Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Investor Presentation (June 2023)
24 slides from Gcm Grosvenor's investor presentation, June 2023
Slide 1: GCM Grosvenor Investor Presentation June 2023
GCM Grosvenor Investor Presentation June 2023
Slide 2: 52 Years of Alternative Asset Management Investing
52 Years of Alternative Asset Management Investing 1971 74% 543 178 First year of of AUM in customized Employees1 Investment Investing separate accounts professionals Real Estate Absolute Return $5.6bn $22.8bn Primary Alternative Private Credit Direct $75bn Co- Invest Equity $12.2bn Assets under $29
Slide 3: Allocations to Alternatives are Growing
Allocations to Alternatives are Growing % OF INVESTORS WHO PLAN TO MAINTAIN OR INCREASE TARGET ALTERNATIVE INVESTMENTS AUM ($T) ALLOCATION TO ALTERNATIVE INVESTMENTS IN THE NEXT 3 YEARS 21.2 15.1 95% 97% 92% 88% 91% 87% 9.8 Private Equity Hedge Funds Real Estate Infrastructure Private Credit Liquid
Slide 4: GCM Grosvenor is a Growing Firm in a Growing Industry
GCM Grosvenor is a Growing Firm in a Growing Industry GCM Grosvenor AUM ($bn) % CAGR Drivers of growth Persistent growth in global +10.5% + $75.3 institutional wealth $9.1 $6.4 Increasing investor demand + $55.8 for alternative investment strategies $2.6 $5.4 $21.8 Consistent strong historical + per
Slide 5: Within Alternatives, We Operate as a Solutions Provider
Within Alternatives, We Operate as a Solutions Provider GCM Grosvenor is the connective tissue between the growing, fragmented deal and manager universe and the vast global pools of capital LARGE AND GROWING CLIENT UNIVERSE FRAGMENTED DEAL AND MANAGER UNIVERSE Track 5,600+ managers across our platfo
Slide 6: Our Strengths Fuel Our Future Growth
Our Strengths Fuel Our Future Growth OUR BREADTH We can invest across the full spectrum of alternative strategies ABSOLUTE RETURN PRIVATE EQUITY INFRASTRUCTURE REAL ESTATE CREDIT MULTI-ASSET CLASS ESG & IMPACT STRATEGIES OUR DEPTH We can invest in a variety of implementation styles Primary Investmen
Slide 7: Our Platform Fuels Client Extension Opportunities
Our Platform Fuels Client Extension Opportunities • 74% of AUM • Specifically tailored program to client objectives and constraints • Extension of staff • Provide value-add ancillary services, including administering capital on behalf of certain of our clients • Open-ended and closed ended options •
Slide 8: Customized Separate Accounts Generate Sticky Relationships
Customized Separate Accounts Generate Sticky Relationships Illustrative client relationship assuming $100M initial account size FIRST SALE $600 SECOND SALE THIRD SALE FOURTH SALE $500 $400 FPAUM ($M) $300 $200 $100 $0 1 2 3 4 5 6 7 8 9 10 11 12 YEARS PROVEN SUCCESS WITH GROWING STICKY SEPARATE ACCOU
Slide 9: Strong Value Proposition Attracts Tenured and Diversified Clients
Strong Value Proposition Attracts Tenured and Diversified Clients Our client base is Our client base is Our client base is institutional and stable global diversified % of AUM % of AUM % of management fees No single client contributes more than Financial 5% of our management fees Institutions Rest o
Slide 10: Private Markets Experiencing Growth and Mix Shift
Private Markets Experiencing Growth and Mix Shift FPAUM Has Shifted Towards Private Markets... ...And Private Markets Management Fees Have Grown Private Markets FPAUM (bn) Private Markets Management Fees (mm) 15% 13% CAGR CAGR Q1 21 Q1 23 Q1 21 Q1 23 54% 64% 41% 49% Private Markets % % of Private Ma
Slide 11: ESG and Impact Remains a Core Driver of AUM Growth
ESG and Impact Remains a Core Driver of AUM Growth 8 ESG and Impact Investments AUM ($bn) ESG and Impact AUM by Strategy9 Diverse Managers 31% $14.5 billion Regionally Targeted / Inclusive Finance $1.8 billion Clean Energy $4.1 billion Workforce Standards / Labor Impact $1.7 billion Other ESG and Im
Slide 12: Strong Revenue Characteristics Drive Growing Earnings
Strong Revenue Characteristics Drive Growing Earnings $ million % 3-year CAGR Fee-Related Revenue Fee-Related Earnings Adjusted Net Income Capital Returned to Shareholders 5% $90 19% $30 Repurchasing Shares 26% $20 cumulative shares $77 $67M and warrants repurchased13 13% remaining on $52 $18 $23M a
Slide 13: Key 2023 and Long-Term Growth Drivers
Key 2023 and Long-Term Growth Drivers Scale Core Capabilities New Channel Expansion14 High-Growth Strategies Grow with Existing Clients Non-institutional / Retail Private Markets Secondaries/Co-Invest/Direct 88% 50%+ LTM Flows AUM $26b 21% Of clients have added capital in last Of top clients a
Slide 14: Appendix
Appendix
Slide 15: Illustrative Client Economic Value Proposition: Absolute Return Strategies
Illustrative Client Economic Value Proposition: Absolute Return Strategies Example: $300M Fee Paying; $300M Non-Fee Paying. Assuming 0% gross return. Fee Paying15 Non-Fee Paying ◦ GCM Grosvenor offers large $300 million $300 million Absolute Return Strategies clients a ‘hybrid model’ Management fee
Slide 16: Illustrative Client Economic Value Proposition: Private Markets
Illustrative Client Economic Value Proposition: Private Markets Example: $1.0Bn Program – Direct Primary Program vs. Direct Primaries Program + Co-Investment Program GCM Grosvenor Direct Primary Only Direct Primaries Managed Co- Program vs. Program Investment Program $1.0 billion $650 million $350 m
Slide 17: GAAP Statements of Income
GAAP Statements of Income Three Months Ended $000, except per share amounts and where otherwise noted Mar 31, 2020 Mar 31, 2023 Revenues Management fees $ 77,701 $ 92,245 Incentive fees 3,233 5,815 Other operating income 1,683 1,056 Total operating revenues 82,617 99,116 Expenses Employee compensati
Slide 18: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures19 Three Months Ended $000, except per share amounts and where otherwise noted Mar 31, 2020 Mar 31, 2023 Adjusted EBITDA Revenues Private markets strategies $ 36,464 $ 51,802 Absolute return strategies 39,263 37,136 Management fees, net10 75,727 88,938 Administr
Slide 19: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Mar 31, 2023 Adjusted Pre-Tax Income & Adjusted Net Income Net loss attributable to GCM Grosvenor Inc. $ — $ (1,230) Plus: Net income (loss) attributable to noncontrolling interests in GCMH (14,955) 16,690 Provision for income t
Slide 20: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Mar 31, 2023 Adjusted EBITDA Adjusted Net Income $ 9,605 $ 19,623 Plus: Adjusted income taxes24 3,202 6,626 Depreciation expense 696 347 Interest expense 5,867 6,655 Adjusted EBITDA $ 19,370 $ 32,891 Fee-Related Earnings Adjuste
Slide 21: Notes
Notes 1. Employee data as of April 1, 2023. Individuals with dual responsibilities are counted only once. 2. AUM as of March 31, 2023. ESG / Impact and Alternative Credit investments overlap with investments in other strategies. 4. Based on 25 largest clients by AUM as of March 31, 2023. 5. Based on
Slide 22: 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 23: 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 24: Disclaimer
Disclaimer 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 incrementa