Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q1 2022 Earnings Presentation
34 slides from Gcm Grosvenor's earnings presentation, 2022
Slide 1: 2022 First Quarter Results Earnings Presentation
2022 First Quarter Results Earnings Presentation
Slide 2: Presenters
Presenters Michael Sacks Jonathan Levin Pamela Bentley Stacie Selinger Chairman and President Chief Financial Officer Head of Investor Relations Chief Executive Officer 2
Slide 3: First Quarter 2022 Results
First Quarter 2022 Results • Q1 2022 Fee-Related Revenue growth of 10% and Fee-Related Earnings growth of 26% compared to quarter ended March 31, 2021 • Fundraising of $1.3 billion in Q1 2022 and $8.2 billion for the last twelve months • GCM Grosvenor's Board of Directors approved a $0.10 per share
Slide 4: Fundraising: Last Twelve Months Through Q1 2022
Fundraising: Last Twelve Months Through Q1 2022 $ billion Closed in 1Q 22 Closed through Forecasted Next / First Fund Strategy Final Close ($mm) 1Q 22 ($mm) Closing $1.3 billion $8.2 billion GSF III PE Secondaries $110 $677 Q2 2022 Late 2022 Q1 2022 Capital Raised LTM Capital Raised CIS III Diversif
Slide 5: First Quarter 2022 Fundraising
First Quarter 2022 Fundraising $ billion $1.3 Real Estate, 6% Absolute Return Strategies, 19% Specialized Funds, 21% Opportunistic, 1% By By Strategy Structure Private Equity, Customized Infrastructure, 19% Separate 1.1 55% Accounts, 79% Financial Other, 1% Institutions, 9% HNW/Non- Americas, 38% In
Slide 6: ESG and Impact Remains a Core Driver of Growth
3 ESG and Impact Remains a Core Driver of Growth ESG and Impact Investments AUM ($bn) ESG and Impact AUM by Strategy4 Diverse Managers $17.9 $11.8 billion 35% Regionally Targeted $2.3 billion $13.3 Clean Energy $1.8 billion Labor Impact $0.9 billion Other ESG and Impact $3.8 billion Q1 2021 Q1 2022
Slide 7: Q1 2022 Revenue & Earnings
Q1 2022 Revenue & Earnings $ million Fee-Related Revenue5 Fee-Related Earnings 10% $90.6 26% $82.6 $31.7 1.0 31.7 2.4 $25.2 42.7 25.2 39.9 40.4 46.8 Q1 21 Q1 22 Q1 21 Q1 22 Private Markets Absolute Return Strategies Administrative fees and other operating income Incentive Fees Adjusted EBITDA 23% $3
Slide 8: Assets Under Management
Assets Under Management $ billion CNYFPAUM Fees Total AUM Charged on Scheduled 10% Ramp-in 0.8 Fees Charged 0.6 $1.6 on Invested 0.2 Capital $4.9 $71.3 Remainder 2023 2024+ of 2022 6.9 $64.9 Private Markets AUM Absolute Return Strategies AUM 4.1 6.5 18% 7.5 $46.3 (2)% 6.0 $39.3 3.0 $25.6 6.5 $25.0 1
Slide 9: Highly Diversified Incentive Fee Opportunity
Highly Diversified Incentive Fee Opportunity $ million Growing Firm Share of Carried Interest7,9 Q1 2022 Incentive Fees Firm Share7,8 Contractual and NCI 8 Unrealized Carried Interest - Firm Share Unrealized Carried Interest - Non-Firm Share Average Percent of Firm Share $11 $12 $12 91% $939 8 8 Net
Slide 10: Key 2022 and Long-Term Growth Drivers
Key 2022 and Long-Term Growth Drivers • Full-year impact of 2021 FPAUM growth plus CNYFPAUM conversion net of distributions 2022 Fee-Related Revenue Growth Drivers • Private Markets FPAUM growth from 2022 fundraising - from both Customized Separate Accounts and Specialized Funds • 2022 fundraising c
Slide 11: Other Key Items
Other Key Items • In accordance with the firm's existing $45 million stock repurchase authorization, GCM Grosvenor repurchased $3.0 million of Class A common stock and $0.6 million of warrants during the quarter ◦ $32.2 million remained in the approved share and warrant repurchase program as of Marc
Slide 12: GAAP Statements of Income
GAAP Statements of Income Three Months Ended $000, except per share amounts and where otherwise noted Mar 31, 2021 Mar 31, 2022 Revenues Management fees $ 82,625 $ 92,110 Incentive fees 18,214 11,992 Other operating income 2,380 1,026 Total operating revenues 103,219 105,128 Expenses Employee compen
Slide 13: Summary of Non-GAAP Financial Measures
16 Summary of Non-GAAP Financial Measures Three Months Ended $000, except per share amounts and where otherwise noted Mar 31, 2021 Mar 31, 2022 Adjusted EBITDA Revenues Private markets strategies $ 40,373 $ 46,841 Absolute return strategies 39,892 42,711 Management fees, net17 80,265 89,552 Administ
Slide 14: Appendix
Appendix
Slide 15: Only Alternative Solutions Provider Covering the Full Range of Strategies
Only Alternative Solutions Provider Covering the Full Range of Strategies Client Value Proposition Strong Business Momentum Unparalleled flexibility Highly visible incremental revenue ◦ Customized solutions and specialized funds Absolute Real Estate ◦ Revenue from prior year FPAUM growth Return ◦ Pr
Slide 16: Strong Value Proposition Drives Diversified, Long-Tenured Client Base
Strong Value Proposition Drives Diversified, Long-Tenured 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 High Net Worth/ Endowments 5% of our management fee
Slide 17: 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 Paying28 Non-Fee Paying ◦ GCM Grosvenor offers large $300 million $300 million Absolute Return Strategies clients a ‘hybrid model’ Management fee
Slide 18: Illustrative Client Economic Value Proposition: Private Markets
Illustrative Client Economic Value Proposition: Private Markets Example: $1.0Bn Program – Direct Primary Program vs. Direct Primary + GCM Grosvenor-Managed Co-Investment Program GCM Grosvenor Direct Primary Only Direct Primaries Managed Co-Investment Program Program Program $1.0 billion $650 million
Slide 19: GAAP Balance Sheets
GAAP Balance Sheets $000 Dec 31, 2021 Mar 31, 2022 Assets Cash and cash equivalents $ 96,185 $ 76,510 Management fees receivable 21,693 18,195 Incentive fees receivable 91,601 15,602 Due from related parties 11,777 10,647 Investments 226,345 232,668 Premises and equipment, net 5,411 5,283 Lease righ
Slide 20: Components of GAAP Expenses
Components of GAAP Expenses Three Months Ended $000 Mar 31, 2021 Mar 31, 2022 Components of GAAP Employee Compensation and Benefits Cash-based employee compensation and benefits, net31 $ 41,192 $ 40,863 Cash-based incentive fee related compensation 1,833 1,594 Carried interest compensation, net32 7,
Slide 21: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2021 Mar 31, 2022 Net Incentive Fees Attributable to GCM Grosvenor Incentive fees: Performance fees $ 6,113 $ 1,001 Carried interest 12,101 10,991 Total Incentive Fees $ 18,214 $ 11,992 Less incentive fees contractually owed to other
Slide 22: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2021 Mar 31, 2022 Adjusted Pre-Tax Income & Adjusted Net Income Net income attributable to GCM Grosvenor Inc. $ 2,547 $ 4,726 Plus: Net income attributable to noncontrolling interests in GCMH 703 13,669 Provision (benefit) for income
Slide 23: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2021 Mar 31, 2022 Adjusted EBITDA Adjusted Net Income $ 18,906 $ 23,770 Plus: Adjusted income taxes22 6,302 7,714 Depreciation expense 473 399 Interest expense 4,491 5,284 Adjusted EBITDA $ 30,172 $ 37,167 Fee-Related Earnings Adjust
Slide 24: Reconciliation to Adjusted Net Income Per Share
Reconciliation to Adjusted Net Income Per Share Three Months Ended $000, except per share amounts and where otherwise noted Mar 31, 2021 Mar 31, 2022 Adjusted Net Income Per Share Adjusted Net Income $ 18,906 $ 23,770 Weighted-average shares of Class A common stock outstanding - basic (in millions)
Slide 25: Quarterly Change in FPAUM and AUM
Quarterly Change in FPAUM and AUM Three Months Ended March 31, 2022 Private Markets Absolute Return Contracted Not Yet $mm Strategies Strategies Total FPAUM FPAUM Total AUM Fee-Paying AUM Beginning of Period (January 1, 2022) $ 33,080 $ 25,575 $ 58,655 $ 7,683 $ 72,130 Contributions from CNYFPAUM 1,
Slide 26: Management Fee Detail
34 Management Fee Detail Three Months Ended $000 Mar 31, 2021 Mar 31, 2022 Management Fees Private Markets Specialized Funds $ 12,970 $ 17,088 Average Fee Rate35 0.74 % 0.76 % Customized Separate Accounts 27,403 29,753 Average Fee Rate 0.49 % 0.48 % Private Markets Management Fees 40,373 46,841 Aver
Slide 27: Private Markets Strategies Performance Metrics
Private Markets Strategies Performance Metrics Realized and Partially Realized Investments ($bn) Investment Investment Strategy Commitments Contributions Distributions Current Value PME IRR PME Index Net TVPI Net IRR Private Equity Primary Fund Investments37 $ 11,965 $ 13,100 $ 21,510 $ 2,928 1.87 1
Slide 28: Private Markets Strategies Performance Metrics
Private Markets Strategies Performance Metrics All Investments ($bn) Investment Investment Strategy Commitments Contributions Distributions Current Value PME IRR PME Index Net TVPI Net IRR Private Equity Primary Fund Investments37 $ 22,497 $ 20,242 $ 24,872 $ 9,474 1.70 13.3 % 11.2 % S&P 500 Seconda
Slide 29: Absolute Return Strategies Performance
Absolute Return Strategies Performance Annualized Returns Periods Ended Mar 31, 2022 Year to Date One Year Three Year Five Year Since Inception Assets Under Management as of Gross Net Gross Net Gross Net Gross Net Gross Net Mar 31, 2022 (Bn) Absolute Return Strategies (Overall) $ 25.0 (5.2)% (5.3)%
Slide 30: Notes
Notes 3. The data regarding ESG themes presented above and otherwise contained herein is based on the amount committed to and invested in investments by GCM Grosvenor-managed portfolios as of the date above, based on the assessment of each such investment by GCM Grosvenor investment team members. Th
Slide 31: Notes (continued)
Notes (continued) 24. Represents top 25 clients by AUM. 25. Defined by improved fee structures and capacity constrained funds. 26. For Private Markets customized separate accounts from January 1, 2017 through March 31, 2022. 31. Excludes severance expenses of $0.6 million and $0.5 million for the th
Slide 32: 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 33: 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 34: 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