This article first appeared on GuruFocus .
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Adjusted Net Income:$0.24 per share in Q2 2026, compared to $0.23 per share in Q2 2025.
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Fee-Related Earnings (FRE):Totaled $39 million, up 10% year-over-year.
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FRE Margin:48% for the quarter.
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Fee-Related Revenue:Totaled $81 million, up 11% year-over-year.
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Management and Advisory Fees:Totaled $80 million, representing nearly all of fee-related revenue.
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Assets Under Management (AUM):Surpassed $50 billion at period end, up more than $10 billion or approximately 25% year-over-year.
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Fee-Paying AUM:Totaled nearly $35 billion at quarter end, up 19% year-over-year.
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Capital Raised and Deployed:$1.1 billion in the quarter, bringing the trailing four-quarter total to nearly $5 billion.
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Average Core Fee Rate:100 basis points in Q2, up 3 basis points from Q1.
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Fully Diluted Shares Outstanding:Approximately 130 million at the end of Q2, including partnership units.
Release Date: August 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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AUM surpassed $50 billion, up 25% year-over-year, with fee-paying AUM up 19% to nearly $35 billion.
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Strong investment performance across strategies, with net IRRs ranging from 10.9% (private credit) to 23.1% (secondary and co-invest funds).
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Raised and deployed $1.1 billion in Q2, bringing trailing four-quarter total to nearly $5 billion, with $3 billion in H1 2026.
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Completed Stellas acquisition, with integration underway and potential for $500 million to $1 billion in incremental annual commitments.
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Fee-related earnings grew 10% year-over-year to $39 million, with a stable FRE margin of 48% and a core fee rate of 100 basis points.
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AI and technology initiatives are driving operational efficiencies, such as reducing NDA review time from 60 minutes to 5-10 minutes.
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Distributions from RCP funds more than doubled year-over-year, indicating increased exit activity and positive implications for future fundraising.
Negative Points
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Leverage ratio increased to approximately 2.8 times EBITDA pro forma for Stellas, above the long-term target of mid-2 times.
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Cash tax rate expected to rise to mid-teens in 2027 as NOLs are fully utilized by end of 2026.
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FRE margin guidance for full year 2026 remains in the mid-40s, with anticipated placement agent costs and fundraising-related hires in H2.
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Stellas' fee-paying AUM is based on deployed capital, which may grow slowly as the fund focuses on deployment rather than new fundraising.
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The stock is trading at what management views as dislocated valuations, limiting share repurchase activity in the near term.
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Integration of Stellas is still in early stages, with the full benefit of origination opportunities expected to take years to materialize.
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The company faces potential dilution from annual employee stock issuance, which requires offsetting through capital management.
Q & A Highlights
Q: Can you elaborate on the steps needed to capture the $500 million to $1 billion of incremental annual commitments at Stellus by leveraging RCP's GP network, and what is the realistic timeline for achieving this? A: Luke Sarsfield (CEO) noted that the transaction closed only six weeks ago, so it is early days. The opportunity stems from RCP's deep relationships in the middle and lower middle market, where sponsors deploy roughly $5 billion annually. Capturing 10%-20% of that demand could yield the targeted incremental commitments. The teams have already begun collaborating on a daily basis, and while reaching the full potential will take years, they expect incremental progress and near-term transaction opportunities sooner.
Q: With the Stellus acquisition complete, how should we think about its contribution to the $10 billion fundraising and deployment target for 2026-2027, and what are the modeling implications for the FRE margin? A: Luke Sarsfield (CEO) explained that Stellus recently closed a fundraising cycle raising $1.5 billion, so the near-term focus is on deployment rather than new fundraising. Amanda Coussens (CFO) added that the FRE margin guidance remains in the mid-40s for the full year, factoring in anticipated placement agent costs and fundraising-related hires in the back half. Arjay Jensen (Head of M&A) noted that Stellus's margin profile is similar to Ridgepost's.
Q: You mentioned being in the market with about 20 funds. Are there any planned flagship fund launches between now and year-end, or is that mainly a 2027 event? A: Luke Sarsfield (CEO) detailed that multiple flagship funds are currently in the market, including Bonacord's Fund III, HART's Fund V, and TrueBridge's flagship fund. RCP just closed its flagship Fund 20 and immediately launched Fund 21. Enhanced Capital operates in an evergreen format. The company expects more launches in the back half of the year and into 2027, maintaining a perpetual pipeline of 15-20 funds in the market.
Q: The Stellus fund table shows $448 million, but you mentioned $1.5 billion in commitments. Will that number increase as the fund deploys capital? A: Luke Sarsfield (CEO) confirmed that while most of Ridgepost's strategies charge fees on committed capital, credit strategies like Stellus charge on deployed capital. As deployment increases, the fee-paying AUM will correspondingly rise.
Q: Given the focus on deleveraging and share repurchases, what are the potential M&A opportunities or product strategies that could be added to the RPC platform? A: Arjay Jensen (Head of M&A and Strategy) indicated a continued focus on geographic expansion, particularly European private credit as an analog to Stellus in the U.S. The firm is also interested in asset-based lending platforms and real assets, including infrastructure and real estate. While new process launches were slower in the first half, activity is expected to increase in the second half of the year.
Q: Can you provide more detail on the AI and technology initiatives and the tangible benefits being realized? A: Amanda Coussens (CFO) highlighted three key areas: operations and automation, enhanced investment capabilities, and collaboration. Tangible examples include reducing NDA review time from 60 minutes to 5-10 minutes, saving thousands of hours annually, and streamlining the production of GP Scout profiles from one to two days down to roughly one hour. The firm is reinvesting near-term savings into further initiatives, viewing AI adoption as still in its early innings.
Q: What is the current status of the Stellus integration, and what are the early signs of collaboration between the teams? A: Luke Sarsfield (CEO) stated that the integration is well underway. Stellus's senior originators have spent time in person with RCP professionals to begin identifying collaboration opportunities. The Stellus leadership team has also presented the entire Ridgepost platform to educate teams on potential synergies. The origination pipeline at Stellus has picked up meaningfully over the last 30 days, and distributions from RCP funds have more than doubled year-over-year, indicating increased exit activity.
Q: Can you provide an update on the fundraising and deployment activity for TrueBridge and the demand for venture capital offerings? A: Luke Sarsfield (CEO) noted that TrueBridge has raised and deployed approximately $1.5 billion in the first half of 2026. Demand remains strong as investors focus on the growing dispersion in venture returns, and TrueBridge's nearly two-decade track record of differentiated performance continues to resonate with LPs.
Q: What is the outlook for the core fee rate and cash taxes for the remainder of 2026? A: Amanda Coussens (CFO) reiterated that the full-year 2026 core fee rate is expected to be 103 basis points, with direct and secondary catch-up fees totaling between $6 million and $8 million. The FRE margin is expected to be in the mid-40s. Cash taxes are expected to be in the high single-digit to low double-digit range for 2026, with NOLs fully utilized by year-end.
Q: How is the company balancing capital allocation priorities, particularly regarding leverage and share repurchases? A: Amanda Coussens (CFO) stated that near-term focus is on deleveraging, with the goal of bringing leverage back to the mid-2 times EBITDA target by year-end, down from approximately 2.8 times pro forma for Stellus. The company has already paid down $20 million of debt in the third quarter. Share repurchases remain a priority when valuations are attractive, as the stock is viewed as trading at dislocated valuations relative to fair value.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
