear modest but must be evaluated in the context of P10's asset-light model and acquisition accounting that depresses near-term returns while building long-term value.

Peer comparisons highlight P10's unique positioning. Hamilton Lane trades at 22.64 times earnings with superior margins and scale, but lacks P10's middle market specialization. StepStone's explosive growth comes with volatility from performance fees and negative margins that make direct multiple comparisons misleading. AlTi Global's struggles with impairments and negative returns make it a weaker comparator, underscoring P10's relative stability. The valuation discount appears justified by size, but may not fully capture the scarcity value of P10's integrated middle market platform.

Conclusion: The Middle Market Platform at an Inflection Point

P10 stands at a critical juncture where its middle market moat and platform integration strategy converge to create a compelling, if execution-dependent, investment opportunity. The company's 17% growth in fee-paying assets, peer-leading 47% fee-related earnings margins, and raised $5 billion fundraising target demonstrate that the platform is gaining traction with institutional and wealth management clients seeking specialized access to difficult-to-reach opportunities.

The Qualitas acquisition represents more than geographic expansion—it validates the platform's ability to replicate its U.S. success in Europe through joint ventures that leverage existing capabilities. If the Qualitas US I model proves successful, it could become a template for further cross-segment collaboration, creating network effects that larger competitors cannot easily duplicate. The simultaneous launch of evergreen funds, secondaries vehicles, and NAV lending strategies shows product innovation that meets evolving LP demands for liquidity and impact.

The investment thesis remains fragile, however, and depends on flawless execution. Integration risks, middle market concentration, and leverage create vulnerabilities that could pressure margins if the macro environment deteriorates. The valuation at $9.84 reflects these risks but also offers upside if management delivers on its platform promises. For investors, the critical variables are clear: monitor Qualitas fundraising progress, track credit portfolio quality through early paydown rates, and watch for signs of competitive pressure on core fee rates. If P10 executes, its middle market moat could prove far more durable than its current valuation suggests.