GCM Grosvenor Inc. · NASDAQ:GCMG
GCM Grosvenor — Investor Presentation (September 2023)
26 slides from GCM Grosvenor's investor presentation, September 2023
Slide 1: GCM Grosvenor Investor Presentation
GCM Grosvenor Investor Presentation September 2023
Slide 2: 52 Years of Alternative Asset Management Investing
52 Years of Alternative Asset Management Investing 1971 74% 533 173 First year of of AUM in customized Employees1 Investment Investing separate accounts professionals Real Estate Absolute Return $5.5bn $22.5bn Direct Primary Private Alternative Credit $76bn Equity Assets under $29.9bn $12.5bn Seedin
Slide 3: Allocations to Alternatives are Growing
Allocations to Alternatives are Growing % OF INVESTORS WHO PLAN TO MAINTAIN OR INCREASE TARGET ALTERNATIVE INVESTMENTS AUM ($T) ALLOCATION TO ALTERNATIVE INVESTMENTS IN THE NEXT 3 YEARS 21.2 15.1 95% 97% 92% 88% 91% 87% 9.8 Private Equity Hedge Funds Real Estate Infrastructure Private Credit Liquid
Slide 4: GCM Grosvenor is a Growing Firm in a Growing Industry
GCM Grosvenor is a Growing Firm in a Growing Industry GCM Grosvenor AUM ($bn) % CAGR Drivers of growth Persistent growth in global +10.1% + $76.0 institutional wealth $8.7 $6.7 Increasing investor demand $56.9 + for alternative investment strategies $1.7 $5.6 $21.5 Consistent strong historical + $22
Slide 5: Within Alternatives, We Operate as a Solutions Provider
Within Alternatives, We Operate as a Solutions Provider GCM Grosvenor is the connective tissue between the growing, fragmented deal and manager universe and the vast global pools of capital LARGE AND GROWING CLIENT UNIVERSE Pensions • • Re l Governmenta tail FRAGMENTED DEAL • Insu AND MANAGER UNIVER
Slide 6: Our Strengths Fuel Our Future Growth
Our Strengths Fuel Our Future Growth OUR BREADTH We can invest across the full spectrum of alternative strategies ABSOLUTE RETURN PRIVATE EQUITY INFRASTRUCTURE REAL ESTATE CREDIT MULTI-ASSET CLASS ESG & IMPACT STRATEGIES OUR DEPTH We can invest in a variety of implementation styles Primary Investmen
Slide 7: Our Platform Fuels Client Extension Opportunities
Our Platform Fuels Client Extension Opportunities • 74% of AUM • Specifically tailored program to client objectives and constraints • Extension of staff • Provide value-add ancillary services, including administering capital on behalf of certain of our clients • Open-ended and closed ended options •
Slide 8: Customized Separate Accounts Generate Sticky Relationships
Customized Separate Accounts Generate Sticky Relationships Illustrative client relationship assuming $100M initial account size FIRST SALE $600 SECOND SALE THIRD SALE FOURTH SALE $500 $400 FPAUM ($M) $300 $200 $100 $0 1 2 3 4 5 6 7 8 9 10 11 12 YEARS PROVEN SUCCESS WITH GROWING STICKY SEPARATE ACCOU
Slide 9: Strong Value Proposition Attracts Tenured and Diversified Clients
Strong Value Proposition Attracts Tenured and Diversified Clients Our client base is Our client base is Our client base is institutional and stable global diversified % of AUM % of AUM % of management fees No single client contributes more than Financial 5% of our management fees Institutions Rest o
Slide 10: Private Markets Experiencing Growth and Mix Shift
Private Markets Experiencing Growth and Mix Shift FPAUM Has Shifted Towards Private Markets... ...And Private Markets Management Fees Have Grown Private Markets FPAUM (bn) Private Markets Management Fees7 (mm) 15% 14% CAGR CAGR Q2 21 Q2 23 Q2 21 Q2 23 55% 64% 42% 49% Private Markets % % of Private M
Slide 11: Consistent Private Markets Growth
Consistent Private Markets Growth Private Markets Management Fees7 (mm) 15% CAGR Increasing Private Markets Management Fees7 Year-over-year Private Markets Management Fee Growth7 7. See Notes towards the end of the document. 11
Slide 12: Highly Diversified Incentive Fee Opportunity
Highly Diversified Incentive Fee Opportunity $ million • Annual Performance Fees: $28 million annual run-rate performance fee opportunity10, from 55 programs ◦ $13 million performance fee potential in 202310 • Carried Interest: 135 programs with unrealized carried interest Firm Share of Carried Inte
Slide 13: ESG and Impact Remains a Core Driver of AUM Growth
ESG and Impact Remains a Core Driver of AUM Growth 11 ESG and Impact Investments AUM ($bn) ESG and Impact AUM by Strategy12 Diverse Managers $15.1 billion 24% Regionally Targeted / Inclusive Finance $1.6 billion Clean Energy $4.2 billion Workforce Standards / Labor Impact $1.7 billion Essential Soci
Slide 14: Strong Revenue Characteristics Drive Growing Adjusted Earnings
Strong Revenue Characteristics Drive Growing Adjusted Earnings $ million % 3-year CAGR Fee-Related Revenue Fee-Related Earnings Adjusted Net Income Capital Returned to Shareholders 6% 9% $91 $33 Repurchasing Shares 15% $23 cumulative shares $75 $25 $68M and warrants repurchased15 13% remaining on $1
Slide 15: Key 2023 and Long-Term Growth Drivers
Key 2023 and Long-Term Growth Drivers Scale Core Capabilities New Channel Expansion16 High-Growth Strategies Grow with Existing Clients Non-institutional / Retail Private Markets Secondaries/Co-Invest/Direct 50%+ 2-Year Flows AUM $26b 18% Of top clients are invested in more 9% > 5% AUM YoY Inc
Slide 16: Appendix
Appendix
Slide 17: Illustrative Client Economic Value Proposition: Absolute Return Strategies
Illustrative Client Economic Value Proposition: Absolute Return Strategies Example: $300M Fee Paying; $300M Non-Fee Paying. Assuming 0% gross return. Fee Paying17 Non-Fee Paying ◦ GCM Grosvenor offers large $300 million $300 million Absolute Return Strategies clients a ‘hybrid model’ Management fee
Slide 18: Illustrative Client Economic Value Proposition: Private Markets
Illustrative Client Economic Value Proposition: Private Markets Example: $1.0Bn Program – Direct Primary Program vs. Direct Primaries Program + Co-Investment Program GCM Grosvenor Direct Primary Only Direct Primaries Managed Co- Program vs. Program Investment Program $1.0 billion $650 million $350 m
Slide 19: GAAP Statements of Income
GAAP Statements of Income Three Months Ended $000, except per share amounts and where otherwise noted June 30, 2020 June 30, 2023 Revenues Management fees $ 75,136 $ 93,564 Incentive fees 13,041 12,996 Other operating income 1,953 1,053 Total operating revenues 90,130 107,613 Expenses Employee compe
Slide 20: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures21 Three Months Ended $000, except per share amounts and where otherwise noted June 30, 2020 June 30, 2023 Adjusted EBITDA Revenues Private markets strategies $ 36,548 $ 52,978 Absolute return strategies 36,761 36,752 Management fees, net12 73,309 89,730 Adminis
Slide 21: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 June 30, 2020 June 30, 2023 Adjusted Pre-Tax Income & Adjusted Net Income Net income attributable to GCM Grosvenor Inc. $ — $ 4,848 Plus: Net income (loss) attributable to noncontrolling interests in GCMH 5,927 (42,495) Provision for income
Slide 22: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 June 30, 2020 June 30, 2023 Adjusted EBITDA Adjusted Net Income $ 14,837 $ 22,719 Plus: Adjusted income taxes26 4,946 7,252 Depreciation expense 536 352 Interest expense 5,841 5,682 Adjusted EBITDA $ 26,160 $ 36,005 Fee-Related Earnings Adju
Slide 23: Notes
Notes 1. Employee data as of July 1, 2023. Individuals with dual responsibilities are counted only once. 2. AUM as of June 30, 2023. ESG / Impact and Alternative Credit investments overlap with investments in other strategies. 4. Institutional clients as of March 31, 2023. 5. Based on 50 largest cli
Slide 24: Certain Definitions and Use of Non-GAAP Financials and Key Performance Indicators
Certain Definitions and Use of Non-GAAP Financials and Key Performance Indicators Adjusted Net Income is a non-GAAP measure that we present on a pre-tax and after-tax basis to evaluate our profitability. Adjusted Pre-Tax Income represents net income attributable to GCM Grosvenor Inc. including (a) n
Slide 25: Certain Definitions and Use of Non-GAAP Financials and Key Performance Indicators (continued)
Certain Definitions and Use of Non-GAAP Financials and Key Performance Indicators (continued) Fee-Paying Assets Under Management (“FPAUM” or “Fee-Paying AUM") is a key performance indicator we use to measure the assets from which we earn management fees. Our FPAUM comprises the assets in our customi
Slide 26: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected future performance of GCM Grosvenor’s business, including anticipated incrementa
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