Hark Capital Closes on $645 Million in Capital Commitments for Fund IV
P10 (NYSE: PX) announced that its affiliated manager, Hark Capital, has successfully closed Hark Capital IV with $645 million in capital commitments, exceeding its $500 million target. This represents a 60% increase over Fund III and a 220% rise over Fund II. The fund, which offers Net Asset Value (NAV) credit solutions, received significant backing from existing and new partners, including U.S. insurance companies, public pension plans, and family offices. Hark Capital aims to provide non-dilutive loans to lower middle market private equity and growth equity funds, their portfolio companies, and management companies. The increased demand for NAV loans, driven by higher interest rates in the private equity market, positions Hark to achieve attractive risk-adjusted returns for its investors.
- $645M in capital commitments, exceeding the $500M target.
- 60% increase in commitments compared to Fund III.
- 220% increase in commitments compared to Fund II.
- Significant backing from both existing and new partners.
- Increased demand for NAV loans due to higher interest rates.
- None.
Insights
The successful closing of Hark Capital IV with
The context of higher interest rates is critical. With traditional financing becoming more expensive, NAV loans are increasingly attractive, driving the demand Hark is capitalizing on. These loans provide a non-dilutive financing option, which means they don't require giving up equity, making them appealing to sponsors wanting to retain ownership while still accessing growth capital.
For retail investors, this development signals robust performance prospects for P10, Inc. As a parent company, P10 stands to benefit from Hark's growing influence and success in the lower middle market. The increased fund size indicates stronger revenue potential, which could translate to higher earnings for P10. However, it's essential to monitor how effectively these funds are deployed and the returns they generate in the long run.
This fund closing highlights a trend in the financial sector where private equity firms are increasingly seeking NAV loans to navigate the current market conditions. NAV lending is becoming more critical as sponsors look for ways to enhance portfolio performance without diluting ownership. Hark's ability to secure significant commitments from prominent U.S. insurance companies, public pension plans and family offices underscores its reputation and the trust it has built in this niche market.
The strong reups from existing partners also indicate high satisfaction levels with previous fund performances. This loyalty is an important success factor as it suggests sustainable investor confidence, which is important for future fundraising efforts. For retail investors, this can be a positive signal of stability and ongoing growth potential for P10, Inc.
DALLAS, July 09, 2024 (GLOBE NEWSWIRE) -- P10, Inc. (NYSE: PX), a leading private markets solutions provider, today announced that its affiliated manager, Hark Capital (“Hark”), a provider of flexible Net Asset Value (“NAV”) credit solutions to lower middle market sponsors, announced the final closing of Hark Capital IV (“Fund IV” or the “Fund”). With
The total capital commitments for Fund IV represent more than a
“Hark Capital IV is our largest fund close to date and demonstrates the momentum we have as pioneers in NAV lending,” said Doug Cruikshank, Hark Founder and Managing Partner. “Current conditions in the private equity market, including the effects of higher interest rates, have created unprecedented demand for the use of NAV loans by financial sponsors. We remain focused on our mission to partner with GPs to strategically improve the performance of their portfolio companies on behalf of their LPs.”
Hark provides NAV loans to lower middle market private equity and growth equity funds, their portfolio companies, and their management companies. These loans are non-dilutive and supply growth and support capital. The firm has carved out a niche strategy that provides its limited partners an opportunity to achieve attractive risk-adjusted returns and compelling relative value compared to other asset classes.
"We congratulate Hark on this fund closing and capital raising milestone,” said Luke Sarsfield, P10 Chairman and Chief Executive Officer. “Hark is a first mover in NAV lending and has met a critical need in the lower middle market. The firm’s products increase optionality for both GPs and LPs to enhance their returns. Hark’s proven track record and differentiated network in the large and growing lower middle market positions the team to drive deal flow, launch additional funds, and deliver strong results in the years ahead.”
About P10
P10 is a leading multi-asset class private markets solutions provider in the alternative asset management industry. P10’s mission is to provide its investors differentiated access to a broad set of investment solutions that address their diverse investment needs within private markets. As of March 31, 2024, P10 has a global investor base of more than 3,600 investors across 50 states, 60 countries, and six continents, which includes some of the world’s largest pension funds, endowments, foundations, corporate pensions, and financial institutions. Visit www.p10alts.com.
About Hark Capital
Hark Capital is an innovative provider of NAV solutions for financial sponsors, their portfolio companies, and their management companies. Since 2013, Hark has deployed over
The information contained in this press release does not constitute investment advice or an offer or sale of any security or investment product. Offerings are made only pursuant to a private offering memorandum containing important information. Hark Capital’s investment strategy is subject to significant risks and there is no guarantee that any fund will achieve comparable results as any prior investments or prior investment funds of Hark Capital. Past performance does not predict, and is not a guarantee of, future results.
Forward-Looking Statements
Some of the statements in this release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “believe,” “estimate,” “continue,” “anticipate,” “intend,” “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements discuss management’s current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance, and business. The inclusion of any forward-looking information in this release should not be regarded as a representation that the future plans, estimates, or expectations contemplated will be achieved. Forward-looking statements reflect management’s current plans, estimates, and expectations, and are inherently uncertain. All forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors that may cause actual results to be materially different; global and domestic market and business conditions; successful execution of business and growth strategies and regulatory factors relevant to our business; changes in our tax status; our ability to maintain our fee structure; our ability to attract and retain key employees; our ability to manage our obligations under our debt agreements; our ability to make acquisitions and successfully integrate the businesses we acquire; assumptions relating to our operations, financial results, financial condition, business prospects and growth strategy; and our ability to manage the effects of events outside of our control. The foregoing list of factors is not exhaustive. For more information regarding these risks and uncertainties as well as additional risks that we face, you should refer to the “Risk Factors” included in our annual report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 13, 2024, and in our subsequent reports filed from time to time with the SEC. The forward-looking statements included in this release are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information or future events, except as otherwise required by law.
Ownership Limitations
P10’s Certificate of Incorporation contains certain provisions for the protection of tax benefits relating to P10’s net operating losses. Such provisions generally void transfers of shares that would result in the creation of a new
P10 Investor Contact:
info@p10alts.com
P10 Media Contact:
Josh Clarkson
jclarkson@prosek.com
FAQ
What is the capital commitment for Hark Capital IV (PX)?
How much did Hark Capital IV exceed its original target?
By how much did Hark Capital IV's commitments increase compared to Fund III?
Who are the typical investors in Hark Capital IV?
Why is there increased demand for NAV loans in the private equity market?
