Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q2 2021 Earnings Presentation
35 slides from Gcm Grosvenor's earnings presentation, Aug 10, 2021
Slide 1: 2021 Second Quarter Results Earnings Presentation
2021 Second Quarter Results Earnings Presentation August 10, 2021
Slide 2: Presenters
Presenters Michael Sacks Jonathan Levin Pamela Bentley Stacie Selinger Chairman and President Chief Financial Head of Chief Executive Officer Officer Investor Relations 2
Slide 3: Business Update
Business Update
Slide 4: Second Quarter 2021 Results
Second Quarter 2021 Results $ million June 30, 2020 March 31, 2021 June 30, 2021 % Change vs 1Q 21 % Change vs 2Q 20 AUM $ 56,890 $ 64,862 $ 66,900 3% 18 % FPAUM 49,597 53,362 55,000 3% 11 % CNYFPAUM 5,584 7,454 7,027 (6)% 26 % Three Months Ended Six Months Ended $ million unless otherwise noted Jun
Slide 5: Business Highlights
Business Highlights • Total AUM growth of 18% over 2Q 2020 • Fee-Paying AUM growth of 11% over 2Q 2020 • Contracted Not Yet Fee-Paying AUM growth of 26% over 2Q 2020 • Fee-Related Revenue growth of 13% over 2Q 2020 and 10% over YTD 2Q 2020 Continued Growth in • Fee-Related Earnings growth of 9% over
Slide 6: Increased Management Fee Earnings Power From Growing AUM
Increased Management Fee Earnings Power From Growing AUM FPAUM and CNYFPAUM ($bn) Absolute return strategies FPAUM Private markets FPAUM Contracted not yet FPAUM ("CNYFPAUM") Scheduled CNYFPAUM Ramp-in $2.5 $60.8 $62.0 $59.0 1.4 $55.3 7.5 7.0 7.1 0.7 $51.2 5.2 0.4 2.3 Invested 2021 2022 2023+ Capita
Slide 7: Growing Value of Incentive Fees and Investments
Growing Value of Incentive Fees and Investments Growing Firm Share of Investments and Carried Interest1 (mm) Growing Carried Interest Annual Earnings Power2 (mm) Unrealized Carried Interest Investments $38 $349 $28 $274 102 93 $158 $14 68 247 181 90 Q2 2020 Q1 2021 Q2 2021 Q2 2020 Q1 2021 Q2 2021 Gr
Slide 8: Financial Results
Financial Results
Slide 9: Strong Growth in Revenues
Strong Growth in Revenues $ million Q2 21-over-Q2 20 YTD 21-over-YTD 20 1 Fee Related Revenue 10% 13% 84.9 167.6 152.7 75.3 1.9 4.3 3.6 2.0 80.6 40.7 76.0 36.8 36.5 42.3 73.0 82.7 Q2 20 Q2 21 Q2 YTD 20 Q2 YTD 21 Private Markets Absolute Return Strategies Administrative fees and other operating incom
Slide 10: Strong Growth in Earnings
Strong Growth in Earnings $ million Q2 21-over-Q2 20 YTD 21-over-YTD 20 Adjusted EBITDA 17% 34% 30.7 60.9 26.2 45.5 Q2 20 Q2 21 Q2 YTD 20 Q2 YTD 21 Fee-Related Earnings 23% 9% 52.6 42.7 25.1 27.5 Q2 20 Q2 21 Q2 YTD 20 Q2 YTD 21 Adjusted Net Income 30% 19.3 56% 14.8 38.2 24.4 Q2 20 Q2 21 Q2 YTD 20 Q2
Slide 11: Year to Date 2021 and 2020 Fundraising Summary
Year to Date 2021 and 2020 Fundraising Summary $ billion Private Markets Absolute Return 2.5 2.1 1.8 $4.0Bn 1.7 of new capital raised in 1.9 1.5 2021 1.4 1.0 1.7 1.5 Robust fundraising 1.0 pipeline supports future 1.3 growth 0.7 0.6 0.4 0.5 0.3 0.1 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 11
Slide 12: Other Key Items
Other Key Items • On July 2, 2021, GCM Grosvenor repurchased certain fund investments and rights to future carry associated with Mosaic (collectively, the “Mosaic Assets”) • GCM Grosvenor funded the discounted $165 million repurchase price with a combination of $57 million of balance sheet cash and
Slide 13: GAAP Statements of Income (unaudited)
GAAP Statements of Income (unaudited) Three Months Ended Six Months Ended $000, except per share amounts and where otherwise noted Jun 30, 2020 Jun 30, 2021 % Change Jun 30, 2020 Jun 30, 2021 % Change Revenues Management fees $ 75,136 $ 85,594 14 % $ 152,837 $ 168,219 10 % Incentive fees 13,041 32,2
Slide 14: Summary of Non-GAAP Financial Measures
1 Summary of Non-GAAP Financial Measures Three Months Ended Six Months Ended $000, except per share amounts and where otherwise noted Jun 30, 2020 Jun 30, 2021 % Change Jun 30, 2020 Jun 30, 2021 % Change Adjusted EBITDA Revenues Private markets strategies $ 36,548 $ 42,360 16 % $ 73,012 $ 82,733 13
Slide 15: About GCM Grosvenor
About GCM Grosvenor
Slide 16: Only Alternative Asset Solutions Provider Covering the Full Range of Strategies
Only Alternative Asset Solutions Provider Covering the Full Range of Strategies CLIENT VALUE PROPOSITION STRONG BUSINESS MOMENTUM Strong economic value proposition Stable and diversified revenue base ◦ Fee savings and preferential terms Absolute Real Estate ◦ Management and administrative fees are ~
Slide 17: Strong Value Proposition Drives Diversified, Long-Tenured Client Base
Strong Value Proposition Drives Diversified, Long-Tenured Client Base Our client base is institutional and stable Our client base is global Our client base is diversified % of AUM % AUM % of management fees No single client contributes more than High Net Worth/ Endowments Family Office & Foundations
Slide 18: ESG and Investing with an Impact are Core Values
ESG and Investing with an Impact are Core Values ESG and Impact Investments AUM ($bn) A+ rating From UN Principles of Responsible Investing (PRI)¹ 21% CAGR Approx. $14.4 $18.8 billion $12.8 $13.3 Committed and invested in ESG and Impact $11.2 $9.0 Approx. $14.4 billion Of ESG and Impact AUM 2018 201
Slide 19: Appendix
Appendix
Slide 20: GAAP Balance Sheets (unaudited)
GAAP Balance Sheets (unaudited) $000 Dec 31, 2020 Jun 30, 2021 Assets Cash and cash equivalents $ 198,146 $ 265,830 Management fees receivable 14,524 16,716 Incentive fees receivable 69,424 39,697 Due from related parties 11,326 10,684 Investments 166,273 190,552 Premises and equipment, net 7,870 5,
Slide 21: Components of GAAP Expenses
Components of GAAP Expenses Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Components of GAAP Employee Compensation and Benefits Cash-based employee compensation and benefits, net1 $ 38,332 $ 41,192 $ 40,255 $ 80,354 $ 81,447 Cash-based ince
Slide 22: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Net Incentive Fees Attributable to GCM Grosvenor Incentive fees Performance fees $ 132 $ 6,113 $ 2,891 $ 737 $ 9,004 Carried interest 12,909 12,101 29,336 15,5
Slide 23: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Adjusted Pre-Tax Income & Adjusted Net Income Net income (loss) attributable to GCM Grosvenor Inc. $ — $ 2,547 $ 656 $ — $ 3,203 Plus: Net income (loss) attrib
Slide 24: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Adjusted EBITDA Adjusted Net Income $ 14,837 $ 18,906 $ 19,306 $ 24,442 $ 38,212 Plus: Adjusted Income taxes1 4,946 6,302 6,435 8,148 12,737 Depreciation expen
Slide 25: Reconciliation to Adjusted Net Income Per Share
Reconciliation to Adjusted Net Income Per Share Three Months Ended Six Months Ended $000, except per share amounts and where otherwise noted Jun 30, 2020 1 Jun 30, 2021 Jun 30, 2020 1 Jun 30, 2021 Adjusted Net Income Per Share Adjusted Net Income $ 14,837 $ 19,306 $ 24,442 $ 38,212 Weighted-average
Slide 26: Quarterly Growth in FPAUM and AUM
Quarterly Growth in FPAUM and AUM Three Months Ended June 30, 2021 Private Markets Absolute Return Contracted Not Yet $mm Strategies Strategies Total FPAUM FPAUM Total AUM Fee-Paying AUM Beginning of Period (April 1, 2021) $ 28,889 $ 24,473 $ 53,362 $ 7,454 $ 64,862 Contributions from CNYFPAUM 715 1
Slide 27: Management Fee Detail
1 Management Fee Detail Three Months Ended Six Months Ended $000 Jun 30, 2020 Mar 31, 2021 Jun 30, 2021 Jun 30, 2020 Jun 30, 2021 Management Fees Private Markets Specialized Funds $ 11,327 $ 12,970 $ 14,428 $ 22,138 $ 27,398 Average Fee Rate3 0.73 % 0.74 % 0.75 % 0.73 % 0.74 % Customized Separate Ac
Slide 28: Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments
Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments Investment Net Investment Net Strategy Commitments Contributions Distributions Current Value PME IRR PME Index TVPI IRR Private Equity Primary Fund Investments1 $ 10,897 $ 11,941 $ 19,319 $ 2,324 1.81 14.0 %
Slide 29: Private Markets Strategies Performance Metrics – All Investments
Private Markets Strategies Performance Metrics – All Investments Investment Net Investment Net Strategy Commitments Contributions Distributions Current Value PME IRR PME Index TVPI IRR Private Equity Primary Fund Investments1 $ 21,248 $ 19,197 $ 22,540 $ 8,742 1.63 12.7 % 10.9 % S&P 500 Secondary In
Slide 30: Absolute Return Strategies Performance
Absolute Return Strategies Performance Assets Under Year to Date Returns Ending June 30, Annualized Returns Since Inception Management as 2021 Through June 30, 2021 of June 30, 2021 ($Bn) Gross Net Gross Net Absolute Return Strategies (Overall) $ 26.0 3.67 % 3.30 % 7.26 % 6.14 % GCMLP Diversified Mu
Slide 31: Notes
Notes Notes on Summary of Non-GAAP Financial Measures (Page 14) 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. See Summary of Non-GAAP Financial Measu
Slide 32: Notes (continued)
Notes (continued) Notes on Components of GAAP Expenses (Page 21) 1. Excludes severance expenses of $0.0 million, $0.6 million and $0.8 million for the three months ended June 30, 2020, March 31, 2021 and June 30, 2021, respectively, and $2.3 million and $1.4 million for the six months ended June 30,
Slide 33: 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 34: 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) Contracted, Not Yet Fee-Paying AUM (“CNYFPAUM”) represents limited partner commitments during or prior to the initial commitment or investment period where fees are expected to be charged in the future base
Slide 35: 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