Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q3 2024 Earnings Presentation
39 slides from Gcm Grosvenor's earnings presentation, Nov 8, 2024
Slide 1: 2024 Third Quarter Results Earnings Presentation
2024 Third Quarter Results Earnings Presentation
Slide 2: GCM Grosvenor Reports Q3 2024 Results
GCM Grosvenor Reports Q3 2024 Results CHICAGO, November 8, 2024 – GCM Grosvenor (Nasdaq: GCMG), a leading global alternative asset management solutions provider, today reported results for the third fiscal quarter ended September 30, 2024. “We're pleased with the Dividend strong momentum in GCM Gros
Slide 3: Forward Looking Statements
Forward Looking Statements THIS PRESENTATION CONTAINS CERTAIN FORWARD- Form 10-K filed by GCM Grosvenor Inc. on February 29, 2024 LOOKING STATEMENTS within the meaning of the Private and its other filings with the U.S. Securities and Exchange Securities Litigation Reform Act of 1995, including state
Slide 4: Third Quarter 2024 Results
Third Quarter 2023 Results Third Quarter 2024 Results • Raised $4.8 billion of new capital year-to-date, an increase of 34% compared to prior year-to-date. Raised $1.4 billion of new capital in the third quarter 2024. • Solid financial results year-to-date ◦ Year-to-date 2024 GAAP Net Income attribu
Slide 5: Adjusted Earnings
Adjusted Earnings Fee-Related Earnings (mm) Adjusted EBITDA (mm) Adjusted Net Income (mm) 9% 11% 11% $39.8 $48.4 $31.4 $36.4 $43.6 $28.4 31.4 28.4 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Longer-Term Trends 26% 66% $185.9 32% $157.5 $147.0 $120.5 120.5 $91.0 $95.1 91.0 2020 LTM 2020 LTM 2020
Slide 6: Growth in Key Business Drivers
Growth in Key Business Drivers December 31, 2020 September 30, 2024 Growing Earnings Power $62bn $80bn AUM Private Markets Growing as a Percentage 54% 66% Private Markets % of FPAUM Shifting Towards Direct- Oriented Strategies 39% 51% Direct-Oriented Strategies % of Private Markets AUM Operating Lev
Slide 7: Key Long-Term Growth Drivers
Key 2023 and Long-Term Growth Drivers Key Long-Term Growth Drivers 1. 2. 3. 9 Scaling Core Capabilities Planting Seeds for Future Growth Improving Earnings Quality and Power Client Retention & Compound Capital Individual Investor Business Shifting Towards Private Markets Approximately Opportunity to
Slide 8: Individual Investor is a Substantial Market Opportunity
Individual Investor is a Substantial Market Opportunity Individuals Represent $150 trillion Significantly Under Allocated, ~50% of Global AUM Relative to Institutions Global AUM by Investor Type (tn) Average Allocation to Alternatives 20-25% 20-25% Represents trillions of under-allocation Institutio
Slide 9: Delivering an Institutional Experience to Individuals
Delivering an Institutional Experience to Individuals Growth of GCMG's Individual Investor Presence Since 2020 GCMG's Individual Investor Cumulative fundraising for individual investor channel (bn) Fundraising Since 2020 $3.1 $2.7 $2.4 $1.8 57% Absolute Return 43% Private Markets $0.8 58% Americas 2
Slide 10: Significant Breadth and Depth of Capabilities
Significant Breadth and Depth of Capabilities Institutional-Quality Product Suite Tailored for Individual Investors > Single Investor Funds > Single Advisor Funds > Specialized Funds Closed-end private market funds Absolute Return Strategies registered funds Private Markets registered funds • Privat
Slide 11: 53 Years of Alternative Asset Management Investing
53 Years of Alternative Asset Management Investing 1971 72% 549 180 First year in business of AUM in customized Employees10 Investment professionals10 separate accounts Real Estate Absolute Return $6.1bn $22.8bn DIRECT SEEDING/ PRIMARY STAKES Alternative Credit $80bn Private Equity $14.1bn AUM11 $30
Slide 12: Growing and Diversifying AUM and Earnings Power
Growing and Diversifying AUM and Earnings Power AUM by Strategy (bn) 7% CAGR $79.6 $76.9 $73.7 $72.1 $61.9 $30.6 8% $29.4 Private Equity $26.2 $29.1 CAGR 12% $22.8 Private12Markets CAGR $13.1 $20.0 $20.9 24% $16.6 $9.2 Real Assets CAGR $25.2 $26.6 $23.0 $22.4 $22.8 (3)% Absolute Return Strategies CA
Slide 13: Diversified Fundraising Drives Stability & Growth
Diversified Fundraising Drives Stability & Growth Diversified by Channel Diversified by Geography 54% Pensions 7% Corporation 16% Government/Sovereign Entity 65% Americas LTM LTM 8% Individual Investor 14% EMEA Fundraising Fundraising 5% Financial Institutions 21% APAC 3% Insurance 7% Other Diversif
Slide 14: Customized Separate Accounts are Highly Valuable
Customized Separate Accounts are Highly Valuable Illustrative client relationship assuming $100M initial account size Sticky Relationships 600 500 90% average re-up rate on initial sale 14 400 28% FPAUM ($M) 300 average size increase on each re-up 15 200 100 15 years average relationship across 16 t
Slide 15: Private Markets Specialized Fund Franchises
Private Markets Specialized Fund Franchises Scaling and expanding private market specialized fund franchises Cumulative selected private market specialized fund closings (mm) $11,054 $403 $9,816 $567 $965 $8,758 $1,285 $7,402 CIS $1,615 MAC GSF $5,234 IAF $4,808 $1,858 GCF Advance $3,879 Elevate Pri
Slide 16: Growing Private Markets Business
Growing Private Markets Business $57bn Private Markets Management Fees18 (mm) Private Markets Total AUM 12% CAGR $224.4 66% $193.6 $213.7 Private Markets % of Total FPAUM $169.4 $149.3 $18bn Private Markets Fundraising in Last 2020 2021 2022 2023 LTM Three Years 18. Excludes catch up management fees
Slide 17: Growing Carried Interest Earnings Power
Growing Carried Interest Earnings Power $ million Total carried interest continues to experience strong growth, and the firm is keeping a larger share of that carry Unrealized carried interest bridge (mm) Unrealized carried interest at net asset value as of Q3 2024 +$701 143 programs with unrealized
Slide 18: Significant Embedded Value From Incentive Fees
Significant Embedded Value From Incentive Fees Incentive Fee Revenue has Been ...and Incentive Fee Earnings Power is Muted Despite Growth in Unrealized Growing with Shift Towards Direct- Carry... Oriented Strategies Unrealized Carried Interest vs Gross Incentive Fees (mm) AUM Subject to Incentive Fe
Slide 19: Growth in Sustainable and Impact Investments
Growth in Sustainable and Impact Investments19 $28bn Sustainable Investing AUM20 Energy Workforce Regionally Other Diverse Essential Social Transition / Standards / Targeted / Sustainable Managers Services Climate Labor Impact Inclusive Finance Investments $15.7 bn $7.8 bn $5.6 bn $2.4 bn $1.6 bn $0
Slide 20: Other Key Items
Other Key Items • $32 million remained in the approved share and warrant repurchase program as of September 30, 2024. ◦ GCM Grosvenor was deemed to have repurchased $2.7 million of Class A common stock during the quarter ended September 30, 2024. • GCM Grosvenor's Board of Directors approved a $0.11
Slide 21: Supplemental Information
Supplemental Information GCM GROSVENOR | 21
Slide 22: GAAP Statements of Income
GAAP Statements of Income $000, EXCEPT PER SHARE AMOUNTS AND WHERE OTHERWISE NOTED THREE MONTHS ENDED NINE MONTHS ENDED SEP 30, 2023 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Revenues Management fees $ 94,573 $ 98,537 $ 280,382 $ 294,265 Incentive fees 26,073 23,304 44,884 49,459 Other operating income
Slide 23: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures3 $000, except per share amounts and where otherwise noted THREE MONTHS ENDED NINE MONTHS ENDED ADJUSTED EBITDA SEP 30, 2023 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Revenues Private markets strategies2 $ 54,497 $ 57,904 $ 159,277 $ 172,288 Absolute return strateg
Slide 24: GAAP Balance Sheets
GAAP Balance Sheets $000, except per share amounts and where otherwise noted DEC 31, 2023 SEP 30, 2024 Assets Cash and cash equivalents $ 44,354 $ 98,447 Management fees receivable 24,996 20,707 Incentive fees receivable 27,371 26,292 Due from related parties 13,581 7,399 Investments 240,202 250,940
Slide 25: Components of GAAP Employee Compensation and Benefits
Components of GAAP Employee Compensation and Benefits $000 THREE MONTHS ENDED NINE MONTHS ENDED SEP 30, 2023 JUN 30, 2024 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Fee-Related Earnings Compensation Cash-based employee compensation and benefits, net25 $ 38,027 $ 38,103 $ 36,989 $ 116,409 $ 112,079 Incen
Slide 26: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED NINE MONTHS ENDED NET INCENTIVE FEES ATTRIBUTED TO GCM GROSVENOR SEP 30, 2023 JUN 30, 2024 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Incentive fees: Performance fees $ 661 $ 4,346 $ 2,745 $ 1,174 $ 13,078 Carried interest 25,412 11,691 20,559 4
Slide 27: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED NINE MONTHS ENDED ADJUSTED PRE-TAX INCOME & ADJUSTED NET INCOME SEP 30, 2023 JUN 30, 2024 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Net income attributable to GCM Grosvenor Inc. $ 5,898 $ 4,800 $ 4,156 $ 9,516 $ 11,080 Plus: Net income (loss) a
Slide 28: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED NINE MONTHS ENDED ADJUSTED EBITDA SEP 30, 2023 JUN 30, 2024 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Adjusted Net Income $ 28,427 $ 29,386 $ 31,434 $ 70,769 $ 88,032 Plus: Adjusted income taxes4 9,075 9,639 10,311 22,593 28,876 Depreciation ex
Slide 29: Reconciliation to Adjusted Net Income Per Share
Reconciliation to Adjusted Net Income Per Share $000, except per share amounts and where otherwise noted THREE MONTHS ENDED NINE MONTHS ENDED ADJUSTED NET INCOME PER SHARE SEP 30, 2023 JUN 30, 2024 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Adjusted Net Income $ 28,427 $ 29,386 $ 31,434 $ 70,769 $ 88,03
Slide 30: Change in FPAUM and AUM
Change in FPAUM and AUM Three Months Ended September 30, 2024 PRIVATE MARKET ABSOLUTE RETURN CONTRACTED $mm STRATEGIES STRATEGIES TOTAL FPAUM NOT YET FPAUM TOTAL AUM Fee-Paying AUM Beginning of Period (July 1, 2024) $ 41,782 $ 21,446 $ 63,228 $ 7,324 $ 78,703 Contributions from CNYFPAUM 486 11 497 C
Slide 31: Management Fee Detail
Management Fee Detail2 $000 THREE MONTHS ENDED NINE MONTHS ENDED MANAGEMENT FEES SEP 30, 2023 JUN 30, 2024 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 Private Markets Specialized Funds $ 21,117 $ 24,324 $ 22,913 $ 60,489 $ 68,238 Average Fee Rate31 0.79 % 0.79 % 0.78 % 0.79 % 0.79 % Customized Separate A
Slide 32: Private Markets Strategies Performance Metrics
Private Markets Strategies Performance Metrics Realized and Partially Realized Investments ($mm) CURRENT INVESTMENT INVESTEMNT STRATEGY COMMITMENTS CONTRIBUTIONS DISTRIBUTION PME IRR PME INDEX VALUE NET TVPI NET IRR Private Equity Primary Fund Investments33 $ 13,898 $ 15,129 $ 25,131 $ 2,538 1.83 13
Slide 33: Private Markets Strategies Performance Metrics
Private Markets Strategies Performance Metrics All Investments All Investments ($($mm) million) CURRENT INVESTMENT INVESTEMNT STRATEGY COMMITMENTS CONTRIBUTIONS DISTRIBUTION PME IRR PME INDEX VALUE NET TVPI NET IRR Private Equity Primary Fund Investments33 $ 25,585 $ 24,027 $ 28,488 $ 10,691 1.63 12
Slide 34: Absolute Return Strategies Performance
Absolute Return Strategies Performance AS OF THREE MONTHS ANNUALIZED RETURNS PERIODS ENDED SEP 30, 2024 SEP 30, 2024 ENDED SINCE SEP 30, 2024 YEAR TO DATE ONE YEAR THREE YEAR FIVE YEAR INCEPTION Assets Under Management (bn) Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Absolute Return
Slide 35: Notes
Notes Data in the presentation is as of September 30, 2024 unless otherwise noted. 1. Of the $7.9 billion CNYFPAUM as of September 30, 2024, approximately $3.1 billion is subject to an agreed upon fee ramp in schedule that will result in management fees being charged on approximately $0.3 billion of
Slide 36: Notes (Continued)
Notes (Continued) 26. General, administrative and other, net is comprised of the following: $000 THREE MONTHS ENDED NINE MONTHS ENDED COMPONENTS OF GENERAL, ADMINISTRATIVE AND OTHER, NET SEP 30, 2023 SEP 30, 2024 SEP 30, 2023 SEP 30, 2024 General, administrative and other $ (21,397) $ (24,617) $ (75
Slide 37: 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 38: Certain Definitions and Use of Non-GAAP Financials and KPIs (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 39: Disclosures
Disclosures Non-GAAP Financial Measures The non-GAAP financial measures contained in this presentation are not GAAP measures of GCM Grosvenor’s financial performance or liquidity and should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows fro