Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q2 2024 Earnings Presentation
36 slides from Gcm Grosvenor's earnings presentation, Aug 8, 2024
Slide 1: 2024 Second Quarter Results Earnings Presentation
2024 Second Quarter Results Earnings Presentation
Slide 2: GCM Grosvenor Reports Q2 2024 Results
GCM Grosvenor Reports Q2 2024 Results CHICAGO, August 8, 2024 – GCM Grosvenor (Nasdaq: GCMG), a leading global alternative asset management solutions provider, today reported results for the second fiscal quarter ended June 30, 2024. “We had a strong Dividend second quarter, GCM Grosvenor's Board of
Slide 3: Forward Looking Statements
Forward Looking Statements THIS PRESENTATION CONTAINS CERTAIN FORWARD- Form 10-K filed by GCM Grosvenor Inc. on February 29, 2024 LOOKING STATEMENTS within the meaning of the Private and its other filings with the U.S. Securities and Exchange Securities Litigation Reform Act of 1995, including state
Slide 4: Second Quarter 2024 Results
Third Quarter 2023 Results Second Quarter 2024 Results • Raised $1.8 billion of new capital in the quarter and $3.4 billion year-to-date, an increase of 45% compared to prior year-to-date • Solid financial results for the quarter ◦ Second quarter 2024 GAAP Net Income attributable to GCM Grosvenor In
Slide 5: Adjusted Earnings
Adjusted Earnings Fee-Related Earnings (mm) Adjusted EBITDA (mm) Adjusted Net Income (mm) 20% 26% 29% $45.5 $29.4 $39.2 $36.0 29.4 $32.8 $22.7 22.7 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Longer-Term Trends 23% $181.1 62% $154.1 $147.0 29% $117.5 $95.1 $91.0 117.5 91.0 2020 LTM 2020 LTM 2020
Slide 6: Key Long-Term Growth Drivers
Key 2023 and Long-Term Growth Drivers Key Long-Term Growth Drivers 1. 2. 3. 9 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 Op
Slide 7: 53 Years of Alternative Asset Management Investing
53 Years of Alternative Asset Management Investing 1971 71% 539 176 First year in business of AUM in customized Employees10 Investment professionals10 separate accounts Real Estate Absolute Return $6.1bn $22.6bn DIRECT SEEDING/ PRIMARY STAKES Alternative Credit $79bn Private Equity $14.1bn AUM11 $30
Slide 8: Growth in Key Business Drivers
Growth in Key Business Drivers December 31, 2020 June 30, 2024 Growing Earnings Power $62bn $79bn AUM Private Markets Growing as a Percentage 54% 66% Private Markets % of FPAUM Shifting Towards Direct- Oriented Strategies 39% 51% Direct-Oriented Strategies % of Private Markets AUM Operating Leverage
Slide 9: Growing and Diversifying AUM and Earnings Power
Growing and Diversifying AUM and Earnings Power AUM by Strategy (bn) 7% CAGR $76.9 $78.7 $73.7 $72.1 $61.9 8% $29.4 $30.2 Private Equity $26.2 $29.1 CAGR 13% $22.8 Private12Markets CAGR $13.1 $20.0 $20.6 26% $16.6 $9.2 Real Assets CAGR $25.2 $26.6 $23.0 $22.4 $22.6 (3)% Absolute Return Strategies CA
Slide 10: Diversified Fundraising Drives Stability & Growth
Diversified Fundraising Drives Stability & Growth Diversified by Channel Diversified by Geography 49% Pensions 10% Corporation 16% Government/Sovereign Entity 61% Americas LTM LTM 7% Individual Investor 17% EMEA Fundraising Fundraising 5% Financial Institutions 22% APAC 6% Insurance 7% Other Diversi
Slide 11: Customized Separate Accounts are Highly Valuable
Customized Separate Accounts are Highly Valuable Illustrative client relationship assuming $100M initial account size Sticky Relationships 600 500 90% average re-up rate on initial sale 14 400 28% FPAUM ($M) 300 average size increase on each re-up 15 200 100 15 years average relationship across top
Slide 12: Growing Private Markets Business
Growing Private Markets Business $56bn Private Markets Management Fees16 (mm) Private Markets Total AUM 12% CAGR $221.2 $213.7 $193.6 66% $169.4 Private Markets % of Total FPAUM $149.3 $19bn Private Markets Fundraising in Last 2020 2021 2022 2023 LTM Three Years 16. Excludes catch up management fees
Slide 13: 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 142 programs with unrealized carried interest (mm) Unrealized Carried Interest by Vintage Year (mm)5 $810 $540 248 427 54% Firm Share $
Slide 14: Significant Embedded Value From Incentive Fees
Significant Embedded Value From Incentive Fees Incentive Fee Revenue has Been ...and Incentive Fee Earnings Power is Muted Despite Growth in Unrealized Growing with Shift Towards Direct- Carry... Oriented Strategies Unrealized Carried Interest vs Gross Incentive Fees (mm) AUM Subject to Incentive Fe
Slide 15: Growth in Sustainable and Impact Investments
Growth in Sustainable and Impact Investments17 $27bn Sustainable Investing AUM18 Energy Workforce Regionally Other Diverse Essential Social Transition / Standards / Targeted / Sustainable Managers Services Climate Labor Impact Inclusive Finance Investments $15.7 bn $7.1 bn $5.6 bn $2.3 bn $1.6 bn $0
Slide 16: Supplemental Information
Supplemental Information GCM GROSVENOR | 16
Slide 17: Private Markets Specialized Fund Franchises
Private Markets Specialized Fund Franchises Scaling and expanding private market specialized fund franchises Cumulative selected private market specialized fund closings (mm) $10,808 $258 $9,816 $567 $920 $8,758 $1,285 $7,402 CIS $1,560 MAC GSF $5,234 IAF $4,808 $1,858 GCF Advance $3,879 Elevate Pri
Slide 18: Other Key Items
Other Key Items • $35 million remained in the approved share and warrant repurchase program as of June 30, 2024. ◦ GCM Grosvenor was deemed to have repurchased $30.3 million of Class A common stock during the quarter ended June 30, 2024. • GCM Grosvenor's Board of Directors approved a $0.11 per shar
Slide 19: GAAP Statements of Income
GAAP Statements of Income $000, EXCEPT PER SHARE AMOUNTS AND WHERE OTHERWISE NOTED THREE MONTHS ENDED SIX MONTHS ENDED JUN 30, 2023 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Revenues Management fees $ 93,564 $ 99,843 $ 185,809 $ 195,728 Incentive fees 12,996 16,037 18,811 26,155 Other operating income
Slide 20: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures3 $000, except per share amounts and where otherwise noted THREE MONTHS ENDED SIX MONTHS ENDED ADJUSTED EBITDA JUN 30, 2023 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Revenues Private markets strategies2 $ 52,978 $ 58,807 $ 104,780 $ 114,384 Absolute return strategi
Slide 21: GAAP Balance Sheets
GAAP Balance Sheets $000, except per share amounts and where otherwise noted DEC 31, 2023 JUN 30, 2024 Assets Cash and cash equivalents $ 44,354 $ 73,921 Management fees receivable 24,996 21,696 Incentive fees receivable 27,371 20,221 Due from related parties 13,581 9,193 Investments 240,202 251,099
Slide 22: Components of GAAP Employee Compensation and Benefits
Components of GAAP Employee Compensation and Benefits $000 THREE MONTHS ENDED SIX MONTHS ENDED JUN 30, 2023 MAR 31, 2024 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Fee-Related Earnings Compensation Cash-based employee compensation and benefits, net24 $ 38,492 $ 36,987 $ 38,103 $ 78,382 $ 75,090 Incentiv
Slide 23: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED SIX MONTHS ENDED NET INCENTIVE FEES ATTRIBUTED TO GCM GROSVENOR JUN 30, 2023 MAR 31, 2024 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Incentive fees: Performance fees $ 269 $ 5,987 $ 4,346 $ 513 $ 10,333 Carried interest 12,727 4,131 11,691 18,29
Slide 24: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED SIX MONTHS ENDED ADJUSTED PRE-TAX INCOME & ADJUSTED NET INCOME JUN 30, 2023 MAR 31, 2024 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Net income attributable to GCM Grosvenor Inc. $ 4,848 $ 2,124 $ 4,800 $ 3,618 $ 6,924 Plus: Net income (loss) att
Slide 25: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED SIX MONTHS ENDED ADJUSTED EBITDA JUN 30, 2023 MAR 31, 2024 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Adjusted Net Income $ 22,719 $ 27,212 $ 29,386 $ 42,342 $ 56,598 Plus: Adjusted income taxes4 7,252 8,926 9,639 13,518 18,565 Depreciation expe
Slide 26: Reconciliation to Adjusted Net Income Per Share
Reconciliation to Adjusted Net Income Per Share $000, except per share amounts and where otherwise noted THREE MONTHS ENDED SIX MONTHS ENDED ADJUSTED NET INCOME PER SHARE JUN 30, 2023 MAR 31, 2024 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Adjusted Net Income $ 22,719 $ 27,212 $ 29,386 $ 42,342 $ 56,598
Slide 27: Change in FPAUM and AUM
Change in FPAUM and AUM Three Months Ended June 30, 2024 PRIVATE MARKET ABSOLUTE RETURN CONTRACTED $mm STRATEGIES STRATEGIES TOTAL FPAUM NOT YET FPAUM TOTAL AUM Fee-Paying AUM Beginning of Period (April 1, 2024) $ 40,788 $ 22,420 $ 63,208 $ 7,091 $ 78,780 Contributions from CNYFPAUM 433 37 470 Contr
Slide 28: Management Fee Detail
Management Fee Detail2 $000 THREE MONTHS ENDED SIX MONTHS ENDED MANAGEMENT FEES JUN 30, 2023 MAR 31, 2024 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 Private Markets Specialized Funds $ 19,922 $ 21,001 $ 24,324 $ 39,372 $ 45,325 Average Fee Rate30 0.79 % 0.77 % 0.79 % 0.80 % 0.78 % Customized Separate Ac
Slide 29: Private Markets Strategies Performance Metrics
Private Markets Strategies Performance Metrics Realized and Partially Realized Investments ($mm) CURRENT INVESTMENT INVESTEMNT STRATEGY COMMITMENTS CONTRIBUTIONS DISTRIBUTION PME IRR PME INDEX VALUE NET TVPI NET IRR Private Equity Primary Fund Investments32 $ 13,852 $ 15,070 $ 24,882 $ 2,680 1.83 13
Slide 30: Private Markets Strategies Performance Metrics
Private Markets Strategies Performance Metrics All Investments All Investments ($($mm) million) CURRENT INVESTMENT INVESTEMNT STRATEGY COMMITMENTS CONTRIBUTIONS DISTRIBUTION PME IRR PME INDEX VALUE NET TVPI NET IRR Private Equity Primary Fund Investments32 $ 25,174 $ 23,677 $ 28,147 $ 10,577 1.64 12
Slide 31: Absolute Return Strategies Performance
Absolute Return Strategies Performance AS OF THREE MONTHS ANNUALIZED RETURNS PERIODS ENDED JUN 30, 2024 JUN 30, 2024 ENDED SINCE JUN 30, 2024 YEAR TO DATE ONE YEAR THREE YEAR FIVE YEAR INCEPTION Assets Under Management (bn) Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Absolute Return
Slide 32: Notes
Notes Data in the presentation is as of June 30, 2024 unless otherwise noted. 1. Of the $7.3 billion CNYFPAUM as of June 30, 2024, approximately $2.5 billion is subject to an agreed upon fee ramp in schedule that will result in management fees being charged on approximately $0.3 billion of such amou
Slide 33: Notes (Continued)
Notes (Continued) 25. General, administrative and other, net is comprised of the following: $000 THREE MONTHS ENDED SIX MONTHS ENDED COMPONENTS OF GENERAL, ADMINISTRATIVE AND OTHER, NET JUN 30, 2023 JUN 30, 2024 JUN 30, 2023 JUN 30, 2024 General, administrative and other $ (28,726) $ (28,164) $ (54,
Slide 34: 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 35: 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 36: Disclosures
Disclosures Non-GAAP Financial Measures The non-GAAP financial measures contained in this presentation are not GAAP measures of GCM Grosvenor’s financial performance or liquidity and should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows fro