Full Transcript: Ridgepost Capital Q2 2026 Earnings Call

Ridgepost Capital (NYSE: RPC ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary Ridgepost Capital reported strong financial performance in Q2 2026, with AUM surpassing $50 billion and fee-paying AUM reaching nearly $35 billion, marking a 25% and 19% increase year over year, respectively. 1%). Ridgepost Capital completed the acquisition of Stellus and emphasized integration efforts to expand origination opportunities, targeting an additional $500 million to $1 billion in commitments. The firm maintained its 2026 and 2027 fundraising and deployment target of $10 billion, reflecting strong demand from LPs and the diversification of its investment strategies.

Ridgepost Capital's FRE margin stood at 48% in Q2, with fee-related earnings up 10% year over year to $39 million, driven primarily by management and advisory fees. The company is exploring AI and technology to enhance operational efficiencies, reporting significant time savings in NDA reviews and data processing tasks. Management expressed optimism about long-term growth, highlighting stable earnings driven by contractually committed management fees and ongoing strategic M&A opportunities. Full Transcript Lateef, Operator Good morning and welcome to Ridgepost Capital's second quarter 2026 earnings conference call.

My name is Lateef and I will be coordinating your call today. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. As a reminder, today's conference call is being recorded.

I will now pass the call to your host, Brian McKenna, Vice President, Investor Relations. Brian, please go ahead. Brian McKenna, Vice President, Investor Relations Thank you, Operator, and 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, RJ Jensen, EVP, Head of M&A and Strategy, and Sarita Jarreth, 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. So I've interacted with a number of different companies and management teams across the industry. So 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. And 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. Luke Sarsfield, Chairman and Chief Executive Officer 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.

Many of you will have the opportunity to connect with Brian in the coming weeks and months, and we look forward to further strengthening our dialogue with the investment community. On an unrelated note, I did want to share some very sad news relating to the Ridgepost Capital family. , 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 PTEN.

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.

1%. 9%. Now moving on to fundraising and deployment activity, second quarter trends remained healthy. We were in the market with about 20 funds, and we raised a meaningful amount of investor commitments across each of our investment verticals.

1 billion of capital in the quarter, bringing the trailing four-quarter total to nearly $5 billion. And we are still in the market with multiple funds across most of our strategies, including our GP Stake strategy Bonaccord, our NAV Lending strategy, Hart Capital, our Venture Capital strategy Trubridge, 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 Trubridge. 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, and Trubridge's track record of delivering differentiated performance for investors for nearly two decades continues to resonate in the market. 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 firmwide 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-of-fund vehicles. 7 billion of capital, representing over 55% of firmwide capital raising and deployment activity. Moving on, and we've talked about this at length in prior quarters, but 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, and 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, so 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 22, 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's origination funnel given the strong fit within our GP sponsor ecosystem focused on the middle and lower middle market. So 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% to 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 to $1 billion of incremental annual commitments across Stellus. I would also highlight that the Stellus leadership team recently presented to the entire Ridgepost Capital platform, including all of our investment strategies, to educate teams on their business and strategy and where there might be incremental opportunities to work together.

In terms of the business, before considering any impact from the RCP origination opportunity, Stellus's origination pipeline is robust and has picked up meaningfully over the last 30 days. In fact, across all of our private credit businesses, origination pipelines are strong. A related point worth highlighting that also indicates we're beginning to see an increase in the velocity of capital returns in the middle and lower middle market: distributions at RCP's funds—and therefore exit activity—have shown a meaningful pickup to date.

Specifically, through July 24, distributions from RCP funds have more than doubled year over year and are up more than 25% relative to the comparable period in 2024. This clearly has positive implications for distributions to fund investors, but it also has positive implications for future fundraising and deployment activity at both RCP as well as our private credit businesses, most notably Stellus, which is consistent with the pipeline activity we previously highlighted. Before turning it over to Amanda, I want to highlight that RCP is celebrating its 25th anniversary this year. In our industry, track record and incumbency are critical.

Over the past two and a half decades, RCP has built a highly differentiated franchise supported by long-standing relationships, 25 years of investment data and insights, and a proven ability to deliver attractive returns across market cycles. It's been a terrific 25 years for RCP, and we're excited about the opportunities ahead as we look toward the next 25 years. With that, I'll turn it over to Amanda. Amanda Coussens, Chief Financial Officer & Executive Vice President Thanks, Luke.

As highlighted earlier in the call, we delivered strong results again in the second quarter. 23 per share in the second quarter of 2025. Fee-related earnings totaled $39 million, up 10% year over year, while the FRE margin came in at 48%. Fee-related revenue totaled $81 million in the quarter, up 11% year over year.

Management and advisory fees represented nearly all of fee-related revenue in 2Q, totaling $80 million. We believe this revenue mix results in a highly durable and stable earnings profile for Ridgepost Capital. In terms of the fee rate, the average core fee rate, excluding direct and secondary catch-up fees, totaled 100 basis points in the second quarter, up 3 basis points from the first quarter. As a reminder, the core fee rate is typically seasonally lower in the first half of the year and seasonally higher in the back half of the year, particularly in the fourth quarter, primarily due to our tax credit business.

In terms of the core fee rate for full year 2026, we continue to expect this will total 103 basis points and we also expect direct and secondary catch-up fees will total between 6 and 8 million in 2026, unchanged from our prior expectations. With respect to the outlook for the margin, we continue to expect the FRE margin for full year 2026 will be in the mid-40s. As a reminder on cash interest, we fully utilized our credit revolver to fund the Stellus acquisition at our borrowing rate of 260 basis points plus SOFR.

I would point out that in June we expanded our revolving credit facility by 20 million to 195 million, enhancing our financial flexibility, and on cash taxes, we still expect to fully utilize our NOLs by the end of this year. As we've discussed in the past, we expect our cash tax rate to be in the high single-digit to low double-digit range for 2026 and in the mid-teens for 2027. 8 million shares of partnership units and shares in connection with the Stellus acquisition. As a result of this, at the end of the second quarter, including partnership units exchangeable for shares, we had approximately 130 million fully diluted shares outstanding.

04 per share, offsetting the dilution from annual employee stock issuance, managing our leverage, and returning excess capital through share repurchases when valuations are attractive. 8 times at the end of the second quarter, pro forma for Stellus, and I would point out that we have already paid down $20 million of debt thus far in the third quarter. As is always the case, we will balance other capital uses with share repurchases, as we view this as an efficient and accretive way to return excess capital to shareholders, particularly if the stock continues to trade at what we view to be dislocated valuations.

One other topic I want to discuss before turning it back to Luke for closing remarks. In close collaboration with our Chief Information Officer, Mike Goodwin, we're spending a meaningful amount of our time on AI and technology.