P10's Q4 2024 Earnings Call: Unraveling Contradictions in FRE Margins, SMA Growth, and Fundraising Strategies

These are the key contradictions discussed in P10's latest 2024Q4 earnings call, specifically including: FRE Margin Expectations, Strategic Impact of SMA Growth Opportunities, Fundraising Target and Strategy, and Integration Synergies with Qualitas:



Revenue and Asset Growth:
- P10 reported that fee-paying AUM increased by 10%, revenues rose by 23%, and adjusted EBITDA rose by 17% for the full year 2024.
- The growth was driven by successful fundraising efforts, including closing Bonaccord Capital Partners Fund II with $1.6 billion, and strategic acquisitions such as the Qualitas Funds acquisition.

Fundraising and Strategic Acquisitions:
- The company generated $3.8 billion in gross fundraising, exceeding their target of $2.5 billion, with Bonaccord Capital Partners Fund II being the first fund to attract over $1 billion.
- This was supported by strategic acquisitions like the Qualitas Funds acquisition, which aims to expand P10's European presence and enhance its middle and lower middle market focus.

Operational Investments and Efficiency:
- The company is making key investments in areas like distribution, human capital, and strategic M&A to drive growth, which are expected to provide a high return on investment.
- These investments are aimed at enhancing operational efficiencies and leveraging data insights to better serve clients and improve internal processes.

Diversification and Product Mix Strategy:
- P10 is focusing on expanding its product offerings and distribution channels to cater to a broader range of clients, including SMAs and different types of pooled vehicles.
- This diversification is in response to evolving client needs and competitive pressures, aiming to access new client segments while maintaining a strong global investor base and data-driven insights.