P10 Inc

Previous wording

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. 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 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. 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. Alpert resigned as Executive Chairman and the board of the Company appointed CEO and President Mr. Sarsfield to Chairman of the Board. In connection with Mr. Alpert's resignation as Executive Chairman, the Company and Mr. Alpert agreed to the early termination of Mr. Alpert's Transition Agreement. The associated expenses were recorded in compensation and benefits on the Consolidated Statements of Operations.

Current wording

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. 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 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. 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. Alpert resigned as Executive Chairman and the board of the Company appointed CEO and President Mr. Sarsfield to Chairman of the Board. In connection with Mr. Alpert's resignation as Executive Chairman, the Company and Mr. Alpert agreed to the early termination of Mr. Alpert's Transition Agreement. The associated expenses were recorded in compensation and benefits on the Consolidated Statements of Operations. Mr. Webb's Transition Agreement terminated in accordance with its terms on October 23, 2024.

Previous wording

Private Equity Solutions (PES). 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. The PES investment team, which is comprised of 44 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 2,050+ investors, 220+ fund managers, 550+ private market funds and 4,400+ portfolio companies. We have 54 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 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 June 30, 2024, PES managed $12.4 billion of Fee-Paying Assets Under Management ("FPAUM").

Current wording

Private Equity Solutions (PES). 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. The PES investment team, which is comprised of 43 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 2,120+ investors, 285+ fund managers, 550+ private market funds and 5,100+ portfolio companies. 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. 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 5,880 investment firms, 10,700 funds, 48,000 individual transactions, 32,000 private companies and 334,000 financial metrics. As of September 30, 2024, PES managed $13.4 billion of Fee-Paying Assets Under Management ("FPAUM").

Previous wording

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. 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 1,900+ investors, 90+ fund managers, 90+ direct investments, 370+ private market funds and 13,100+ portfolio companies. 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. As of June 30, 2024, VCS managed $6.3 billion of FPAUM.

Current wording

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. The VCS investment team, which is comprised of 15 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 1,900+ investors, 90+ fund managers, 95+ direct investments, 385+ private market funds and 13,100+ portfolio companies. 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. As of September 30, 2024, VCS managed $6.4 billion of FPAUM.

Previous wording

Impact Investing Solutions (IIS). Under IIS, we make equity, tax equity, and debt investments in impact initiatives across North America. 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. The IIS investment team, which is comprised of 17 investment professionals with an average of 23+ years of experience, has deep and long-standing relationships in the impact market which it has cultivated over the past 20 years, including deploying capital on behalf of over 119 investors. We currently have 36 active investment vehicles. 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 June 30, 2024, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.0 billion. Of the total AUM, impact assets represent $3.8 billion invested in over 950 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. As of June 30, 2024, IIS managed $1.9 billion of FPAUM.

Current wording

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. PCS also provides loans to mid-life, growth equity, venture and other funds backed by the unrealized investments at the fund level and provide financing for companies that would otherwise require equity. The PCS investment team, which is comprised of 55 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 420+ investors across 50 active investment vehicles and 1,800+ portfolio companies with $9.8+ billion capital deployed. 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 655 credit opportunities annually. We currently maintain 80+ active sponsor relationships and have 120+ platform investments. Within PCS, the Company has investments that target 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. 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 September 30, 2024, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $6.3 billion. Of the total AUM, impact assets represent $4.2 billion invested in over 950 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. As of September 30, 2024, PCS managed approximately $5.1 billion of FPAUM.

Previous wording

During 2022, the Board approved a program to repurchase up to $40.0 million of outstanding shares of our Class A and Class B common stock. Upon completion of purchases under the prior authorizations, on February 27, 2024, the Board of Directors authorized an additional $40.0 million for repurchases under the Stock Repurchase Program. On August 6, 2024, the Board of Directors authorized an additional $12.0 million for repurchases under the Stock Repurchase Program. These shares may be repurchased from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades, in accordance with Rule 10b5-1 trading plans and/or through other legally permissible means. 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 June 30, 2024, $71.9 million has been spent to buy back shares under this program.

Current wording

During 2022, the Board approved a program to repurchase up to $40.0 million of outstanding shares of our Class A and Class B common stock. Upon completion of purchases under the prior authorizations, on February 27, 2024, the Board of Directors authorized an additional $40.0 million for repurchases under the Stock Repurchase Program. On August 6, 2024, the Board of Directors authorized an additional $12.0 million for repurchases under the Stock Repurchase Program. These shares may be repurchased from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades, in accordance with Rule 10b5-1 trading plans and/or through other legally permissible means. 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 September 30, 2024, $78.1 million has been spent to buy back shares under this program.

Previous wording

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 customizable 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. We receive a fee stream that is typically based on our investor’s committed, locked-in capital; capital commitments that typically average ten to fifteen years, though they may vary by fund and strategy. We offer primary investment funds across private equity and venture capital solutions. Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our primary funds comprise approximately $13.4 billion of our FPAUM as of June 30, 2024.

Current wording

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 customizable 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. We receive a fee stream that is typically based on our investor’s committed, locked-in capital; capital commitments that typically average ten to fifteen years, though they may vary by fund and strategy. We offer primary investment funds across private equity and venture capital solutions. Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our primary funds comprise approximately $13.7 billion of our FPAUM as of September 30, 2024.

Previous wording

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. P10’s direct and co- investment funds include both commingled investment vehicles with multiple investors as well as customizable separate accounts, which typically include one investor. Capital committed to direct investments and co-investments is typically invested immediately, thereby advancing the timing of expected returns on investment. 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. Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our direct investing platform comprises approximately $8.8 billion of our FPAUM as of June 30, 2024.

Current wording

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. P10’s direct and co- investment funds include both commingled investment vehicles with multiple investors as well as customizable separate accounts, which typically include one investor. Capital committed to direct investments and co-investments is typically invested immediately, thereby advancing the timing of expected returns on investment. 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. Often, the fees are structured such that they step down, or decrease, over the life of the fund. Our direct investing platform comprises approximately $9.6 billion of our FPAUM as of September 30, 2024.

Previous wording

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. 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.

Current wording

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. Despite high 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.

Previous wording

Our total 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 three months ended June 30, 2024 and June 30, 2023. For the three months ended June 30, 2024 compared to the three months ended June 30, 2023, revenues increased by $8.6 million or 14% due to organic FPAUM growth across Bonaccord, Enhanced, and TrueBridge.

Current wording

Our total 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 three months ended September 30, 2024 and September 30, 2023. For the three months ended September 30, 2024 compared to the three months ended September 30, 2023, revenues increased by $15.3 million or 26% due to organic FPAUM growth across Bonaccord, Enhanced, RCP, and WTI.

Previous wording

Management and advisory fees increased by $6.8 million, or 11%, to $68.5 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 due primarily to organic FPAUM growth generating revenues of $8.6 million at Bonaccord, Enhanced, and TrueBridge. A decrease in catch-up fees at RCP for $2.0 million offset this increase in management fee revenue. Catch-up fees for the three months ended June 30, 2024 were $6.0 million of the $68.5 million in management and advisory fees associated with the fund closings at Bonaccord, TrueBridge, and RCP.

Current wording

Management and advisory fees increased by $14.5 million, or 25%, to $72.6 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 due primarily to organic FPAUM growth generating revenues of $14.7 million at Bonaccord, Enhanced, RCP and WTI. Catch-up fees for the three months ended September 30, 2024 were $6.2 million of the $72.6 million in management and advisory fees associated with the fund closings at Bonaccord and RCP.

Previous wording

Other revenues increased by $1.8 million or 219% to $2.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 driven by $1.8 million of recognized carried interest income in other revenue at RCP from an uncommon pre-acquisition legacy managed fund.

Current wording

Other revenues increased by $0.8 million or 91% to $1.6 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 driven by $0.6 million increase in ancillary elements of our business. Additionally, an increase of $0.2 million of interest income in other revenue at RCP.

Previous wording

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 six months ended June 30, 2024 and June 30, 2023. For the six months ended June 30, 2024 compared to the six months ended June 30, 2023, revenues increased by $17.5 million or 15% primarily due to organic FPAUM growth across Bonaccord, Enhanced, and TrueBridge.

Current wording

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 nine months ended September 30, 2024 and September 30, 2023. For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, revenues increased by $32.8 million or 18% primarily due to organic FPAUM growth across Bonaccord, Enhanced, RCP, WTI, and TrueBridge.

Previous wording

Management and advisory fees increased by $15.4 million, or 13%, to $133.6 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 due to organic FPAUM growth at Bonaccord, Enhanced, and TrueBridge of $17.7 million offset slightly by a decrease of $2.3 million in management fees at RCP primarily due to a decrease in catch-up fees. Catch-up fees for the six months ended June 30, 2024 were $13.8 million associated with the fund closings at Bonaccord, TrueBridge and RCP.

Current wording

Management and advisory fees increased by $29.9 million, or 17%, to $206.2 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 due to organic FPAUM growth at Bonaccord, Enhanced, WTI, and TrueBridge of $30.2 million offset slightly by a decrease of $0.7 million in management fees at Five Points. Catch-up fees for the nine months ended September 30, 2024 were $20.0 million associated with the fund closings at Bonaccord, TrueBridge and RCP.

Previous wording

Other revenues increased by $2.1 million or 143% to $3.6 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 primarily driven by $1.8 million of recognized carried interest income from an uncommon pre-acquisition legacy managed fund in other revenue and an increase of $0.4 million of interest income in other revenue at RCP.

Current wording

Other revenues increased by $2.9 million or 124% to $5.2 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily driven by $2.0 million of recognized carried interest income from an uncommon pre-acquisition legacy managed fund in other revenue and an increase of $0.6 million of interest income in other revenue at RCP.

Previous wording

Total operating expenses increased by $2.1 million, or 4%, to $54.2 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This increase was primarily due to an increase in general, administrative, and other expenses.

Current wording

Total operating expenses increased by $6.9 million, or 12%, to $65.4 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This increase was primarily due to an increase in professional fees as well as general, administrative, and other expenses.

Previous wording

Compensation and benefits expense was unchanged for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to a change of estimate for timing of achieving the earnout payment related to the acquisition of WTI, which prospectively adjusted recognition of the expense and resulted in $2.8 million decrease for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Additionally, there was a decrease in severance expense of $0.9 million and a decrease in stock compensation of $1.4 million primarily driven by remeasurement for the fair value of the Bonaccord Units and Hark Units related to the acquisition of Bonaccord and Hark. In 2023, the Hark Units were fully earned and recognized, therefore, there was no correlating expense in 2024 associated with the Hark Units. Moreover, the Bonaccord Units, which are recognized using the tranche method, had a decrease in expense for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. These decreases were offset by a $5.1 million increase related to increases in headcount and associated benefits across the Company as well as merit-based salary raises to retain and motivate talent across the Company.

Current wording

Compensation and benefits expense was relatively unchanged for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. There was a decrease in severance expense of $2.3 million and a decrease in stock compensation of $1.3 million primarily driven by a decrease in management stock compensation expense acceleration related to the executive transition that occurred in October 2023 offset by an increase in the remeasurement for the fair value of the Bonaccord Units related to the acquisition of Bonaccord. The Bonaccord Units, which are recognized using the tranche method, had an increase in expense for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. These decreases were offset by a $1.8 million increase in profit and revenue share expense at Bonaccord and $1.3 million increase related to increases in headcount and associated benefits across the Company as well as merit-based salary raises to retain and motivate talent across the Company.

Previous wording

Professional fees increased by $0.5 million, or 18%, to $3.5 million. The primary increase in professional fees for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is driven by an increase of $0.8 million in legal fees associated with the Company's transitions related to turnover at the management level, office locations, policies, as well as normal course of business such as filings and due diligence for acquisitions, which was slightly offset by the drop off of $0.3 legal fees associated with Enhanced's Oregon DOJ matter in the second quarter of 2023.

Current wording

Professional fees increased by $5.8 million, or 173%, to $9.2 million. The primary increase in professional fees for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 is primarily driven by an increase in professional and legal fees associated with the Company's debt refinancing as well as the Company's transitions related to turnover at the management level, office locations, policies, as well as normal course of business such as filings and due diligence for acquisitions.

Previous wording

General, administrative, and other increased by $2.0 million, or 39%, to $7.0 million, due primarily to $0.6 million increase of placement agent fees at Hark, $0.1 million increase in rent at TrueBridge, $0.1 million increase in premises and utilities expense, $0.3 million increase in marketing efforts, $0.3 million increase in conferences, travel, and entertainment expenses, as well as $0.4 million ongoing enhancements to infrastructure, technology, and security across the Company.

Current wording

General, administrative, and other increased by $1.3 million, or 24%, to $6.6 million, due primarily to $0.5 million increase of placement agent fees at Hark, $0.4 million increase in marketing efforts, as well as $0.4 million ongoing enhancements to infrastructure, technology, and security across the Company.

Previous wording

Total operating expenses increased by $3.7 million, or 4%, to $108.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This increase was primarily due to increases in compensation and benefits, general, administrative and other expense, and strategic alliance expense offset slightly by a decrease in amortization of intangibles.

Current wording

Total operating expenses increased by $10.6 million, or 6%, to $173.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This increase was primarily due to increases in compensation and benefits, general, administrative and other expense, professional fees, and strategic alliance expense offset slightly by a decrease in amortization of intangibles.

Previous wording

Compensation and benefits expense increased by $1.4 million, or 2%, to $73.4 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was driven by $8.3 million of increases in headcount and associated benefits across the Company as well as merit-based salary raises to retain and motivate talent across the Company. This increase was offset by change of estimate for timing of achieving the earnout payment related to the acquisition of WTI, which prospectively adjusted recognition of the expense and resulted in $5.7 million decrease for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Additionally, there was a decrease in severance expense of $0.9 million and a decrease in stock compensation of $1.8 million, of which $5.3 million decrease relates to remeasurement for the fair value of the Bonaccord Units and Hark Units related to the acquisition of Bonaccord and Hark offset by $3.8 million increase related to management separation agreements. In 2023, the Hark Units were fully earned and recognized, therefore, there was no correlating expense in 2024 associated with the Hark Units. Moreover, the Bonaccord Units, which are recognized using the tranche method, had a decrease in expense for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Compensation and benefits expense increased by $1.8 million, or 2%, to $115.9 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was driven by $15.9 million of increases in headcount and associated benefits across the Company as well as merit-based salary raises to retain and motivate talent across the Company. This increase was offset by change of estimate for timing of achieving the earnout payment related to the acquisition of WTI, which prospectively adjusted recognition of the expense and resulted in $8.6 million decrease for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Additionally, there was a decrease in severance expense of $3.3 million and a decrease in stock compensation of $3.1 million, of which $2.1 million decrease relates to remeasurement for the fair value of the Bonaccord Units and Hark Units related to the acquisition of Bonaccord and Hark and a decrease of $1.0 million related to management stock award accelerations in 2023 related to the Executive Transition in October 2023. In 2023, the Hark Units were fully earned and recognized, therefore, there was no correlating expense in 2024 associated with the Hark Units. Moreover, the Bonaccord Units, which are recognized using the tranche method, had a decrease in expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Professional fees increased by $0.5 million, or 7%, to $7.3 million. The primary driver for the increase in professional fees for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 is an increase of $1.0 million legal expenses associated with the Company's transitions related to turnover at the management level, office locations, policies, as well as normal course of business such as filings and due diligence for acquisitions, which was slightly offset by a decrease in audit and tax services incurred in the six months ended June 30, 2024.

Current wording

Professional fees increased by $6.3 million, or 62%, to $16.5 million. The primary driver for the increase in professional fees for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is an increase of $5.0 million in professional and legal expenses associated with the Company's debt refinancing and the Company's transitions related to turnover at the management level, office locations, policies, as well as normal course of business such as filings and due diligence for acquisitions. Additionally, a $1.1 million increase related to audit, tax, and compliance services provided to the Company.

Previous wording

General, administrative and other increased by $3.2 million, or 32%, to $13.1 million, due to $0.8 million increase of placement agent fees, $0.2 million increase of rent, $0.2 million increase of consulting expense, $0.5 million increase in marketing efforts, $0.4 million increase in conferences, travel, and entertainment expenses, and $0.6 million increase for ongoing enhancements to infrastructure, technology, and security across the Company.

Current wording

General, administrative and other increased by $4.5 million, or 29%, to $19.7 million, due to $1.1 million increase of placement agent fees, $0.3 million increase of rent, $0.9 million increase in marketing efforts, $0.6 million increase in conferences, travel, and entertainment expenses, and $1.1 million increase for ongoing enhancements to infrastructure, technology, and security across the Company.

Previous wording

Contingent consideration expense decreased by $0.3 million, to $0.1 million, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. This was driven by remeasurement of contingent consideration payable in connection with the acquisitions of Hark and Bonaccord. The Hark contingent consideration was fully earned and paid in 2023 and the Bonaccord contingent consideration remaining fair value is $5.6 million as of June 30, 2024.

Current wording

Contingent consideration expense decreased by $0.4 million, to $0.2 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This was driven by remeasurement of contingent consideration payable in connection with the acquisitions of Hark and Bonaccord. The Hark contingent consideration was fully earned and paid in 2023 and the Bonaccord contingent consideration is fully earned as of September 30, 2024 and has a remaining fair value is $4.3 million as of September 30, 2024.

Previous wording

Amortization of intangibles decreased by $1.7 million, or 12%, to $12.9 million, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. This is due to decreases at ECG, RCP, and TrueBridge. The decrease at ECG is driven by unique syndication contracts and advisory contracts' amortization schedule, which is based on projected revenues at the time of acquisition. The decreases at RCP and TrueBridge are driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition.

Current wording

Amortization of intangibles decreased by $2.6 million, or 12%, to $19.3 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This is due to decreases at ECG, RCP, and TrueBridge. The decrease at ECG is driven by unique syndication contracts and advisory contracts' amortization schedule, which is based on projected revenues at the time of acquisition. The decreases at RCP and TrueBridge are driven by asset management fee contracts' amortization schedule, which is based on projected revenues at the time of acquisition.

Previous wording

Other expenses decreased by $0.5 million, or 8%, to $5.7 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was driven by $1.3 million in other income/(losses) related to legal settlements incurred in the three months ended June 30, 2023 compared to no legal settlements incurred in the three months ended June 30, 2024. This was offset by an increase in interest expense of $0.7 million on the credit facility due to higher SOFR rates and a larger outstanding balance on the Revolving Credit Facility in the three months ended June 30, 2024.

Current wording

Other expenses decreased by $1.1 million, or (15)%, to $6.2 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. This decrease was driven by $3.1 million in other income/(losses) related to legal settlements incurred in the three months ended September 30, 2023 compared to no legal settlements incurred in the three months ended September 30, 2024. This was offset by an increase in interest expense of $2.0 million on the credit facility due to higher SOFR rates and a larger outstanding debt balance in the three months ended September 30, 2024.

Previous wording

Other expenses decreased by $0.5 million, or 4%, to $10.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. This decrease was driven by $1.3 million in other income/(losses) related to legal settlements incurred in the three months ended June 30, 2023 compared to no legal settlements incurred in the three months ended June 30, 2024 and $0.5 million increase in other income primarily as a result of interest earned for money market accounts. This was offset by an increase in interest expense of $1.3 million due to higher SOFR rates and a larger outstanding balance on the Revolving Credit Facility for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

Other expenses decreased by $1.6 million, or 8%, to $17.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. This decrease was driven by $2.3 million in other income/(losses) related to legal settlements incurred in the nine months ended September 30, 2023 compared to no legal settlements incurred in the nine months ended September 30, 2024 and $1.7 million increase in other income driven by interest earned for money market accounts and income from unconsolidated subsidiaries. This was offset by an increase in interest expense of $2.5 million due to higher SOFR rates and a larger average outstanding debt balance for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Income tax expense increased by $1.8 million to $3.7 million for the three months ended June 30, 2024 compared to the expense of $2.0 million for the three months ended June 30, 2023. The increase was primarily due to additional income during the period.

Current wording

Income tax expense increased by $3.9 million to $6.7 million for the nine months ended September 30, 2024 compared to an expense of $2.8 million for the nine months ended September 30, 2023. The increase was primarily due to additional income during the period.

Previous wording

FPAUM remained flat by staying at $23.8 billion for the three months ended June 30, 2024, due primarily to an increase in capital raised and deployed from our private equity and venture capital solutions being offset by expirations and scheduled fee stepdowns. FPAUM increased by $0.6 billion, or 2.5%, to $23.8 billion for the six months ended June 30, 2024, due primarily to an increase in capital raised and deployed from our private equity and venture capital solutions and offset by stepdowns and expirations. 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.

Current wording

FPAUM increased by $1.1 million to $24.9 million for the three months ended September 30, 2024, due primarily to an increase in capital raised from our private equity and venture capital solutions being offset by scheduled fee stepdowns. FPAUM increased by $1.7 billion, or 7.2%, to $24.9 billion for the nine months ended September 30, 2024, due primarily to an increase in capital raised from our private equity and venture capital solutions. 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.

Previous wording

The cash income taxes paid during the three months ended June 30, 2024 and June 30, 2023 as well as during the six months ended June 30, 2024 and June 30, 2023 differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.

Current wording

The cash income taxes paid during the three months ended September 30, 2024 and September 30, 2023 as well as during the nine months ended September 30, 2024 and September 30, 2023 differ significantly from the net income tax expense, which is primarily comprised of deferred tax expense as described in the results of operations.

Previous wording

Cash and cash equivalents remained flat from $32.1 million as of December 31, 2023 to $32.2 million as of June 30, 2024 primarily due to strategic open market repurchases in the open market and the debt draws and repayments associated with the share repurchases. There was a decrease in goodwill and intangible assets of $12.9 million due to amortization of intangibles during the six months ended June 30, 2024. Remaining total assets increased in the same period by $1.9 million. The increase is driven by an increase in accounts receivable and due from related parties which is primarily due to ECG's Advisory Agreement with Enhanced PC and Crossroads. The increase in remaining total assets was offset by a decrease in deferred tax assets, net due to a change in estimates and a decrease in prepaid expenses and other assets, which is primarily due to Enhanced's sale of state tax credits during the six months ended June 30, 2024. Debt obligations increased by $10.8 million which is driven by revolver activity due to common stock repurchases during the six months ended June 30, 2024.

Current wording

Cash and cash equivalents increased from $32.1 million as of December 31, 2023 to $63.3 million as of September 30, 2024 primarily due to the Company's debt refinancing. There was a decrease in goodwill and intangible assets of $19.3 million due to amortization of intangibles during the nine months ended September 30, 2024. Remaining total assets increased in the same period by $11.7 million. The increase is driven by an increase in accounts receivable and due from related parties which is primarily due to ECG's Advisory Agreement with Enhanced PC and Crossroads. The increase in remaining total assets was offset by a decrease in deferred tax assets, net due to utilization of the net operating losses and a decrease in prepaid expenses and other assets, which is primarily due to Enhanced's sale of state tax credits during the nine months ended September 30, 2024. Debt obligations increased by $30.4 million which is driven by the Company's debt refinancing during the nine months ended September 30, 2024.

Previous wording

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.

Current wording

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 or issue new shares as consideration will be critical as we pursue additional business development opportunities and new acquisitions.

Previous wording

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. 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.

Current wording

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. 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. On August 1, 2024, the Company entered into the Amended and Restated Credit Agreement, which provides for a new senior secured revolving credit facility in the amount of $175 million, with a $10 million sublimit for the issuance of letters of credit, and a new senior secured loan facility in the amount of $325 million. The New Credit Facilities are to be used to refinance and replace the credit facilities under the Credit Agreement and for general corporate purposes, including acquisitions.

Previous wording

Both facilities are Term SOFR Loans meaning loans bearing interest based upon the "Adjusted Term SOFR Rate". The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus 2.10%. The Company can elect one or three months for the Revolver Facility and one, three, or six months for the Term Loan. 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.

Current wording

The New Credit Facilities are Term SOFR Loans meaning loans bearing interest based upon the "Adjusted Term SOFR Rate". The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus 2.60%. The Company can elect one or three months for the Revolver Facility and one, three, or six months for the Term Loan. Principal is contractually repaid at a rate of 1.25% on the term loan quarterly effective December 31, 2025. The New Revolving Facility has no contractual principal repayments until maturity, which is August 1, 2028 for both facilities.

Previous wording

As of June 30, 2024, the Term Loan with a balance of $196.6 million is incurring interest at a weighted average Adjusted Term SOFR Rate of 7.43%. As of June 30, 2024, the Revolver Facility is split into fourteen tranches. The total principal outstanding is $106.1 million and the average Adjusted Term SOFR Rate amongst the tranches is 7.43%. The tranches are all incurring interest at a set rate for one, three, or six month periods and are subsequently reset at the current SOFR rate. Refer to Note 11 of the Consolidated Financial Statements for further details provided on the tranches and associated interest periods.

Current wording

As of September 30, 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 September 30, 2024, there is no outstanding balance for the Revolver Facility. Refer to Note 11 of the Consolidated Financial Statements for further details provided on the debt and associated interest periods.

Previous wording

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 June 30, 2024, P10 was in compliance with its financial and other covenants required under the facility. The Company has incurred $11.2 million in interest expense for the six months ended June 30, 2024.

Current wording

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 leverage ratio of less than or equal to 3.50. As of September 30, 2024, P10 was in compliance with its financial and other covenants required under the facility. The Company has incurred $17.5 million in interest expense for the nine months ended September 30, 2024.

Previous wording

The following table reflects our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table reflects our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

The Company’s operating activities generally reflect the Company’s earnings in the respective periods after adjusting for significant non-cash activity, including income of unconsolidated subsidiaries, stock-based compensation, depreciation, amortization, and deferred tax expense, all of which are included in net income. Cash from operating activities increased by $16.6 million, or 57%, to $45.8 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, our net cash provided by operating activities was driven primarily by receipts of management fees and advisory fees, partially offset by payment of operating expenses, which includes professional fees, compensation and benefits, as well as general, administrative and other expenses. Additionally, the six months ended June 30, 2024 was impacted by cash received for the sale of tax credits while the six months ended June 30, 2023 was impacted by repaying deposit liabilities to third parties related to pending tax credit projects.

Current wording

The Company’s operating activities generally reflect the Company’s earnings in the respective periods after adjusting for significant non-cash activity, including income of unconsolidated subsidiaries, stock-based compensation, depreciation, amortization, and deferred tax expense, all of which are included in net income. Cash from operating activities increased by $27.5 million, or 60%, to $73.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. For the nine months ended September 30, 2024 and 2023, our net cash provided by operating activities was driven primarily by receipts of management fees and advisory fees, partially offset by payment of operating expenses, which includes professional fees, compensation and benefits, as well as general, administrative and other expenses. Additionally, the nine months ended September 30, 2024 was impacted by cash received for the sale of tax credits while the nine months ended September 30, 2023 was impacted by repaying deposit liabilities to third parties related to pending tax credit projects.

Previous wording

The cash used in investing activities increased by $0.5 million, or 81%, to $1.1 million, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. This increase in cash used was primarily due to purchases of leasehold improvements, included in property and equipment during the six months ended June 30, 2024.

Current wording

The cash used in investing activities increased by $2.6 million, or 362%, to $3.4 million, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. This increase in cash used was primarily due to purchases of leasehold improvements, included in property and equipment during the nine months ended September 30, 2024.

Previous wording

We recorded a net $44.5 million for the six months ended June 30, 2024 for cash used in financing activities, as compared to cash used in financing activities of $33.2 million for the six months ended June 30, 2023. The change is driven by the repurchase of common stock funded by cash available from operating activities and additional draws on debt during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

We recorded a net $38.7 million for the nine months ended September 30, 2024 for cash used in financing activities, as compared to cash used in financing activities of $52.4 million for the nine months ended September 30, 2023. The change is driven by the cash provided by debt refinancing during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

The Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact the VIE’s economic performance and has a controlling financial interest in each entity. Accordingly, the Company consolidates these entities, which include P10 Intermediate, Holdco, RCP 2, RCP 3, TrueBridge, Hark, Bonaccord, and WTI. The assets and liabilities of the consolidated VIEs are presented gross in the Consolidated Balance Sheets. The liabilities of our consolidated VIE’s are obligations of those entities and their creditors do not generally have recourse to the assets of P10. See Note 6 of our consolidated financial statements for more information on both consolidated and unconsolidated VIEs.

Current wording

The Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact such VIEs' economic performance and has a controlling financial interest in each entity. Accordingly, the Company consolidates these entities, which include P10 Intermediate, Holdco, RCP 2, RCP 3, TrueBridge, Hark, Bonaccord, and WTI. The assets and liabilities of the consolidated VIEs are presented gross in the Consolidated Balance Sheets. The liabilities of our consolidated VIEs' are obligations of those entities and their creditors do not generally have recourse to the assets of P10. See Note 6 of our consolidated financial statements for more information on both consolidated and unconsolidated VIEs.