PX 2026 Q2 Earnings Call

Thank you all for joining our call this morning. With us today, we have Luke Sarsfield, Chairman and Chief Executive Officer, and Amanda Coussens, EVP, Chief Financial Officer. After our prepared remarks, Arjay Jensen, EVP, Head of M&A and Strategy, and Sarita Narson Jairath, EVP, Global Head of Client Solutions, will also be available for the Q&A session. Before we begin, I'd like to remind everyone that this conference call, as well as the presentation slides, may include forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current plans, estimates, and expectations and are inherently uncertain.

Actual results for future periods may differ materially from those expressed or implied by forward-looking statements due to a number of risks and uncertainties that are described in greater detail in our earnings release and in our periodic reports filed from time to time with the SEC. The forward-looking statements included are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements as a result of new information or future events, except as otherwise required by law. Please note that during this call, we'll reference certain non-GAAP measures that we believe can be useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measures is available in the presentation slides posted on our website and in our filings with the SEC.

In addition, we will provide certain historical performance metrics for our funds, and further details can be found in the presentation slides. Of course, past performance does not guarantee future results. Before I turn it over to Luke, I want to spend a minute sharing my perspective on why I'm so excited to be at Ridgepost Capital. I spent 12-plus years in sell-side equity research covering financials, specifically the alternative asset managers and BDCs. I've interacted with a number of different companies and management teams across the industry. What stood out to me? First, the people, culture, and collaboration. Second, the durability of the model. Ridgepost Capital is one of the only pure-play capital-light management fee-based alternative asset managers in the public markets. Third, which I think is most important, the firm continues to deliver impressive investment performance. I'm thrilled to be here.

I look forward to working with the team as we continue to tell and educate the market on the Ridgepost Capital story, and I'm excited to interact with all of our stakeholders in the coming months and quarters. With that, I'll turn the call over to Luke.

Thank you, Brian. Good morning, everyone, and thank you for joining our call today. I'd like to start by welcoming Brian to Ridgepost Capital. Brian recently joined Ridgepost Capital to lead our investor relations efforts. Brian comes from Citizens, where he was a senior equity research analyst covering the alternative asset management and BDC sectors. His deep knowledge of our industry and strong relationships within the investment community make him an excellent addition to our team as we continue to prioritize transparency, accessibility, and proactive engagement with our shareholders. On an unrelated note, I did want to share some very sad news relating to the Ridgepost Capital family.

One of our long-serving board members, Robert Stewart Jr., unexpectedly passed away recently. On behalf of everyone at Ridgepost Capital, we extend our deepest condolences to Rob's family and loved ones during this very difficult time. Rob was a dedicated supporter of Ridgepost Capital and a valued member of our board, whose guidance, insight, and friendship had a meaningful impact on our company and the people who worked alongside him. He will be greatly missed by all of us. Now, turning to 2Q earnings, Ridgepost Capital delivered another strong quarter of results as our balanced and durable model continues to perform well amid a fluid operating environment. As a reminder, this was our first full quarter rebranded as Ridgepost Capital, formerly known as P10.

We reached two new milestones in the second quarter as AUM surpassed $50 billion at period end, up more than $10 billion, or approximately 25% year-over-year, while fee-paying AUM totaled nearly $35 billion at quarter end, up 19% year-over-year. Importantly, we continue to experience very strong investment performance across our strategies. In the past, we've aggregated investment performance across our key funds to highlight the underlying strength and differentiated returns we are delivering for all of our stakeholders. We thought it would be helpful to update those numbers and share them with you today. Looking at the net IRRs for funds that are greater than five years old, private equity primary funds have averaged 14.1%, while secondary and co-invest funds have averaged 23.1%.

Our GP stakes funds at Bonaccord have averaged 18.9%, the flagship funds at our venture strategy, TrueBridge, have averaged 18.7%. Our private credit strategies have averaged 10.9%. Moving on to fundraising and deployment activity. Second quarter trends remained healthy. We were in the market with about 20 funds, we raised a meaningful amount of investor commitments across each of our investment verticals. We raised and deployed $1.1 billion of capital in the quarter, bringing the trailing four quarter total to nearly $5 billion. We are still in the market with multiple funds across most of our strategies, including our GP stake strategy, Bonaccord, our NAV lending strategy, Hark Capital, our venture capital strategy, TrueBridge, our lower middle market private equity strategies, RCP and Qualitas, as well as our project finance and small business lending strategy, Enhanced Capital. I do want to spend a minute on TrueBridge.

We continue to see strong demand for our venture capital offerings as investors are increasingly focused on the growing dispersion in venture returns. This is why manager selection remains so important, TrueBridge's track record of delivering differentiated performance for investors for nearly two decades continues to resonate in the market. To that point, TrueBridge has raised and deployed approximately $1.5 billion in the first half of this year. Bottom line, we believe the trajectory of our fundraising and capital deployment speaks directly to the strong demand we continue to see from LPs, the diversification of offerings across our strategies, as well as our ability to deploy capital consistently and prudently.

In the first half of 2026, we organically raised and deployed over $3 billion of capital, consistent with our expectations heading into the year, which we had contemplated in our $10 billion fundraising and deployment target for 2026 and 2027. As previously highlighted, underlying growth in firm-wide fee-paying AUM remains strong as year-over-year growth totaled 19% in the second quarter, giving us comfort and line of sight into achieving our 2029 year-end fee-paying AUM target of $50 billion. To that point, at the time of the investor day in September 2024 when we disclosed this target, the implied fee-paying AUM CAGR was approximately 15%. We're pleased to report that our fee-paying AUM CAGR through the second quarter of 2026 stands at 20%. I also want to highlight the growing contribution from direct co-investment and secondary funds or assets that are not in fund-to-fund vehicles.

Over the past four quarters, these funds have raised and deployed over $2.7 billion of capital, representing over 55% of firm-wide capital raising and deployment activity. Moving on, we've talked about this at length in prior quarters, I think it's important to re-highlight the underlying structure of our business. We believe we have one of the most durable business models in the industry, specifically as we operate a capital-light third-party asset management business, our composition of earnings is entirely driven by FRE, with no direct exposure to realizations. Notably, within FRE, approximately 98% of fee-related revenue was generated from management and advisory fees in the second quarter. There was very little contribution from fee-related performance fees and other non-fee related revenue streams, which tend to be more cyclical in nature.

We primarily earn these contractual management fees on committed or deployed AUM that sit within long-dated and capital-committed investment strategies, meaning our fee-related revenue and fee-related earnings have little exposure to movements in NAV, while just less than 2% of our fee-paying AUM is subject to quarterly redemptions. On June 22nd, we completed the Stellus acquisition, and we are incredibly excited to have the Stellus team officially a part of Ridgepost Capital. We've spent a reasonable amount of time on our previous two calls reviewing the strategic merits and financial profile of the business and the transaction. I want to spend a moment today on our ongoing integration efforts and what we are doing to bring that strategic vision to life.

You'll remember that we've talked about the opportunity to increase Stellus' origination funnel, given the strong fit within our GP sponsor ecosystem focused on the middle and lower middle market. What are we doing to facilitate that? Well, Stellus' senior originators recently spent time in person with senior professionals at RCP as these teams begin collaborating and identifying ways to do exactly that. Regarding the longer-term origination opportunity with Stellus and RCP. If over time, Stellus can capture 10%-20% of the demand from the equity capital deployed annually within RCP's network of private equity GPs, it could produce an additional $500 million-$1 billion of incremental annual commitments across Stellus.