Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Investor Presentation (May 2024)
28 slides from Gcm Grosvenor's investor presentation, May 2024
Slide 1: GCM Grosvenor Investor Presentation
GCM Grosvenor Investor Presentation May 2024
Slide 2: 53 Years of Alternative Asset Management Investing
53 Years of Alternative Asset Management Investing 1971 73% 545 179 First year in business of AUM in customized Employees1 Investment professionals separate accounts Real Estate Absolute Return $6.1bn $23.6bn DIRECT SEEDING/ PRIMARY STAKES Alternative Credit $13.6bn $79bn Private Equity $30.0bn 2 AU
Slide 3: Long Term Tailwinds for Alternatives Persist
Long Term Tailwinds for Alternatives Persist The Majority of Investors Plan to Maintain or Increase Target Alternative Investments AUM ($T) Allocation to Alternative Investments Over the Longer Term 93% 93% 94% +10% 84% $24.5 CAGR 76% $16.3 $10.1 Private Equity Hedge Funds Infrastructure Real Privat
Slide 4: We Operate as a Solutions Provider
We Operate as a Solutions Provider Open Architecture Origination Platform We can invest across the full spectrum of alternative strategies and implementation styles ABSOLUTE MULTI-ASSET RETURN PRIVATE EQUITY INFRASTRUCTURE REAL ESTATE CREDIT SUSTAINABILITY/ STRATEGIES CLASS IMPACT Primary Investment
Slide 5: Tenured and Diversified Client Base
Tenured and Diversified Client Base 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 of World Other EMEA 7% Top 6% 1
Slide 6: Customized Separate Accounts are Highly Valuable
Customized Separate Accounts are Highly Valuable Illustrative client relationship assuming $100M initial account size Sticky Relationships 600 500 90% average re-up rate on initial sale5 400 28% FPAUM ($M) 300 average size increase on each re-up6 200 100 15 years average relationship across top 25 c
Slide 7: Growth in Key Business Drivers
Growth in Key Business Drivers December 31, 2020 March 31, 2024 Growing Earnings Power $62bn $79bn AUM Private Markets Growing as a Percentage 54% 65% Private Markets % of FPAUM Shifting Towards Direct- Oriented Strategies 39% 52% Direct-Oriented Strategies % of Private Markets AUM Operating Leverag
Slide 8: Growing and Diversifying AUM and Earnings Power
Growing and Diversifying AUM and Earnings Power AUM by Strategy (bn) 8% CAGR $78.8 $76.9 $73.7 $72.1 $61.9 $30.0 9% $29.4 Private Equity $26.2 $29.1 CAGR 13% $22.8 Private7 Markets CAGR $13.1 $20.0 $20.1 27% $16.6 $9.2 Real Assets CAGR $25.2 $26.6 $23.0 $22.4 $23.6 (2)% Absolute Return Strategies CA
Slide 9: Growing Private Markets Business
Growing Private Markets Business $55bn Private Markets Management Fees8 (mm) Private Markets Total AUM 12% CAGR $217.1 $213.7 $193.6 65% $169.4 Private Markets % of Total FPAUM $149.3 $19bn Private Markets Fundraising in Last 2020 2021 2022 2023 LTM Three Years 8. Excludes catch up management fees a
Slide 10: Significant Value From Absolute Return Strategies
Significant Value From Absolute Return Strategies Significant $146mm $29mm Revenue LTM Absolute Return Run-Rate Annual Generation Strategies Management Fees Performance Fees9 Broad Strategic Benefits Sourcing and Data Engine Loyal Client Base With Private Markets Cross Sell Opportunities 1750 150+ M
Slide 11: Growth in Sustainable and Impact Investments
Growth in Sustainable and Impact Investments13 $27bn Sustainable Investing AUM14 Energy Workforce Regionally Other Diverse Essential Social Transition / Standards / Targeted / Sustainable Managers Services Climate Labor Impact Inclusive Finance Investments $15.9bn $6.9bn $6.0bn $2.3bn $1.6bn $0.6bn
Slide 12: 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 140 programs with unrealized carried interest (mm) Unrealized Carried Interest by Vintage Year (mm)15 $494 $779 224 55% Firm 410 Share
Slide 13: Significant Embedded Value From Incentive Fees
Significant Embedded Value From Incentive Fees Incentive Fee Revenue has Been Muted Despite Growth ...and Incentive Fee Earnings Power is Growing with Shift in Unrealized Carry... Towards Direct-Oriented Strategies Unrealized Carried Interest vs Gross Incentive Fees (mm) AUM Subject to Incentive Fee
Slide 14: Financial Performance Highlights
Financial Performance Highlights Fee-Paying AUM (bn) Fee-Related Earnings (mm) Adjusted EBITDA (mm) Adjusted Net Income (mm) 29% 6% 26% $42.4 39% $63.2 $38.1 $27.2 $59.8 $32.9 27.2 $30.4 22.4 $19.6 21.8 19.6 38.0 40.8 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Private Markets Ab
Slide 15: Key 2023 and Long-Term Growth Drivers
Key 2023 and Long-Term Growth Drivers Key Long-Term Growth Drivers 1. 2. 3. 17 Scaling Core Capabilities Planting Seeds for Future Growth Improving Earnings Quality and Power Client Retention & Compound Capital Individual Investor & Insurance Business Shifting Towards Private Markets Approximately O
Slide 16: Supplemental Information
Supplemental Information GCM GROSVENOR | 16
Slide 17: Illustrative Client Economic Value Proposition
Illustrative Client Economic Value Proposition Absolute Return Strategies Example: $300M Fee Paying; $300M Non-Fee Paying. Assuming 0% gross return. Fee Paying18 Non-Fee Paying $300 million $300 million ▪ GCM Grosvenor offers large Absolute Return Strategies clients a ‘hybrid model’ through Manageme
Slide 18: Illustrative Client Economic Value Proposition
Illustrative Client Economic Value Proposition Private Markets Example: $1.0bn Program - Direct Primary Program vs. Direct Primaries + Co-Investment Program GCM Grosvenor Direct Primary Direct Primaries Managed Only Program vs. Program Co-Invest Program $1.0 billion $650 million $350 million Managem
Slide 19: GAAP Statements of Income
GAAP Statements of Income $000, EXCEPT PER SHARE AMOUNTS AND WHERE OTHERWISE NOTED THREE MONTHS ENDED MAR 31, 2023 MAR 31, 2024 Revenues Management fees $ 92,245 $ 95,885 Incentive fees 5,815 10,118 Other operating income 1,056 2,863 Total operating revenues 99,116 108,866 Expenses Employee compensa
Slide 20: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures22 $000, except per share amounts and where otherwise noted THREE MONTHS ENDED ADJUSTED EBITDA MAR 31, 2023 MAR 31, 2024 Revenues Private markets strategies21 $ 51,802 $ 55,577 Absolute return strategies21 37,136 36,375 Management fees, net21 88,938 91,952 Admin
Slide 21: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED ADJUSTED PRE-TAX INCOME & ADJUSTED NET INCOME MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Net income (loss) attributable to GCM Grosvenor Inc. $ (1,230) $ 3,258 $ 2,124 Plus: Net income (loss) attributable to noncontrolling interests in GCMH (16,
Slide 22: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED ADJUSTED EBITDA MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Adjusted Net Income $ 19,623 $ 32,435 $ 27,212 Plus: Adjusted income taxes27 6,266 11,260 8,926 Depreciation expense 347 314 305 Interest expense 6,655 5,720 5,923 Adjusted EBITDA $ 32,8
Slide 23: Notes
Notes Data in the presentation is as of March 31, 2024 unless otherwise noted. 1. Employee data as of April 1, 2024. Individuals with dual responsibilities are counted only once. 2. AUM as of March 31, 2024. Sustainable / Impact and Alternative Credit Investments overlap with investments in other st
Slide 24: Notes (Continued)
Notes (Continued) 24. General, administrative and other, net is comprised of the following: $000 THREE MONTHS ENDED COMPONENTS OF GENERAL, ADMINISTRATIVE AND OTHER, NET MAR 31, 2023 MAR 31, 2024 General, administrative and other $ (25,779) $ (25,179) Plus: Transaction expenses 2,359 56 Fund reimburs
Slide 25: 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 26: 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 27: Disclosures
Disclosures 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. These forward-looking statement
Slide 28: Disclosures
Disclosures Share Repurchase Plan Authorization GCMG’s Board of Directors previously authorized a share repurchase plan, which may be used to repurchase outstanding Class A common stock and warrants in open market transactions, in privately negotiated transactions including with employees or otherwi