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P10, Inc.

Q22024

8/8/2024

speaker
Operator
Conference Operator

Mark Hood, EVP, Chief Administrative Officer. Mark, please go ahead.

speaker
Mark Hood
EVP, Chief Administrative Officer

Thank you, Operator. On today's call, we will be joined by Luke Sarsfield, Chairman and Chief Executive Officer, Amanda Cousins, EVP, Chief Financial Officer and Chief Compliance Officer. Additionally in the room with us today is RJ Jensen, our EVP and Head of Strategy at M&A. Before we begin, I'd like to remind everyone that this conference call, as well as the presentation slides, may constitute forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current plans, estimates, and expectations, and are inherently uncertain. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of risks and uncertainties that are described in greater detail in our earnings release and in our periodic reports filed from time to time with the SEC. The forward-looking statements included are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements as a result of new information or future events, except as otherwise required by law. During the call, we will also discuss certain non-GAAP measures which we believe could be useful in evaluating the company's performance. A reconciliation of these measures to the most comparable GAAP measure is available in our earnings release and our filings with the SEC. I will now turn the call over to Luke. Thank you, Mark. Good afternoon, everyone, and thank you for joining us today. Our second quarter performance demonstrates the strong momentum we have in our business underscores our ability to execute the strategic plan we laid out at the beginning of the year, and we believe positions PTEN well for the second half of 2024 and beyond. We raised and deployed $844 million in gross new fee-paying AUM and delivered record revenue of $71 million, representing 14% year-over-year growth. We delivered fee-related revenue, or FRR, of $68.3 million, a 12% increase compared to the prior year period, and generated approximately 33.6 million of fee-related earnings, or FRE, a 3% decrease from Q2 2023. This represents an FRE margin of 49%. Amanda will provide additional detail on our second quarter financial performance shortly. We have continued to gain traction with clients in the second quarter. We had 12 commingled funds in the market, providing multiple avenues to meet the particular investment objectives of our clients and achieve our organic growth goals. I want to take a minute to highlight some of our momentum on the fundraising front. Our NAV lending strategy, Hart Capital, closed Fund 4 at $645 million, meaningfully exceeding its target of $500 million. fund received strong re-ups from existing investors as well as significant new commitments and represented more than a 60% increase compared to its predecessor fund. As a credit strategy, HARC's fees are generated as capital is deployed, which means we will see the revenue contribution over time. Our Venture Lending Manager, WTI, closed the second quarter with $321 million of fee-paying assets in Fund 11, which remains in the market and continues to raise capital. Bond Accord, our strategy that provides growth capital to alternative asset managers through non-controlling equity interests, ended the second quarter with $890 million in capital raised for BCP Fund 2, which we expect to close later this year. Given the robust investing opportunities that we are seeing in this business, we continue to expect to launch BCP Fund 3 in 2025. TrueBridge, our venture capital strategy, closed its flagship Fund 8 at $880 million, exceeding its target of $750 million. TrueBridge expects to launch additional funds this year, including Blockchain 2 and Secondaries 2. RCP is positioned to deliver strong performance heading into the second half of the year. They recently launched Direct Fund 5 and anticipate launching Secondary Fund 5 later this year. We are excited about the investing opportunities that we are seeing and anticipate strong LP demand. Through two quarters, we've achieved 61% of our 2024 goal to organically raise and deploy $2.5 billion of gross new assets. We remain confident in meeting or exceeding this target and the financial guidance we provided the market in February. With the number of funds in the market scheduled to increase as the year goes on, we expect continued strength in the back half of the year. Next, I want to highlight the ongoing progress around our key strategic initiatives. We remain steadfast in our commitment to the corporate imperatives we laid out in February. We're creating value through doubling down on focus areas that are performing, eliminating ancillary processes, and implementing world-class systems that are set to yield tangible results. I will now run through some of the key second quarter highlights and comment on the progress we've made. First, I'm thrilled to share that last week, we announced the appointment of Sarita Narsan-Jairath as Executive Vice President and Global Head of Client Solutions, effective in mid-September. Sarita brings more than two decades of client-facing experience in the alternative space, at firms such as Blackstone, JPMorgan, and Goldman Sachs. She will be integral in developing a comprehensive framework to serve our growing investor base. Further, Sarita will help define the strategy and execution of our organic growth initiatives by expanding our client relationships and developing new products and offerings. We look forward to her leadership at the firm as we advance the platform's long-term growth strategy. As you will recall, When I let out our steady state P10 senior organizational structure in February, I contemplated a structure that would have four executive vice president level roles reporting directly to me and focused on four critical vectors. One, finance and compliance. Two, administration and operations.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

Three, strategy and corporate development. And four, client solutions and capital formation.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

With the appointment of we have now established a world-class senior team. I'm really excited to have the opportunity to partner with professionals and take B10 to the next level. I also want to highlight that we named Tracy Benford as our lead independent dependent director.

speaker
Mark Hood
EVP, Chief Administrative Officer

This new role enables additional effective oversight support from our experienced diverse board.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

As PTEN's chairman, I cannot be more excited about the opportunity to work with Tracy. Next, we continue to execute on the disciplined and process-driven approach to inorganic growth.

speaker
Mark Hood
EVP, Chief Administrative Officer

RJ Jensen and his team are doing a fantastic job as they build an inorganic growth engine and pipeline. We are encouraged by the opportunities we're evaluating, and we remain on track to announce a strategic transaction in the calendar year. Of course, we will remain selective as we seek to execute on the right transaction at the right terms. On that front, as we announced earlier this week, we increased our total borrowing capacity from our credit facilities from $359 million to $500 million. The larger facilities provide us greater financial and strategic flexibility and, importantly, extends maturities to August 2028. We want to thank our financial partners and our bank syndicate, which is made up of new and existing lenders, many of whom upsize their commitment.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

Finally, as I addressed in our summary of Q2 results, we are pleased with the reception around the new KPIs we introduced to our reporting structure. As our investor day approaches in September, we will look for additional opportunities to increase transparency for the investment community.

speaker
Mark Hood
EVP, Chief Administrative Officer

Before I hand the call off to Amanda, I want to touch on our capital allocation efforts, which remain focused on creating value for shareholders. We continue to believe our stock presents a compelling entry point for investors who are looking for access to a diversified alternatives platform focused on the lower and core middle market. In the second quarter, we purchased 1,533,800 shares at an average price of $8.12. That takes the total quantum of shares repurchased since the beginning of 2024 to $42.5 million. Since the inception of our repurchase program in 2022, we have repurchased a total of 8.2 million shares at an average price of $8.70.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

As of June 30th, 2020, we had approximately $8 million remaining on the program.

speaker
Mark Hood
EVP, Chief Administrative Officer

After the quarter, our Board of Directors authorized an additional repurchase in the amount of $12 million, bringing the total available for repurchases to approximately $20 million.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

With that, I'll hand the call over to Amanda.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

Thank you, Luke.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

PTEN delivered strong financial results in the second quarter as our strategies continue to benefit from ongoing improvements to our corporate-level organizational structure. During the second quarter, fee-paying assets under management were $23.8 billion, an 8% increase on a year-over-year basis. In the second quarter, $844 million of fundraising and capital deployment was offset by $855 million in step-downs and expirations. As we mentioned at the start of the year, we expect step-downs and expirations for the full year to be approximately $1.5 billion. with most of the step-downs and expirations having occurred in Q2, and the remaining approximately 500 million distributed across Q3 and Q4. As anticipated, most of the second quarter step-downs and expirations are attributable to RCP Fund 9, a 2014 vintage, and TrueBridge Fund 2, a 2010 vintage. Revenue in the first quarter was 71.1 million, a 14% increase over the second quarter of 2023. Average fee rate in the second quarter was 115 basis points, which was driven by higher fee rates from direct strategies becoming a larger part of our fee-paying AUM mix, as well as higher catch-up fees.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

As Luke mentioned, we had 12 commingled funds in the market and saw broad participation across our investment platform. Our private equity strategies raised and deployed 302 million. Our venture solution raised and deployed 159 million.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

Our credit strategies added 368 million to fee-paying asset center management,

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

and our impact strategy added $15 million to fee-paying asset center management. The performance of P-10 strategies is reflective of our diverse global investor base, comprised of family offices and wealth managers, public pensions and endowments and foundations, as well as our season deal team to continue to execute on best-in-class investments and generate durable alpha. In the second quarter, catch-up fees were $6 million, bringing the total for the year to $13.7 million. Catch-up fees are driven by the timing of fund closings, and in the second quarter, the fees were primarily attributable to closings related to Bon Accord II, RCP Fund 18, and RCP Multi-Strat II. Based on the projected fund closings that may occur in the second half of 2024, Our catch-up fees could exceed our previously stated annual guidance of $16 million. Operating expenses in the second quarter were $54.2 million, a 4% increase over the same period a year ago. The increase was primarily driven by compensation expense and placement fees.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

Gap net income in the second quarter was $7.2 million. million, an increase compared to 2.1 million in the comparable period a year ago.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

The adjusted EBITDA in the second quarter was 35.4 million, an increase of 2% from the second quarter of 2023. For the quarter, our adjusted EBITDA margin was 50%. Our margin came in a bit higher than expected due to the strength of our direct strategies and product mix. We still expect margins for the year to be in the mid-40s as we continue to make key investments that we believe will deliver clear ROI. For the second quarter, adjusted net income, or ANI, was $28.8 million, an 8% increase over the second quarter of 2023. Fully diluted ANI EPS was $0.24 per share, an increase of 9% on a year-over-year basis. As discussed in our first quarter 2024 earnings results, we've included the following metrics for increased transparency and to help the investment community draw better apples-to-apples comparisons with the asset management landscape at large. Fee-related revenue, or FRR, fee-related earnings, or FRE, and complementary FRE margins. FRR in the quarter was $68.3 million, representing a 12% annual increase. and FRE was 33.6 million, representing a 3% decrease. Our FRE margin was 49% in the second quarter. Cash and cash equivalents at the end of the second quarter were $31 million. At quarter end, we had an outstanding debt balance of $303 million and $56 million available on the revolver. Today, we have an outstanding debt balance of $325 million

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

and $175 million available on the revolver.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

We are pleased to have amended and extended our credit facility, which is a division of P10 for enhanced flexibility as we continue to evaluate potential transactions in the market. Our syndicate increased to 14 million with many upsizing their commitments.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

I am exceptionally thankful to all our banks who participated, especially our joint lead arrangers, JPMorgan Chase Bank, KeyBank Capital Markets, and Texas Capital Bank. We've worked with many of our lenders for years and appreciate their confidence in the company's ability to execute on our strategic growth plan.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

We enter the second half of the year with a balanced balance sheet while maintaining relatively modest leverage levels, which we believe is prudent in the current environment.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

We also continue to pay our quarterly dividend for Class A and Class B common stock. Today, we declared a quarterly cash dividend of 3.5 cents per share payable on September 20th, 2024 to stockholders of record as of the close of business on August 30th, 2024. Finally, as of June 30th, 2024, our Class A shares outstanding were 53,471,354. And Class B Shares Outstanding were $58,207,000.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

Last month, we announced our Investor Day will be on September 19, 2024 at the New York Stock Exchange.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

Additional details can be found on the Investor Relations page of our website. We invite you to join us and hear directly from our management team and affiliated managers on our financial outlook, growth levers, strategic vision, and investment thesis. Formal presentations will be followed by a Q&A session, all of which will be webcast on our investor relations website. We look forward to updating the street on our growth plan and meeting with our investment community in person in September. Thank you for your time today.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

We look forward to updating you on our continued progress in the second half of the year as we execute against our I'll now pass the call over to the operator to begin the Q&A session.

speaker
Operator
Conference Operator

Thank you. As a reminder, to ask a question, you will need to press star 1 1 on your telephone. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ben Budish of Barclays.

speaker
Ben Budish
Analyst, Barclays

Hi. Good evening, and thanks for taking the question. I guess maybe to start just on the fundraising, you know, Luke, you mentioned you're 60% of the way to your full-year target. It sounds like there's a lot of momentum you feel good about. I guess just from a messaging perspective, why not raise the target? I guess there's still a couple quarters left to report, but just curious about what the upside to that might look like, if there's any more color you could give there.

speaker
Mark Hood
EVP, Chief Administrative Officer

Thanks, Ben. Well, as you recall, I think when we did the 61%, that was obviously off the $2.5 billion, but our guidance was, as you recall, $2.5 billion or more, and I think we're feeling really good about the or more. I think we really have, you know, clear momentum to be able to organically raise and deploy, you know, $2.5 billion or more. As we mentioned, we had 12 funds in the market last quarter. We think those numbers are going to expand as we get into it, as we get into the second half. And when you look at some of the individual strategies, we think we have a lot of momentum, right? So you look at Truebridge closing the flagship fund at $8.80 up from the target of $7.50. You look at HART closing Fund 4 at $645,000 ahead of the $500,000 target. You look at the initial success of WTI, and we're still in the market raising. You look at the ongoing momentum in Bon Accord and that that we're still raising. And then I think we're really going into an exciting fundraising cycle in RCP. So I think we feel really good about the number, you know, in the back half and, frankly, beyond. We're obviously going to talk a lot more about the longer term fundraising momentum and the client activity that we're seeing at our investor day, but I think we feel really, really good about our ability to meet and exceed the targets we laid out.

speaker
Ben Budish
Analyst, Barclays

Got it. Helpful. And then maybe just thinking about the deployment environment, we saw sort of a mix of performance from some of your larger cap peers, but a number of them showed very meaningful step-ups quarter over quarter in deployment. and yours stepped down a little bit quarter of a quarter. Now, you operate in some different markets and probably go to head-to-head a bit less than I think some might expect. So just could you comment on what you expect for the back half of the year there? Any sort of nuances about the markets in which you operate that would be less obvious from what we're seeing from some of your peers?

speaker
Mark Hood
EVP, Chief Administrative Officer

No, look, I think, again, I can't comment. on our peers, but just on us, I think we continue to see a really attractive investing environment across many of our businesses. Recall that a lot of our businesses, when we report, we report on committed capital. And so that's what you're seeing in the fundraising. The big place, I think, where we're really charging on deployed is in our NAV lending strategy. And I think we're seeing some really, really robust opportunities to deploy capital there. We just raised a larger fund. I think we're obviously given some of the stresses and strains that the buyout market is under, where we're a lender to many of those funds, whether it's to be able to do portfolio add-ons, whether it's to be able to sort of stretch and do new strategic transactions within the funds. We're really affording our underlying clients the ability to do that. That continues to be a really robust environment. we're obviously gonna be, it is a credit strategy, and in credit strategies we're about risk underwriting, obviously we wanna generate great returns for our LPs, and so we're gonna be balanced, we're gonna be measured, when we think there's an opportunity to lean in, we'll lean in, but we're very comfortable with our pace of deployment right now.

speaker
Ben Budish
Analyst, Barclays

Understood, now if I could squeeze in one more just kind of, A detailed question. Your other revenue has been, you know, it's quite a bit higher in the first half of this year versus prior years and higher in Q2 than Q1. Could you just remind us what's in that exactly and why has it been going up? And is this like an okay run rate to think about for the rest of the year?

speaker
Mark Hood
EVP, Chief Administrative Officer

Amanda, do you want to take that?

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

Yes. I think in general, in the second quarter in particular, we had a bit of incentive fees that came through other revenue that is not typical for our model, as you're aware. And really, these incentive fees get earned based on performance and structure of the specific investment. The incentive fees you're seeing in the financials this quarter in particular are the result of just one client at RCP. And so we feel like disclosing FRR, FRE, and FRE margin certainly make it easier to appreciate the nature of our business model, which is built upon leading carry with the underlying strategies, as we've said in the past. There is a bit of ongoing other revenue, but I would say, you know, in general, it's fairly minimal.

speaker
Ben Budish
Analyst, Barclays

Okay. All right. Great.

speaker
Mark Hood
EVP, Chief Administrative Officer

Thank you. And, Ben, maybe if I could just add one thing to that. That is times like these are expressly the reason we wanted to give you what I would call a more apt and easy comparison with our peers. And so this is why we rolled out the KPIs like FRR and like FRE so that you could take out sort of any volatility in any given quarter, obviously positive volatility in this case, and we're happy to have it. We're really excited about that relationship that we have and the client that we have there. and the success we've had for them, which ultimately generated that incremental incentive fee revenue. But on the long run, we want to really make sure we're giving you the apples-to-apples comparison, and that's why we did move to FRR and FRE.

speaker
Ben Budish
Analyst, Barclays

Understood. Thank you for taking my questions.

speaker
Operator
Conference Operator

Thank you. Our next question comes from the line of Kenneth Worthington of J.P. Morgan.

speaker
Alex Bernstein
Analyst, J.P. Morgan

Hi, it's Alex Bernstein, Arford County. Thanks so much for taking our questions. For my first question, I wanted to double-click on theories. I know they stepped up quite a bit, even when we're comparing on an X catch-up fee basis. You mentioned there are some direct strategies coming online that are driving these. How should we think about how to go forward for a reasonable timeline, maybe the rest of this year and next year, to the extent you're able to comment?

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

Yeah, thank you for the question. Our core fee rate, ex-catch-up fees, should be approximately 105 basis points for 2024 as we've had it in the past. Our average all-in fee rate in the second quarter of 115 basis points was really driven by higher fee rate direct strategies becoming a larger part of our fee-making as well as higher catch-up fees in the quarter. We look forward to unpacking our dynamics around our fee rate, catch-up fees, and growth framework across our base strategies that are upcoming investor day.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

Thanks so much. Maybe to ask a bigger picture question, you mentioned the M&A topic again.

speaker
Alex Bernstein
Analyst, J.P. Morgan

Definitely seems like an area of focus. You mentioned that you're planning on announcing a deal at some point this year. What areas are you looking at specifically or where are you seeing interesting opportunities? There's obviously been quite a bit of M&A in the broader alternative asset management space. Are you thinking of a geographic expansion? Would it be a certain type of strategy that you're currently potentially missing that you want to add to the fold? Just more commentary on your strategy there, Tix, that you can provide. Thank you.

speaker
Mark Hood
EVP, Chief Administrative Officer

Sure, Alex, happy to. And obviously, as you mentioned, M&A is an important part of our business model. It has been, and it will continue to be. And we think that ability to drive in organic growth is really valuable. It's valuable to us. We also think that ultimately it's valuable to our LPs, and that's why we engage in it. And I'd just say a few things. One is, when we think about what we want to One is we want it to be additive to the whole of P10. We want it to be, you know, simpatico and symbiotic with our other strategies. That's really important. And obviously, we're only going to do transactions that we believe make both strategic and economic sense for P10 and for our shareholders. And so those are kind of the constraints as we think about. When we look out in the broader environment, I'd really highlight kind of four areas or four different kinds of M&A transactions that we're evaluating at any point in time.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

One is what I would call what you'd think of as bolt-ons to existing structures.

speaker
Mark Hood
EVP, Chief Administrative Officer

strategies, tuck unders to things we already do. You know, we have seven market leading strategies. That doesn't mean that there aren't things that we could tuck up or tuck under those individual strategies. We're always on the lookout for those. And the good news is we often run into them because our strategies are out there in the market every day doing business and they're seeing and running into some of these other smaller institutions. And so, you know, if there's an opportunity to do something that fits very nicely and tucks under and adds a capability, or some sort of investing acumen to one of our existing strategies, we're always open to do it. I would then say to your point, there are three areas we really think about as broadening our remit and our footprint. First, and you mentioned it, was geography. Certainly, our business is predominantly a North American business at this point, and we think some of the strategies we execute on very ably in North America have analogs outside the U.S., in Europe, in Asia, And so being able to deliver on a global basis for our clients is something that is really important to us. We can obviously do that synthetically right now, but if we could do it with proprietary P10 investment strategies, that would be even better.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

And so we really look at what might be out there in the geographic landscape.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

And then to your other point, we also look at capabilities. and what are some of the capabilities that we may not have in the broad-based way and that we're also hearing loud and clear from our LPs that they would like and they would like to have from us.

speaker
Mark Hood
EVP, Chief Administrative Officer

And so I think two areas space to think about there. We have a number of private credit strategies, but in the vibrant middle of the private credit spectrum, whether it's direct lending, whether it's asset-based lending, we don't really have a full broad-based strategy there. And so if there was something we could do that would leverage our ecosystem in the middle and lower middle market around private credit, we'd be very excited about that. And then I think the other place that we frankly get a lot of LP inquiry about is real assets. And I think that's both real estate and infrastructure, but I think particularly many of our clients are looking for infrastructure exposure, and they've asked us, you know, we think PTEM would be a great partner to help provide that. Is that something you would think about over time? And, of course, the answer is absolutely yes, if we could find the right strategy and the right platform. And so that's kind of the quick roadmap of the things we're looking at. I would say that RJ and his team have done just an absolutely fantastic job of building out a framework, an approach, a process, one that's replicable, and one that really focuses on

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

not just reacting to what comes to us, but focusing on what are the right platforms for us that we want to own and what's the engagement and cultivation strategy to be with those platforms such that when they do decide the time has come for some evolution in their ownership structure, we're at the top of the list. And so we're really focused on that as well. It's very helpful.

speaker
Operator
Conference Operator

Thank you so much for the detailed answer. Thank you. Our next question comes from the line of Stephanie Ma of Morgan Stanley.

speaker
Stephanie Ma
Analyst, Morgan Stanley

Hey, thanks for taking my question. Maybe just one follow-up on the M&A question. Can you just give us an update on how you think about uses of capital here as the debt balance is growing and you increase your total borrowing capacity? How are you thinking about share buybacks, potential M&A, and pace of that pay down at this point?

speaker
Mark Hood
EVP, Chief Administrative Officer

Great. Well, let's start here. So first and foremost, our capital allocation priorities have not changed, right? And they remain the same. They will remain the same. So as we've always said, number one is that we're going to maintain our dividend and presumably over time grow our dividend at a reasonable pace consistent with our historic practice. Our next two priorities then, and I'm obviously dependent, it will be conditioned on where is our share price, where are the opportunities in the broader M&A market, but it's always going to be, you know, share or purchase and M&A. And you can see, again, we highlighted some of the activities we take in on share or purchase when we see an opportunity and we think our stock price, for whatever reason, is dislocated, we're going to lean in there. And I think we did that particularly in the first and second quarters of the year. And obviously, to the extent Touch wood it doesn't, but if it were to happen again, we would be very focused on it and continue to lean in. And you saw that we increased the authorization to do share repurchases back up to $20 million. And then M&A is a really important strategic priority for us, as we've talked about. We want to do a deal. We want to do many deals, but we want them to be the right deals over time, that is. I've talked before about this approach of crawl, walk, run. So we're going to be really thoughtful about the kind of M&A that we do, and we want to make sure that we've really built the M&A and the inorganic muscle in the right way so that we can execute on it, integrate on it, and then deliver the IR or ROI out of the M&A deal in the right way that we think our shareholders demand. And so those are going to be, you know, probably the next two priorities. And obviously at any point in time, maybe the relative positioning of them changes, but they're very close. And then debt pay down is going to be kind of the last priority. One of the things I would note here is as a factor of the fact that we did this new facility and we upsized, you know, the credit facility, We haven't yet started. That hasn't yet started to amortize. When it does start to amortize, we'll obviously pay it down. And so whenever we have excess cash, we're generally going to use it for one of our four priorities that I outlined there. But we may just be for a minute at a moment in time where our ability to pay down any of our debt is a little bit constrained.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

because we put a new facility in place and there's nothing actually drawn on the revolver right now. We also have an accordion feature on the facility.

speaker
Amanda Cousins
EVP, Chief Financial Officer and Chief Compliance Officer

we increased from 359 million to 500 million of availability, but also have an additional 125 million potentially as an .

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

So we have a lot of room for feedback. Great.

speaker
Stephanie Ma
Analyst, Morgan Stanley

Thanks for that, Connor.

speaker
Mark Hood
EVP, Chief Administrative Officer

Yeah.

speaker
Stephanie Ma
Analyst, Morgan Stanley

And maybe just a broader question on data.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

BlackRock's recent acquisition of that's the value of private market data to the forefront. If you can just

speaker
Stephanie Ma
Analyst, Morgan Stanley

Talk about how you see your data sets as differentiated and your approach to leveraging data as a private market solutions provider.

speaker
Mark Hood
EVP, Chief Administrative Officer

So, Stephanie, that's an outstanding question, and I will give you a very high-level answer here, but I will tell you there is going to be a whole module at our Investor Day on September 19th where we're going to talk about how we utilize data in our business and actually give a demo of our proprietary data set. And so I think that'll be really exciting. And I know you'll be there, but I encourage everybody to look out for that. And that'll be something that'll be on our website afterwards. So if folks want to do a deeper dive on our data, they'll be able to. But to come to the point, we think data is kind of the currency of the kingdom in this business at some level. And it's what makes you better at what you do in almost every aspect of your business. Certainly it's critical in capital raising. We capture a lot of data around capital raising, around clients, and hopefully we use that data to better inform next best actions. And then obviously in our investing processes, in our sourcing process, in our execution process, data is incredibly important. We're very lucky because of our footprint and presence in the middle and lower middle market, we have data longitudinally going back decades. And our ability to leverage that data to glean insight around types of transactions that we're contemplating, investments that we're considering, is really differentiating. And it really, I think it's one of the other reasons that really informs, frankly, the raison d'etre of P10, because this stretches across all our strategies, right? The access to that data can inform, you know,

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

a decision to become an LP, an RCP.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

It can inform a decision to take a minority stake. In Bonacourt, it can inform an ability to make a NAV loan. In Hart, And so that data is really foundational to what we're doing across the platform. And as I said, we'll talk a lot more about it and actually share a demo of how that data works and how we apply it at the Investor Day. Well, stay tuned. Thank you. Thank you. Our next question comes from the line of Chris Kaczowski of Oppenheimer and Company.

speaker
Chris Kaczowski
Analyst, Oppenheimer & Co.

Yeah, good afternoon and thanks. Most of mine were asked, but I just wanted to follow up on the fundraising side about the RCP secondaries and co-investment funds. I'm curious, how long is the marketing period for those typically, you know, between the first and the final close? You know, what should we be expecting there? And I don't know if you've shared the target size for those funds or if you can give an indication of that.

speaker
Mark Hood
EVP, Chief Administrative Officer

Yeah, I would say so. I'll take a couple questions. So first observation, you asked about our RCP co-investment fund. We call it our direct fund, and it's direct five, by the way. And then our secondaries fund, we call it, you know, SLF or secondaries. And so just some sense, you know, generally I would say, and again, it will obviously depend on the environment. It will depend on the momentum. It will depend on a lot of things. but usually we're in the market for somewhere between three and six quarters with these strategies, right? And I think my guess is this time would be similar. So think of it as a year to a year and a little bit of a plus. I don't actually, I want to be a little careful here. I don't know what we've said in terms of sizing publicly. And so I want to be just a little bit careful on it, but obviously anything we can share, we can share. But I will tell you as a directional kind of thought, You know, you've seen what we did in the last of those strategies, right, in terms of direct four and secondaries four. Both of these strategies, I think, are very timely and very resonant with the LP base. And so I think it'd be very reasonable to assume that there's a lot of momentum in those strategies, and we think that will lead to, you know, a lot of outcomes.

speaker
Luke Sarsfield
Chairman and Chief Executive Officer

Okay, great. That's it for me. Thank you.

speaker
Operator
Conference Operator

Thank you. I would now like to turn the conference back to Luke Sarsfield for closing remarks. Sir?

speaker
Mark Hood
EVP, Chief Administrative Officer

Well, thank you, Lateef, and thank you so much to everybody for joining us today. To close, we are extremely proud of the demonstrable progress that we've made in the first half of the year as our team thoughtfully structures the platform for continued growth. Further, we are confident we have the right strategy in place to deliver long-term value for all of our shareholders. I look forward to seeing many of you at our Investor Day in New York on September 19th, and I wish you all a happy and healthy close to the summer. Thank you.

speaker
Operator
Conference Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Q2PX 2024

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