Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q2 2021 Earnings Presentation
35 slides from Gcm Grosvenor's earnings presentation, Aug 10, 2021
Slide 1: 2021 Second Quarter Results Earnings Presentation
August 10, 2021 2021 Second Quarter Results Earnings Presentation
Slide 2: Presenters
2 Presenters Jonathan Levin President Stacie Selinger Head of Investor Relations Pamela Bentley Chief Financial Officer Michael Sacks Chairman and Chief Executive Officer
Slide 3: Business Update
Business Update
Slide 4: Second Quarter 2021 Results
4 Second Quarter 2021 Results $ million June 30, 2020 March 31, 2021 June 30, 2021 % Change vs 1Q 21 % Change vs 2Q 20 AUM $ 56,890 $ 64,862 $ 66,900 3 % 18 % FPAUM 49,597 53,362 55,000 3 % 11 % CNYFPAUM 5,584 7,454 7,027 (6) % 26 % $ million unless otherwise noted Three Months Ended June 30, 2021 %
Slide 5: Business Highlights
5 Business Highlights Continued Growth in Revenue, Earnings and Earnings Power Focused on Accelerating Growth • GCM Grosvenor's Board of Directors approved a $0.09 per share dividend payable on September 15, 2021 to shareholders on record September 1, 2021 • GCM Grosvenor's Board of Directors approv
Slide 6: Increased Management Fee Earnings Power From Growing AUM
Scheduled Ramp-in $2.5 0.4 1.4 0.7 2021 2022 2023+ $51.2 $55.3 $59.0 $60.8 $62.0 24.0 23.6 24.1 24.4 24.9 24.9 26.5 27.8 28.9 30.1 2.3 5.2 7.1 7.5 7.0 2018 2019 2020 Q1 2021 Q2 2021 Absolute return strategies FPAUM Private markets FPAUM Contracted not yet FPAUM ("CNYFPAUM") FPAUM and CNYFPAUM ($bn)
Slide 7: Growing Value of Incentive Fees and Investments
7 Growing Value of Incentive Fees and Investments 129 Programs in Unrealized Carry 2017+ 36% 2014-2016 23% 2010-2013 22% $302 $29 $41 $42 Q2 2020 Q1 2021 Q2 2021 Growing Carried Interest Annual Earnings Power2 (mm) 2009 or Earlier 19% Growing Firm Share of Investments and Carried Interest1 (mm) Carr
Slide 8: Financial Results
Financial Results
Slide 9: Strong Growth in Revenues
75.3 84.9 36.5 42.3 36.8 40.72.0 1.9 Private Markets Absolute Return Strategies Administrative fees and other operating income Q2 20 Q2 21 9 Strong Growth in Revenues Adjusted Revenue1 1. Excludes fund reimbursement revenue of $1.8 million and $2.6 million for the three months ended June 30, 2020 an
Slide 10: Strong Growth in Earnings
10 Strong Growth in Earnings 17% $ million 26.2 30.7 Q2 20 Q2 21 25.1 27.5 Q2 20 Q2 21 9% 14.8 19.3 Q2 20 Q2 21 34% 56% Adjusted EBITDA Adjusted Net Income 42.7 52.6 Q2 YTD 20 Q2 YTD 21 45.5 60.9 Q2 YTD 20 Q2 YTD 21 24.4 38.2 Q2 YTD 20 Q2 YTD 21 23% Fee-Related Earnings 30% Q2 21-over-Q2 20 YTD 21-o
Slide 11: Year to Date 2021 and 2020 Fundraising Summary
Year to Date 2021 and 2020 Fundraising Summary 11 $ billion 1.7 1.8 1.4 2.1 2.5 1.5 0.7 0.3 0.1 0.4 0.6 0.5 1.0 1.5 1.3 1.7 1.9 1.0 Private Markets Absolute Return Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 $4.0Bn of new capital raised in 2021 Robust fundraising pipeline supports future growth
Slide 12: Other Key Items
Other Key Items 12 • On July 2, 2021, GCM Grosvenor repurchased certain fund investments and rights to future carry associated with Mosaic (collectively, the “Mosaic Assets”) • GCM Grosvenor funded the discounted $165 million repurchase price with a combination of $57 million of balance sheet cash a
Slide 13: GAAP Statements of Income (unaudited)
13 GAAP Statements of Income (unaudited) Three Months Ended Six Months Ended $000, except per share amounts and where otherwise noted Jun 30, 2020 Jun 30, 2021 % Change Jun 30, 2020 Jun 30, 2021 % Change Revenues Management fees $ 75,136 $ 85,594 14 % $ 152,837 $ 168,219 10 % Incentive fees 13,041 3
Slide 14: Summary of Non-GAAP Financial Measures
14 1, 3-7. See Notes towards the end of the document. 2. Excludes fund reimbursement revenue of $1.8 million and $2.6 million for the three months ended June 30, 2020 and June 30, 2021, respectively, and $3.8 million and $4.9 million for the six months ended June 30, 2020 and June 30, 2021, respecti
Slide 15: About GCM Grosvenor
About GCM Grosvenor
Slide 16: Only Alternative Asset Solutions Provider Covering the Full Range of Strategies
Strong economic value proposition ◦ Fee savings and preferential terms ◦ Access to hard to access managers ◦ Proprietary deal flow Deeply embedded with our clients ◦ 76% of AUM in customized programs ◦ Cornerstone of clients’ alternative programs ◦ Clients leverage our full investment and operationa
Slide 17: Strong Value Proposition Drives Diversified, Long-Tenured Client Base
17Note: AUM as of June 30, 2021. Management fees for the twelve months ended June 30, 2021. Strong Value Proposition Drives Diversified, Long-Tenured Client Base % of AUM 42% 14% 8% 16% 6% 7% 6% 1% 23% 9% 4% Our client base is institutional and stable % of management fees 64% 24% 12% Our client base
Slide 18: ESG and Impact Investments
18 ESG and Impact Investments AUM ($bn) Clean Energy Invested / Committed: $3.4bn Labor Impact Invested / Committed: $0.9bn Regionally Targeted Invested / Committed: $4.0bn 21% CAGR ESG and Investing with an Impact are Core Values Diverse Managers Invested / Committed: $8.8bn Other ESG Invested / Co
Slide 19: Appendix
Appendix
Slide 20: GAAP Balance Sheets (unaudited)
20 GAAP Balance Sheets (unaudited) $000 Dec 31, 2020 Jun 30, 2021 Assets Cash and cash equivalents $ 198,146 $ 265,830 Management fees receivable 14,524 16,716 Incentive fees receivable 69,424 39,697 Due from related parties 11,326 10,684 Investments 166,273 190,552 Premises and equipment, net 7,870
Slide 21: Components of GAAP Expenses
21 Components of GAAP Expenses Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Components of GAAP Employee Compensation and Benefits Cash-based employee compensation and benefits, net1 $ 38,332 $ 41,192 $ 40,255 $ 80,354 $ 81,447 Cash-based i
Slide 22: Reconciliation to Non-GAAP Metrics
22 Reconciliation to Non-GAAP Metrics Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Net Incentive Fees Attributable to GCM Grosvenor Incentive fees Performance fees $ 132 $ 6,113 $ 2,891 $ 737 $ 9,004 Carried interest 12,909 12,101 29,336 1
Slide 23: Reconciliation to Non-GAAP Metrics
23 Reconciliation to Non-GAAP Metrics Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Adjusted Pre-Tax Income & Adjusted Net Income Net income (loss) attributable to GCM Grosvenor Inc. $ — $ 2,547 $ 656 $ — $ 3,203 Plus: Net income (loss) att
Slide 24: Reconciliation to Non-GAAP Metrics
24 Reconciliation to Non-GAAP Metrics Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Adjusted EBITDA Adjusted Net Income $ 14,837 $ 18,906 $ 19,306 $ 24,442 $ 38,212 Plus: Adjusted Income taxes1 4,946 6,302 6,435 8,148 12,737 Depreciation ex
Slide 25: Reconciliation to Adjusted Net Income Per Share
25 Reconciliation to Adjusted Net Income Per Share Three Months Ended Six Months Ended $000, except per share amounts and where otherwise noted Jun 30, 2020 1 Jun 30, 2021 Jun 30, 2020 1 Jun 30, 2021 Adjusted Net Income Per Share Adjusted Net Income $ 14,837 $ 19,306 $ 24,442 $ 38,212 Weighted-avera
Slide 26: Quarterly Growth in FPAUM and AUM
26 Quarterly Growth in FPAUM and AUM $mm Private Markets Strategies Absolute Return Strategies Total FPAUM Contracted Not Yet FPAUM Total AUM Fee-Paying AUM Beginning of Period (April 1, 2021) $ 28,889 $ 24,473 $ 53,362 $ 7,454 $ 64,862 Contributions from CNYFPAUM 715 12 727 Contributions from New C
Slide 27: Management Fee Detail
27 Management Fee Detail1 Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Management Fees Private Markets Specialized Funds $ 11,327 $ 12,970 $ 14,428 $ 22,138 $ 27,398 Average Fee Rate3 0.73 % 0.74 % 0.75 % 0.73 % 0.74 % Customized Separate
Slide 28: Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments
28 Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments Strategy Commitments Contributions Distributions Current Value Investment Net TVPI Investment Net IRR PME IRR PME Index Private Equity Primary Fund Investments1 $ 10,897 $ 11,941 $ 19,319 $ 2,324 1.81 14.
Slide 29: Private Markets Strategies Performance Metrics – All Investments
29 Private Markets Strategies Performance Metrics – All Investments Strategy Commitments Contributions Distributions Current Value Investment Net TVPI Investment Net IRR PME IRR PME Index Private Equity Primary Fund Investments1 $ 21,248 $ 19,197 $ 22,540 $ 8,742 1.63 12.7 % 10.9 % S&P 500 Secondary
Slide 30: Absolute Return Strategies Performance
30 Absolute Return Strategies Performance Assets Under Management as of June 30, 2021 ($Bn) Year to Date Returns Ending June 30, 2021 Annualized Returns Since Inception Through June 30, 2021 Gross Net Gross Net Absolute Return Strategies (Overall) $ 26.0 3.67 % 3.30 % 7.26 % 6.14 % GCMLP Diversified
Slide 31: Notes on Summary of Non-GAAP Financial Measures
31 Notes on Summary of Non-GAAP Financial Measures (Page 14) 1. Adjusted EBITDA and Adjusted Net Income per share are non-GAAP financial measures. See Appendix for the reconciliations of our non-GAAP financial measures to the most comparable GAAP metric. 2. See Summary of Non-GAAP Financial Measures
Slide 32: Notes (continued)
32 Notes (continued) Notes on Components of GAAP Expenses (Page 21) 1. Excludes severance expenses of $0.0 million, $0.6 million and $0.8 million for the three months ended June 30, 2020, March 31, 2021 and June 30, 2021, respectively, and $2.3 million and $1.4 million for the six months ended June
Slide 33: Certain Definitions and Use of Non-GAAP Financials and Key Performance Indicators
33 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
Slide 34: Definitions of CNYFPAUM, New Capital Raised and AUM
34 Contracted, Not Yet Fee-Paying AUM (“CNYFPAUM”) represents limited partner commitments during or prior to the initial commitment or investment period where fees are expected to be charged in the future based on invested capital (capital committed to underlying investments) or on a scheduled ramp-
Slide 35: Forward-Looking Statements
35 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 incremental revenu