Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q3 2020 Earnings Presentation
27 slides from Gcm Grosvenor's earnings presentation, Nov 19, 2020
Slide 1: 2020 Third Quarter Results Earnings Presentation
November 19, 2020 2020 Third Quarter Results Earnings Presentation
Slide 2: Transaction Overview
2 Transaction Overview Equity sources 2 Equity uses 2 GCM Grosvenor Business Combination with CFAC ▪ On August 3, 2020, GCM Grosvenor announced the firm would become a public company through a business combination with CF Acquisition Corp (“CFAC”) ▪ Simultaneously, GCM Grosvenor announced a $225 mil
Slide 3: Equity Ownership Summary
3 Equity Ownership Summary GCM Grosvenor existing shareholders 78.3% CFAC shares 6.3% PIPE shares 10.0% Sponsors 5.4% 1 1. Sponsors’ shares includes $ 6 mm investment from Cantor in a private placement concurrent with CFAC’s IPO (already funded), $ 30 mm investment from Cantor (pursuant to the amend
Slide 4: Largest Independent Open Architecture Alternative Asset Platform
4 1. AUM as of September 30 , 2020 Flexible implementation platform Broad and deep investment capabilities Customized separate accounts 77% Specialized funds 23% % of AUM 1 AUM: $59bn¹ AUM: $59bn¹ Largest Independent Open Architecture Alternative Asset Platform GCM Grosvenor is at the center of the
Slide 5: Deep, Tenured and Diversified Client Relationships
Public Pensions Sovereign Entities Union Pensions Corporate Pensions Financial Institutions Other Institutional High Net Worth/ Family Office Endowments & Foundations 5 1 . AUM as of September 30 , 2020 Deep, Tenured and Diversified Client Relationships % of AUM 1 42% 14% 8% 16% 6% 7 % 6% 1% 23% 9%
Slide 6: GCM Grosvenor is Reaffirming Revised 2020 Guidance
6 GCM Grosvenor is Reaffirming Revised 2020 Guidance 1. Excludes fund reimbursement revenue 2. Adjusted net income represents amounts attributable to GCMH LLLP and GCM LLC as is not pro forma for the business combination with CFAC on November 17 , 2020 2020 Forecast As of Merger Presentation as of A
Slide 7: Third Quarter 2020 Results: Key Highlights
7 1. See the appendix attached hereto for a reconciliation of each metric to the most comparable GAAP metric 2. Excludes fund reimbursement revenue GCM Grosvenor Third Quarter 2020 Results Third Quarter Key Highlights Financial Results 1 ($mm) 3Q 20 % Change vs. Q2 20 Management fees 2 $76.1 4% Net
Slide 8: Continued FPAUM, CNYFPAUM and AUM Growth
22.7 24.0 23.6 21.6 22.5 22.8 21.4 24.9 26.5 26.2 27.1 27.1 $1.9 $2.3 $5.2 $5.4 $5.6 $6.6 $46.1 $51.2 $55.2 $53.2 $55.2 $56.5 2017 2018 2019 Q1 2020 Q2 2020 Q3 2020 8 Absolute return strategies FPAUM¹ Private markets FPAUM¹ Contracted not yet fee - paying² FPAUM and CNYFPAUM($bn) Total AUM 3 Continu
Slide 9: Continued Strong Fundraising Driving FPAUM and CNYFPAUM Growth
Private Markets 76% Absolute Return Strategies 24% 9 Continued Strong Fundraising Driving FPAUM and CNYFPAUM Growth $1.4Bn of new capital raised in Q3 $0.3Bn of Q3 FPAUM $1.1Bn of Q3 CNYFPAUM Private Markets 92% Absolute Return Strategies 8% Fundraising By Strategy Customized Separate Accounts 91% S
Slide 10: Incentive Fee Drivers
10 Incentive Fee Drivers 1. Reflects GCMLP Diversified Multi - Strategy Composite gross returns 2. Gross unrealized carried interest prior to any amounts allocable to other parties, including current and former employees and Mosaic ▪ The amount of firm AUM eligible for an annual performance fee has
Slide 11: Financial Highlights
Financial Highlights
Slide 12: Quarter-Over-Quarter Comparison
$73 $76 Q2 20 Q3 20 12 Quarter - Over - Quarter Comparison ($mm) Management fees Net Incentive Fees Attributable to GCM Grosvenor 1 Net Fees Attributable to GCM Grosvenor 1 4% 1,548% 13% $0 $7 Q2 20 Q3 20 $76 $85 Q2 20 Q3 20 $25 $26 Q2 20 Q3 20 Adjusted FRE 2 Adjusted EBITDA 2 Adjusted Pre - Tax Inc
Slide 13: Assets Under Management – Q3 2020
13 Assets Under Management – Q3 2020 $mm Private Markets Strategies Absolute Return Strategies Total FPAUM Contracted Not Yet FPAUM Total AUM Fee - Paying AUM Beginning of Period (July 1, 2020) $ 27,083 $ 22,514 $ 49,597 $ 5,584 $ 56,890 Contributions from CNYFPAUM 347 7 354 Contributions from New C
Slide 14: Assets Under Management – Year to Date 2020
14 Assets Under Management – Year to Date 2020 $mm Private Markets Strategies Absolute Return Strategies Total FPAUM Contracted Not Yet FPAUM Total AUM Fee - Paying AUM Beginning of Period (January 1, 2020) $ 26,477 $ 23,556 $ 50,033 $ 5,153 $ 57,746 Contributions from CNYFPAUM 1,361 218 1,579 Contr
Slide 15: Condensed GAAP Statements of Income
15 Condensed GAAP Statements of Income (unaudited) Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 QoQ % Change Sept 30, 2019 Sept 30, 2020 YoY % Change Management Fees $ 82,837 $ 75,136 $ 78,269 4% $ 243,708 $ 231,106 (5%) Incentive Fees 33,342 13,041 21,774 67%
Slide 16: Fee-Related Earnings Statement
16 1 . Excludes fund expense reimbursement revenue Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 QoQ % Change Sept 30, 2019 Sept 30, 2020 YoY % Change Management Fees 1 $ 81,532 $ 73,309 $ 76,105 4% $ 240,040 $ 225,141 (6%) Other Operating Income 2,383 1,953 1,7
Slide 17: Appendix: Financial Information
Appendix: Financial Information
Slide 18: Condensed GAAP Balance Sheets
18 Condensed GAAP Balance Sheets (unaudited) $000 Sept 30, 2019 Dec 31, 2019 Sept 30, 2020 Cash and cash equivalents $ 54,609 $ 79,866 $ 158,186 Management fees receivable 25,124 13,896 12,534 Incentive fees receivable 40,882 20,771 11,570 Due from related parties 9,546 10,226 10,791 Investments 158
Slide 19: Condensed GAAP Statements of Cash Flows
19 Condensed GAAP Statements of Cash Flows (unaudited) Nine Months Ended $000 Sept 30, 2019 Sept 30, 2020 Net cash provided by (used in) operating activities $ 34,832 $ 43,131 Net cash provided by (used in) investing activities 7,739 (2,701) Net cash provided by (used in) financing activities (55,93
Slide 20: Reconciliation to Non-GAAP Metrics
20 Reconciliation to Non - GAAP Metrics Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020 Net incentive fees attributable to GCM Grosvenor Incentive fees $ 33,342 $ 13,041 $ 21,774 $ 65,819 $ 38,048 Less: Carried interest expense attribut
Slide 21: Reconciliation to Non-GAAP Metrics
21 Reconciliation to Non - GAAP Metrics Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020 Adjusted pre - tax income & Adjusted net income Net income (loss) attributable to GCM Grosvenor $ 23,890 $ 5,927 $ 1,326 $ 41,430 $ (7,702) Plus: In
Slide 22: Reconciliation to Non-GAAP Metrics
22 Reconciliation to Non - GAAP Metrics Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020 Adjusted EBITDA Adjusted net income $ 33,941 $ 19,174 $ 26,623 $ 71,572 $ 57,852 Plus: Income taxes 527 526 541 1,643 1,710 Tax effect of non - GAAP
Slide 23: Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments
23 Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments Note : Returns for each strategy are presented from the date the firm established a dedicated team focused on such strategy through June 30 , 2020 . Investment net returns are net of investment - related
Slide 24: Private Markets Strategies Performance Metrics – All Investments
24 Private Markets Strategies Performance Metrics – All Investments Note : Returns for each strategy are presented from the date the firm established a dedicated team focused on such strategy through June 30 , 2020 . Investment net returns are net of investment - related fees and expenses, including
Slide 25: Non-GAAP Measure Definitions
25 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 excluding (a) income taxes, (b) change in fair value of derivatives, (c) partnership intere
Slide 26: Definitions of AUM and Transaction
26 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 manage ment. GCM Grosvenor refers to the combined accounts of (a) Grosvenor Capital Management Holdings, LLLP, an Illinois limited liab
Slide 27: Forward-Looking Statements
27 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 and anticipated recommendation of man