P10, Inc. (NYSE:PX) Q4 2024 Earnings Call Transcript

P10, Inc. (NYSE:PX) Q4 2024 Earnings Call Transcript February 12, 2025

P10, Inc. beats earnings expectations. Reported EPS is $0.3, expectations were $0.26.

Operator: Hello, and welcome to the P10 Fourth Quarter 2024 Conference Call. My name is Lateef and I will be coordinating your call today. Currently, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. As a reminder, today’s conference call is being recorded. I will now hand the call over to your host, Mark Hood, EVP and Chief Administrative Officer. Mark, Please go ahead.

Mark Hood: Thank you, operator and thank you all for joining us. On today’s call, we will be joined by Luke Sarsfield, Chairman and Chief Executive Officer; and Amanda Coussens, EVP and Chief Financial Officer. Additionally, in the room with us today is Arjay Jensen, EVP, Head of Strategy and M&A and Sarita Jairath, EVP, Global Head of Client Solutions. 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 otherwise 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 can be useful in evaluating the company’s future performance. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release and our filing with the SEC.

I will now turn the call over to Luke.

Luke Sarsfield: Thank you, Mark. Good morning, everyone and thank you for joining our fourth quarter and full year 2024 earnings call. We are extremely encouraged by what our team accomplished in 2024 and we are very well positioned to advance our strategy further in the quarters ahead. On today’s call, I will provide an overview of our financial highlights for the quarter and the year, reflect on our record performance, review our five year guidance, share our 2025 outlook, update you on the Qualitas Funds acquisition, and discuss ongoing strategic imperatives that will support our growth plan. Amanda will also provide additional detail on our financial performance for the quarter and the year and key considerations for the year ahead.

In the fourth quarter, P10 made meaningful and demonstrable progress around our strategic initiatives, including adding key members to the leadership team to position P10 to drive growth. We ended the year in a position of strength exceeding the financial and operating guidance we provided in February of 2024 in which we committed to deliver over $2.5 billion in gross fundraising, double-digit revenue growth, margins in the mid 40% range and a reinvigorated M&A process. To put some numbers around our outperformance, for the full year 2024, fee paying AUM increased by 10%, revenues increased by 23%, adjusted EBITDA rose by 17% and we generated $3.8 billion in gross fundraising, notably Bonaccord Capital Partners. Our GP stake strategy closed Fund II with a record $1.6 billion.

It is our first fund to attract more than $1 billion in capital and we believe LP interest speaks to the attractiveness of our differentiated middle market focus. Additionally, fee related revenue grew by 14% excluding the effects of direct and secondary catch up fees, while full year FRE margins were 48.8%. In early 2024, we committed to reinvigorate our M&A engine and in September, we announced our acquisition of Qualitas Funds, a leading European private equity fund of funds manager based in Madrid. The firm provides fund to funds, direct co-investing and NAV financing opportunities in the European lower middle market. We remain on track to close the transaction in the first quarter. Additionally, at our September 2024 Investor Day, we shared our longer term vision which included our target of more than doubling fee paying AUM over the next five years through 2029.

This equates to growth from $23.8 billion to $50 billion of fee paying AUM. While we expect the vast majority of growth to be organic, we also expect to execute on value creating M&A that meaningfully advances our strategy and delivers additional fee paying AUM. Turning to margins. There are three key dynamics that are going to impact our FRE margin outlook. First, the key investments we are making in the business which are largely focused on human capital in areas like distribution. We expect these investments to drive accelerating growth and provide a high ROI. Second, the ongoing mix shift within our portfolio of strategies. Some of our newer and faster growing strategies have lower core FRE margins than some of the larger and more established parts of our business.

And third, a dynamic that we think is really attractive is the inherent operating leverage in our model, particularly as we scale assets and revenues. Over the longer term, the net aggregate effect of these three dynamics, excluding any impact from MA is that we see FRE margins expanding from our current near and intermediate term target of the mid-40s% to closer to 50% in the out years. Looking at our strong momentum in 2025, we remain on track to meet or exceed our five year goals. For 2025, we expect gross fundraising of at least $4 billion. This 2025 guidance reflects a 60% increase over our 2024 guidance $2.5 billion. The guidance excludes the approximately $1 billion of incremental fee paying assets we expect to receive following the close of the Qualitas Funds transaction.

In addition, we plan to have 19 commingled funds in the market at various times in 2025. This includes four Qualitas commingled funds. We expect step downs and expirations to be in line with 2024 numbers between 5% and 7% of fee paying AUM. As it relates to our revenue outlook, we expect double-digit growth excluding direct and secondary catch up fees and including revenue contribution from Qualitas Funds once the transaction closes. And finally for 2025 we expect FRE margins to be in line with our investor day guidance. With core organic FRE margins excluding M&A in the mid-40s%, the Qualitas Funds business will put some modest downward pressure on 2025 margins which is already baked into our mid-40s% guidance. Our confidence in our future performance and our ability to execute is rooted in a number of compelling factors.

Our platform is composed of elite high quality underlying strategies with long track records of delivering durable alpha. We continue to have a vast and growing global LP base with over 3,800 relationships and with the addition of Qualitas Funds to our platform we anticipate that number will increase to approximately 5,000, further expanding our European investor base and high net worth channel. We believe we are well positioned as a world-class platform to serve clients while expanding our product set and the ways in which we can engage LPs through our investment offerings. With over two decades in the middle and lower middle market, P10 is a trusted partner with a unique competitive advantage from our very robust proprietary data platform.

We also have a firm conviction that that we are an acquirer of choice and an excellent partner to strategies looking to join a larger platform. Finally, the plan we put in place last year functions as the North Star that guides our actions. I would like to unpack each of these imperatives, what we achieved in 2024 and how we are thinking about 2025. First, we committed to optimizing our leadership team and corporate organizational structure. We made tremendous progress in 2024 by hiring key top level corporate professionals such as Arjay Jensen, Head of Strategy and M&A; Sarita Jairath, Global Head of Client Solutions; Melodie Craft, General Counsel and Chief Compliance Officer and Mike Goodwin, Chief Information Officer. We also elevated our governance framework and appointed Tracy Benford as our first lead Independent Director in June.

As we think about 2025, we are working to strengthen the all important middle layers of our organization and institutionalize our platform by enhancing our capabilities and skills across the organization. Second, we are committed to driving increased organic growth. We will find ways to accelerate our trajectory and increase the depth and breadth of our services by expanding our existing client franchise in delivering innovative products and solutions. Third, we committed to reaccelerating M&A by implementing a robust, disciplined and process driven approach to inorganic growth. The Qualitas Funds acquisition demonstrates our commitment to this strategic pillar and inorganic growth continues to be a key focus in 2025 and beyond. We believe we have built the right team and processes and we will look to execute on strategic value creating transactions with franchises that complement our platform.

Fourth, we committed to generating operational efficiencies through incentivizing collaboration and leveraging data insights. This work is underway in earnest and we are evaluating a host of attractive opportunities. Our mission remains to operate more as one cohesive enterprise and generate the requisite efficiencies and cost savings that will position our teams for success. Our data insights are a key competitive advantage and we plan on leveraging this in a thoughtful and appropriate way to the benefit of our clients. Fifth, we committed to enhancing our shareholder communications with an eye to greater visibility and transparency. In 2024 we made tremendous progress. We established the five strategic pillars, held an Investor Day, offered clear financial guidance and disclosed additional KPIs that make it easier for the investment community to draw a comparison to our peers.

In 2025, we will build upon our efforts to more broadly communicate P10’s capabilities to investors, LPs and others and highlight our aspiration to be the category killer in the middle and lower middle market. Before I hand the call off to Amanda, I want to touch on our capital allocation efforts. We believe our stock represents 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 fourth quarter, we repurchased 815,327 shares at an average price of $12.72, leaving $3.5 million available on the current buyback authorization. For the full year of 2024, we repurchased 6,641,827 shares at an average price of $8.88. In total, the 2024 buyback amounted to $59.1 million.

We continue to see share repurchases as an important tool for us to return capital to shareholders. With today’s announcement, the Board has authorized an additional $40 million for share repurchases, bringing the total available for repurchases to approximately $43.5 million. With that, I’ll hand the call over to Amanda to provide a deeper look at our financials.

Amanda Coussens: Thank you, Luke. During the quarter, fee paying assets under management were $25.7 billion, a 10% increase on a year-over-year basis. In the fourth quarter $905 million of fundraising and capital deployment was offset by $152 million in step downs and expiration. I think it’s worth reminding everyone, our fourth quarter gross fundraising total excludes approximately $300 million of fee paying commitments that closed earlier than expected and were included in our third quarter financials. Fundraising during the fourth quarter was driven by the successful close of Bonaccord II, which added $506 million in the quarter, RCP Multi-Strat II, which raised $75 million, and RCP Fund XIX, which added $51 million. As Luke mentioned earlier in the call, for 2025 we expect step downs and expirations to be in the range of 5% to 7% of fee paying assets under management in line with our historical numbers.

In 2025 we expect about two-thirds of the step downs and expirations to occur in the first half of the year. Revenue in the fourth quarter was $85 million, a 35% increase over the fourth quarter of 2023. Year-over-year revenue increased from $241.7 million to $296.4 million, up 23%. Average fee rate in the fourth quarter was 133 basis points in total with an average fee rate of 105 basis points, excluding the impact of secondary and direct catch up fees. For the full year, average fee rate was 120 basis points with an average fee rate of 107 basis points, excluding the impact of secondary and direct catch up fees. In 2025, we expect the core fee rate to average 103 basis points reflecting our expectation for fewer catch up fees in the year.

In the fourth quarter we had 12 commingled funds in the market and saw broad participation across our investment platform. Our private equity strategies raised and deployed $712 million, our venture capital solution raised and deployed $28 million and our private credit strategies added $165 million to fee paying assets under management. The performance of P10 strategy 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 seasoned deal team who continue to execute on best-in-class investments and generate durable alpha. In the fourth quarter, catch up fees were $18.9 million, bringing the total for the year to $38.9 million. Catch up fees are driven by the timing of fund closings and in the fourth quarter the fees were primarily attributable to the final closing of Bonaccord II.

Bonaccord II’s outsized catch up fees were an extraordinary event that we do not expect to be repeated in the future. In the fourth quarter, direct and secondary catch up fees incrementally increased ANI per share by around $0.07 per share. Operating expenses in the fourth quarter were $62.2 million, an 8% increase over the same period a year ago. For the full year 2024, operating expenses were $235.8 million, a 7% increase over 2023. The increase was primarily driven by compensation expense associated with the successful closing of Bonaccord II and placement fees associated with fundraising at other strategies. GAAP net income in the fourth quarter was $5.7 million, an increase compared to a GAAP net loss of $1.9 million in the prior year quarter.

For the full year 2024, GAAP net income was $19.7 million, an increase compared to a GAAP net loss of $7.8 million in 2023. Adjusted EBITDA in the fourth quarter was $42.9 million, an increase of 40% from the fourth quarter of 2023. For the year, adjusted EBITDA grew from $123.6 million to $144.5 million, a 17% increase. For the quarter, our adjusted EBITDA margin was 50.5%. Our margin was higher in the quarter due to the strength of our direct strategies and product mix. For the full year, adjusted EBITDA margin was 48.7%. For the fourth quarter, adjusted net income or ANI was $35.3 million, a 39% increase over the fourth quarter of 2023. For the full year, ANI increased from $102 million to $120.2 million, representing an 18% increase. For the quarter, fully diluted ANI was $0.30 per share, an increase of 44%.

For the full year fully diluted ANI was $1 per share. FRR in the quarter was $85 million, representing a 37% increase and FRE was $42.7 million, representing a 39% increase. Our FRE margin was 50.2% in the fourth quarter. For the full year, FRR was $291.3 million, FRE was $142.1 million and the FRE margin was 48.8%. Cash and cash equivalents at the end of the fourth quarter were $67.5 million. At quarter end, we had an outstanding debt balance of $325 million and no balance on the revolver. There is $175 million available on the credit facilities. As I reviewed at Investor Day, we plan to begin reporting fully taxed ANI per share in 2025. We believe this metric will further enable the investment community to draw an apples to apples comparison with our peers.

We will also continue to pay our quarterly dividend for Class A and Class B common stock. Today, we declared a quarterly cash dividend of $0.035 per share, payable on March 20, 2025 to stockholders of record as of the close of business on February 28, 2025. Finally, as of December 31, 2024, our Class A shares outstanding were 67,614,875 and Class B shares outstanding were 43,461,442. Thank you for your time today. I’ll now pass the call over to the operator to begin the Q&A session.

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Ken Worthington of JPMorgan. Your line is open, Ken.

Ken Worthington: Hi, good morning. Thanks for taking my question. As we look ahead to the next couple of quarters, where is your sales team focusing? So what are the bigger funds in market? So you mentioned 19 funds, I think in market in 2025, which of those are sort of the biggest and most important for the sales and marketing team to get right to kind of hit your $4 billion hit or exceed I’ll say that your $4 billion target?

Luke Sarsfield: Hey Ken. It’s Luke Sarsfield. Thanks for the question. And as we mentioned, you’re right. We think we’ll have 19 funds in total in the market at different times in 2025. Not necessarily all at the same time, but at different times throughout the year. And in particular, four of those will come from Qualitas. And obviously those will be things we’ll focus on once we close the acquisition. And as we said, we continue to expect to close the acquisition later here in the first quarter. We’re really excited about the product offering that we have in market in 2025 at our RCP strategy. We have a number of funds in the market, including our co-investment strategy, including our secondary strategy, including our primary fund of fund strategy, small and emerging managers.

And we see real momentum across that. And I think that’s probably reflective of some of the momentum we’re seeing generally in the private equity space. Our TrueBridge business has a number of strategies in the market that we’re really excited about, particularly the blockchain and the Seed & Micro Strategy five points is going to be out raising a new credit strategy. We’re really excited about that. We’ll probably be back out in the market later this year with a number of other credit strategies, more news to come on that. And then finally, as we mentioned on Bonaccord, we’re excited about the momentum in that business and I think we’ll have some news to announce there as we get later in the year. So we think a lot of really interesting things in the market.

Just to remind everybody, we think one of the really compelling things about our platform is the diversity of our business, the diversification of our fundraising. And I think we’re really, really excited about the momentum and the outlook for 2025.

Ken Worthington: Great. Thank you very much.

Operator: Thank you. Our next question comes from the line of Ben Budish of Barclays. Your question please, Ben.

Nick Benoit: Hey, good morning. This is Nick Benoit on the call for Ben this morning. So I want to ask about the progress being made on your goals to broaden across new vehicles and different channels and maybe just how we would think about the investments that are going to be made in 2025. And I know last quarter you provide some color on SMA fundraising. So maybe just an update on maybe what SMA fundraising was in the quarter and then any updates on progress being made on that kind of vehicle? Thanks.

Luke Sarsfield: Thanks, Nick. And it’s Luke again. That’s a great question. And as we mentioned at Investor Day, one of our key areas of focus is going to be really about meeting our clients where they are and being a solution oriented provider to them, as we’ve always frankly aspired to be. And certainly a part of that is continuing to have the broadest diversification in terms of product offerings to meet them where they want to go, but also to have it in the right wrappers. And so you’re right, we think about a number of potential alternatives from SMAs that are helping our clients achieve their goals to different kinds of pooled vehicles we can use. We’ve looked at in the past and had some various different rated feeder funds.

And we think that that’s an exciting place. We think about kind of commingling some of our different strategies into kind of single point product offerings for our clients. And that’s an opportunity. And so under Sarita’s leadership, we are looking at a number of different ways to access that, to access different kinds of clients, whether it’s in the RIA channel, whether it’s in the high net worth channel, whether it’s in the institutional channel, and that work continues in earnest I would say. You’re right. Last quarter we did talk about some of the momentum we had in the SMA parts of the business. I think we’re not going to get into necessarily just disclosing kind of by product type every quarter. But one thing we do is when we do have notable progress and notable success, we’re going to make it a point obviously to note that for you.

So you can see our progress against those initiatives that we laid out at Investor Day. And so my guess is as we get into 2025, you’ll hear us talk about our progress, very specifically around some of these initiatives, not the least of which will be SMAs.

Nick Benoit: Great. Thank you. If I could sneak in a follow-up question, I also wanted to ask about the M&A pipeline. So obviously we have the Qualitas acquisition expected to close here in the quarter, but looking later in the year in 2025, just kind of like what looks attractive in the current pipeline. What do you see in terms of pricing? And then how are some of these initiatives under Arjay in terms of more recurring M&A starting to come through – and come through this year? Thanks.

Luke Sarsfield: Thanks, Nick. So maybe what I’ll do is I’ll start and frame it. And seeing as Arjay sitting here right next to me, I will turn it over to him to give a few thoughts. But I would say, look, one of the things we talked about at Investor Day and I think we’ve been very successful at prosecuting, is building what I would call a disciplined and programmatic approach to M&A. And a key part of that is building out a pipeline that is one that we are consistently monitoring, one that we are consistently executing on one that we have different potential opportunities in different stages of the funnel. And so I think that that’s really important. I think we feel really good about both the state of the pipeline, but also the feedback we’re hearing from potential partners around our attractiveness as a place where they want to be, they want to work and they want to partner with. And so with that, Arjay, maybe you want to add a few thoughts.

Arjay Jensen: Yes, I would just say – thank you, Luke. I would just say that, look, we’re working very hard at working an active pipeline. We think we have interesting opportunities across the areas and asset classes that we laid out at Investor Day, including focusing on private credit, direct lending, asset backed. I think those are really important areas for us. I think interestingly we talked about at Investor Day the one step, two step, we think with Qualitas now that opens up interest in Europe with respect to direct lending and asset backed. So we’re very focused on those things. We think there are interesting things we’re looking at and we’re optimistic about the forward [ph].

Operator: Thank you. Our next question comes from the line of Chris Kotowski of Oppenheimer & Company. Please go ahead, Chris.

Chris Kotowski: Yes. Good morning. Thank you. I was just wondering, I think I heard Amanda say you expected an average fee rate of 103 basis points for ex catch-up fees, but the last year was 107 basis points. I know it’s a little small difference, but just wondering why it would go down quite by that magnitude?

Amanda Coussens: Thank you, Chris, for the question. So I’m going to frame my response around catch-up fees first in general. So as a reminder, we view our catch-up fees in two distinct categories. We have core fees from our primary funds which occur on a more regular rate basis. They tend to be smaller in nature given a shorter duration of the fundraise. We also have direct and secondary fund catch-up fees that are episodic in nature because they raise bigger funds less frequently. It can be difficult to predict in size and frequency. So during 2024 our catch-up fees were significantly elevated relative to historical levels as a result of the funds that we had in the market, particularly our extraordinary results within Bonaccord II fundraise that we do not expect to be repeated in the future as we said.

We do expect catch-up fees to be approximately $4 million to $5 million in 2025, which including our core fee rate ex secondary catch-up fees should remain stable at about 103 basis points for 2025.

Luke Sarsfield: And Chris, I think it’s just important to note if you look back over the history of our business, we’ve been at that pretty consistently at that core fee rate. If you look in the kind of slide show we put out every quarter, you see 2021, we were at 100 basis points. 2022, we were at 103 basis points. 2023, we were at 103 basis points. 2024 was a little bit of a higher rate at 107 basis points. And so when we look at kind of a guidance in the, for 2025 in the 103 basis points level, that’s very much in line with the historical kind of trajectory of the fee rate in the business and we think kind of reflects the momentum.

Chris Kotowski: Okay. All righty. Thank you.

Operator: Thank you. Our next question comes from the line of Aidan Hall of KBW. Please go ahead, Aidan.

Aidan Hall: Great. Good morning, everyone. Thanks for taking my question. I just wanted to follow-up on the FRE margin commentary. Heard the thoughts around remaining in the mid-40s for 2025 and also some of the incremental fundraising coming from less scaled managers and a little bit of a headwind? But at the same time, you guys just closed one of your largest funds with Bonaccord II, which is usually a tailwind to the margin. So just wanted to hear how you’re thinking about maybe the trajectory from here in 2025. Is it the puts and takes there remain stable? Is it still striving for expansion in 2025? Or should we kind of be thinking about it contracting near-term before going towards your longer term goals that you laid out at Investor Day?

Luke Sarsfield: So good question and I just start by saying the guidance we gave at Investor Day is unchanged, right? We continue to believe in the near and intermediate term, the core kind of FRE margin rate will be in the mid-40s. And given the dynamics we see in our business, we think that will expand closer to 50% in the out year. So that guidance, that thinking, that trajectory, that momentum of margin is absolutely unchanged from what we thought back in September and what we continue to believe here today. I’d make a few observations. The first is as you can imagine, as Amanda talked about, we had meaningful catch up fees in 2024. Those will tend to come at a higher margin and some of just what I would call regular way FRR management fees.

And as a result, they will have some positive accretive impact on margin. And when we get those, it’s great and they will have a transitory benefit of driving margin higher. But when you look at kind of the core of the business, we really think about being in that mid-40s, as we said, in the near and intermediate term and then seeing that accretion from there. I’d say two things. One, and you’ll see it, we’ve talked about it. We’re still continuing to build out particularly in our client solutions team focused on distribution. We think it will have ROI. We think it’s going to be a really positive growth driver and one momentum creator for our business. But the work is not done there yet, right? Remember, Sarita only started in September. And so we’re still very early days on this.

Obviously, we’re going to do that in a balanced and prudent way. And so everything is factored into our margin guidance. The second thing I would note is, and we’ve talked about this, it is the impact of the mix shift in our business impacting margin. And so again, we have some strategies that are growing faster that tend to be at lower core margins because of the nature – inherent nature of their businesses. And that will have some impact on margin relative to some of our larger higher margin businesses that tend to grow a little bit slower. And then I would just point out as well, and I think you heard this in my part of the script, we did mention that we factored it into our margin guidance. But we think in 2025, again, in that vein of different strategies having different kind of core margin profiles, Qualitas, which we’re acquiring will have a modest kind of downward pressure on margin, factored into our core guidance, still factored into that guidance of kind of mid-40s right now.

But again, that’s part of this whole mix shift conversation that we’re having.

Aidan Hall: Thanks for the color, Luke. I’ll leave it there.

Operator: Thank you. Our next question comes from Michael Cyprys of Morgan Stanley. Your question please, Michael.

Unidentified Analyst: Hey, good morning. This is Stephanie on for Mike. Just hoping to get an update on Qualitas. What are some of the lower hanging fruits in terms of integration or synergies? And then maybe longer term, what sort of opportunities do you see around cross selling new product development or maybe potentially leveraging additional datasets?

Luke Sarsfield: So thank you, Stephanie. Great question, and I think something we are really, really excited about. We actually just spent the last few days at a management off-site and we actually had even though the transaction hasn’t officially closed yet, we had the opportunity to have the senior leadership team, the managing partners, Eric and Sergio from Qualitas join us. I will tell you the enthusiasm in the room was just absolutely palpable. As we mentioned, they’re already working closely and well known to two of our strategies, right? They’ve been working with our RCP strategy for years. Their core strategy is a European middle and lower middle market fund to fund strategy. Obviously, RCP has effectively the identical strategy in the U.S. market.

And so when they get together, one is their compelling vision for what we can build on a global basis as a product offering focused on the middle and lower middle market. Second thing, we spent a lot of time on is they have a tremendous data set and data attribute that they bring around their kind of analysis of that European market. We have something you saw at Investor Day through GPScout that’s very similar in the U.S. And I think the opportunity to combine that rich data set and be able to be a real solution provider for clients now on a global basis or at least North America plus EMEA basis is really, really compelling. The other thing I think that they bring to us is real know how and how to design products and wrappers in Europe, right?

So they’ve been very successful getting licensed in different European jurisdictions. They obviously have big throwaway in the private bank channel in Europe, that’s one of the things they’ve sold very successfully on a lot of large private bank platforms. And so that sort of distribution knowledge, that product wrapper knowledge, that synergy is really, really compelling. They also do a lot – they are building and they’ve successfully raised a first fund in the NAV lending space, working closely with our Hark strategy. That’s a place where we’ve been at that business for an incredibly long time, one of the pioneers in that business as you know. And so just watching the dynamic that we’re seeing there is that is a big, big opportunity in Europe.

It’s still a big opportunity in the U.S. by the way, but it’s much more advanced and mature in the U.S. than it is in Europe. And so the opportunity to combine their relationship network, their distribution throwaway, their relationships with GPs, with our core credit underwriting expertise, our knowledge of that NAV lending market is, we think really differentiated. And we think we’re just right now scratching the surface of that opportunity, but a lot more to come on that in the quarters and years ahead.

Unidentified Analyst: Great. Thanks so much for that. And maybe just a follow-up for me. I know you guys just had a successful close for Bonaccord II, but I think the deployment and investment pipeline has been pretty active. So what can we expect in terms of timing and potential for the successor fund Bonaccord III to come back to market faster and scale? Thank you.

Luke Sarsfield: Again, another great question. And just stepping back, I think it’s really been amazing to watch the momentum that the Bonaccord team has in this GP stake space. Clearly, I think from an LP and prospective LP appetite, there’s been enormous focus on where we play, which is the middle and lower middle market. The opportunity set there is incredibly robust. The team has is seeing so many different opportunities. I think the broad acceptance of the product, both from a GP perspective and then from an LP perspective, looking to invest in the strategy, given some of the attributes that the near-term yield, the long-term equity upside with the carry participation is really compelling. And so we’re seeing a lot of enthusiasm and excitement around kind of that GP stakes broadly written in particular our GP stakes strategy, which is middle and lower middle market focused where we think there’s just a massive opportunity and we have a real head start relative to any of the competition.

Obviously, we’re really proud of what we accomplished with BCP2. It was a fundraising outcome that was very positively unexpected, I would say, and I think highlights the strength and momentum in that business and the investor appetite for that business. You’re absolutely right. We have – there are a lot of really attractive opportunities out there in the world. I think the team has done an extraordinary job of putting capital to work in a very positive way. We’ve had some really, really positive developments of some of our – some of the GPs within the portfolio that we’re excited about, but I think creates momentum for the business. And to your point, I think we’re really excited about the prospects of BCP3. And I think as I mentioned, we should be in a position to talk about it more here as we roll into 2025.

Unidentified Analyst: Okay, great. Thanks for taking my questions.

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

Luke Sarsfield: Well, thank you, operator, and thanks to everyone for joining our call today. Following a truly transformational 2024, we believe we have the infrastructure in place to accelerate growth and drive operational efficiencies for the benefit of our strategies and our shareholders in 2025. We very much look forward to updating you on our first quarter 2025 financial results in May. Have a good morning.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.