PX - Earnings call 3 2021

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Operator

Good morning. My name is Victoria, and I will be your conference operator today. At this time, I would like to welcome everybody to the P10 Earnings Call Conference Call -- third quarter earnings call. [Operator Instructions] I will now turn the call over to your host, Mark Hood, Director of Investor Relations. Mark, go ahead.

Mark Hood

you. Thank welcome Third and Call. XXXX the to morning, Quarter PXX Conference Good is Investor of Hood, This Director Relations. Mark and Souder, I Today, will Operating Officer. Fritz Co-CEO; be Alpert, Chief Officer; Chief Robert Chairman joined and Webb, Clark Amanda Financial Coussens, by Co-CEO;

the like meaning begin, everyone remind of of Private Securities of believe, well Section I'd call constitute forward-looking XXXX, the Litigation that Act slides intend, Securities statements. XXXX and such intended expect, Act of Exchange of Act the will, XXA plan are Words forward-looking presentation Before estimate, Securities may conference Section XXXX. statements identify as to we expressions of this as within Reform XXE anticipate, these the to and the as similar continue,

expectations release relating position, projections regarded discuss not Forward-looking will The to objectives, performance be current this statements achieved. of as results representation estimates of the and management's in should contemplated financial inclusion information future future expectations business. plans, plans, operations, that or be a forward-looking our any and

subject statements and risks, various Forward-looking assumptions. uncertainties to are

to XX, the XX-Q XX, current statements and reflect number filed risks may those dated and filed the and time plans, in time described to with October SEC differ with Risk prospectus XXXX, in report or Commission. of or factors filed Securities the under subsequent and from in XXXX, October the Factors our with and these are inherently reports Exchange on Commission be expectations company's management's a uncertain. on from U.S. Securities our future Actual materially quarterly statements Exchange Forward-looking Form expressed by that are implied periods due and to results forward-looking for estimates other of greater detail

result We will law. included in a the to no now obligation forward-looking new call hereof. over events, except required or undertake this only by information I to The otherwise date as statement future forward-looking revise release as any of Rob. or of update made the as are statements turn

Robert Alpert

XXXX recent update. of we transactions uplisting offering morning, for Good Exchange, our thank Stock important Alpert, our Co-CEO and you will York performance. and Robert Today, results third present I'm PXX Third quarter New review of discuss the and are Chairman Quarter the in and joining financial the PXX.

sector. to set excited is York are $XX. say Stock million secondary listed shares well-versed subscribed New X.X XX.X PXX Investors of alternative Exchange million of I'm many purchased The a now investors whom fully asset a in offering and high-quality at by shares was company. primary the

join years, long-term the about quarters, this event, over As believe a journey. ecosystem raise branding we profile listing, is the our welcome our we we think with awareness shareholders investment partners, we acquisition this with not Becoming business NYSE and will companies. compounding limited to community offering us an uplisting as of as in along elevates portfolio The and partners in also completed, candidates. general well company

The our allowed capital evaluating our for portion our us refinancing begin to and options for balance of capital deployment sheet bolster down a remaining pay debt, debt raise opportunities.

organic choice growth, platform. unique makes partner market solution a us substantial for we generates model believe larger of to financial looking PXX's While a into providers PXX's integrate other position

over quarter. turn highlights the to to discuss of Clark it Now me the let

C. Clark Webb

Thanks, Robert.

from fee-paying and the billion, market FPAUM XX%. $XX.X at or quarter quarter quarter. our third middle We or Turning venture was XXX% end, lower growth Organic XXXX. to equity, solutions, At demand increase period assets of private private the witnessed $X.X management, over credit. third under of of all impact the strong investment billion across an capital, same stood

to highlight factors, by in X many driven While asset growth like particular. is I'd

growth enjoy that markets rates. in operates PXX strong First, underlying

growing risk-adjusted select and the segments to macro tailwind we environment, in desire technology institutional venture of equity believe lower a within markets. While the a optimize but the we whether a asset private for including or alternative growth ingenuity all is shift we we in growth for nascent impact, the to operate private focus sweet an classes, even growing alternatives capital by on middle spot allocation returns sit market, structural believe in to the of

we performance is our second Second, believe to investment none.

have record Our an X verticals and that average of decades exceeds X dozens funds. track covers

cycles clients are across battle strategies making who for private of prospective desire tested us a environments, exposure Our economic hands multiple and pair safe to macro markets.

we with proprietary structural provider long-term for Private positioned sets uniquely of uncover decisions, being and decades guiding performance success. a directly With markets us and to clients. the X to innovative be enter are products opportunities for data can solutions investment challenging up

results we we beginning our approximately be X,XXX. cross-sell innings cross-selling in numbers are To and encouraging. high results. financial believe client the investment distribution existing clear, global are are raising significant which and supply, to benefit initial the to products early products of see opportunity investment With our in very base, demand and see in Finally, strong limited asset we but network a to we

the recent announced to ample portfolio. of approximately activity. we $XXX opportunity the me Partners and Capital the Bonaccord M&A the their growth, strong was Capital organic additions see FPAUM While At In third to for million. the Hark strategic discuss and we let acquisitions, PXX continued time turn quarter, combined made we

for there of markets stakes cross-selling GP credit as minority midsized benefit opportunities. middle investments continue. over premier pipeline network, we robust experienced on acquires over focus given the strong portfolio today. FPAUM of believe a GP Bonaccord, we I, investment franchise. that are assets. with has Fund the raised private across and growth real industry in strategy, alternative and And last investment diversified managers few would Their the managers, years a Fund in is Bonaccord see to early equity, known million founded the We their $XXX asset Bonaccord we launch in we in stakes, in back equity II a XXXX, private significant PXX's now with XXXX, expect to GP and market believe expect

our is steps in Capital. limited providing the partner thus the to unable when Hark to Hark, our compelling Hark is fits as venture private and that drawn retains offering's in opportunity, general equity loans Hark XXXX, lending, partners and have Known and general PXX a a their growth been funds. pursuing to equity will of to act their but We opportunities while a Hark engaging believe ecosystem important in able equity, fund's not investment other NAV be midlife from GPs. By make part all partner investments. sees perfectly into down has pioneer would otherwise service equity, they Founded an upon. new Also

on and integration the September PXX into have successfully the We portfolio. closed day of both completed the transactions last

Now the let financial Amanda results. third the to call me to turn over walk through quarter

Amanda Coussens

in you, management the Thank Clark. by $X.X quarter. grew under paying billion Fee assets

XX reminder, fund, life simple, a AUMs between that into which fee largely range through PXX of As advisory stable XX model fees of visibility capital years. consist management our funds committed This the charge future revenue based periods. the paying and and on tremendous gives

a past reliable our Revenue of AUMs revenue averaged rates increase XXX% XXXX. stream. third our quarter the indicative highly Fee points and consistent over was on with XXX diversified of in quarter the performance and $XX.X million, basis fee paying

the In market the third money. raising had in we $X.XX quarter,

expansion. As we raise upward funds, see margin we additional could

to margin grow additional to marketing drive use and teams expect our organic to additional We dollars growth.

model consist of operating were our is in XXX% employee expenses million, XXXX. increase amortization, Over expenses. leverage with a in professional We quarter $XX.X the general Operating third half continued of there consisting expenses operating and our primarily operating quarter remainder compensation, substantial over of increases and and administrative of not third expect the costs. intangible fees in the do believe

costs. made we in of $X.X the we to our year, to marginal meaningful Net improvement Contributing third many necessary corresponding the income this over a the increase strong Earlier quarter quarter was of delivered in with was activity margin a public investments fundraising company. become the $XX,XXX third XXXX. million, incremental

a EBITDA the in increase $XX.X over the was third Adjusted million, of XXXX. quarter quarter third XXX%

EBITDA target net and by ANI, income, adjusted calculated is EBITDA and for income Our Adjusted is between tax. interest adjusted or cash cash reducing expense margin XX% XX%.

the to our quarter ANI a XXXX. profit for fee-related the third believe and for million, increase after-tax best is of We peers. ANI over measure third business our $XX.X quarter, comparable the earnings For XXX% was

see, adjusted our tax to as we EBITDA interest small an capital ANI $X amounts expenditures, can leakage of have continue you of to have cash $X due to As tax of assets. of efficient conversion expense minimal we and

tax Our of X composed items. assets are

a million net The first offset NOL, is $XXX net loss, which operating or income.

amortization an LLC, second The a reduced in period, created tax amortized step no the value. taxable million we and basis has a a remaining by that asset is tax federal balance. is usually full when company, remaining XX-year has over goodwill the and amortization. in acquire then NOL up our $XXX income Tax We is

make exhaust tax over and to do utilize acquisitions. additional amortization the as to increase we While years, we expect we future expect NOL

million interest outstanding Cash less $XX fourth in the will payment a be expense on made because our debt. quarter we

We also interest continue to remaining expense quarters decline our as expect refinance expect we to future cash debt. in to

down cash I At of the to of it comments. $XX the over will leaves million offerings, net paying closing balance now quarter, debt cash of Robert debt, the we PXX back for and improved post-offering of and has end in had The debt $XXX million. the of equivalents after $XXX million. third which offering $XXX turn balance million sheet

Robert Alpert

Thank you, Amanda.

excited. are We

solutions this our to increasing and institutional portfolio. for markets. in high to assembling worth who have PXX market in We a environment investors significant tailwinds desire and investment private expanding by our We've exposure best-in-class built net thrive

as ecosystem that that investment managers companies data as well and by the giving on operating their us to unparalleled insights better our metrics of make teams have better our underlying reinforces decisions. allow We us

to team ownership have is long-term that shareholders, excess We team clients contractually uniquely on team predictable aligned up earnings. recurring robust align stream well in long-term and the margins of PXX shareholders. positioned capital XX%, that locked diversified structured with members management committed and management a are based We for growth. believe insider With and provides PXX continued fee members to create

the let's Now turn few over questions. for call a

Operator

Stanley. Cyprys And Instructions] our first Morgan from [Operator comes Michael question from

Unknown Analyst

Mike. is Stephanie on This for

that about And little need then investor the about to take? your you offered What Can more opportunity for bringing might customers Any broadly, steps retail? products bit you to are to retail credited think talk do you how a today? products?

Robert Alpert

-- question. Fritz, why that? Yes. we you don't Why have take don't Great

William Souder

Okay. Great.

the all qualified that you not in most of credit and will investors. today While LPs our are numbers, purchasers see historical

XXXX and like globe. the around different to offerings, start will it's of couple and a strategic attack on lots come investors us other working lots retail with this of initiative with ahead, group in currently a partnering various asset I think of I growth this are class, retail also seeing to working you out And think years of definitely the you'll in, are yourselves lots that grow see a we the space, in and in for Although partners others beyond. the

Robert Alpert

that, of if add number are on wirehouse distribute some and where will. continue we platforms To you we on our platforms to that we wirehouses, a of to -- products different opportunity, the expand

-- also alternative very all are retail managers. distribution for early stages of it's We asset

And across X,XXX plus from it we opportunity. pursuing capital Currently, our partners raising X,XXX so -- world. our of are is a and great that most comes partners the

Unknown Analyst

Great. private drives equity fund And a back, do then the PE? middle maybe go larger and market look clients how space to versus your at step universe? taking follow-up, market What a decision just larger middle and the market to as middle lower you versus

Robert Alpert

it's there. mean companies listen, tens I a equity private big out are think is Yes, industry. I of There -- question. thousands it's the of great a

the for far job like Our in it they great in our a larger brethren their LPs. efficient market opinion. is We the markets, less middle do because

and just companies our are institutional to These companies at when we of with XX,XXX those that no under have public million you have nearly about EBITDA. database think the million access And listed $XX public private between alone, look they're equity, much very If businesses. $XX debt. you no radar

the having we Folks think billion with of advantage. to market is We year none have advantage years, database we $X us think feel information a and So have an we that just in into north an like a deploying opportunities. being second to XX we come segment. for this

better ecosystem think the us the And like we idea for decisions. our GPs middle about operates in we've being advantage, and make with roadshow, LPs can surround equity those enhances market. the services, efficiency more in to talked information allows and of we the really which enhances it As the our investment products private we and

in I highlight have record the we investment track deck. certainly would the

reflective You X decades. think of And market. it's It's we of dozens the certainly advantage across structural is lower can spans it middle within see funds. we what think a

Operator

from And Oppenheimer. next Kotowski our comes question Chris from

Christoph Kotowski

an relative underlying could kind the We wonder, have limited kind can that see annual we that growth we have of out should of fundraising, on history, I seasonal and you statement quarterly the basis. point a But to from in in? fee And that either registration are the expect patterns strong flag might fund stability any annual we for major us flow market? to you flows of that expect us funds in or what cadence the just given when

And step-ups some next thing. companies in fees there? all then that and of of if also catch-up we the in the wonder I recognition, we should and have X what kind terms -- expecting quarters general for terms that can of kind revenue we see cover, out and of we that in step-downs you the to flag be X other

Robert Alpert

question. thanks Chris, the Sure. for

deployed capital We revenue with investments. see is know, marginally committed real you quarter higher there our do impact is As is associated than strategy long-term as on at our in But revenue no stream. capital. fourth seasonality other our solar revenues that, primarily margin in the based

Amanda Coussens

isn't see mentioned, investors this since raises, we we will we to have invest. seasonality, don't want of as lumpiness quarter-to-quarter and with timing associated fees, some catch-up capital Although when our control do the you

So fees. catch-up we will in some the yes, lumpiness see

Christoph Kotowski

we Or pattern? magnitude kind of wondering their that fundraising expecting And of we and specific of should size to year expand quarterly -- and of impact expect in there you kind having the the sometime funds fourth kind bit. in in X kind final just the even should Are the flowing on was what fundraising expect quarter be can impact? just of I from -- also, continuous a an then close the should ahead?

C. Clark Webb

X are committed of tied it's model, I'm majority we're on order. business questions. AUM reverse Yes, to them being in our dollars. Chris, to great you about think the going take paid our where When vast revenues again,

a or of on so AUM businesses. turning have our fees, the few deployed and shadow we for of AUM don't And issue being except

where our strength is a some that As solar seasonal is you upon based Robert said, in QX. business business investment and capital, deployed see

We're be number magnitude. quarters. future things going on like specifically not to two, weather give to availability of on not like one, and products, Number going that. we're guidance giving it depends things But

about some today. think there the funds in our So slight have QX. when in the in we a seasonality And we is the you north business of market dozen have of market, in terms funds

and GPs is LPs view with we and like the to Our the surround products solutions.

market you're that great, We to but credit, flagship, attack when that's options, in want it because And NAV have out lots a you're the with profile. a giving So a should rather a the of surrounding in of a market, a funds a co-invest, unitranche see our consistent they than X that's more fund of when product, investors stakes, a and whether secondary, market, ecosystem, menu to better it. think a of that, funds, in primary whatever be. of loan, GP growth we might be earnings it's

that are means doesn't, always peers. in it's to be have our it have completely believe, model it more our funds going we funds be closing smooth? should We consistent, but Does that the mean some always No, than certainly of on lots market. We revenue of capital.

larger We market, funds flagship when it's ideal. have when great. in not, it's they're much And less they're the

Christoph Kotowski

-- or goodwill it the how can deductibility more guess, Because Great. my And acquisitions, discuss the tax on future? to the how we drives how that reading wasn't. in ability deductible as the you Okay. long that thing said do life prospectus, the in underlying you've on And repeatable of done? that? you the others, is, was the you question deductibility tax and just preserve acquisitions me you -- transactions, then preserve is, for some intangibles the last goodwill can What how through is I do

Robert Alpert

Yes, question. Chris, great

organic the So let need me a with we We start we acquisitions. that business premise have substantial model that do believe don't to generates that make growth.

do long terms for in table, are cross-sell. we and able believe not in that what terms the business in been actively bring of said, we we're have there to in to we're a of time, strategies That to terms out LP of to around trying by So a of that sweet the distribution bit both being grow a spot M&A.

that join have to do robust a like strategies our we would platform. So pipeline of

So it because part be our not we to going but that is win a is of such do all believe because for we it, activity future, M&A need a involved. parties

as this some a When the good more vast C-corp there you the an units, think opposed tax to instances purchased believe majority The out when a goodwill referring exercise. whereas the deductibility, about landscape thing is you're is the is businesses there a we what are I that are to in really deduct C-corp, LLC. prospectus about We're able LLCs. to purchase if it's the of difficult LLC we where

the capital going as to And that form us about we we M&A, do to into of vast believe back of is so deploying think amortization. majority that capital in the come

September, Just a transactions and to $XX to recent added with at Bonaccord that the the million great closed those give amortization actually end you of example, Hark around schedule. our

generate into we are benefits that cases back in that as to growing the platform, the cash vast get believe cash as we step-up basis. redeploy going of flow those So form of in we tax in we free the majority do flow,

Operator

for being, pass final have And further time over to no questions. I'll we remarks. the Robert At now Alpert

Robert Alpert

Thanks, for everyone, call. our earnings joining

out them Appreciate interest you Hood, follow-up answered Mark If or day. questions, we great get and support with quickly try as Thank your to a and as up will questions possible. you. Have please come PXX. any reach to more in

Operator

Thank Great. today's call. for everybody, joining you,

disconnect now lines. your may You

P10 (PX) 12 Nov 212021 Q3 Earnings call transcript