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What changed in P10, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of P10, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+374 added−464 removedSource: 10-K (2025-02-28) vs 10-K (2024-03-13)

Top changes in P10, Inc.'s 2024 10-K

374 paragraphs added · 464 removed · 275 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+11 added−115 removed99 unchanged
Biggest changeWe offer the following vehicles for our investors: 8 Primary Investment Funds Primary investment funds refer to investment vehicles which target investments in new private markets funds, which in turn invest directly in portfolio companies. P10’s primary investment funds include both commingled investment vehicles with multiple investors, as well as our customized separate accounts, which typically include one investor.
Biggest changeWhile catch-up fees are not a significant component of our overall revenue stream, they may result in a temporary increase in our revenues in the period in which they are recognized. 8 We offer the following vehicles for our investors: Primary Investment Funds Primary investment funds refer to investment vehicles which target investments in new private markets funds, which in turn invest directly in portfolio companies.
ERISA and the Code impose certain duties on persons that are fiduciaries under ERISA, prohibit certain transactions involving benefit plans and “parties in interest” or “disqualified persons” to those plans, and provide monetary penalties for violations of these prohibitions.
ERISA and the Code impose certain duties on persons that are fiduciaries under ERISA, prohibit certain transactions involving benefit plans and “parties in interest” or “disqualified persons” to those plans, and provide for monetary penalties for violations of these prohibitions.
However, because of the number of investors seeking to gain access to investment funds and co-investment opportunities managed or sponsored by the top performing fund managers, there can be no assurance that we will be able to secure the opportunity to invest on behalf of our investors in all or a substantial portion of the investments we select, or that the size of the investment opportunities available to us will be as large as we would desire.
However, because of the number of investors seeking to gain access to investment funds and co-investment opportunities managed or sponsored by the top performing fund managers, there can be no 17 assurance that we will be able to secure the opportunity to invest on behalf of our investors in all or a substantial portion of the investments we select, or that the size of the investment opportunities available to us will be as large as we would desire.
Our business development and investor relations professionals are also responsible for being the principal points of contact for our existing investors, and for our customized separate accounts, we work with each investor to design and implement a specific strategic plan in accordance with the investment guidelines agreed to by us and the investor. 10 Our Investment Performance We believe our investment performance acts as a key retention mechanism for our existing investors and a primary attribute for prospective investors.
Our business development and investor relations professionals are also responsible for being the principal points of contact for our existing investors, and for our customized separate accounts, we work with each investor to design and implement a specific strategic plan in accordance with the investment guidelines agreed to by us and the investor. 10 Our Investment Performance We believe the performance of our investment vehicles acts as a key retention mechanism for our existing investors and a primary attribute for prospective investors.
We have 20 active investment vehicles. Our VCS solution is differentiated by our innovative strategic partnerships and our vantage point within the venture capital and technology ecosystems, maximizing advantages for our investors. In addition, since 2011, we have partnered with Forbes to publish the Midas List, a ranking of the top value-creating venture capitalists.
We have 20 active investment vehicles. VCS is differentiated by our innovative strategic partnerships and our vantage point within the venture capital and technology ecosystems, maximizing advantages for our investors. In addition, since 2011, we have partnered with Forbes to publish the Midas List, a ranking of the top value-creating venture capitalists.
In addition, our multi-asset class solutions are highly synergistic, and coupled with our vast network of general partners and portfolio companies, drive cross-solution sourcing opportunities. 5 Our global investor base includes some of the world’s largest institutional investors, including pension funds, endowments, foundations, corporate pensions and financial institutions.
In addition, our multi-asset class solutions are highly synergistic, and coupled with our vast network of general partners and portfolio companies, drive cross-solution sourcing opportunities. Our global investor base includes some of the world’s largest institutional investors, including pension funds, endowments, foundations, corporate pensions and financial institutions.
We believe adding new asset class solutions will foster deeper manager relationships, enabling managers and portfolio companies alike to benefit from our offering and expect to expand within other asset classes and geographies through additional acquisitions and future planned organic growth by providing additional specialized investment vehicles within our existing investment asset class solutions.
We believe adding new asset class solutions or new geographies will foster deeper manager relationships, enabling managers and portfolio companies alike to benefit from our offering and expect to expand within other asset classes and geographies through additional acquisitions and future planned organic growth by providing additional specialized investment vehicles within our existing investment asset class solutions.
Contingent upon the solution, each investment fund will have a designated “Manager”, which generally serves as the investment manager of the fund, responsible for all investment diligence, decision making and monitoring. Fees We earn management and advisory fees based on a percentage of investors’ capital commitments to, in funds or deployed capital.
Contingent upon the solution, each investment fund will have a designated “Manager”, which generally serves as the investment manager of the fund, responsible for all investment diligence, decision making and monitoring. 16 Fees We earn management and advisory fees based on a percentage of investors’ capital commitments to, in funds or deployed capital.
We aim to continually improve and evolve, and plan to review our policy annually. 25 Given our scale and position in the private markets ecosystem, we believe we are well positioned to help educate the broader investor and fund manager community on how best to integrate responsible investment considerations in their investment process and programs.
We aim to continually improve and evolve, and plan to review our policy annually. Given our scale and position in the private markets ecosystem, we believe we are well positioned to help educate the broader investor and fund manager community on how best to integrate responsible investment considerations in their investment process and programs.
The discretion to invest committed capital generally is subject to investment guidelines established by our investors or by us in conjunction with our investors. In some cases, at the investor’s 27 request, we establish a separate investment vehicle, generally a limited partnership with our investor as the sole limited partner and a wholly owned subsidiary as the general partner.
The discretion to invest committed capital generally is subject to investment guidelines established by our investors or by us in conjunction with our investors. In some cases, at the investor’s request, we establish a separate investment vehicle, generally a limited partnership with our investor as the sole limited partner and a wholly owned subsidiary as the general partner.
We offer competitive benefits packages that reflect the needs of our workforce. In the U.S., we provide all full-time employees medical, dental, and vision benefits, life and disability coverage, parental leave, education 31 reimbursement, and paid time off. We provide retirement benefits including a 401(k)-match program.
We offer competitive benefits packages that reflect the needs of our workforce. In the U.S., we provide all full-time employees medical, dental, and vision benefits, life and disability coverage, parental leave, education reimbursement, and paid time off. We provide retirement benefits including a 401(k)-match program.
However, additional legislation, changes in rules promulgated by financial regulatory authorities or self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability. 30 Compliance Each Adviser has a Chief Compliance Officer.
However, additional legislation, changes in rules promulgated by financial regulatory authorities or self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability. Compliance Each Adviser has a Chief Compliance Officer.
In many of these countries and jurisdictions, which include the European Union ("EU"), the European 29 Economic Area ("EEA"), the individual member states of each of the EU and EEA, Central and South America, Australia and other countries in the South Pacific, we and our operations, and in some cases our personnel, are subject to regulatory oversight and requirements.
In many of these countries and jurisdictions, which include the European Union ("EU"), the European Economic Area ("EEA"), the individual member states of each of the EU and EEA, Central and South America, Australia and other countries in the South Pacific, we and our operations, and in some cases our personnel, are subject to regulatory oversight and requirements.
On November 19, 2021, we announced that the underwriters of the public offering fully exercised their option to acquire an additional 3,000,000 shares of Class A common stock at the public offering price of $12 per share, less underwriting discounts and commissions.
On November 19, 2021, we announced that the underwriters of the public offering fully exercised their option to acquire an additional 3,000,000 shares of Class A common stock at the public offering price of $12.00 per share, less underwriting discounts and commissions.
Gramm-Leach-Bliley Act of 1999, the European Union’s General Data Protection Regulation (“EU GDPR”), the U.K. GDPR, China’s Personal Information Protection Law (PIPL), Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) and territorial Canadian privacy laws, and the Privacy Acts of Australia and New Zealand.
Gramm-Leach-Bliley Act of 1999, the European Union’s General Data Protection Regulation (“EU GDPR”), the U.K. 19 GDPR, China’s Personal Information Protection Law (PIPL), Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) and territorial Canadian privacy laws, and the Privacy Acts of Australia and New Zealand.
Our attractive positioning within the private markets ecosystem, coupled with our synergistic network of general partners and extensive database has enabled us to cultivate a comprehensive funnel of what we believe are premier investment opportunities.
Our attractive positioning within the private markets 14 ecosystem, coupled with our synergistic network of general partners and extensive database has enabled us to cultivate a comprehensive funnel of what we believe are premier investment opportunities.
In addition, certain funds are not registered under the Investment Company Act because we limit such funds to 100 or fewer “persons” as defined in the Investment Company Act. In addition, certain WTI funds are registered under the Investment Company Act and must comply with the reporting and governance requirements of the Investment Company Act.
In addition, certain funds are not registered under the Investment Company Act because we limit such funds to 100 or fewer “persons” as defined in the Investment Company Act. In addition, certain WTI funds are registered under the Investment Company Act and must comply with the reporting and governance requirements of 18 the Investment Company Act.
Direct and Co-Investment Funds Direct and co-investments involve acquiring an equity interest in or making a loan to an operating company, project, property or asset, typically by co-investing alongside an investment by a fund manager or by investing directly in the underlying asset.
Direct and Co-Investment Funds Direct and co-investments involve acquiring an equity interest in or making a loan to an operating company, project, property, alternative asset manager, or asset, typically by co-investing alongside an investment by a fund manager or by investing directly in the underlying asset.
As a result of the acquisition, the WTI sellers obtained 3,916,666 membership units of P10 Intermediate, which can be exchanged into 3,916,666 shares of P10 class A common stock, following applicable restrictive periods. 14 The diagram below illustrates our structure and does not include all unconsolidated entities in which we hold non-controlling equity method investments.
As a result of the acquisition, the WTI sellers obtained 3,916,666 membership units of P10 Intermediate, which can be exchanged into 3,916,666 shares of P10 class A common stock, following applicable restrictive periods. 12 The diagram below illustrates our structure and does not include all unconsolidated entities in which we hold non-controlling equity method investments.
By virtue of its role as investment manager of these funds, each Adviser is a “fiduciary” under ERISA with respect to such benefit plan investors.
By virtue of its role as investment manager of these funds, each applicable Adviser is a “fiduciary” under ERISA with respect to such benefit plan investors.
In addition, we have a strong footprint within some of the most prominent family offices and high net worth individuals. The following chart illustrates the diversification of our investor base as of December 31, 2023: Our Distribution and Marketing We continuously seek to strengthen and expand our relationships with our current and prospective investors.
In addition, we have a strong footprint within some of the most prominent family offices and high net worth individuals. The following chart illustrates the diversification of our investor base as of December 31, 2024: Our Distribution and Marketing We continuously seek to strengthen and expand our relationships with our current and prospective investors.
We typically receive fees from investors based upon committed capital, with some funds receiving fees based on invested capital; capital commitments which typically average ten to fifteen years, though they may vary by fund. We offer direct and co-investment funds across our private equity, venture capital, impact investing and private credit solutions.
We typically receive fees from investors based upon committed capital, with some funds receiving fees based on invested capital; capital commitments which typically average ten to fifteen years, though they may vary by fund. We offer direct and co-investment funds across our private equity, venture capital, and private credit solutions.
Our compliance and legal teams review and makes recommendations regarding amendments and requests for consents presented by the fund managers from time to time. In addition, our compliance and legal teams work with outside counsel as we deem necessary to prepare, review and negotiate all documents relating to the formation and operation of our funds.
Our compliance and legal teams review and make recommendations regarding amendments and requests for consents presented by the fund managers from time to time. In addition, our compliance and legal teams work with outside counsel as we deem necessary to prepare, review and negotiate all documents relating to the formation and operation of our funds.
We attribute our strong investment performance track record to several factors, including: our broad private market relationships and access, our diligent and responsible investment process, our tenured investing experience and our premier data capabilities. In concert, these factors enable us to pursue attractive, risk-adjusted investment opportunities to meet our investors’ investment objectives.
We attribute our strong investment performance to several factors, including: our broad private market relationships and access, our diligent and responsible investment process, our tenured investing experience and our premier data capabilities. In concert, these factors enable us to pursue attractive, risk-adjusted investment opportunities to meet our investors’ investment objectives.
Our existing portfolio of private solutions include Private Equity, Venture Capital, Impact Investing and Private Credit. Our deep industry relationships, differentiated investment access and structure, proprietary data analytics, and our portfolio monitoring and reporting capabilities provide our investors the ability to navigate the increasingly complex and difficult to access private markets investments.
Our existing portfolio of private solutions include Private Equity, Venture Capital, and Private Credit. Our deep industry relationships, differentiated investment access and structure, proprietary data analytics, and our portfolio monitoring and reporting capabilities provide our investors the ability to navigate the increasingly complex and difficult to access private markets investments.
These privacy and cybersecurity laws and regulations have GDPR has heightened our privacy and cybersecurity compliance obligations, impacted our businesses’ collection, processing and retention of personal data, including how we protect that data, and imposed strict standards for reporting data breaches. Many of these privacy and cybersecurity laws and regulations also provide for significant penalties for non-compliance.
These privacy and cybersecurity laws and regulations have heightened our privacy and cybersecurity compliance obligations, impacted our businesses’ collection, processing and retention of personal data, including how we protect that data, and imposed strict standards for reporting data breaches. Many of these privacy and cybersecurity laws and regulations also provide significant penalties for non-compliance.
Through our website, we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports in a timely manner after we provide them to the Securities and Exchange Commission (“SEC”). 32
Through our website, we make available free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports in a timely manner after we provide them to the Securities and Exchange Commission (“SEC”). 21
The Class B Holders have approximately 91% of the combined voting power of our common stock. Upon any transfer, Class B common stock converts automatically on a one-for-one basis to shares of Class A common stock, except in the case of transfers to certain permitted transferees.
The Class B Holders have approximately 87% of the combined voting power of our common stock. Upon any transfer, Class B common stock converts automatically on a one-for-one basis to shares of Class A common stock, except in the case of transfers to certain permitted transferees.
Our Internal Audit group independently reports to an audit committee of our board of directors, operates with a global mandate and will be responsible for the examination and evaluation of the adequacy and effectiveness of the organization’s governance and risk management processes and internal controls, as well as the quality of performance in carrying out assigned responsibilities to achieve the organization’s stated goals and objectives.
Our Internal Audit group independently reports to an audit committee of our board of directors, operates with a global mandate and is responsible for the examination and evaluation of the adequacy and effectiveness of the organization’s governance and risk management processes and internal controls, as well as the quality of performance in carrying out assigned responsibilities to achieve the organization’s stated goals and objectives.
The details of our investment process are outlined below: Opportunities Tracked As of December 31, 2023, we track thousands of potential investment opportunities across private markets, spanning primary investment funds, secondaries and direct and co-investments.
The details of our investment process are outlined below: Opportunities Tracked As of December 31, 2024, we track thousands of potential investment opportunities across private markets, spanning primary investment funds, secondaries and direct and co-investments.
Possible sanctions that may be imposed include the suspension of individual employees, limitations on engaging in certain lines of business for specified periods of time, revocation of investment advisor and other registrations, censures and fines. SEC Regulation Certain subsidiaries of P10 are registered as an investment adviser with the SEC.
Possible sanctions that may be imposed include the suspension of individual employees, limitations on engaging in certain lines of business for specified periods of time, revocation of investment advisor and other registrations, censures and fines. SEC Regulation Certain subsidiaries of P10 are registered as investment advisers with the SEC.
We have 55 active investment vehicles. PES occupies a differentiated position within the private markets ecosystem helping our investors access, perform due diligence, analyze and 7 invest in what we believe are attractive middle and lower-middle market private equity opportunities.
We have 57 active investment vehicles. PES occupies a differentiated position within the private markets ecosystem helping our investors access, perform due diligence, analyze and invest in what we believe are attractive middle and lower-middle market private equity opportunities.
With respect to these funds, each Adviser relies on particular statutory and administrative exemptions from certain ERISA prohibited transactions, which exemptions are highly complex and may in certain circumstances depend on compliance by third parties whom we do not control.
With respect to these funds' regulations, each Adviser relies on particular statutory and administrative exemptions from certain ERISA prohibited transactions, which exemptions are highly complex and may in certain circumstances depend on compliance by third parties whom we do not control.
We leverage our differentiated approach to serve a broad set of investors across multiple geographies. As of December 31, 2023, we have a global investor base of over 3,600 investors, across 50 states, 60 countries and 6 continents – incl uding some of the world’s largest pension funds, endowments, foundations, corporate pensions and financial institutions.
We leverage our differentiated approach to serve a broad set of investors across multiple geographies. As of December 31, 2024, we have a global investor base of over 3,800 investors, across 50 states, 60 countries and 6 continents – incl uding some of the world’s largest pension funds, endowments, foundations, corporate pensions and financial institutions.
Our secondary funds comprise approximately $1.5 billion of our FPAUM as of December 31, 2023. 9 Our Investors We believe our comprehensive value proposition across our private market solutions, vehicles offering, data analytics, portfolio monitoring and reporting has enabled us to build strong relationships with our existing investors and to attract new high-quality investors.
Our secondary funds comprise approximately $1.6 billion of our FPAUM as of December 31, 2024. 9 Our Investors We believe our comprehensive value proposition across our private market solutions, vehicles offering, data analytics, portfolio monitoring and reporting has enabled us to build strong relationships with our existing investors and to attract new high-quality investors.
See “—Voting Rights of Class A and Class B Common Stock.” Because a Sunset may not take place for some time, it is expected that the Class B common stock will continue to entitle its holders to ten votes per share, and the Class B Holders will continue to exercise voting control over the Company, for the near future.
Because a Sunset may not take place for some time, it is expected that the Class B common stock will continue to entitle its holders to ten votes per share, and the Class B Holders will continue to exercise voting control over the Company, for the near future.
Of the total AUM, impact assets represent $4.0 billion invested in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates. Investments in clean energy have generated an estimate of over 2,229 GWh of renewable energy from inception to December 31, 2023.
Of the total AUM, impact assets represent $4.2 billion invested in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates. Investments in clean energy have generated an estimate of over 2,900 GWh of renewable energy from inception to December 31, 2024.
In addition to our distinct ongoing risk management processes we participate in board meetings, investment funds’ annual meetings, maintain membership on limited partnership boards and advisory boards and remain in frequent dialogue with portfolio companies in an effort to remain appraised of relevant developments in the investment funds.
Our investments in our portfolio companies include both debt and equity. In addition to our distinct ongoing risk management processes we participate in board meetings, investment funds’ annual meetings, maintain membership on limited partnership boards and advisory boards and remain in frequent dialogue with portfolio companies in an effort to remain appraised of relevant developments in the investment funds.
Our Solutions We operate and invest across private markets through a number of specialized investment solutions. We offer the following solutions to our investors: Private Equity Solutions "PES" Under PES, we make direct and indirect investments in middle and lower- middle market private equity across North America.
Venture Capital Solutions ("VCS") Our Solutions We operate and invest across private markets through a number of specialized investment solutions. We offer the following solutions to our investors: Private Equity Solutions "PES" Under PES, we make direct and indirect investments in middle and lower- middle market private equity primarily across North America and Europe.
We believe that ensuring that our key decision-makers will continue to guide the 15 direction of P10 results in a high degree of alignment with our stockholders, and voting members of the Class B common stock have ten votes per share which will help maintain this continuity.
We believe that ensuring that our key decision-makers will continue to guide the direction of P10 results in a high degree of alignment with our stockholders, and voting members of the Class B common stock have ten votes per share which will help maintain this continuity. 13 Our Class A Common Stock The Class A common stock have one vote per share and share ratably with our Class B common stock in all distributions.
“A” refers to calculations made on an actual basis. 26 Our Fees and Other Key Contractual Terms Specialized Investment Vehicles While the terms of each fund may vary, we have outlined the key terms of the customized separate accounts and commingled funds within our specialized investment vehicles below: Commingled Investment Vehicles Capital Commitments Investors in our investment funds generally make commitments to provide capital at the outset of a fund and deliver capital when called upon by us, as investment opportunities become available and to fund operational expenses and other obligations.
Our Fees and Other Key Contractual Terms Specialized Investment Vehicles While the terms of each fund may vary, we have outlined the key terms of the customized separate accounts and commingled funds within our specialized investment vehicles below: Commingled Investment Vehicles Capital Commitments Investors in our investment funds generally make commitments to provide capital at the outset of a fund and deliver capital when called upon by us, as investment opportunities become available and to fund operational expenses and other obligations.
Our direct investing platform comprises approximately $8.3 billion of our FPAUM as of December 31, 2023. Secondaries Secondaries refer to investments in existing private markets funds through the acquisition of an existing interest by one investor from another in a negotiated transaction.
Our direct investing platform comprises approximately $10.2 billion of our FPAUM as of December 31, 2024. Secondaries Secondaries refer to investments in existing private markets funds through the acquisition of an existing interest in a private markets fund by one investor from another in a negotiated transaction.
The nature of our solutions and the integral role that our solutions play in our investors’ investment decisions have translated into high revenue visibility and investor retention. As of December 31, 2023, we had FPAUM of $23.3 billion.
The nature of our solutions and the integral role that our solutions play in our investors’ investment decisions have translated into high revenue visibility and investor retention. As of December 31, 2024, we had FPAUM of $25.7 billion.
P10’s revenue associated with the funds are from the management fees while employees of P10 receive the performance fees directly from the vehicles. Our average annual fee rates remain stable at approximately 1%.
P10’s revenue associated with the funds are from the management fees while employees of P10 receive the vast majority of performance fees directly from the vehicles. 7 Our average annual fee rates remain stable at approximately 1% of average fee paying assets under management.
As of December 31, 2023, IIS managed $2.0 billion of FPAUM. Private Credit Solutions "PCS" Under PCS, we primarily make debt investments across North America, targeting lower middle market companies owned by leading financial sponsors and also offer certain private equity solutions.
As of December 31, 2024, VCS managed $6.4 billion of FPAUM. Private Credit Solutions "PCS" Under PCS, we primarily make debt investments across North America, targeting lower middle market companies owned by leading financial sponsors and also offer certain private equity solutions.
Noncontrolling interest is allocated a share of income or loss in the respective consolidated subsidiaries in proportion to their relative ownership interest. Additionally, the Company makes periodic distributions to the WTI sellers for tax related and other agreed upon expenses as disclosed in the purchase agreement. As we reflect on 2023, we are exceptionally proud of our accomplishments.
Noncontrolling interest is allocated a share of income or loss in the respective consolidated subsidiaries in proportion to their relative ownership interest. Additionally, the Company makes periodic distributions to the WTI sellers for tax related and other agreed upon expenses as disclosed in the purchase agreement.
The PCS investment team, which is comprised of 39 investment professionals with an average of 24+ years of experience, has deep and long-standing relationships in the private credit market which it has cultivated over the past 22 years, including 300+ investors across 11 active investment vehicles and 1,600+ portfolio companies with $9.8+ billion capital deployed.
The PCS investment team, which is comprised of 54 investment professionals with an average of 25+ years of experience, has deep and long-standing relationships in the private credit market which it has cultivated over the past 22 years, including 440+ investors across 49 active investment vehicles and 1,800+ portfolio companies with $9.8+ billion capital deployed.
In addition, California and at least thirteen other states have recently enacted, or are actively considering, consumer privacy laws that impose compliance obligations with regard to the collection, use and disclosure of personal information, as well as cybersecurity requirements to protect personal information and our data systems in general.
In addition, California and at least nineteen other states have enacted comprehensive consumer privacy laws that impose compliance obligations with regard to the collection, use and disclosure of personal data, as well as cybersecurity requirements to protect personal data and our data systems in general.
Key components of our ongoing risk management of investment funds include monitoring vintage year, fund size, currency, as well as measures of historical performance (including percent of commitments called, distributions to paid in capital, residual value to paid in capital, net total value multiple of invested capital, net internal rate of return, and the date performance results were last updated), historical investments and benchmarking.
Key components of our ongoing risk management of investment funds include monitoring vintage year, fund size, currency, as well as measures of historical performance (including percent of commitments called, distributions to paid in capital, residual value to paid in capital, net total value multiple of invested capital, net internal rate of return, and the date performance results were last updated), historical investments and benchmarking. 15 Portfolio Company Key components of our ongoing risk management of portfolio companies include monitoring cash flow details, financial and operating metrics, and other relevant performance measurements.
As such, attracting, recruiting, developing, and retaining diverse talent is vital to our success. The Company is focused on supporting our employees, and we consider talent management to be essential to the ongoing success of our business. Our Board of Directors and Committees provide oversight of our human capital management strategy.
The Company is focused on supporting our employees, and we consider talent management to be essential to the ongoing success of our business. Our Board of Directors and Committees provide oversight of our human capital management strategy.
The PES investment team, which is comprised of 42 investment professionals with an average of 25+ years of experience, has deep and long-standing investor and fund manager relationships in the middle and lower-middle market which it has cultivated over the past 20 years, including over 1,900+ investors, 300+ fund managers, 750+ private market funds and 2,000+ portfolio companies.
The PES investment team, which is comprised of 42 investment professionals with an average of 26+ years of experience, has deep and long-standing investor and fund manager relationships in the middle and lower-middle market which it has cultivated over the past 20 years, including over 2,280+ investors, 285+ fund managers, 560+ private market funds and 5,100+ portfolio companies.
Our Class B Common Stock We have 58,474,267 outstanding shares of Class B common stock held of record by approximately 2,740 stockholders as of December 31, 2023. Each share of our Class B common stock entitles its holder to ten votes per share until a Sunset ("Sunset") occurs.
Our Class B Common Stock We have 43,461,442 outstanding shares of Class B common stock held of record by approximately 2,710 stockholders as of December 31, 2024. Each share of our Class B common stock entitles its holder to ten votes per share until a Sunset ("Sunset") occurs.
We are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of our track record. From inception in 1999 through December 31, 2023, inclusive of proprietary assets and assets managed by affiliates, Enhanced has raised a total of $6.1 billion.
These investments are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of the impact investing track record. From the impact investing inception in 1999 through December 31, 2024, inclusive of proprietary assets and assets managed by affiliates, the Company has raised a total of $6.4 billion.
Our PCS is differentiated by our relationship-driven sourcing approach providing capital solutions for growth-oriented companies. We are further synergistically strengthened by our PES network of fund managers, characterized by more than 400 credit opportunities annually. We currently maintain 55+ active sponsor relationships and have 80+ platform investments. As of December 31, 2023, PCS managed approximately $2.9 billion of FPAUM.
Our PCS is differentiated by our relationship-driven sourcing approach providing capital solutions for growth-oriented companies. We are further synergistically strengthened by our PES network of fund managers, characterized by more than 630 credit opportunities annually. We currently maintain 80+ active sponsor relationships and have 125+ platform investments.
We seek to mitigate risk through prudent portfolio diversification and through comprehensive due diligence on general partners, investment funds and portfolio companies. General Partner We perform extensive, upfront due diligence on general partners prior to making an investment and all our current period partners are subject to our ongoing risk management framework.
General Partner We perform extensive, upfront due diligence on general partners prior to making an investment and all our current period partners are subject to our ongoing risk management framework.
Our Vehicles We have a flexible business model whereby our investors engage us across multiple specialized private market solutions through different specialized investment vehicles. Our vehicles have traditional, stable fee structures that generate performance fees, which are not accrued to P10 due to our structure.
As of December 31, 2024, PCS managed approximately $5.2 billion of FPAUM. Our Vehicles We have a flexible business model whereby our investors engage us across multiple specialized private market solutions through different specialized investment vehicles. Our vehicles have traditional, stable fee structures that generate performance fees, which are generally not accrued to P10 due to our structure.
The VCS investment team, which is comprised of 12 investment professionals with an average of 23+ years of experience, has deep and long-standing investor and fund manager relationships in the venture market which it has cultivated over the past 14+ years, including over 1,800+ investors, 80+ fund managers, 83 direct investments, 350+ private market funds and 12,000+ portfolio companies.
The VCS investment team, which is comprised of 16 investment professionals 6 with an average of 24+ years of experience, has deep and long-standing investor and fund manager relationships in the venture market which it has cultivated over the past 14+ years, including over 1,980+ investors, 110+ fund managers, 100+ direct investments, 415+ private market funds and 14,700+ portfolio companies.
We have a dedicated team of business development and investor relations professionals who maintain an active and transparent dialogue with an expansive list of existing and prospective investors and while we have a significant presence in North America, we have cultivated relationships with a number of international investors Our business development and investor relations professionals frequent dialogue with existing and prospective investors, enable us to monitor investor preferences and tailor future product offerings to meet investor demand.
We have a dedicated team of business development and investor relations professionals who maintain an active and transparent dialogue with an expansive list of existing and prospective investors and while we have a significant presence in North America, we have cultivated relationships with a number of international investors.
Human Capital The Company believes that a strong focus on human capital through the talent we hire and retain is critical to maintaining our competitiveness. As of December 31, 2023, we have 252 full-time equivalent employees, primarily located in the United States. As of December 31, 2023, we had 252 total employees, including 108 investment professionals.
Human Capital The Company believes that a strong focus on human capital through the talent we hire and retain is critical to maintaining our competitiveness. As of December 31, 2024, we have 267 full-time equivalent employees, primarily located in the United States, including 112 investment professionals. Our employees are not represented by a collective bargaining group.
We are further differentiated by the scale, depth, diversity and accuracy of our constantly expanding proprietary private markets database that contains comprehensive information on more than 5,600 investment firms, 10,200 funds, 47,000 individual transactions, 31,000 private companies and 317,000 financial metrics. As of December 31, 2023, PES managed $12.3 billion of FPAUM.
We are further differentiated by the scale, depth, diversity and accuracy of our constantly expanding proprietary private markets database that contains comprehensive information on more than 6,000 investment firms, 11,100 funds, 49,000 individual transactions, 32,600 private companies and 458,000 financial metrics. As of December 31, 2024, PES managed $14.1 billion of FPAUM.
AVAILABLE INFORMATION We maintain a website with the address https://ir.p10alts.com/. We are not including the information contained on our website as part of, or incorporating it by reference into, this Form 10-K.
In 2024, we continued the evolution of our D&I strategy and objectives and recognize it as an ongoing business imperative. AVAILABLE INFORMATION We maintain a website with the address https://ir.p10alts.com/. We are not including the information contained on our website as part of, or incorporating it by reference into, this Form 10-K.
Capital commitments typically average ten to fifteen years, though they may vary by fund and strategy. We offer primary investment funds across our private equity and venture capital solutions. Our primary funds comprise approximately $13.5 billion of our FPAUM as of December 31, 2023.
We receive a fee stream that is typically based on our investors’ committed, locked-in capital. Capital commitments typically average ten to fifteen years, though they may vary by fund and strategy. We offer primary investment funds across our private equity and venture capital solutions. Our primary funds comprise approximately $13.9 billion of our FPAUM as of December 31, 2024.
Enhanced undertakes and manages equity and debt investments in impact initiatives across North America, targeting underserved areas and other socially responsible end markets including renewable energy, historic building renovations, and affordable housing.
Enhanced undertakes and manages equity and debt investments in impact initiatives across North America, targeting underserved areas and other socially responsible end markets including renewable energy, historic building renovations, and affordable housing. ECP is a registered investment advisor with the United States Securities and Exchange Commission.
Our employees are not represented by a collective bargaining group. We consider our employee relations to be strong and have not experienced interruptions of operations due to labor disagreements. Human Capital Objectives Our business is built on strong, trusted and relationships with stakeholders: employees, limited partners, general partners, and our public stockholders.
We consider our employee relations to be strong and have not experienced interruptions of operations due to labor disagreements. 20 Human Capital Objectives Our business is built on strong, trusted and relationships with stakeholders: employees, limited partners, general partners, and our public stockholders. As such, attracting, recruiting, developing, and retaining diverse talent is vital to our success.
We offer a comprehensive set of investment strategies to clients, including both commingled funds and customized separate accounts within our primary investment funds, secondary, direct investment, co-investment vehicles, and advisory solutions. Since October 2017, we have been focused on building best-in-class solutions aimed at growing our fee paying assets under management.
As of December 31, 2024, we have $25.7 billion in fee paying assets under management. We offer a comprehensive set of investment strategies to clients, including both commingled funds and customized separate accounts within our primary investment funds, secondary, direct investment, co-investment vehicles, and advisory solutions.
The IPO priced on October 20, 2021, and P10’s Class A common stock began trading on the NYSE on October 21, 2021 under the ticker “PX”. Investors purchased 23,000,000 Class A shares in conjunction with the IPO and the Company gained a top-tier set of institutional investors. The IPO process is described in more detail below.
Investors purchased 23,000,000 Class A shares in conjunction with the IPO and the Company gained a top-tier set of institutional investors. The IPO process is described in more detail below.
The asset management business is intensely competitive, and in addition to the above factors, our ability to continue to compete effectively will depend upon our ability to attract highly qualified investment professionals and retain existing employees. 28 Regulatory and Compliance Matters Our business is subject to extensive regulation in the United States at both the federal and state level and, in certain circumstances, outside the United States.
The asset management business is intensely competitive, and in addition to the above factors, our ability to continue to compete effectively will depend upon our ability to attract highly qualified investment professionals and retain existing employees.
Prospective investors that wish to learn more about us often visit our offices to conduct in-depth due diligence of our firm. Our business development and investor relations professionals lead this process, coordinate meetings, and continue to be the prospective investor’s principal point of contact throughout their decision-making process.
Our business development and investor relations professionals lead this process, coordinate meetings, and continue to be the prospective investor’s principal point of contact throughout their decision-making process.
IIS primarily targets investments in renewable energy development and historic building renovation projects, as well as providing capital to small businesses that are women or minority owned or operating in underserved communities.
Within PCS, the Company has investments that target renewable energy development and historic building renovation projects, as well as provide capital to small businesses that are woman or minority owned or operated in underserved communities.
Consistent with this strategy, we continue to evaluate ongoing opportunities, some of which may be significant. 23 Our Investment Process We maintain rigorous investment, monitoring and risk management processes across each of our specialized private market solutions, all unified by a common philosophy and a focus on comprehensive analysis of fund managers and/or portfolio companies.
These board designation rights are subject to certain limitations and exceptions. Our Investment Process We maintain rigorous investment, monitoring and risk management processes across each of our specialized private market solutions, all unified by a common philosophy and a focus on comprehensive analysis of fund managers and/or portfolio companies.
Upon successful 24 confirmatory due diligence the Investment Committee will reconvene to review the investment for a final vote. Once final approval has been obtained, the investment team may proceed with commitments or funding.
Upon successful confirmatory due diligence the Investment Committee will reconvene to review the investment for a final vote. Once final approval has been obtained, the investment team may proceed with commitments or funding. Our Risk Management Process Our risk management process includes risk identification, measurement, mitigation, monitoring and management/reporting, with particular risk assessments tailored by solution, vehicle and individual client.
Our success and growth have been driven by our long history of strong performance and our position in the private markets ecosystem. We believe our growing scale in the middle and lower-middle market provides us a competitive advantage with investors and fund managers.
We believe our growing scale in the middle and lower-middle market provides us a competitive advantage with investors and fund managers.
These include RCP Advisors, Bonaccord Capital, and P10 Advisors, our Private Equity solutions; TrueBridge, our Venture Capital solution; Enhanced, our Impact Investing solution; and Five Points, Hark Capital, and WTI, our Private Credit solutions (which Five Points also offers certain private equity solutions).
These include RCP Advisors, Bonaccord Capital, and P10 Advisors, our Private Equity solutions; TrueBridge, our Venture Capital solution; and Enhanced, Five Points, Hark Capital, and WTI, our Private Credit solutions (of which Five Points also offers certain private equity solutions). In addition, in September 2024, we entered into an agreement to acquire Qualitas Equity Funds SGEIC, S.A. ("Qualitas").
P10’s primary investments are made during a fundraising period in the form of capital commitments, which are called upon by the fund manager and utilized to finance its investments in portfolio companies during a predefined investment period. We receive a fee stream that is typically based on our investors’ committed, locked-in capital.
P10’s primary investment funds include both commingled investment vehicles with multiple investors, as well as our customized separate accounts, which typically include one investor. Primary investments are made during a fundraising period in the form of capital commitments, which are called upon by the fund manager and utilized to finance its investments in portfolio companies during a predefined investment period.
Prior to October 2017, the Company took strategic actions designed to lay the foundation for what is now known as P10. The Company's history began with founding P10 Holdings as a Texas corporation in 1992 and reincorporating in Delaware in 2000.
The Company's history began with founding P10 Holdings as a Texas corporation in 1992 and reincorporating in Delaware in 2000.
During 2021, the Company began exploring the benefits of going public on a listed exchange and raising additional capital through an equity issuance. On October 18, 2021, the Company announced an Initial Public Offering ("IPO") and corporate reorganization that would make P10 Holdings a wholly-owned subsidiary of P10, Inc.
On October 18, 2021, the Company announced an Initial Public Offering ("IPO") and corporate reorganization that would make P10 Holdings a wholly-owned subsidiary of P10, Inc. The IPO priced on October 20, 2021, and P10’s Class A common stock began trading on the NYSE on October 21, 2021 under the ticker “PX”.
We provide global institutional investors differentiated access to a broad set of solutions and specialized investment vehicles across attractive asset classes and geographies generating competitive risk-adjusted returns. As of December 31, 2023, we have $23.3 billion in fee paying assets under management.
Our History P10’s mission is to be the premier private markets solutions provider focused on the middle and lower middle market. We provide global institutional investors differentiated access to a broad set of solutions and specialized investment vehicles across attractive asset classes and geographies generating competitive risk-adjusted returns.
ECP is a registered investment advisor with the United States Securities and Exchange Commission. 13 On September 30, 2021, we completed the acquisitions of Hark Capital and Bonaccord Capital Advisors. Hark provides loans to mid-life private equity, growth equity, venture and other funds.
On September 30, 2021, we completed the acquisitions of Hark Capital and Bonaccord Capital Advisors. Hark provides loans to mid-life private equity, growth equity, venture and other funds. These loans are backed by the unrealized investments at the fund level and provide financing for companies that would otherwise require equity.
Our Risk Management Process Our risk management process includes risk identification, measurement, mitigation, monitoring and management/reporting, with particular risk assessments tailored by solution, vehicle and individual client. We apply our risk management framework across three distinct areas of our investment process: (a) the general partner, (b) the investment fund, and (c) the portfolio company.
We apply our risk management framework across three distinct areas of our investment process: (a) the general partner, (b) the investment fund, and (c) the portfolio company. We seek to mitigate risk through prudent portfolio diversification and through comprehensive due diligence on general partners, investment funds and portfolio companies.
We managed $23.3 billion in FPAUM from which we earn management and advisory fees as of December 31, 2023.
As of December 31, 2024, we had 267 employees, including 112 investment professionals across 11 offices located in 9 states. 5 We managed $25.7 billion in FPAUM from which we earn management and advisory fees as of December 31, 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe terms in our agreements and instruments governing our debt contain various provisions that limit our and our subsidiaries’ ability to, among other things: • create or incur any lien; • incur additional indebtedness; • make or pay any Restricted Junior Payment (as defined in the Facility); • create or permit any consensual encumbrance or restriction; • enter into any merger or consolidation, or liquidate, wind-up or dissolve itself, or dispose of all or any part of its business, assets or property of any kind; • make any acquisition or purchase any management fee tails; • sell, pledge or otherwise dispose of any capital stock of any of its subsidiaries; • enter into sale-leaseback transactions; • enter into certain transactions or business activities with affiliates, including any joint venture; and • make certain modifications to organizational or debt documents or certain material contracts, including any change to fiscal year.
Biggest changeThe terms in our agreements and instruments governing our debt contain various provisions that limit our and our subsidiaries’ ability to, among other things: • incur additional indebtedness; • create or incur any lien on our or our subsidiaries' assets; • make acquisitions or other investments ; • pay dividends or repurchase our equity interests; • enter into any merger or consolidation; • sell or otherwise dispose of any property or assets; and • enter into any transaction with an affiliate other than on an arms' length basis.
We also may incur future debt obligations that might subject us to additional restrictive covenants that could affect our financial and operational flexibility. Our ability to comply with these covenants in future periods will largely depend on our ability to successfully implement our overall business strategy.
We may also incur future debt obligations that might subject us to additional restrictive covenants that could affect our financial and operational flexibility. Our ability to comply with these covenants in future periods will largely depend on our ability to successfully implement our overall business strategy.
Our amended and restated certificate of incorporation and bylaws include provisions that: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • specify that special meetings of our stockholders can be called only by our board of directors, chief executive officer(s), or the chairman of our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; and • reflect two classes of common stock, as discussed above.
Our amended and restated certificate of incorporation and bylaws include provisions that: • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; 49 • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • specify that special meetings of our stockholders can be called only by our board of directors, chief executive officer(s), or the chairman of our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • authorize our board of directors to issue, without further action by the stockholders, up to 10,000,000 shares of undesignated preferred stock; and • reflect two classes of common stock, as discussed above.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of our initial public offering, (ii) the first fiscal year after our annual gross revenues are $1.07 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than 59 $1.0 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value of our Class A common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of our initial public offering, (ii) the first fiscal year after our annual gross revenues are $1.07 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) the end of any fiscal year in which the market value of our Class A common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.
The cost of compliance with these obligations is high and is likely to increase in the future, and includes a series of operational measures such as: preparing data maps or records of our sources, usage, storage and sharing of personal information; maintaining and 50 updating detailed disclosures in our privacy policies; conducting risk assessments for the use of sensitive personal information; ensuring we have adequate data security measures to protect personal information; auditing the data security of our service providers; and establishing mechanisms to respond to consumers’ data access, deletion, portability, and opt-out requests..
The cost of compliance with these obligations is high and is likely to increase in the future, and includes a series of operational measures such as: preparing data maps or records of our sources, usage, storage and sharing of personal information; maintaining and updating detailed disclosures in our privacy policies; conducting risk assessments for the use of sensitive personal information; ensuring we have adequate data security measures to protect personal information; auditing the data security of our service providers; and establishing mechanisms to respond to consumers’ data access, deletion, portability, and opt-out requests.
These companies may be in an early stage of development, may not have a proven operating history, may be operating at a loss or have significant variations in operating results, may be engaged in a rapidly changing business with products subject to a substantial risk of obsolescence, may be subject to extensive regulatory 40 oversight, may require substantial additional capital to support their operations, finance expansion or maintain their competitive position, may have a high level of leverage, or may otherwise have a weak financial condition.
These companies may be in an early stage of development, may not have a proven operating history, may be operating at a loss or have significant variations in operating results, may be engaged in a rapidly changing business with products subject to a substantial risk of obsolescence, may be subject to extensive regulatory oversight, may require substantial additional capital to support their operations, finance expansion or maintain their competitive position, may have a high level of leverage, or may otherwise have a weak financial condition.
A failure or interruption of our systems, including the loss of data, whether caused by fire, other natural disaster, power or telecommunications failure, service interruptions, system malfunction, unauthorized access, computer viruses, acts of terrorism or war or otherwise, could result in a disruption of our business, liability to investors, regulatory intervention or reputational damage, and thus materially and adversely affect our business.
A failure or interruption of our systems, 31 including the loss of data, whether caused by fire, other natural disaster, power or telecommunications failure, service interruptions, system malfunction, unauthorized access, computer viruses, acts of terrorism or war or otherwise, could result in a disruption of our business, liability to investors, regulatory intervention or reputational damage, and thus materially and adversely affect our business.
Our advisory and investment management businesses are subject to regulation in the U.S., including by the SEC, the Small Business Administration (“SBA”), the Commodity Futures Trading Commission, the Internal Revenue Service (the “IRS”) and other regulatory agencies, pursuant to, among other laws, the Investment Advisers Act, the Securities Act, the Small Business Investment Act of 1958, the Code, the Commodity Exchange Act, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Our advisory and investment management businesses are subject to regulation in the U.S., including by the SEC, the Small Business Administration (“SBA”), the Commodity Futures Trading Commission, the Internal Revenue Service (the 38 “IRS”) and other regulatory agencies, pursuant to, among other laws, the Investment Advisers Act, the Securities Act, the Small Business Investment Act of 1958, the Code, the Commodity Exchange Act, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Emerging growth companies are exempt from this requirement for a period of five years, or until it no longer qualifies as an emerging growth company, whichever occurs first. We maintain internal control procedures to satisfy the requirements of Section 404(a), which requires annual 58 management assessments of the effectiveness of our internal control over financial reporting.
Emerging growth companies are exempt from this requirement for a period of five years, or until it no longer qualifies as an emerging growth company, whichever occurs first. We maintain internal control procedures to satisfy the requirements of Section 404(a), which requires annual management assessments of the effectiveness of our internal control over financial reporting.
These factors could also make it more difficult for us to attract and retain qualified colleagues, executive officers and members of our board of directors. We are a “controlled company” within the meaning of the NYSE listing standards and, as a result, we qualify for, and may rely on, exemptions from certain corporate governance requirements.
These 47 factors could also make it more difficult for us to attract and retain qualified colleagues, executive officers and members of our board of directors. We are a “controlled company” within the meaning of the NYSE listing standards and, as a result, we qualify for, and may rely on, exemptions from certain corporate governance requirements.
Significant future borrowings could make it more difficult for us to withstand adverse economic conditions or business plan variances, to take advantage of new business opportunities, or to make necessary capital expenditures. Any portion of our cash flow required for debt service would not be available for our operations, distributions, dividends or other purposes.
Significant future borrowings could make it more difficult for us to withstand adverse economic conditions or business plan variances, to take advantage of new business opportunities, or to 26 make necessary capital expenditures. Any portion of our cash flow required for debt service would not be available for our operations, distributions, dividends or other purposes.
Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which one or more of our specialized investment vehicles or advisory accounts hold an investment, holders of securities ranking senior to our investors’ investments would typically be entitled to receive payment in full before distributions could be made in respect of our investors’ investments.
Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which one or more of our specialized investment vehicles or advisory accounts hold an investment, holders of securities ranking senior to our investors’ investments would typically be entitled to receive 30 payment in full before distributions could be made in respect of our investors’ investments.
In addition, our specialized funds directly or indirectly invest in businesses with capital structures that have significant leverage. The leveraged capital structure of such businesses increases the exposure of the funds’ portfolio companies to adverse economic factors such as rising interest rates, downturns in the economy or deterioration in the condition of such business or its industry.
In addition, our specialized funds directly or indirectly invest in businesses with capital structures that have significant leverage. The leveraged capital structure of such businesses increases the exposure of the funds’ portfolio companies to 29 adverse economic factors such as rising interest rates, downturns in the economy or deterioration in the condition of such business or its industry.
Possible changes in regulations and interpretations of statutes and regulations could negatively affect our ability to use the tax benefits associated with our NOL carryforwards. The rules relating to U.S. federal income taxation are periodically under review by persons involved in the legislative and administrative rulemaking processes, by the IRS and by the U.S.
Possible changes in regulations and interpretations of statutes and regulations could negatively affect our ability to use the tax benefits associated with our NOL carryforwards. The rules relating to U.S. federal income taxation are periodically under review by persons involved in the legislative and administrative rulemaking processes, including the IRS and the U.S.
Under the Investment Advisers Act, each of the investment advisory agreements for the funds and other accounts we manage must provide that it may not be assigned without the consent of the particular fund or other client. An assignment may occur under the Investment Advisers Act if, among other things, an Adviser undergoes a change of control.
Under the Investment Advisers Act, each of the investment advisory agreements for the funds and other accounts we manage must provide that it may not be assigned without the consent of the particular fund or other client. An assignment 45 may occur under the Investment Advisers Act if, among other things, an Adviser undergoes a change of control.
In our investment management business, we make investment decisions on behalf of our investors that could result in substantial losses. Any such losses also may subject us to the risk of legal and regulatory liabilities or actions 43 alleging negligent misconduct, breach of fiduciary duty or breach of contract.
In our investment management business, we make investment decisions on behalf of our investors that could result in substantial losses. Any such losses also may subject us to the risk of legal and regulatory liabilities or actions alleging negligent misconduct, breach of fiduciary duty or breach of contract.
If our revenue declines without a 48 commensurate reduction in our expenses, our net income will be reduced. Accordingly, difficult market conditions could materially and adversely affect our business, financial condition and results of operations. Increased government regulation, compliance failures and changes in law or regulation could adversely affect us.
If our revenue declines without a commensurate reduction in our expenses, our net income will be reduced. Accordingly, difficult market conditions could materially and adversely affect our business, financial condition and results of operations. Increased government regulation, compliance failures and changes in law or regulation could adversely affect us.
Any contractual protections we may have against relevant counterparties may not be sufficient to protect adequately us from any such liabilities and losses, and we may be unable to enforce any such contractual protections. 51 Internationally, many jurisdictions have established their own data privacy and protection legal frameworks with which we may need to comply.
Any contractual protections we may have against relevant counterparties may not be sufficient to protect adequately us from any such liabilities and losses, and we may be unable to enforce any such contractual protections. Internationally, many jurisdictions have established their own data privacy and protection legal frameworks with which we may need to comply.
If a new business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our business, financial condition and results of operations could be materially and adversely affected. Future transactions and recent acquisitions could pose risks. We frequently evaluate strategic opportunities and tactical acquisitions.
If a new business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our business, financial condition and results of operations could be materially and adversely affected. Future transactions and recent acquisitions could pose risks. We frequently evaluate strategic opportunities and acquisitions.
We may incur significant costs to further upgrade our data processing systems and other operating technology in the future. 42 We are dependent on the effectiveness of our information security policies, procedures and capabilities to protect our computer and telecommunications systems and the data such systems contain or transmit.
We may incur significant costs to further upgrade our data processing systems and other operating technology in the future. We are dependent on the effectiveness of our information security policies, procedures and capabilities to protect our computer and telecommunications systems and the data such systems contain or transmit.
These laws and regulations may affect our costs and manner of conducting business in one or more markets, the risks of doing business, the assets that we manage or advise, and our ability to raise capital from 54 investors.
These laws and regulations may affect our costs and manner of conducting business in one or more markets, the risks of doing business, the assets that we manage or advise, and our ability to raise capital from investors.
Our valuation of the funds in which we invest is largely dependent upon the processes employed by the managers 39 of those funds. The fair value of investments is determined using a number of methodologies described in the particular funds’ valuation policies.
Our valuation of the funds in which we invest is largely dependent upon the processes employed by the managers of those funds. The fair value of investments is determined using a number of methodologies described in the particular funds’ valuation policies.
In recent years, certain institutional investors have placed increasing importance on environmental, social and governance (“ESG”) implications of investments made by private equity and other funds to which they commit capital.
In recent years, certain institutional investors have placed importance on environmental, social and governance (“ESG”) implications of investments made by private equity and other funds to which they commit capital.
While we have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL, our amended and restated certificate of incorporation contains provisions that have similar effects as Section 203 of the DGCL, except that they provide that the Sunset Holders, their affiliates, groups that include the Sunset Holders and certain of their direct and indirect transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions. 60 Item 1B.
While we have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the DGCL, our amended and restated certificate of incorporation contains provisions that have similar effects as Section 203 of the DGCL, except that they provide that the Sunset Holders, their affiliates, groups that include the Sunset Holders and certain of their direct and indirect transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions. 50 Item 1B.
The substantial growth of our business has placed, and if it continues, will 36 continue to place, significant demands on our infrastructure, our investment team and other employees, and will increase our expenses.
The substantial growth of our business has placed, and if it continues, will continue to place, significant demands on our infrastructure, our investment team and other employees, and will increase our expenses.
These changes also require additional information in annual disclosures regarding companies’ cybersecurity risk management and reporting processes, as well as the cybersecurity expertise of relevant personnel and third-party service providers or auditors. At the state level, certain states have enacted comprehensive laws governing personal information of consumers, employees and business representatives.
These rules also require additional information in annual disclosures regarding companies’ cybersecurity risk management and reporting processes, as well as the cybersecurity expertise of relevant personnel and third-party service providers or auditors. At the state level, certain states have enacted comprehensive laws governing personal information of consumers, employees and business representatives.
Access to secondary investment opportunities is also highly competitive and is often controlled by a 34 limited number of general partners, fund managers and intermediaries. Our ability to continue to compete effectively will depend upon our ability to attract highly qualified investment professionals and retain existing employees.
Access to secondary investment opportunities is also highly competitive and is often controlled by a limited number of general partners, fund managers and 23 intermediaries. Our ability to continue to compete effectively will depend upon our ability to attract highly qualified investment professionals and retain existing employees.
However, poor 33 performance of our specialized investment vehicles or the investments that we recommend to our investors could cause a decline in our ability to raise additional funds, and could therefore have a negative effect on our performance and on returns on our Class A common stock.
However, poor 22 performance of our specialized investment vehicles or the investments that we recommend to our investors could cause a decline in our ability to raise additional funds, and could therefore have a negative effect on our performance and on returns on our Class A common stock.
Any change to our senior leadership team could materially and adversely affect our business, financial condition and results of operations. 35 We intend to expand our business and may enter into new lines of business or geographic markets, which may result in additional risks and uncertainties in our business.
Any change to our senior leadership team could materially and adversely affect our business, financial condition and results of operations. 24 We intend to expand our business and may enter into new lines of business or geographic markets, which may result in additional risks and uncertainties in our business.
Following the exit of the United Kingdom (“UK”) from the European Union ("EU") we can no longer rely on “passporting” privileges that allow issuers approved in the UK to raise capital in EU jurisdictions without restrictions.
Following the exit of the United Kingdom (“UK”) from the EU we can no longer rely on “passporting” privileges that allow issuers approved in the UK to raise capital in EU jurisdictions without restrictions.
We have operations in numerous states, and continue to review potential acquisitions in states throughout the U.S., each of which has its own regulatory and compliance requirements. Each of our current and future businesses is and will be required to comply with all applicable federal, state and local laws, rules and regulations.
We have operations in numerous states, and continue to review potential acquisitions in the European Union ("EU") and in states throughout the U.S., each of which has its own regulatory and compliance requirements. Each of our current and future businesses is and will be required to comply with all applicable federal, state and local laws, rules and regulations.
Operational risks, data security breaches, loss or leakage of data and other interruptions of our information technology systems or those of our third-party service providers may disrupt our business, compromise sensitive information related to our business, or prevent us from accessing critical information, which may result in losses or limit our growth.
Operational risks, data security breaches, AI related cyber events, loss or leakage of data and other interruptions of our information technology systems or those of our third-party service providers may disrupt our business, compromise sensitive information related to our business, or prevent us from accessing critical information, which may result in losses or limit our growth.
Several factors serve to increase our competitive risks: • some of our competitors have more relevant experience, greater financial and other resources and more personnel than we do; • there are relatively few barriers to entry impeding new asset management firms, including a relatively low cost of entering these lines of business, and the successful efforts of new entrants into our various lines of business have resulted in increased competition; • some of our competitors have recently raised, or are expected to raise, significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities that our funds seek to exploit; • some of our funds may not perform as well as competitors’ funds or other available investment products; • several of our competitors have significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit; 47 • we face increased competition for alternative investments and access to fund general partners and managers; • certain investors may prefer to invest with private partnerships rather than a public company; • other industry participants will from time to time seek to recruit our investment professionals and other employees away from us; • some of our competitors may have a lower cost of capital, which may be exacerbated to the extent potential changes to the Internal Revenue Code of 1986, as amended, (the "Code"), limit the deductibility of interest expense; • some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities; • some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do; • some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors; and • some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do.
Several factors serve to increase our competitive risks: • some of our competitors have more relevant experience, greater financial and other resources and more personnel than we do; 36 • there are relatively few barriers to entry impeding new asset management firms, including a relatively low cost of entering these lines of business, and the successful efforts of new entrants into our various lines of business have resulted in increased competition; • some of our competitors have recently raised, or are expected to raise, significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities that our funds seek to exploit; • some of our funds may not perform as well as competitors’ funds or other available investment products; • several of our competitors have significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit; • we face increased competition for alternative investments and access to fund general partners and managers; • certain investors may prefer to invest with private partnerships rather than a public company; • other industry participants will from time to time seek to recruit our investment professionals and other employees away from us; • some of our competitors may have a lower cost of capital, which may be exacerbated to the extent potential changes to the Internal Revenue Code of 1986, as amended, (the "Code"), limit the deductibility of interest expense; • some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities; • some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do; • some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors; • some of our competitors have instituted or may institute low cost high speed financial products and services based on artificial intelligence and new competitors may enter the space using new products and services based on artificial intelligence; and • some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do.
We may not be able to fully utilize our net operating loss (“NOL”) and other tax carryforwards which may have the effect of devaluing significant deferred tax assets of the company. As of December 31, 2023, we had $164 million of federal NOL carryforwards, a portion of which will expire each year if not used to reduce taxable income.
We may not be able to fully utilize our net operating loss (“NOL”) and other tax carryforwards which may have the effect of devaluing significant deferred tax assets of the company. As of December 31, 2024, we had $60 million of federal NOL carryforwards, a portion of which will expire each year if not used to reduce taxable income.
The services contemplated under the Advisory Services Agreement did not previously generate revenues when the Permanent Capital Subsidiaries (as defined below) were owned by ECG.
The services contemplated under the Advisory Services Agreements did not previously generate revenues when the Permanent Capital Subsidiaries (as defined below) were owned by ECG.
In addition, we may from time to time explore opportunities to grow our business via acquisitions, partnerships, investments or other strategic transactions. There can be no assurance that we will successfully identify, negotiate or complete such transactions, that any completed transactions will produce favorable financial results or that we will be able to successfully integrate an acquired business with ours.
In addition, we continue to explore opportunities to grow our business via acquisitions, partnerships, investments or other strategic transactions. There can be no assurance that we will successfully identify, negotiate or complete such transactions, that any completed transactions will produce favorable financial results or that we will be able to successfully integrate an acquired business with ours.
The Protective Provision’s transfer restrictions generally restrict any direct or indirect transfers of the common stock if the effect would be to increase the direct or indirect ownership of the common stock by any person from less than 4.99% to 4.99% or more of the common stock, or increase the percentage of the common stock owned directly or indirectly by a person owning or deemed to own 4.99% or more of the common stock (with percentage ownership determined under applicable U.S. federal income tax rules).
The Protective Provision generally restricts any direct or indirect transfers of the common stock if the effect would be to increase the direct or indirect ownership of the common stock by any person from less than 4.99% to 4.99% or more of the common stock, or increase the percentage of the common stock owned directly or indirectly by a person owning or deemed to own 4.99% or more of the common stock (with percentage ownership determined under applicable U.S. federal income tax rules).
In exchange for those services, ECG receives advisory fees from Enhanced PC based on a fixed fee schedule under which annual fees decline between $1.0 million and $4.0 million each year, totaling $107.5 million over 7 years.
In exchange for those services, ECG receives advisory fees from Enhanced PC based on a fixed fee schedule under which annual fees decline between $0.4 million and $4.0 million each year, totaling $115.1 million over 10 years.
So long as no Sunset has occurred, the Class B stockholders who are party to the Controlled Company Agreement hold approximately 60% of the Company’s outstanding voting power and thereby control the outcome of matters submitted to a stockholder vote.
So long as no Sunset has occurred, the Class B stockholders who are party to the Controlled Company Agreement hold more than 50% of the Company’s outstanding voting power and thereby control the outcome of matters submitted to a stockholder vote.
After a Sunset becomes effective, each share of our Class B common stock will convert into Class A common stock. As of December 31, 2023, the Class B Holders have approximately 91% of the combined voting power of our common stock.
After a Sunset becomes effective, each share of our Class B common stock will convert into Class A common stock. As of December 31, 2024, the Class B Holders have approximately 87% of the combined voting power of our common stock.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar activities); litigation (including class-related claims); additional reporting requirements and/or oversight; bans on processing personal information; orders to destroy or not use personal information; imprisonment of company officials; public censure; damage to our reputation; loss of revenue and profits; loss of goodwill; and other adverse business impacts, any of which could materially and adversely affect our business, financial condition and results of operations.
These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections and similar activities); litigation (including class-related claims); additional reporting requirements and/or oversight; bans on processing personal information; orders to destroy or not use personal information; imprisonment of company officials; public censure; damage to our reputation; loss of revenue and profits; loss of goodwill; and other adverse business impacts, any of which could materially and adversely affect our business, financial condition and results of operations. 40 In the U.S., there are numerous federal and state laws and regulations relating to personal information privacy and protection.
Our international operations, presently in existence or which we may establish in the future, carry special financial and business risks, which could include the following: • greater difficulties in managing and staffing foreign operations; • fluctuations in foreign currency exchange rates that could adversely affect our results; • unexpected changes in trading policies, regulatory requirements, tariffs and other barriers; • longer transaction cycles; • higher operating costs; • local labor, protections conditions and regulations; • adverse consequences or restrictions on the repatriation of earnings; • potentially adverse tax consequences, such as trapped foreign losses; • less stable political and economic environments; • terrorism, political hostilities, war, outbreak of disease and other civil disturbances or other catastrophic events that reduce business activity; • cultural and language barriers and the need to adopt different business practices in different geographic areas; and • difficulty collecting fees and, if necessary, enforcing judgments. 44 As part of our day-to-day operations outside the U.S., we are required to create compensation programs, employment policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries.
Our international operations, presently in existence or which we may establish in the future, carry special financial and business risks, which could include the following: • greater difficulties in managing and staffing foreign operations; • fluctuations in foreign currency exchange rates that could adversely affect our results; • unexpected changes in trading policies, regulatory requirements, tariffs and other barriers; • longer transaction cycles; • higher operating costs; 33 • local labor, protections conditions and regulations; • adverse consequences or restrictions on the repatriation of earnings; • potentially adverse tax consequences, such as trapped foreign losses; • less stable political and economic environments; • terrorism, political hostilities, war, outbreak of disease and other civil disturbances or other catastrophic events that reduce business activity; • cultural and language barriers and the need to adopt different business practices in different geographic areas; and • difficulty collecting fees and, if necessary, enforcing judgments.
It is possible that a court may find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, in which case we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition, or results of operations and result in a diversion of the time and resources of our management and board of directors. 57 General Risk Factors Fulfilling our public company financial reporting and other regulatory obligations is expensive and time consuming.
It is possible that a court may find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, in which case we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially adversely affect our business, financial condition, or results of operations and result in a diversion of the time and resources of our management and board of directors.
The difference in voting rights could adversely affect the value of our Class A common stock to the extent that investors view, or any potential future purchaser of our company views, the superior voting rights and implicit control of the Class B common stock to have value.
The difference in voting rights could adversely affect the value of our Class A common stock to the extent that investors view, or any potential future purchaser of our company views, the superior voting rights and implicit control of the Class B common stock to have value. 48 Our dual class structure may depress the trading price of our Class A common stock.
Our business is exposed to the risk that investors that owe us money may not pay us. If investors in our specialized investment vehicles default on their obligations to us, there may be adverse consequences on the investment process, and we could incur losses and be unable to meet underlying capital calls.
If investors in our specialized investment vehicles default on their obligations to us, there may be adverse consequences on the investment process, and we could incur losses and be unable to meet underlying capital calls.
Any change in such tax law or policy to eliminate or substantially limit these income tax deductions, as has been discussed from time to time in various jurisdictions, would reduce the after-tax rates of return on the affected investments, which may have an adverse impact on our business, results of operations and financial condition. 38 Defaults by investors in certain of our specialized funds could adversely affect that fund’s operations and performance.
Any change in such tax law or policy to eliminate or substantially 27 limit these income tax deductions, as has been discussed from time to time in various jurisdictions, would reduce the after-tax rates of return on the affected investments, which may have an adverse impact on our business, results of operations and financial condition.
We also are required to communicate and monitor standards and directives across our global operations. Our failure to successfully manage and grow our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with non-U.S. standards and procedures.
Our failure to successfully manage and grow our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with non-U.S. standards and procedures.
For example, we are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, as well as rules and regulations subsequently implemented by the SEC and the NYSE, including the establishment and maintenance of effective disclosure controls and internal controls over financial reporting and implementation of public company corporate governance practices.
As a public company, we incur significant legal, accounting and other expenses to comply with the reporting requirements of the Exchange Act and the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, as well as rules and regulations implemented by the SEC and the NYSE, including the establishment and maintenance of effective disclosure controls and internal controls over financial reporting and implementation of public company corporate governance practices.
We intend to grow our non-U.S. business, including growth into new regions with which we have less familiarity and experience, and this growth is important to our overall success.
Upon the closing of the acquisition of Qualitas, we will have a European presence and we intend to grow our non-U.S. business, including growth into new regions with which we have less familiarity and experience, and this growth is important to our overall success.
In the event (i) it was determined that an acquisition or subsidiary was found to have violated an applicable law, rule or regulation, or other requirement, (ii) such violation was determined to be material and (iii) to the extent that we were liable for claims for which indemnification under our acquisition agreement or other coverage is not available, our business, financial condition and results of operations could be materially and adversely affected.
In the event (i) it was determined that an acquisition or subsidiary was found to have violated an applicable law, rule or regulation, or other requirement, (ii) such violation was determined to be material and (iii) to the extent that we were liable for claims for which indemnification under our acquisition agreement or other coverage is not available, our business, financial condition and results of operations could be materially and adversely affected. 25 Our organic growth with selective strategic acquisitions in recent years may be difficult to sustain, as it may place significant demands on our resources and employees and may increase our expenses.
In addition, if we fail to monitor and adapt to changes in policy and the regulations to which we are or may become subject, we could be subject to enforcement actions, which may materially and adversely affect our businesses, financial condition and results of operations.
In addition, if we fail to monitor and adapt to changes in policy and the regulations to which we are or may become subject, we could be subject to enforcement actions, which may materially and adversely affect our businesses, financial condition and results of operations. 42 The IRS could challenge the amount, timing and/or use of our NOL carryforwards, and new information could also impact the usability of our NOL carryforwards.
In addition, if we have a net unrealized built-in gain (generally determined by comparing market capitalization plus total liabilities to the adjusted tax basis of assets) at the time of an ownership change, certain built-in gains recognized within five years after the ownership change (the “recognition period”) may increase the amount of the otherwise available annual limitation.
Generally, the annual limitation equals the product of (i) the fair market value of all of our outstanding equity immediately prior to the ownership change, multiplied by (ii) the applicable federal long-term, tax-exempt rate. 35 In addition, if we have a net unrealized built-in gain (generally determined by comparing market capitalization plus total liabilities to the adjusted tax basis of assets) at the time of an ownership change, certain built-in gains recognized within five years after the ownership change (the “recognition period”) may increase the amount of the otherwise available annual limitation.
We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons. As a leading provider of private markets solutions, we depend to a large extent on our relationships with our investors and our reputation for integrity and high-caliber professional services to attract and retain investors.
As a leading provider of private markets solutions, we depend to a large extent on our relationships with our investors and our reputation for integrity and high-caliber professional services to attract and retain investors.
Continued volatility in political or economic conditions, including an outbreak or escalation of major hostilities, declarations of war, terrorist actions or other substantial national or international calamities or emergencies, could have a material adverse effect on our business, financial condition and results of operations. 55 Risks Related to Our Organizational Structure A change of control of our company, including the occurrence of a “Sunset,” could result in an assignment of our investment advisory agreements.
Continued volatility in political or economic conditions, including an outbreak or escalation of major hostilities, declarations of war, terrorist actions or other substantial national or international calamities or emergencies, could have a material adverse effect on our business, financial condition and results of operations.
However, preparing to comply with the varying requirements of these laws has already subjected us to costs and legal fees and will subject us to additional costs and risks as they take effect.
Failure to comply with these privacy laws can result in civil penalties. These state privacy laws have some provisions and requirements similar to the CCPA. However, preparing to comply with the varying requirements of these laws has already subjected us to costs and legal fees and will subject us to additional costs and risks as they take effect.
Any substantial decrease in net operating cash flows or any substantial increase in expenses could make it difficult for us to meet our debt service requirements or force us to modify our operations. 37 Restrictive covenants in agreements and instruments governing our debt may adversely affect our ability to operate our business.
Any substantial decrease in net operating cash flows or any substantial increase in expenses could make it difficult for us to meet our debt service requirements or force us to modify our operations.
In addition, the SEC recently changed its disclosure requirements regarding cybersecurity risk management, strategy, governance and incident reporting. These changes require companies to investigate all cybersecurity incidents without unreasonable delay, determine their level of materiality, and report specific details about any material cybersecurity incidents in a separate filing within four business days.
These SEC rules require companies to investigate all cybersecurity incidents without unreasonable delay, determine their level of materiality, and report specific details about any material cybersecurity incidents in a separate filing within four business days.
Our effective income tax rate can vary significantly between periods due to a few complex factors including, but not 53 limited to, projected levels of taxable income, tax audits conducted and settled by tax authorities, and adjustments to income taxes upon finalization of income tax returns.
Our effective income tax rate can vary significantly between periods due to a few complex factors including, but not limited to, projected levels of taxable income, tax audits conducted and settled by tax authorities, and adjustments to income taxes upon finalization of income tax returns. 43 Federal, state and foreign anti-corruption and sanctions laws create the potential for significant liabilities and penalties and reputational harm.
It also imposed new limitations on several tax benefits, including deductions for business interest, use of NOL carryforwards, taxation of foreign income, and the foreign tax credit, among others.
It also imposed new limitations on several tax benefits, including deductions for business interest, use of NOL carryforwards, taxation of foreign income, and the foreign tax credit, among others. Many of those changes are set to expire at the end of 2025, unless extended through new legislation.
Any interruption or deterioration in the performance of these third parties, or failures of their information systems and technology or their data privacy programs, could impair the quality of the funds’ operations and could affect our reputation and hence adversely affect our business, financial condition and results of operations.
Any interruption or deterioration in the performance of these third parties, or failures of their information systems and technology or their data privacy programs, could impair the quality of the funds’ operations and could affect our reputation and hence adversely affect our business, financial condition and results of operations. 32 We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons.
This competitive pressure could adversely affect our ability to make successful investments and restrict our ability to raise future funds, either of which would materially and adversely impact our business, financial condition and results of operations.
This competitive pressure could adversely affect our ability to make successful investments and restrict our ability to raise future funds, either of which would materially and adversely impact our business, financial condition and results of operations. Emerging technologies, such as artificial intelligence, may disrupt the market, lead to greater legal and regulatory risks, and adversely affect our ability to compete.
We cannot assure you that we will be granted waivers or amendments to these agreements or instruments if for any reason we are unable to comply with these agreements and instruments.
We cannot assure you that we will be granted waivers or amendments to these agreements or instruments if for any reason we are unable to comply with these agreements and instruments. The breach of any of these covenants and restrictions could result in a default under the agreements and instruments governing our debt.
We are uncertain if subsequent offerings will increase the owner shift to be greater than 50%. If an ownership change occurs, we will be limited in our ability to realize a tax benefit from the use of our deferred tax assets, whether or not we are profitable in future years.
Thus, there are no longer provisions in our governing documents designed to prevent an "ownership change." If an ownership change occurs, we will be limited in our ability to realize a tax benefit from the use of our deferred tax assets, whether or not we are profitable in future years.
The failure to accurately predict the possible outcome of policy changes and regulatory reform could have a material adverse effect on the returns generated from our funds’ investments and our revenues. In recent years, the U.S. has imposed tariffs on various products imported into the U.S.
The failure to accurately predict the possible outcome of policy changes and regulatory reform could have a material adverse effect on the returns generated from our funds’ investments and our revenues. The United States has recently enacted and proposed to enact significant new tariffs.
Valuation methodologies for certain assets in our specialized investment vehicles can be significantly subjective, and the values of assets established pursuant to such methodologies may never be realized, which could result in significant losses for our specialized investment vehicles.
If one of our employees, advisors or third-party service providers were to engage in misconduct or were to be accused of such misconduct, our business and our reputation could be materially and adversely affected. 28 Valuation methodologies for certain assets in our specialized investment vehicles can be significantly subjective, and the values of assets established pursuant to such methodologies may never be realized, which could result in significant losses for our specialized investment vehicles.
The SEC recently proposed rules that would overhaul the regulation of the private fund industry, to significantly increase disclosure requirements and impose substantive requirements and prohibitions on fund advisory contracts, and if these rules are adopted as proposed, will increase our Advisers’ compliance monitoring and reporting obligations, resulting in increased costs of compliance, and may require certain changes to our practices.
In addition, in 2023 the SEC adopted rules (the "Private Fund Adviser Rules" that significantly increased disclosure requirements and impose substantive requirements and prohibitions on fund advisory and related contracts, and that, once implemented, promised both to increase our Advisers’ compliance monitoring and reporting obligations, resulting in increased costs of compliance, and to require changes to our Advisers' practices.
To the extent we raise capital in any EU jurisdiction, we are subject to new and increased regulations and we may also be adversely affected by changes in the interpretation or enforcement of existing laws and rules by EU state governmental authorities and self-regulatory organizations. 49 In addition, global climate change and global climate change transitions could lead to new or enhanced regulation, which may be difficult or costly to comply with, or impact assets that we invest in, which may result in realized and unrealized losses in future periods that could have a material adverse impact on our results of operations and/or financial position.
In addition, global climate change and global climate change transitions could lead to new or enhanced regulation, which may be difficult or costly to comply with, or impact assets that we invest in, which may result in realized and unrealized losses in future periods that could have a material adverse impact on our results of operations and/or financial position.
Policy changes and regulatory reform by the U.S. federal government may create regulatory uncertainty for our funds’ portfolio companies and our investment strategies and adversely affect the profitability of our funds’ portfolio companies. Ongoing political developments could adversely impact our investment management and investment advisory businesses.
Policy changes and regulatory reform by the U.S. federal government may create regulatory uncertainty for our funds’ portfolio companies and our investment strategies and adversely affect the profitability of our funds’ portfolio companies. Governmental policy changes and regulatory or tax reform could also have a material effect on our funds.
We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. Changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.
Changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.
In addition, a court could find that one of our co-investment funds has formed a partnership-in-fact conducting a trade or business and would therefore be jointly and severally liable for the portfolio company’s unfunded pension liabilities.
In addition, a court could find that one of our co-investment funds has formed a partnership-in-fact conducting a trade or business and would therefore be jointly and severally liable for the portfolio company’s unfunded pension liabilities. 39 Certain funds managed by subsidiaries of P10, including certain WTI funds, are registered as an investment adviser with the SEC and are subject to the requirements and regulations of the Investment Advisers Act, including the reporting and governance requirements of the Investment Company Act.
However, if anything were to happen that would cause P10 to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates (including us) and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among the Advisers, the general partners, the funds, us or our senior leadership team, or any combination thereof and materially and adversely affect our business, financial condition and results of operations. 56 The protective provision contained in our Amended and Restated Certificate of Incorporation, which is intended to help preserve the value of certain income tax assets, primarily tax NOL carryforwards, may have unintended negative effects.
However, if anything were to happen that would cause P10 to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates (including us) and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among the Advisers, the general partners, the funds, us or our senior leadership team, or any combination thereof and materially and adversely affect our business, financial condition and results of operations. 46 Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and the federal district courts as the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with us or our directors, officers, other employees, or agents.
In the U.S., there are numerous U.S. federal and state laws and regulations relating to personal information privacy and protection. For example, at a federal level, we may be subject to the Gramm-Leach-Bliley Act (“GLBA”) that applies to financial institutions and requires regulated entities to implement and maintain certain data privacy and security safeguards.
For example, at a federal level, we may be subject to the Gramm-Leach-Bliley Act (“GLBA”) that applies to financial institutions and requires regulated entities to implement and maintain certain data privacy and security safeguards. In addition, the SEC requires certain disclosures regarding cybersecurity risk management, strategy, governance and incident reporting.
The IRS could challenge the amount, timing and/or use of our NOL carryforwards, and new information could also impact the usability of our NOL carryforwards. The amount of our NOL carryforwards has not been audited or otherwise validated by the IRS. Among other things, the IRS could challenge the amount, the timing and/or our use of our NOLs.
The amount of our NOL carryforwards has not been audited or otherwise validated by the IRS. Among other things, the IRS could challenge the amount, the timing and/or our use of our NOLs. Any such challenge, if successful, could significantly limit our ability to utilize a portion or all our NOL carryforwards.
We compete in all aspects of our business with a large number of asset management firms, commercial banks, broker-dealers, insurance companies and other financial institutions. With respect to our investment strategies, we primarily compete with other private markets solutions providers within North America that specialize in private equity, venture capital, impact investing, NAV loans, GP stakes, and private credit.
With respect to our investment strategies, we primarily compete with other private markets solutions providers within North America and, upon closing of the Qualitas acquisition, Europe, that specialize in private equity, venture capital, impact investing, NAV loans, GP stakes, and private credit.
In 2023, the SEC proposed rules that would significantly change how investment advisers manage and safeguard client assets by expanding the custody rule to apply to all client assets held in its advisory account, and if adopted as proposed, will introduce new challenges and costs to our investment advisory business.
However, the Private Fund Adviser Rules were vacated by the US Fifth Circuit Court of Appeals in 2024 prior to going into effect, and the SEC proposed a new rule applicable to US registered investment advisers (the "Safeguarding Rule") that would significantly change how investment advisers manage and safeguard client assets by expanding the custody rule to apply to all client assets held in its advisory account, and if adopted as proposed, would have introduced new challenges and costs to our investment advisory business.
We also have a shareholder rights plan that prohibits anyone becoming a holder of 4.99% or more of our common stock (as determined for tax purposes) without prior board of directors’ approval. The Protective Provision and shareholder rights plan may have an unintended “anti-takeover” effect because our Board may be able to prevent any future takeover.
We also had a shareholder rights plan that prohibits anyone becoming a holder of 4.99% or more of our common stock (as determined for tax purposes) without prior board of directors' approval. However, the Protective Provision lapsed and the shareholders rights plan was redeemed in 2024 and are no longer in effect.
Also, during periods of financial distress or following an insolvency, our ability to influence a company’s affairs and to take actions to protect investments by our specialized investment vehicles or advisory accounts may be substantially less than that of those holding senior interests. 41 We may not be able to maintain our desired fee structure as a result of industry pressure from private markets investors to reduce fees, which could have a material adverse effect on our profit margins and results of operations.
Also, during periods of financial distress or following an insolvency, our ability to influence a company’s affairs and to take actions to protect investments by our specialized investment vehicles or advisory accounts may be substantially less than that of those holding senior interests.
For example, certain index providers restrict inclusion of companies with dual or multiple class share structures in certain of their indexes, including the S&P 500. In addition, several stockholder advisory firms have announced their opposition to the use of dual or multiple class structures.
In addition, several stockholder advisory firms have announced their opposition to the use of dual or multiple class structures.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and financial condition and results of operations.
In addition, our funds’ cash held with a custodian or counterparty generally will not be segregated from the custodian’s or counterparty’s own cash, and our funds may therefore rank as unsecured creditors in relation thereto. 34 Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and financial condition and results of operations.
For transactions that have been announced to the public or for which a binding commitment has been entered into when the final regulations are published, the provisions of IRS Notice 2003-65 should still be available. 46 The collectability of revenue under the Advisory Services Agreement is dependent on future cash flows of Enhanced PC.
These regulations have not been finalized but provide generally for an effective date of 30 days after the final regulations are published. For transactions that have been announced to the public or for which a binding commitment has been entered into when the final regulations are published, the provisions of IRS Notice 2003-65 should still be available.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeManagement's Role Our CTO and Chief Compliance Officer have primary responsibility for assessing and managing material cybersecurity risks, including overseeing and identifying cybersecurity risks associated with our use of third party cybersecurity consultancy firms, and are members of management’s IT Steering Committee, which consists of management team members and certain employees who drive alignment on technology and security decisions across the Company.
Biggest changeManagement's Role Our CIO, who has 15 years experience in technology, has primary responsibility for assessing and managing material cybersecurity risks , including overseeing and identifying cybersecurity risks associated with our use of third party cybersecurity consultancy firms, and are members of management’s IT Steering Committee, which consists of management team members and certain employees who drive alignment on technology and security decisions across the Company.
Item 1C. Cybersecurity. We maintain an information security program and governance framework that is designed to protect our information systems against operational risks related to cybersecurity. Cybersecurity Risk Management and Strategy We utilize third party cybersecurity consultancy firms to manage and execute our cybersecurity programs. These third party firms are led and supervised by our Chief Technology Officer (“CTO”).
Item 1C. Cybersecurity. We maintain an information security program and governance framework that is designed to protect our information systems against operational risks related to cybersecurity. Cybersecurity Risk Management and Strategy We utilize third party cybersecurity consultancy firms to manage and execute our cybersecurity programs. These third party firms are led and supervised by our Chief Information Officer (“CIO”).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. We lease our corporate headquarters and principal offices, which are located at 4514 Cole Avenue, Suite 1600, Dallas, Texas 75205. We also lease additional office space in Illinois, California, North Carolina, New York, Louisiana, Missouri, Maryland, and Colorado. We do not own any real property.
Biggest changeItem 2. Properties. We lease our corporate headquarters and principal offices, which are located at 4514 Cole Avenue, Suite 500, Dallas, Texas 75205. We also lease additional office space in Illinois, California, North Carolina, New York, Louisiana, Missouri, 51 Maryland, and Colorado. We do not own any real property.
We believe our current facilities are adequate for our current needs and that suitable additional space will be available as and when needed. 61
We believe our current facilities are adequate for our current needs and that suitable additional space will be available as and when needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough there can be no assurance of the outcome of such proceedings, our management does not believe it is probable that any pending or, to our knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect our consolidated financial statements. Item 4. Mine Safety Disclosures. Not applicable. 62 PART II
Biggest changeAlthough there can be no assurance of the outcome of such proceedings, our management does not believe it is probable that any pending or, to our knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect our consolidated financial statements. Item 4. Mine Safety Disclosures. Not applicable. 52 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn December 27, 2022, we announced that our Board of Directors authorized an additional $20 million for repurchases under the Stock Repurchase Program.
Biggest changeAs of December 31, 2024, the Board has approved $92.0 million, of which $52.0 million was approved during the year ending December 31, 2024, for repurchase under the Share Repurchase Program. On February 11, 2025, the Board of Directors authorized an additional $40.0 million for repurchases under the Stock Repurchase Program.
The Company was admitted to the Russell 2000 Index in 2023. The graph and table assume $100 invested on October 21, 2021, and dividends reinvested in the security or index. The performance graph and table are not intended to be indicative of future performance.
Asset Managers Index, and Russell 2000 Index. The Company was admitted to the Russell 2000 Index in 2023. The graph and table assume $100 invested on October 21, 2021, and dividends reinvested in the security or index. The performance graph and table are not intended to be indicative of future performance.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividend Policy We declared a quarterly dividend of $0.0325 per share of our common stock to record holders in each fiscal quarter of 2023.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividend Policy We declared a quarterly dividend of $0.035 per share of our common stock to record holders in each fiscal quarter of 2024.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. Market Information for Common Stock Our Class A common stock is traded on the New York Stock Exchange under the symbol "PX".
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities. Market Information for Common Stock Our Class A common stock is traded on the New York Stock Exchange under the symbol "PX". There is no established public trading market for our Class B common stock.
The Stock Repurchase Program does not obligate P10 to acquire any particular amount of common stock and it may be terminated or amended by the Board of Directors at any time. Recent Sales of Unregistered Securities We did not sell any unregistered equity securities during the year ended December 31, 2023.
The Stock Repurchase Program does not obligate P10 to acquire any particular amount of common stock and it may be terminated or amended by the Board of Directors at any time.
Stock Performance Graph The following graph and table depict the total return to stockholders from the closing price on October 21, 2021 (the date our Class A common stock began trading on NYSE) through December 31, 2023, relative to the performance of the S&P 63 500 Index, Dow Jones U.S. Asset Managers Index, and Russell 2000 Index.
Recent Sales of Unregistered Securities We did not sell any unregistered equity securities during the year ended December 31, 2024. 53 Stock Performance Graph The following graph and table depict the total return to stockholders from the closing price on October 21, 2021 (the date our Class A common stock began trading on NYSE) through December 31, 2024, relative to the performance of the S&P 500 Index, Dow Jones U.S.
Issuer Purchases of Equity Securities The following table provides information about our repurchase activity with respect to shares of our common stock for the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (1) Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 - 31, 2023 — $ - - $ 18,936,024 November 1 - 30, 2023 431,500 $ 9.75 431,500 $ 14,727,974 December 1 - 31, 2023 428,100 $ 9.72 428,100 $ 10,566,370 Total 859,600 $ 9.74 859,600 (1) On May 12, 2022, we announced that our Board of Directors authorized a program to repurchase outstanding shares of our Class A and Class B common stock as of the date of authorization, not to exceed $20 million (the "Stock Repurchase Program").
Issuer Purchases of Equity Securities The following table provides information about our repurchase activity with respect to shares of our common stock for the quarter ended December 31, 2024: Period Total Number of Shares Purchased Weighted Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (1) Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 - 31, 2024 — $ - - $ 13,872,482 November 1 - 30, 2024 361,721 $ 12.06 361,721 $ 9,508,865 December 1 - 31, 2024 453,606 $ 13.24 453,606 $ 3,496,192 Total 815,327 $ 12.72 815,327 (1) On May 12, 2022, we announced that our Board of Directors authorized a program to repurchase outstanding shares of our Class A and Class B common stock as of the date of authorization (the "Stock Repurchase Program").
There is no established public trading market for our Class B common stock or our Series A Junior Participating Preferred Stock Purchase Rights. Holders of Record As of March 6, 2024, there were approximately 6,400 stockholders of record of our Class A common stock and there were approximately 2,740 stockholders of record of our Class B common stock.
Holders of Record As of February 13, 2025, there were approximately 6,750 stockholders of record of our Class A common stock and there were approximately 2,710 stockholders of record of our Class B common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor the Years Ended December 31, 2023 2022 2021 (in thousands) Net (loss)/income $ (7,772 ) $ 29,399 $ 10,767 Adjustments: Depreciation & amortization 31,472 28,028 30,703 Interest expense, net 21,872 9,505 37,497 Income tax expense (benefit) 4,632 6,064 (7,070 ) Non-recurring expenses 13,874 9,587 8,807 Non-cash stock based compensation 21,519 9,587 2,416 Non-cash stock based compensation - acquisitions 8,674 9,029 — Non-cash stock based compensation - CEO transition 6,331 — — Earn out related compensation 22,992 5,612 — Adjusted EBITDA 123,594 106,811 83,120 Less: Cash interest expense (20,100 ) (6,784 ) (17,997 ) Cash income taxes, net of taxes related to acquisitions (1,539 ) (2,114 ) (2,308 ) Adjusted Net Income $ 101,955 $ 97,913 $ 62,815 Financial Position, Liquidity and Capital Resources Selected Statements of Financial Position As of As of December 31, December 31, 2023 2022 $ Change % Change (in thousands) Cash and cash equivalents (including restricted cash) $ 32,057 $ 29,492 $ 2,565 9% Goodwill and other intangibles 629,233 658,433 (29,200 ) (4)% Total assets 834,074 826,360 7,714 1% Accrued compensation and benefits 45,081 18,900 26,181 139% Debt obligations 289,844 289,224 620 0% Equity $ 425,162 $ 433,883 $ (8,721 ) (2)% There was an increase in cash and cash equivalents from $29.5 million as of December 31, 2022 to $32.1 million as of December 31, 2023 due to operating cash flows largely offset by cash used in financing activities.
Biggest changeFor the Year Ended December 31, 2024 2023 2022 (in thousands) Net Income/(Loss) $ 19,667 $ (7,772 ) $ 29,399 Adjustments: Depreciation & amortization 28,314 31,472 28,028 Interest expense, net 25,510 21,872 9,505 Income tax expense 8,698 4,632 6,064 Non-recurring expenses 17,520 13,874 9,587 Non-cash stock based compensation 22,480 21,519 9,587 Non-cash stock based compensation - acquisitions 7,971 8,674 9,029 Non-cash stock based compensation - CEO transition — 6,331 — Earn out related compensation 14,312 22,992 5,612 Adjusted EBITDA $ 144,472 $ 123,594 $ 106,811 Less: Cash interest expense, net (21,727 ) (20,100 ) (6,784 ) Cash income taxes, net of taxes related to acquisitions (2,538 ) (1,539 ) (2,114 ) Adjusted Net Income $ 120,208 $ 101,955 $ 97,913 Total Revenues $ 296,448 $ 241,734 $ 198,360 Adjustments: Non-Fee Related Revenue (5,179 ) (4,730 ) (2,751 ) Fee-Related Revenue $ 291,269 $ 237,004 $ 195,609 Adjusted EBITDA $ 144,472 $ 123,594 $ 106,811 Less: Non-Fee Related Income (2,354 ) (497 ) (334 ) Fee-Related Earnings $ 142,118 $ 123,097 $ 106,477 65 Financial Position, Liquidity and Capital Resources Selected Statements of Financial Position As of As of December 31, December 31, 2024 2023 $ Change % Change (in thousands) Cash and cash equivalents (including restricted cash) $ 68,115 $ 32,057 $ 36,058 112% Goodwill and other intangibles 603,627 629,233 (25,606 ) (4)% Total assets 869,275 834,074 35,201 4% Accrued compensation and benefits 69,544 45,081 24,463 54% Debt obligations 319,783 289,844 29,939 10% Equity 386,890 425,162 (38,272 ) (9)% There was an increase in cash and cash equivalents from $32.1 million as of December 31, 2023 to $68.1 million as of December 31, 2024 due to operating cash flows offset by cash used for open market repurchases for the Company's stock.
We typically receive fees from investors based upon committed capital, with some funds receiving fees based on invested capital; capital commitments, typically average ten to fifteen years, though they may vary by fund. We offer direct and co-investment funds across our private equity, venture capital, impact investing and private credit solutions.
We typically receive fees from investors based upon committed capital, with some funds receiving fees based on invested capital. Capital commitments from investors typically average ten to fifteen years, though they may vary by fund. We offer direct and co-investment funds across our private equity, venture capital, impact investing and private credit solutions.
As global financial markets continue to remain uncertain and private markets investors evaluate their exposure and allocation to private markets, a trend of consolidating managers has emerged. Our strategies, with long-track records of success, deep industry experience, well-established relationships, and high-quality investment opportunities, can benefit from a trend toward reducing the number of managers to which capital is allocated.
As global financial markets continue to remain uncertain and private markets investors evaluate their exposure and allocation to private markets, a trend of 58 consolidating managers has emerged. Our strategies, with long-track records of success, deep industry experience, well-established relationships, and high-quality investment opportunities, can benefit from a trend toward reducing the number of managers to which capital is allocated.
This favorable lower and lower-middle market dynamic implies a larger pool of opportunities at compelling purchase price valuations with significant return potential. In addition, our premier data and analytic capabilities, driven by our proprietary database, support our robust and disciplined sourcing criteria, which fuels our highly selective investment process.
This favorable lower and lower-middle market dynamic implies a larger pool of opportunities at compelling purchase price valuations with significant return potential. In addition, our premier data and analytic capabilities, driven by our proprietary 57 database, support our robust and disciplined sourcing criteria, which fuels our highly selective investment process.
Catch up fees are associated with the fund closings at Bonaccord, TrueBridge and RCP. Management fees are non-refundable, however, a certain fund was raised in 2022 with the objective of investing in all funds raised by an undisclosed manager across its global platform, most likely across two vintages – 2022 and 2024/2025.
Catch up fees are associated with the fund closings at Bonaccord, TrueBridge and RCP. Management fees are non-refundable, however, a certain fund was raised in 2022 with the objective of investing in all funds raised with an undisclosed manager across its global platform, most likely across two vintages – 2022 and 2024/2025.
Despite our general operating leverage that exists, we expect to continue to experience an incremental rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand into new markets to create new products and services.
Despite our general operating leverage that exists, we expect to continue to experience an incremental rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain 59 competitive compensation levels as we expand into new markets to create new products and services.
Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Form 10-K, particularly in "Risk Factors", the "Summary of Risk Factors" and the "Forward-Looking Information." Unless otherwise indicated, references in this Annual Report on Form 10-K to fiscal 2023, fiscal 2022 and fiscal 2021 are to our fiscal years ended December 31, 2023 and 2022, respectively.
Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this Form 10-K, particularly in "Risk Factors", the "Summary of Risk Factors" and the "Forward-Looking Information." Unless otherwise indicated, references in this Annual Report on Form 10-K to fiscal 2024, fiscal 2023 and fiscal 2022 are to our fiscal years ended December 31, 2024, 2023 and 2022, respectively.
The Company believes it is probable that the third parties will exercise their options to sell back the revenue share and has recognized liabilities on the Consolidated Balance Sheets. The Company has also recognized contingent payments to customers asset associated with the agreements and will amortize the assets against revenue over the length of the management contracts.
The Company believes it is probable that the third parties will exercise their options to sell back the revenue share and has recognized liabilities on the Consolidated Balance Sheets. The Company has also recognized contingent payments to customers assets associated with the agreements and will amortize the assets against revenue over the estimated length of the management contracts.
For awards with graded vesting and require either a performance condition or market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value of the grant date. Certain acquisition-related RSUs vest after meeting certain performance metrics.
For awards with graded vesting and require a market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value of the grant date. Certain acquisition-related RSUs vest after meeting certain performance metrics.
We have 55 active investment vehicles. PES occupies a differentiated position within the private markets ecosystem helping our investors access, perform due diligence, analyze and invest in what we believe are attractive middle and lower-middle market private equity opportunities.
We have 57 active investment vehicles. PES occupies a differentiated position within the private markets ecosystem helping our investors access, perform due diligence, analyze and invest in what we believe are attractive middle and lower-middle market private equity opportunities.
Management and advisory fees during the commitment period are charged on capital commitments and after the commitment period (or a defined anniversary of the fund’s initial closing) is reduced by a percentage of the management and advisory fees for the preceding years or charged on net invested capital or NAV, in selected cases.
Management and advisory fees during the commitment period are charged on capital commitments and after the commitment period (or a defined anniversary of the fund’s initial closing) is reduced by a percentage of the management and advisory fees for the preceding years or charged on net invested capital or NAV, in select cases.
For these, the Company uses the tranche method and recognizes expense for each tranche of RSU's deemed probable of vesting on a straight-line basis over the expected vesting period. The Company evaluates the probability of vesting at each reporting period. Unvested units are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets.
For these, the Company uses the tranche method and recognizes expense for each tranche of RSUs deemed probable of vesting on a straight-line basis over the expected vesting period. The Company evaluates the probability of vesting at each reporting period. Unvested RSUs are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets.
Furthermore, investors continue to increase their exposure to passive strategies in search for lower fee alternatives as relative returns in active public market strategies have compressed. We believe the continued move away from active public market strategies into passive strategies will support growth in private market solutions as investors seek higher risk-adjusted returns.
Furthermore, investors continue to increase their exposure to passive strategies in search for lower fee alternatives. We believe the continued move away from active public market strategies into passive strategies will support growth in private market solutions as investors seek higher risk-adjusted returns.
We also earn revenues through catch-up fees ("catch 69 up fees") on the funds we manage.
We also earn revenues through catch-up fees on the funds we manage.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of our annual report Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 27, 2023 and incorporated by reference herein. Non-GAAP Financial Measures Below is a description of our unaudited non-GAAP financial measures.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of our annual report Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 13, 2024 and incorporated by reference herein. Non-GAAP Financial Measures Below is a description of our unaudited non-GAAP financial measures.
Results of Operations for Years Ended December 31, 2022 and 2021 For a comparison of our results of operations for fiscal years ended December 31, 2022 and 2021 see "Part II, Item 7.
Results of Operations for Years Ended December 31, 2023 and 2022 For a comparison of our results of operations for fiscal years ended December 31, 2023 and 2022 see "Part II, Item 7.
Of the total AUM, impact assets represent $4.0 billion invested in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates. Investments in clean energy have generated an estimate of over 2,229 GWh of renewable energy from inception to December 31, 2023.
Of the total AUM, impact assets represent $4.2 billion invested in over 1,000 projects and businesses across 40 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates. Investments in clean energy have generated an estimate of over 2,900 GWh of renewable energy from inception to December 31, 2024.
Additional trends driving investor demand are (a) increasing long-term investor allocations towards private market asset classes, (b) legislation that allows retirement plans to add private equity vehicles as an investment option, and (c) the adoption of Environmental, Social, and Corporate Governance (“ESG”) and impact investing by the institutional and high net worth investor community. • Favorable lower and lower-middle market dynamics, and data driven sourcing.
Additional trends driving investor demand are (a) increasing long-term investor allocations towards private market asset classes, (b) legislation that allows retirement plans to add private equity vehicles as an investment option, and (c) the adoption of Environmental, Social, and Corporate Governance (“ESG”) and impact investing by the institutional and high net worth investor community, and demand from high-net-worth individuals, also known as retail investors. • Favorable lower and lower-middle market dynamics, and data driven sourcing.
We currently offer secondaries funds across our private equity solutions. Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our secondary funds comprise approximately $1.5 billion of our FPAUM as of December 31, 2023.
We currently offer secondaries funds across our private equity solutions. Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our secondary funds comprise approximately $1.6 billion of our FPAUM as of December 31, 2024.
Webb were appointed as Executive Chairman and Executive Vice Chairman, respectively, for a one-year period. Additionally, Mr. Webb's Transition Agreement provides a one year transition period to continue serving the Company in a mergers and acquisitions capacity. Effective October 23, 2023, the board of the Company appointed Luke A. Sarsfield III as Chief Executive Officer (“CEO”) of the Company.
Webb were appointed as Executive Chairman and Executive Vice Chairman, respectively, for a one-year period. Additionally, Mr. Webb's Transition Agreement provided a one year transition period to continue servicing the Company in a mergers and acquisitions capacity. Effective October 23, 2023, the board of the Company appointed Luke A. Sarsfield III as Chief Executive Officer ("CEO") of the Company.
Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our primary funds comprise approximately $13.5 billion of our FPAUM as of December 31, 2023. • Direct and Co-Investment Funds.
Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our primary funds comprise approximately $13.9 billion of our FPAUM as of December 31, 2024. 56 • Direct and Co-Investment Funds.
Other companies may calculate these measures differently than we do, limiting their usefulness as a comparative measure. We use Adjusted Net Income, or ANI, as well as Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to provide additional measures of profitability.
Other companies may calculate these measures differently than we do, limiting their usefulness as a comparative measure. We use Fee-Related Revenue ("FRR"), Fee-Related Earnings ("FRE"), Adjusted Net Income ("ANI"), as well as Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to provide additional measures of profitability.
In connection with his appointment as CEO, the Company entered into an employment agreement with Mr. Sarsfield (the “Employment Agreement”) setting forth the terms of his employment and compensation. In connection with both the Transition Agreements and the Employment Agreement, provisions were made for severance and sign-on compensation, respectively.
In connection with his appointment as CEO, the Company entered into an employment agreement with Mr. Sarsfield (the "Employment Agreement") setting forth the terms of his employment and compensation. In connection with both the Transition Agreements and the Employment Agreement, provisions were made for severance and sign-on compensation, respectively. Effective June 14, 2024, Mr.
We earn management and advisory fees based on a percentage of investors’ capital commitments to, in funds or deployed capital.
We earn management and advisory fees based on a percentage of investors’ capital commitments, in or, in select cases, capital deployed to our investment funds.
Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our direct investing platform comprises approximately $8.3 billion of our FPAUM as of December 31, 2023. • Secondaries.
Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our direct investing platform comprises approximately $10.2 billion of our FPAUM as of December 31, 2024. • Secondaries.
Fee-Paying Assets Under Management, or FPAUM FPAUM reflects the assets from which we earn management and advisory fees. Our vehicles typically earn management and advisory fees based on committed capital, and in certain cases, net invested capital, depending on the fee terms. Management and advisory fees based on committed capital are not affected by market appreciation or depreciation.
Fee-Paying Assets Under Management, or FPAUM FPAUM reflects the assets from which we earn management and advisory fees. Our vehicles typically earn management and advisory fees based on committed capital, and in certain cases, net invested capital, depending on the fee terms.
We are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of our track record. From inception in 1999 through December 31, 2023, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.1 billion.
These investments are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of the impact investing track record. From the impact investing inception in 1999 through December 31, 2024, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.4 billion.
As of December 31, 2023, IIS managed $2.0 billion of FPAUM . 66 • Private Credit Solutions (PCS). Under PCS, we primarily make debt investments across North America, targeting lower middle market companies owned by leading financial sponsors and also offer certain private equity solutions.
As of December 31, 2024, VCS managed $6.4 billion of FPAUM. • Private Credit Solutions (PCS). Under PCS, we primarily make debt investments across North America, targeting lower middle market companies owned by leading financial sponsors and also offer certain private equity solutions.
The PCS investment team, which is comprised of 39 investment professionals with an average of 24+ years of experience, has deep and long-standing relationships in the private credit market which it has cultivated over the past 22 years, including 300+ investors across 11 active investment vehicles and 1,600+ portfolio companies with $9.8+ billion capital deployed.
The PCS investment team, which is comprised of 54 investment professionals with an average of 25+ years of experience, has deep and long-standing relationships in the private credit market which it has cultivated over the past 22 years, including 440+ investors across 49 active investment vehicles and 1,800+ portfolio 55 companies with $9.8+ billion capital deployed.
The PES investment team, which is comprised of 42 investment professionals with an average of 25+ years of experience, has deep and long-standing investor and fund manager relationships in the middle and lower-middle market which it has cultivated over the past 20 years, including over 1,900+ investors, 300+ fund managers, 750+ private market funds and 2,000+ portfolio companies.
The PES investment team, which is comprised of 42 investment professionals with an average of 26+ years of experience, has deep and long-standing investor and fund manager relationships in the middle and lower-middle market which it has cultivated over the past 20 years, including over 2,280+ investors, 285+ fund managers, 560+ private market funds and 5,100+ portfolio companies.
Our PCS is differentiated by our relationship-driven sourcing approach providing capital solutions for growth-oriented companies. We are further synergistically strengthened by our PES network of fund managers, characterized by more than 400 credit opportunities annually. We currently maintain 55+ active sponsor relationships and have 80+ platform investments. As of December 31, 2023, PCS managed approximately $2.9 billion of FPAUM.
Our PCS is differentiated by our relationship-driven sourcing approach providing capital solutions for growth-oriented companies. We are further synergistically strengthened by our PES network of fund managers, characterized by more than 630 credit opportunities annually. We currently maintain 80+ active sponsor relationships and have 125+ platform investments.
Operating Segments We operate our business as a single operating segment, which is how our chief operating decision maker evaluates financial performance and makes decisions regarding the allocation of resources. 67 Trends Affecting Our Business Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions in the North American markets in which we operate, as well as changes in global economic conditions, and regulatory or other governmental policies or actions, which can materially affect the values of the funds our platforms manage, as well as our ability to effectively manage investments and attract capital.
Trends Affecting Our Business Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions in the North American markets in which we operate, as well as changes in global economic conditions, and regulatory or other governmental policies or actions, which can materially affect the values of the funds our platforms manage, as well as our ability to effectively manage investments and attract capital.
The decrease at RCP is driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition.
This is due to decreases at ECG and RCP. The decrease at ECG is driven by syndicate contracts' amortization schedule, which is based on projected revenues at the time of acquisition. The decrease at RCP is driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition.
Income Tax Benefit/(Expense) Years Ended December 31, 2023 and December 31, 2022 Income tax expense decreased by $1.4 million to an expense of $4.6 million for the year ended December 31, 2023 compared to an expense of $6.1 million for the year ended December 31, 2022.
Income Tax Expense Years Ended December 31, 2024 and December 31, 2023 Income tax expense increased by $4.1 million to an expense of $8.7 million for the year ended December 31, 2024 compared to an expense of $4.6 million for the year ended December 31, 2023.
FPAUM as of December 31, 2023 FPAUM increased by $2.1 billion, or 9.7%, to $23.3 billion on a pro forma basis and $2.1 billion or 9.7% to $23.3 billion on an actual basis for the year ended December 31, 2023, due primarily to an increase in capital raised and capital deployed from our private equity and venture capital solutions, which was offset by a decline of fees related to scheduled fee stepdowns and expiration of fees.
FPAUM as of December 31, 2024 FPAUM increased by $2.4 billion or 10% to $25.7 billion for the year ended December 31, 2024, due primarily to an increase in capital raised and capital deployed from our private equity and venture capital solutions, which was offset by a decline of fees related to scheduled fee stepdowns and expiration of fees.
The VCS investment team, which is comprised of 12 investment professionals with an average of 23+ years of experience, has deep and long-standing investor and fund manager relationships in the venture market which it has cultivated over the past 14+ years, including over 1,800+ investors, 80+ fund managers, 83 direct investments, 350+ private market funds and 12,000+ portfolio companies.
The VCS investment team, which is comprised of 16 investment professionals with an average of 24+ years of experience, has deep and long-standing investor and fund manager relationships in the venture market which it has cultivated over the past 14+ years, including over 1,980+ investors, 110+ fund managers, 100+ direct investments, 415+ private market funds and 14,700+ portfolio companies.
The complex regulatory and tax environment could restrict our operations and subject us to increased compliance costs and administrative burdens, as well as restrictions on our business activities. The SEC recently adopted new rules and rule amendments to enhance the regulation of private fund advisers and update the existing compliance rule that applies to all investment advisers.
The complex regulatory and tax environment carries the potential to restrict our operations and our business activities, as well as subject us to increased compliance and administrative burdens. The SEC recently adopted new rules and rule amendments to enhance the regulation of all investment advisors, including private fund advisers.
Our FPAUM growth and concentration across solutions and vehicles has been relatively consistent over time but can vary in particular periods due to the systematic fundraising cycles of new funds, which typically lasts 12-24 months.
Our FPAUM growth and concentration across solutions and vehicles has been relatively consistent over time but can vary in particular periods due to the systematic fundraising cycles of new funds, which typically lasts 12-24 months. We expect to continue to expand our fundraising efforts and grow FPAUM with the launch of new specialized investment vehicles and asset class solutions.
For the year ended December 31, For the year ended December 31, 2023 2022 (in millions) (in millions) Balance, Beginning of Period $ 21,206 $ 19,031 Add: Acquisitions — — Capital raised (1) 2,818 2,454 Capital deployed (2) 924 1,056 Net Asset Value Change (3) (121 ) (151 ) Less: Scheduled fee base stepdowns (601 ) (577 ) Expiration of fee period (967 ) (607 ) Balance, End of period $ 23,259 $ 21,206 (1) Represents new commitments from funds that earn fees on a committed capital fee base.
For the year ended December 31, 2024 2023 (in millions) (in millions) Balance, Beginning of Period $ 23,259 $ 21,206 Add: Acquisitions — — Capital raised (1) 3,154 2,793 Capital deployed (2) 636 949 Net Asset Value Change (3) (4 ) (121 ) Less: Scheduled fee base stepdowns (578 ) (601 ) Expiration of fee period (790 ) (967 ) Balance, End of period $ 25,677 $ 23,259 (1) Represents new commitments from funds that earn fees on a committed capital fee base.
On October 20, 2023, the Company entered into an executive transition agreement with each of Mr. Alpert and Mr. Webb (each, a “Transition Agreement”). Pursuant to the Transition Agreements, Mr. Alpert and Mr. Webb ceased to serve as Co-Chief Executive Officer, and Mr. Alpert and Mr.
As of December 31, 2024, PCS managed approximately $5.2 billion of FPAUM. On October 20, 2023, the Company entered into an executive transition agreement with each of Mr. Alpert and Mr. Webb (each, a "Transition Agreement"). Pursuant to the Transition Agreements, Mr. Alpert and Mr. Webb ceased to serve as Co-Chief Executive Officer, and Mr. Alpert and Mr.
Despite rising interest rates and the global economy outlook remaining uncertain, we continue to see investors turning towards alternative investments to achieve consistent and higher yields with our contractually guaranteed fee rate. The continued growth of our business may be influenced by several factors, including the following market trends: • Accelerating demand for private markets solutions.
Despite higher interest rates and the global economy outlook remaining uncertain, we continue to see investors turning towards alternative investments to achieve asset class diversification, superior investment returns, and participation in access constrained investment opportunities. The continued growth of our business may be influenced by several factors, including the following market trends: • Accelerating demand for private markets solutions.
The timing and amount of any repurchases pursuant to the program will depend on various factors including, the market price of our Class A Common Stock, trading volume, ongoing assessment of our working capital needs, general market conditions, and other factors. As of December 31, 2023, $28.7 million has been spent to buy back shares under this program.
The timing and amount of any repurchases pursuant to the program will depend on various factors including, the market price of our Class A Common Stock, trading volume, ongoing assessment of our working capital needs, general market conditions, and other factors.
In order to compute Adjusted EBITDA, we adjust our GAAP net (loss)/income for the following items: • Expenses that typically do not require us to pay them in cash in the current period (such as depreciation, amortization and stock-based compensation); • The cost of financing our business; 74 • One-time expenses related to restructuring of the management team including signing bonus, severance, and placement/search fees; • Acquisition-related expenses which reflects the actual costs incurred during the period for the acquisition of new businesses, which primarily consists of fees for professional services including legal, accounting, and advisory, as well as bonuses paid to employees directly related to the acquisition; • Registration-related expenses includes professional services associated with our prospectus process incurred during the period, and does not reflect expected regulatory, compliance, and other costs associated with those that were incurred subsequent to our Initial Public Offering, and • The effects of income taxes.
ANI is calculated as Adjusted EBITDA, less actual cash paid for interest and federal and state income taxes. 64 In order to compute Adjusted EBITDA, we adjust our GAAP net income/(loss) for the following items: • Expenses that typically do not require us to pay them in cash in the current period (such as depreciation, amortization and stock-based compensation); • The cost of financing our business; • One-time expenses related to restructuring of the management team including placement/search fees; • Expenses related to the debt refinancing completed in August 2024; • Acquisition-related expenses which reflects the actual costs incurred during the period for the acquisition of new businesses, which primarily consists of fees for professional services including legal, accounting, and advisory, as well as bonuses paid to employees directly related to the acquisition; and • The effects of income taxes.
PES also makes minority equity investments in a diversified portfolio of mid-sized managers across private equity, private credit, real estate and real assets.
Under PES, we make direct and indirect investments in middle and lower- middle market private equity across North America. PES also makes minority equity investments in a diversified portfolio of mid-sized managers across private equity, private credit, real estate and real assets.
Other advisory services include transaction and management fees associated with managing the origination and ongoing compliance of certain investments. Stock-Based Compensation Expense Stock-based compensation relates to grants for shares of P10 awarded to our employees through stock options as well as RSUs awarded to employees and RSAs issued to non-employee directors as compensation for service on the Company's board.
Stock-Based Compensation Expense Stock-based compensation relates to grants for shares of P10 awarded to our employees through stock options as well as RSUs awarded to employees and RSAs issued to non-employee directors as compensation for service on the Company's board.
Liquidity and Capital Resources We have continued to support our ongoing operations through the receipt of management and advisory fee revenues. However, to fund our continued growth, we have utilized capital obtained through debt and equity raises. Our ability to continue to raise funds will be critical as we pursue additional business development opportunities and new acquisitions.
Liquidity and Capital Resources We have continued to support our ongoing operations through the receipt of management and advisory fee revenues. However, to fund our continued growth, we have utilized capital obtained through debt and equity raises.
There is also a $125 million accordion feature available in the credit agreement, which we exercised in September 2022. The accordion was not drawn until October 2022, at which point it was divided to $87.5 million of term loan and $37.5 million of revolver.
The accordion was not drawn until October 2022, at which point it was divided to $87.5 million of term loan and $37.5 million of revolver.
Similarly, the cash income taxes paid during the 2022 and 2021 periods differ significantly from the net income tax benefit, which is primarily comprised of deferred tax expense as described in the results of operations. The 2021 cash paid for interest includes a loss on extinguishment of $4.8 million.
The cash income taxes paid during the 2024 and 2023 periods differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.
IIS primarily targets investments in renewable energy development and historic building renovation projects, as well as providing capital to small businesses that are women or minority owned or operating in underserved communities.
Within PCS, the Company has investments that target renewable energy development and historic building renovation projects, as well as provide capital to small businesses that are woman or minority owned or operated in underserved communities.
Our professional fees will fluctuate commensurate with our strategic objectives and potential acquisitions, and certain recurring accounting advisory, audit and tax expenses are expected to increase as our Company has become an SEC registrant and we must comply with additional regulatory requirements.
As our Company is an SEC registrant, our professional fees will fluctuate commensurate with our strategic objectives and potential acquisitions, and certain recurring accounting advisory, audit and tax expenses will increase to comply with additional regulatory requirements. General, administrative and other includes rent, travel and entertainment, technology, insurance and other general costs associated with operating our business.
This expense is driven by the Strategic Alliance Agreement that Bonaccord entered into with an investor at the time Bonaccord was acquired in exchange for a portion of net management fee earnings at the time of acquisition. Other (Expense)/Income Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs.
Strategic alliance expense is included in operating expenses. This expense is driven by the Strategic Alliance Agreement that Bonaccord entered into with an investor at the time Bonaccord was acquired in exchange for a portion of net management fee earnings.
We are further differentiated by the scale, depth, diversity and accuracy of our constantly expanding proprietary private markets database that contains comprehensive information on more than 5,600 investment firms, 10,200 funds, 47,000 individual transactions, 31,000 private companies and 317,000 financial metrics. As of December 31, 2023, PES managed $12.3 billion of FPAUM. • Venture Capital Solutions (VCS).
We are further differentiated by the scale, depth, diversity and accuracy of our constantly expanding proprietary private markets database that contains comprehensive information on more than 6,000 investment firms, 11,100 funds, 49,000 individual transactions, 32,600 private companies and 458,000 financial metrics.
In substantially all instances, the Company does not hold carried interests in the funds that we manage. Carried interest is typically structured to stay with the investment professionals.
In substantially all instances, the Company does not hold carried interests in the funds that we manage. Carried interest is typically structured to stay with the investment professionals. It allows our investment professionals to receive additional benefit and provides economic incentive for them to outperform on behalf of our investors.
We use the measures to assess our performance relative to our intended strategies, expected patterns of profitability, and budgets, and use the results of that assessment to adjust our future activities to the extent we deem necessary. ANI reflects our actual cash flows generated by our core operations.
We use the measures to assess our performance relative to our intended strategies, expected patterns of profitability, and budgets, and use the results of that assessment to adjust our future activities to the extent we deem necessary. FRR is calculated as Total Revenues less any incentive fees.
Other revenues, which represent ancillary elements of our business, increased by $1.2 million or 66% to $3.0 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022 driven primarily by an increase of $1.3 million of interest income offset by a decrease of $0.1 million of subscription fee revenues.
Other revenues, which represent ancillary elements of our business, increased by $3.2 million or 107% to $6.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023 driven by $2.1 million of 61 recognized carried interest income from an uncommon pre-acquisition legacy managed fund, an increase of $0.6 million in ancillary services provided to clients, an increase of $0.4 million of interest income, and an increase of $0.1 million of subscription fee revenues.
Under VCS, we make investments in venture capital funds across North America and specialize in targeting high-performing, access-constrained opportunities.
As of December 31, 2024, PES managed $14.1 billion of Fee-Paying Assets Under Management ("FPAUM"). • Venture Capital Solutions (VCS). Under VCS, we make investments in venture capital funds across North America and specialize in targeting high-performing, access-constrained opportunities.
Off Balance Sheet Arrangements We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements. 77 Contractual Obligations, Commitments and Contingencies In the ordinary course of business, we enter contractual arrangements that require future cash payments.
Off Balance Sheet Arrangements We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our consolidated financial statements. 67 Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S.
Refer to Note 16 for further discussion. Forfeitures are recognized as they occur. 79 Income Taxes Current income tax expense represents our estimated taxes to be paid or refunded for the current period.
Current income tax benefit/(expense) represents our estimated taxes to be paid or refunded for the current period.
The Company primarily earns fees for advisory services provided to clients where the Company does not have discretion over investment decisions. Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned. These fees are recorded as deferred revenue on the Consolidated Balance Sheets.
Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned. These fees are recorded as deferred revenues on the Consolidated Balance Sheets due to the performance obligations not being satisfied at the time of collection.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its consolidated subsidiaries. The preparation of the Consolidated Financial Statements in conformity with U.S.
GAAP”) and include the accounts of the Company and its consolidated subsidiaries. The preparation of the Consolidated Financial Statements in conformity with U.S.
The decrease in income tax expense from 2022 to 2023 was due to a reduction in overall taxable income in 2023. FPAUM The following table provides a period-to-period roll-forward of our fee paying assets under management on a pro forma basis as if WTI was acquired on January 1, 2022.
The increase in income tax expense from 2023 to 2024 was due to an increase in overall net operating income and flow-through income from underlying investments in 2024. 63 FPAUM The following table provides a period-to-period roll-forward of our fee paying assets under management on an actual basis.
On December 22, 2021, P10, Inc. entered into a Term Loan and Revolving Credit Facility with JP Morgan Chase Bank, N.A.. The term loan and revolving credit facility provides financing for acquisition activity. The term loan provides for a $125.0 million facility and the revolving credit facility provides for an additional $125.0 million.
Our ability to continue to raise funds or issue new shares as consideration will be critical as we pursue additional business development opportunities and new acquisitions. On December 22, 2021, P10, Inc. entered into a Term Loan and Revolving Credit Facility with JP Morgan Chase Bank, N.A.. The term loan and revolving credit facility provides financing for acquisition activity.
The Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum leverage ratio of less than or equal to 3.50. As of December 31, 2023, P10 was in compliance with its financial covenants required under the facility.
The Amended and Restated Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum FPAUM of the sum of $16.7 million plus 70% of the aggregate amount of FPAUM acquired or not constituted as organic growth as well as a minimum leverage ratio of less than or equal to 3.50.
The Company recognizes an accrued contingent liability and contingent payments to customers in our Consolidated Balance Sheets for agreements between ECG and third parties. The agreements require ECG to share in certain revenues earned with the third party and also includes an option for the third party to sell back the revenue share to ECG at a set multiple.
The agreement requires ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple. Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple.
This annual report reflects the historical results of operations and financial position of P10 Holdings, our predecessor for accounting purposes, prior to the Reorganization and IPO. The following discussion may contain forward-looking statements that reflects our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements.
Our historical results discussed below, and the way we evaluate our results, may differ significantly from the descriptions of our business and key metrics used elsewhere in this annual report on Form 10-K. The following discussion may contain forward-looking statements that reflects our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements.
Investing activities Years Ended December 31, 2023 and December 31, 2022 The cash used in investing activities decreased by $96.3 million, or 98% to $2.3 million, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. This decrease in cash used in investing activities was due almost entirely to the 2022 acquisition of WTI.
Investing Activities Years Ended December 31, 2024 and December 31, 2023 The cash used in investing activities increased by $3.6 million, or 158% to $5.8 million, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Compliance with these new rules is expected to increase our compliance costs and further restrict certain 68 business activities. In addition, the SEC recently adopted significant new compliance requirements for investment advisers related to cybersecurity matters that are expected to increase compliance costs.
The task of satisfying the requirements of these updated rules is expected to increase our compliance costs and further restrict certain business activities. Among these new and amended rules is the SEC's significantly updated requirements for investment advisers related to cybersecurity and ensuring investor privacy.
Other (Expense)/Income Years Ended December 31, 2023 and December 31, 2022 Other expenses increased by $16.1 million, or 202%, to $24.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022. This increase was driven by a rise in interest expense of $12.4 million.
Other (Expense)/Income Years Ended December 31, 2024 and December 31, 2023 Other expenses increased by $8.2 million, or 34%, to $32.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. This increase was driven by $10.1 million in other (losses)/income related to the measurement expense of contra-revenue put option related to incentive fees.
As investors entrust us with additional capital, our relationships with our fund managers are strengthened, which drives additional investment opportunities, sources more data, enables portfolio optimization and enhances returns, and in turn attracts new investors. On October 20, 2021, P10 Holdings, in connection with its Initial Public Offering ("IPO"), completed a reorganization and restructure.
As investors entrust us with additional capital, our relationships with our fund managers are strengthened, which drives additional investment opportunities, sources more data, enables portfolio optimization and enhances returns, and in turn attracts new investors. As of December 31, 2024, our private market solutions were comprised of the following: • Private Equity Solutions (PES) .
For the year ended December 31, 2023 2022 2021 REVENUES (in thousands) Management and advisory fees $ 238,729 $ 196,546 $ 149,424 Other revenue 3,005 1,814 1,110 Total revenues 241,734 198,360 150,534 OPERATING EXPENSES Compensation and benefits 154,286 94,297 54,755 Professional fees 12,668 12,856 11,508 General, administrative and other 22,584 18,522 9,870 Contingent consideration expense 560 1,717 3,472 Amortization of intangibles 29,221 26,867 30,431 Strategic alliance expense 1,494 678 152 Total operating expenses 220,813 154,937 110,188 INCOME FROM OPERATIONS 20,921 43,423 40,346 OTHER (EXPENSE)/INCOME Interest expense implied on notes payable to sellers — — (825 ) Interest expense, net (21,872 ) (9,505 ) (21,360 ) Loss on early extinguishment of debt — — (15,312 ) Other (expense)/income (2,189 ) 1,545 848 Total other (expense) (24,061 ) (7,960 ) (36,649 ) Net (loss)/income before income taxes (3,140 ) 35,463 3,697 Income tax (expense) (4,632 ) (6,064 ) 7,070 NET (LOSS)/INCOME $ (7,772 ) $ 29,399 $ 10,767 Revenues Years Ended December 31, 2023 and December 31, 2022 Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% for the years ended December 31, 2023 and December 31, 2022.
For the year ended December 31, 2024 2023 $ Change % Change REVENUES (in thousands) Management and advisory fees $ 290,218 $ 238,729 $ 51,489 22% Other revenue 6,230 3,005 3,225 107% Total revenues 296,448 241,734 54,714 23% OPERATING EXPENSES Compensation and benefits 155,316 154,286 1,030 1% Professional fees 21,464 12,668 8,796 69% General, administrative and other 28,780 22,584 6,196 27% Contingent consideration expense 160 560 (400 ) (71)% Amortization of intangibles 25,612 29,221 (3,609 ) (12)% Strategic alliance expense 4,496 1,494 3,002 201% Total operating expenses 235,828 220,813 15,015 7% INCOME FROM OPERATIONS 60,620 20,921 39,699 190% OTHER (EXPENSE)/ INCOME Interest expense, net (25,510 ) (21,872 ) (3,638 ) 17% Other (losses)/income (6,747 ) (2,189 ) (4,558 ) 208% Total other (expense) (32,257 ) (24,061 ) (8,196 ) 34% Net income/(losses) before income taxes 28,363 (3,140 ) 31,503 N/A Income tax (expense) (8,696 ) (4,632 ) (4,064 ) 88% NET INCOME/(LOSS) $ 19,667 $ (7,772 ) $ 27,439 N/A Revenues Years Ended December 31, 2024 and December 31, 2023 Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% of average FPAUM for the years ended December 31, 2024 and December 31, 2023.
There was a decrease in 75 goodwill and intangible assets of $29.2 million driven by amortization of intangible assets during the year ended December 31, 2023. Remaining total assets also increased in the same period by $34.4 million primarily due to $21.2 million increase in due from related parties and a $9.9 million increase in prepaid expenses and other assets.
Remaining total assets also increased in the same period by $24.7 million due to $35.9 million increase in due from related parties and accounts receivable offset by a $9.9 million decrease in prepaid expenses and other assets.
For the year ended December 31, 2023 2022 2021 OPERATING EXPENSES (in thousands) Compensation and benefits $ 154,286 $ 94,297 $ 54,755 Professional fees 12,668 12,856 11,508 General, administrative, and other 22,584 18,522 9,870 Contingent consideration expense 560 1,717 3,472 Amortization of intangibles 29,221 26,867 30,431 Strategic alliance expense 1,494 678 152 Total operating expenses $ 220,813 $ 154,937 $ 110,188 Operating Expenses Years Ended December 31, 2023 and December 31, 2022 Total operating expenses increased by $65.9 million, or 43%, to $220.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
For the year ended December 31, 2024 2023 $ Change % Change OPERATING EXPENSES (in thousands) Compensation and benefits $ 155,316 $ 154,286 $ 1,030 1 % Professional fees 21,464 12,668 8,796 69 % General, administrative, and other 28,780 22,584 6,196 27 % Contingent consideration expense 160 560 (400 ) (71 )% Amortization of intangibles 25,612 29,221 (3,609 ) (12 )% Strategic alliance expense 4,496 1,494 3,002 201 % Total operating expenses $ 235,828 $ 220,813 $ 15,015 7 % Operating Expenses Years Ended December 31, 2024 and December 31, 2023 Total operating expenses increased by $15.0 million, or 7%, to $235.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple. The options to repurchase the revenue share are not exercisable until a certain period of time has lapsed per the agreements.
The agreements require ECG to share in certain revenues earned with the third parties and also includes an option for the third parties to sell back the revenue share to ECG at a set multiple. Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple. The options are exercisable starting in July 2025.
Other (expense)/income includes the accrued expenses related to litigation and regulatory activity as discussed in Note 14. 70 Income Tax Benefit/(Expense) Income tax benefit/(expense) is comprised of current and deferred tax benefit/(expense). Current income tax benefit/(expense) represents our estimated taxes to be paid or refunded for the current period.
Other income (loss) includes any income from unconsolidated subsidiaries, interest income earned from bank accounts across management companies, and any accrued expenses related to litigation and regulatory activity as necessary, which would be discussed in Note 13 of our Consolidated Financial Statements. Income Tax Benefit/(Expense) Income tax benefit/(expense) is comprised of current and deferred tax benefit/(expense).
Compensation and benefits expense increased by $60.0 million, or 64%, to $154.3 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase is due to a number of factors. The acquisition of WTI contributed $9.6 million to the increase in compensation expense.
This increase was primarily due to increases in professional fees and general, administrative, and other expenses. Compensation and benefits expense increased by $1.0 million, or 1%, to $155.3 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Professional fees decreased by $0.2 million, or 1%, to $12.7 million primarily driven by a decrease of $1.6 million in legal fees and professional services offset by an increase of $1.4 in audit, tax, and employee placement fees. 72 General, administrative and other increased by $4.1 million, or 22% to $22.6 million, due primarily to the acquisition of WTI as well as additional placement agent fees associated with increased revenues.
General, administrative and other increased by $6.2 million, or 27% to $28.8 million, due to $2.2 million of additional placement agent fees and other expenses associated with increased revenues, $1.4 million increase in marketing efforts, as well as $2.4 million of ongoing enhancements to infrastructure, technology, premises, and security across the Company.
Principal is contractually repaid at a rate of 1.25% on the term loan quarterly effective March 31, 2023. The Revolving Credit Facility has no contractual principal repayments until maturity, which is December 22, 2025 for both facilities.
The New Revolving Facility has no contractual principal repayments until maturity, which is August 1, 2028 for both facilities. As of December 31, 2024, the Term Loan with a balance of $325.0 million is incurring interest at a weighted average Adjusted Term SOFR Rate of 7.68%. As of December 31, 2024, there is no outstanding balance for the Revolver Facility.
Financing Activities Years Ended December 31, 2023 and December 31, 2022 We used a net $42.9 million in cash for financing activities for the year ended December 31, 2023, as compared to cash provided by financing activities of $22.9 million for the year ended December 31, 2022 due to the following factors: (1) net repayments of $0.8 million in 2023 as compared to net borrowings of $77.5 million in 2022 on the Term Loan and Revolver Facility, (2) repurchases of common stock of $18.6 million in 2023 as compared to $22.4 million in 2022, (3) cash settlement of stock options of $12.5 million in 2022, and (4) dividends paid of $14.8 million in 2023 as compared to $10.5 million in 2022.
Financing Activities Years Ended December 31, 2024 and December 31, 2023 We used a net $59.1 million in cash for financing activities for the year ended December 31, 2024, as compared to cash used in financing activities of $42.9 million for the year ended December 31, 2023.
While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts. Management and Advisory Fees The Company earns management fees for asset management services provided to the Funds where the Company has discretion over investment decisions.
Revenue Recognition of Management and Advisory Fees The Company earns management fees for asset management services provided to the Funds where the Company has discretion over investment decisions. The Company primarily earns fees for advisory services provided to clients where the Company does not have discretion over investment decisions.
For certain funds, management fees are initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term. Additionally, the management fee may step down for certain funds depending on the contractual arrangement. Advisory services are generally based upon fixed amounts and billed quarterly.
Asset management fees are based on the contractual terms of each contract which differ, such as fees calculated based on committed capital or deployed capital, fees initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term, fees that step down during specified periods of the fund's term, or in limited instances, fees based on assets under management.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe annual interest rate on the Term Loan is based on SOFR, subject to a floor of 0.10%, plus 2.00%. On December 31, 2023, the interest rate on these borrowings was 2.1% + SOFR.
Biggest changeThe annual interest rate on the Term Loan is based on SOFR, subject to a floor of 0.10%, plus 2.50%. On December 31, 2024, the interest rate on these borrowings was 2.6% + SOFR. The Company remains exposed to interest rate risk if there is a shift in the environment.
We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 80
We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 70 71
We estimate that a 100-basis point increase in the interest rate would result in an approximately $2.0 million increase in interest expense related to the loan over the next 12 months.
We estimate that a 100-basis point increase in the interest rate would result in an approximately $3.4 million increase in interest expense related to the loan over the next 12 months.
Fair value of the financial assets and liabilities of our specialized investment vehicles may fluctuate in response to changes in the value of underlying assets, and interest rates. Interest Rate Risk As of December 31, 2023, we had $201.9 million in outstanding principal in Term debt under our Term Loan and Revolving Credit Facility.
Fair value of the financial assets and liabilities of our specialized investment vehicles may fluctuate in response to changes in the value of underlying assets, and interest rates. Interest Rate Risk As of December 31, 2024, we had $325.0 million in outstanding principal in Term Loans under our Term Loan and $0 under our Revolving Credit Facility.

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