PX Q2 2025: Fee-Paying AUM Jumps 21% as Secondary and Credit Momentum Accelerate Platform Scale

2025-08-07 | By EarningsIQ Research

P10’s Q2 delivered a record-setting $1.9 billion in organic fundraising and a 21% surge in fee-paying AUM, fueled by secondary and credit strategies and integration of the Qualitas acquisition. Management’s focus on cross-platform collaboration and product expansion, including Evergreen and NAV lending, is broadening the investor base and deepening client engagement. With 80% of the annual fundraising target already met and strategic buybacks accelerated, P10 is leveraging secular tailwinds in the middle and lower middle markets for durable growth.

Summary

• Secondary and Credit Expansion: New funds and cross-platform collaboration are driving accelerated asset growth.
• Buybacks Pulled Forward: Management acted on stock dislocation, signaling confidence in intrinsic value.
• Product Innovation Momentum: Evergreen and NAV lending strategies are increasing investor diversification and reach.

Performance Analysis

P10’s Q2 marked a decisive step-up in organic fundraising and asset growth, with $1.9 billion in gross new fee-paying assets and a further $1 billion added from the Qualitas Funds acquisition. This pushed total fee-paying AUM to $28.9 billion, up 21% year over year, and highlighted the platform’s ability to scale even as larger private equity peers face fundraising headwinds. The secondary business, notably RCP’s Secondary Fund 5, raised nearly $1 billion, while the launch of Enhanced Capital’s Evergreen Fund and robust deployment in credit (especially Hark Capital’s NAV lending) underpinned broad-based platform momentum.

Financially, the quarter saw a 6% YoY increase in fee-related revenue (FRR), and a 5% rise in fee-related earnings (FRE), with margin discipline aided by delayed expenses that will partially reverse in the second half. Adjusted net income (ANI) fell 7% YoY, primarily due to higher interest expense from the Qualitas deal, while net income was also down. Management highlighted that operating expenses rose modestly, mainly from integration costs, and expects margins to normalize to the mid-40s as delayed compensation and G&A expenses are realized. Share buybacks reached $41 million year-to-date, with an additional $25 million authorization, reflecting opportunistic capital return amid stock price dislocation.

• Secondary Fundraising Acceleration: RCP Secondary Fund 5 and TrueBridge Secondaries Fund 2 are capturing LP demand for liquidity and diversification.
• Credit Platform Scale: Hark Capital’s NAV lending and Enhanced Capital’s Evergreen Fund are driving new AUM and product innovation.
• Expense Timing Tailwind: Margins benefited from delayed expenses, but normalization is expected in H2 as costs catch up.

Platform breadth and product innovation are enabling P10 to capture secular growth, though higher leverage and integration costs require monitoring as the firm continues to pursue disciplined M&A and capital return.

Executive Commentary

Strategic Positioning

1. Secondary and Credit Product Leadership

P10’s secondary and credit strategies are now central growth engines, with RCP’s Secondary Fund 5 approaching $1 billion and TrueBridge expanding its secondaries lineup. Hark Capital’s NAV lending, NAV lending, a loan secured by a fund’s net asset value, is scaling rapidly, with Hark 4 now the primary vehicle and a successor fund planned for later this year. Enhanced Capital’s Evergreen Fund, Evergreen Fund, an open-ended vehicle with no fixed maturity, is broadening access to differentiated credit for both institutional and high-net-worth channels.

2. Cross-Platform Integration and Globalization

The Qualitas acquisition is unlocking new cross-border product opportunities, such as Qualitas Funds US1, allowing Spanish investors to access US lower middle market deals sourced by RCP. Cross-platform collaboration is accelerating, with joint mandates and integrated solutions now possible for global RFPs spanning the US and Europe. This synergy is a force multiplier for both organic and inorganic growth.

3. Investor Base Diversification and Distribution Expansion

P10’s investor base has grown to over 4,900, with a strong tilt toward wealth managers and high-net-worth individuals. Strategic efforts are underway to deepen institutional relationships and expand into insurance, pension, endowment, and sovereign wealth channels. The platform’s ability to cross-sell strategies is improving, with an increasing share of LPs now investing in multiple products.

4. Capital Allocation Discipline and M&A Strategy

Management pulled forward buybacks in Q2, repurchasing 2.5 million shares as the stock traded at depressed levels. M&A remains selective and disciplined, with a focus on strategic fit, cultural alignment, and financial capacity. Both cash and stock are considered for deals, and management maintains ample credit facility headroom for targeted acquisitions. Alternative structures such as partnerships and staged investments are under consideration to facilitate strategic growth.

5. Operational Scale and Margin Management

Operating leverage is evident as the platform scales, but margin expansion in Q2 was flattered by expense delays. Management expects compensation and G&A to normalize in H2, with peer-leading margins in the mid-40s targeted for the full year. Integration of Qualitas is progressing and expected to drive further scale benefits across the platform.

Key Considerations

P10’s Q2 performance highlights the firm’s ability to capture secular growth in less crowded private market segments, while executing on product, distribution, and capital allocation strategies.

Key Considerations:

• Secular Tailwinds in Middle Market: Lower competition, smaller fund sizes, and better liquidity are driving fundraising resilience compared to larger PE peers.
• Product Breadth Fuels Cross-Sell: New offerings like Evergreen and NAV lending are deepening relationships and expanding wallet share with existing and new LPs.
• Expense Normalization Watch: Margin expansion in Q2 was partly due to delayed expenses; investors should expect cost catch-up in H2.
• Buyback Strategy Signals Confidence: Accelerated repurchases during stock dislocation reflect management conviction in long-term intrinsic value.
• M&A Capacity Managed Prudently: Ample credit and willingness to use stock enable continued disciplined dealmaking without overextending leverage.

Risks

Expense normalization in H2, including delayed compensation and G&A, will pressure margins and could weigh on near-term earnings optics. Integration risk from the Qualitas acquisition remains, especially as new cross-border products and mandates are rolled out. Higher leverage from recent acquisitions and buybacks increases sensitivity to interest expense and liquidity. Competitive dynamics in secondaries and credit could intensify, and any slowdown in middle market M&A or LP allocations would impact fundraising momentum.

Forward Outlook

For Q3 2025, management expects:

• Fundraising pace to moderate from Q2’s record, but remain strong relative to historical norms.
• Operating expenses to increase as delayed compensation and G&A are recognized.

For full-year 2025, management maintained guidance:

• Peer-leading FRE margins in the mid-40s.
• Step-downs and expirations at the upper end of the 5-7% range of fee-paying AUM, with two-thirds realized in H1.

Management highlighted continued product innovation and cross-platform collaboration as key drivers for the back half of the year, as well as a focus on disciplined M&A and capital return.

• Hark Capital successor fund launch expected later in 2025.
• Ongoing integration and cross-sell initiatives with Qualitas and other platform strategies.

Takeaways

P10’s Q2 demonstrates the power of platform breadth, product innovation, and disciplined capital allocation in driving durable asset and earnings growth, even as sector peers face fundraising and liquidity headwinds.

• Platform Expansion Drives Growth: Secondary and credit strategies are scaling rapidly, with cross-platform integration unlocking new opportunities and efficiencies.
• Margin and Expense Management in Focus: Investors should monitor expense catch-up in H2, as well as the impact of higher leverage on earnings and flexibility.
• Product and Distribution Innovation Key for Future: Evergreen, NAV lending, and cross-border offerings position P10 for continued growth and investor diversification.

Conclusion

P10’s Q2 results validate the firm’s focus on middle and lower middle market opportunities, with record fundraising, product innovation, and strategic capital allocation driving platform scale. Margin normalization and integration execution remain key watchpoints, but the business is well-positioned to capitalize on secular growth and investor demand for differentiated private market access.

Industry Read-Through

P10’s success in middle and lower middle market private assets, especially in secondaries and credit, highlights the resilience of these segments versus the challenged fundraising environment faced by larger asset managers. Evergreen and NAV lending products are gaining traction, signaling broader industry demand for liquidity, flexibility, and access among both institutional and high-net-worth investors. Cross-platform integration and global product launches underscore the value of scale and synergy in alternative asset management, suggesting that managers able to offer multi-strategy, cross-border solutions will be best positioned to capture wallet share and new capital in a competitive market.

PX Financials Asset Management Private Equity Credit Secondaries Evergreen Buybacks