Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q1 2021 Earnings Presentation
35 slides from Gcm Grosvenor's earnings presentation, May 13, 2021
Slide 1: 2021 First Quarter Results Earnings Presentation
May 13, 2021 2021 First 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: First Quarter 2021 Results
4 First Quarter 2021 Results $ million March 31, 2020 December 31, 2020 March 31, 2021 % Change vs 4Q 20 % Change vs 1Q 20 AUM $ 55,779 $ 61,943 $ 64,862 5 % 16 % FPAUM 47,769 51,969 53,362 3 % 12 % CNYFPAUM 5,395 7,057 7,454 6 % 38 % $ million unless otherwise noted Three Months Ended March 31, 202
Slide 5: Business Highlights
5 • Fundraising of $2.5 billion for the quarter ended March 31, 2021 • Positive net flows into Absolute Return Strategies of $205 million for the quarter ended March 31, 2021 • Fee-Related Revenue growth of 7% over 1Q 2020 and 4% over 4Q 2020 • Total AUM growth of 16% over 1Q 2020 and 5% over 4Q 202
Slide 6: Strong Growth in Fees and Earnings
6 Strong Growth in Fees and Earnings Adjusted Revenue1 1. Excludes fund reimbursement revenue of $2.0 million and $2.4 million for the three months ended March 31, 2020 and March 31, 2021, respectively. 6% $ million 75.7 80.3 36.5 40.4 39.2 39.9 Private Markets Absolute Return Strategies Q1 20 Q1 21
Slide 7: Q1 2021 and 2020 Fundraising Summary
Q1 2021 and 2020 Fundraising Summary 7 $ billion 1.7 1.8 1.4 2.1 2.5 0.7 0.3 0.1 0.4 0.6 1.0 1.5 1.3 1.7 1.9 Private Markets Absolute Return Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 $2.5Bn of new capital raised in 2021
Slide 8: Increased Earnings Power From Growing AUM
Scheduled Ramp-in $2.5 0.5 1.4 0.6 2021 2022 2023+ $51.2 $55.3 $59.0 $60.8 24.0 23.6 24.1 24.4 24.9 26.5 27.8 28.9 2.3 5.2 7.1 7.5 2018 2019 2020 Q1 2021 Absolute return strategies FPAUM Private markets FPAUM Contracted not yet FPAUM ("CNYFPAUM") FPAUM and CNYFPAUM ($bn) Increased Earnings Power Fro
Slide 9: Significant Embedded Growth and Strong Business Momentum
Significant Embedded Growth and Strong Business Momentum ~$36mm Incremental management fees from $7.5 billion of Contracted Not Yet Fee Paying AUM as of March 31, 2021 Incremental run rate carry earnings from contracted funds and growth in AUM eligible for annual performance fees, increasing run-rat
Slide 10: Incentive Fee Earnings Power and Unrealized Carried Interest
$21.1 $41.2 2017 Run rate 10 Incentive Fee Earnings Power Gross Unrealized Carried Interest2 29% Unrealized carry by vintage 2016+ 32% 2013-2015 25% 2009-2012 23% 2008 or Earlier 20% $381m $491m 113 121 Gross unrealized carried interest Programs in unrealized carry Q1 20 Q1 21 1. The run rate on ann
Slide 11: Financial Results
Financial Results
Slide 12: GAAP Statements of Income (unaudited)
12 GAAP Statements of Income (unaudited) Three Months Ended $000, except per share amounts Mar 31, 2020 Dec 31, 2020 (restated) Mar 31, 2021 % Change vs 4Q 20 % Change vs 1Q 20 Revenues Management fees $ 77,701 $ 79,639 $ 82,625 4 % 6 % Incentive fees 3,233 73,602 18,214 (75) % 463 % Other operating
Slide 13: Non-GAAP Financial Results
13 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. Excludes fund reimbursement revenue of $2.0 million, $2.4 million and $2.4 million for the three mon
Slide 14: Other Key Items
Other Key Items 14 • Repaid $50 million of term loan in February 2021, extended remaining $290 million term loan and $50 million revolving credit facility by 3 years to February 2028 and February 2026 respectively and reduced cost of debt to L+250bps with a LIBOR floor of 50bps • The Board of Direct
Slide 15: About GCM Grosvenor
About GCM Grosvenor
Slide 16: Client Value Proposition and Business Momentum
Strong economic value proposition ◦ Fee savings and preferential terms ◦ Access to hard to access managers ◦ Proprietary deal flow Deeply embedded with our clients ◦ Cornerstone of clients’ alternative programs ◦ Clients leverage our full investment and operational infrastructure ◦ 95%+ of top clien
Slide 17: Strong Value Proposition Drives Diversified, Long Tenured Client Base
17 Note: AUM as of March 31, 2021. Management fees for the twelve months ended March 31, 2021. Strong Value Proposition Drives Diversified, Long Tenured Client Base % of AUM 42% 14% 8% 16% 6% 7% 6% 1% 23% 9% 4% Our client base is institutional and stable % of management fees 64% 24% 12% Our client b
Slide 18: ESG and Impact Investments
18 ESG and Impact Investments AUM ($bn) Clean Energy Invested / Committed: $3.4bn Labor Impact Invested / Committed: $0.9bn Regionally Targeted Invested / Committed: $3.4bn 13% CAGR ESG and Investing with an Impact are Core Values Diverse Managers Invested / Committed: $8.1bn Other ESG Invested / Co
Slide 19: Strong Investment Performance Driven by Proven Investment Process
13.9% 14.2% 22.5% 24.0% 11.2% 21.8% 9.3% 10.1% 14.8% 12.5% 6.4% 11.5% Investment Net IRR PME IRR Primary Fund Investment Secondary Investment Co-Investment / Direct Investment Diverse Managers Infrastructure Real Estate 19 Note: AUM as of March 31, 2021 1. Multi-Strategy Absolute Return Strategies r
Slide 20: Appendix
Appendix
Slide 21: GAAP Balance Sheets (unaudited)
21 GAAP Balance Sheets (unaudited) $000 Dec 31, 2020 (restated) Mar 31, 2021 Assets Cash and cash equivalents $ 198,146 $ 156,273 Management fees receivable 14,524 15,955 Incentive fees receivable 69,424 25,935 Due from related parties 11,326 8,513 Investments 166,273 180,708 Premises and equipment,
Slide 22: Reconciliation to Non-GAAP Metrics
22 Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Components of GAAP Employee Compensation and Benefits Cash-based employee compensation and benefits, net1 $ 42,022 $ 38,467 $ 41,192 Cash-based incentive fee related compensation — 11,454 1,833 Carri
Slide 23: Reconciliation to Non-GAAP Metrics
23 Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Net Incentive Fees Attributable to GCM Grosvenor Incentive fees Performance fees $ 605 $ 51,105 $ 6,113 Carried interest 2,628 22,497 12,101 Less: Cash-based incentive fee related compensation — (11,
Slide 24: Reconciliation to Non-GAAP Metrics
24 Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 (restated) Mar 31, 2021 Adjusted Pre-Tax Income & Adjusted Net Income Net income (loss) attributable to GCM Grosvenor Inc. $ — $ 4,049 $ 2,547 Plus: Net income (loss) attributable to GCMH (14,955) (105,235) 703 I
Slide 25: Reconciliation to Non-GAAP Metrics
25 Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Adjusted EBITDA Adjusted net income $ 9,605 $ 46,057 $ 18,906 Plus: Adjusted Income taxes1 3,202 15,351 6,302 Depreciation expense 696 542 473 Interest expense 5,867 5,931 4,491 Adjusted EBITDA $ 19,
Slide 26: Reconciliation to adjusted net income per share
26 Reconciliation to adjusted net income per share Three Months Ended $000, except per share amounts Mar 31, 2020 1 Mar 31, 2021 Adjusted net income $ 9,605 $ 18,906 Weighted-average shares of Class A common stock outstanding - basic (000) 39,985 42,084 Exercise of private warrants - incremental sha
Slide 27: Quarterly Growth in FPAUM and AUM
27 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 (January 1, 2021) $ 27,839 $ 24,130 $ 51,969 $ 7,057 $ 61,943 Contributions from CNYFPAUM 1,163 92 1,255 Contributions from
Slide 28: Management Fee Detail
28 Management Fee Detail1 Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Management Fees Private Markets Specialized Funds $ 10,811 11,678 $ 12,970 Average Fee Rate3 0.74 % 0.73 % 0.74 % Customized Separate Accounts 25,653 26,712 27,403 Average Fee Rate 0.51 % 0.50 % 0.49 % Private M
Slide 29: Private Markets Strategies Performance Metrics – Realized and Partially Realized
29 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 $ 10,762 $ 11,785 $ 18,898 $ 2,186 1.79 13.
Slide 30: Private Markets Strategies Performance Metrics – All Investments
30 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 $ 20,981 $ 18,867 $ 22,105 $ 8,050 1.60 12.4 % 10.7 % S&P 500 Secondary
Slide 31: Absolute Return Strategies Performance
31 Absolute Return Strategies Performance Assets Under Management as of March 31, 2021 ($Bn) Year to Date Returns Ending March 31, 2021 Annualized Returns Since Inception Through March 31, 2021 Gross Net Gross Net Absolute Return Strategies (Overall) $ 25.5 0.45 % 0.28 % 7.20 % 6.08 % GCMLP Diversif
Slide 32: Mosaic Footnotes
1. Based on cash flow up to the relevant date, GCM Grosvenor made a payment of $4.9mm at 12/31/20, may be required to make payments up to a maximum amount of $7.5mm at 12/31/21 and $7.5mm at 12/31/22; all such payments reduce the option price dollar for dollar. GCM Grosvenor may also be required to
Slide 33: Non-GAAP Measure Definitions
33 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) net income attributable to GCMH, excluding (b) income taxes, (c) changes in fair
Slide 34: Definitions: AUM and Transaction
34 Assets Under Management (“AUM”) reflects the sum of (a) FPAUM, (b) CNYFPAUM and (c) other mark-to-market, insider capital and non-fee-paying assets under management. GCM Grosvenor refers to the combined accounts of (a) Grosvenor Capital Management Holdings, LLLP ("LLLP" or "GCMH"), an Delaware li
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