Alluvial Capital Management, an investment advisory firm, released its first-quarter 2024 investor letter. A copy of the same can be downloaded here. Alluvial Fund rose 6.3% in Q1, outperforming comparable indexes which were up between 4.3% and 5.2%. The overall increase was comprehensive, as multiple assets in the portfolio made significant contributions. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Alluvial Capital Management featured stocks like P10, Inc. (NYSE:PX) in the first quarter 2024 investor letter. Headquartered in Dallas, Texas, P10, Inc. (NYSE:PX) provides multi-asset class private market solutions in the alternative asset management industry. On May 2, 2024, P10, Inc. (NYSE:PX) stock closed at $7.36 per share. One-month return of P10, Inc. (NYSE:PX) was -12.38%, and its shares lost 27.42% of their value over the last 52 weeks. P10, Inc. (NYSE:PX) has a market capitalization of $852.855 million.
Alluvial Capital Management stated the following regarding P10, Inc. (NYSE:PX) in its first quarter 2024 investor letter:
“You may notice a conspicuous absence in our top holdings list. P10, Inc. (NYSE:PX) was a top Alluvial Fund holding for several years, but in March, I decided to sell our entire position. We parted with our last shares a few days ago. This was a difficult decision, but one I believe was necessary and thoroughly considered. In short, P10 disappointed us one too many times. The early years of our P10 investment were marked by triumph after triumph as the company grew from an OTC-traded shell company to a NYSE-listed diversified alternative assets manager. But then, the trouble set in. Since its December 2021 IPO/uplisting, P10 has cut its cash flow margin target from >55% of revenue to a “mid-40%s” figure. It has managed only one additional acquisition. And management turnover has been high, with multiple higher-ups exiting and selling or registering to sell large blocks of shares. Not exactly a sign of confidence.
I still like P10. Their business model is one of the world’s best, with phenomenal returns on capital, nearly zero need to reinvest cash flows, and long-term industry tailwinds. The new CEO is as sharp as they come, with serious deal-making credentials. But P10 has run into the tough reality that creating a true premier diversified alternative investments platform is going to be far more difficult and far more expensive than anticipated. They need more salespeople, more “deals” people, more people in nearly every department, and these people won’t work for cheap. This investment in human capacity is worthwhile, but the financial rewards may not show up for years. Then there is the problem that credibility is rebuilt far more slowly than it was destroyed. P10 has burned a lot of investors since its IPO. When and if P10 starts to show real improvements, it could take several quarters for investors to trust the company once again and send its shares higher
Looking around at the universe of investments available to us, I could no longer justify owning P10 over any of several other potential holdings. So I sold, and re-allocated the proceeds to multiple other ideas. Fortunately, these ideas have already contributed to the fund’s returns. Funny enough, despite its recent tough run, P10 remains one of the fund’s all-time best performing investments. But although I still think P10’s long-term potential is quite strong, my list of “best risk-adjusted ideas” has only a few dozen entries and P10 is no longer one of them.”
A portfolio manager with a stack of financial documents, illustrating the asset management industry.
P10, Inc. (NYSE:PX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held P10, Inc. (NYSE:PX) at the end of the fourth quarter which was 9 in the previous quarter.
We previously discussed P10, Inc. (NYSE:PX) in another article, where we shared Alluvial Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.