Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q1 2021 Earnings Presentation
35 slides from Gcm Grosvenor's earnings presentation, May 13, 2021
Slide 1: 2021 First Quarter Results Earnings Presentation
2021 First Quarter Results Earnings Presentation May 13, 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: First Quarter 2021 Results
First Quarter 2021 Results $ million March 31, 2020 December 31, 2020 March 31, 2021 % Change vs 4Q 20 % Change vs 1Q 20 AUM $ 55,779 $ 61,943 $ 64,862 5% 16 % FPAUM 47,769 51,969 53,362 3% 12 % CNYFPAUM 5,395 7,057 7,454 6% 38 % Three Months Ended $ million unless otherwise noted March 31, 2021 % C
Slide 5: Business Highlights
Business Highlights Strong • Fundraising of $2.5 billion for the quarter ended March 31, 2021 Fundraising and • Positive net flows into Absolute Return Strategies of $205 million for the quarter ended March 31, 2021 Financial Performance • Fee-Related Revenue growth of 7% over 1Q 2020 and 4% over 4Q
Slide 6: Strong Growth in Fees and Earnings
Strong Growth in Fees and Earnings $ million Management Fees, net 1 Adjusted EBITDA 6% 56% 30.2 75.7 80.3 39.2 39.9 19.4 36.5 40.4 Q1 20 Q1 21 Q1 20 Q1 21 Private Markets Absolute Return Strategies Incentive Fees 18.2 Fee-Related Earnings 43% 25.2 469% 17.6 3.2 Q1 20 Q1 21 Q1 20 Q1 21 Adjusted Reven
Slide 7: Q1 2021 and 2020 Fundraising Summary
Q1 2021 and 2020 Fundraising Summary $ billion Private Markets Absolute Return 2.5 2.1 1.8 1.7 1.4 1.9 $2.5Bn 1.0 1.7 of new capital raised in 1.5 2021 1.3 0.7 0.6 0.3 0.4 0.1 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 7
Slide 8: Increased Earnings Power From Growing AUM
Increased Earnings Power From Growing AUM FPAUM and CNYFPAUM ($bn) Absolute return strategies FPAUM Private markets FPAUM Contracted not yet FPAUM ("CNYFPAUM") Estimated incremental management fees from 2021 CNYFPAUM: $36 million CNYFPAUM Scheduled $59.0 $60.8 Ramp-in $2.5 $55.3 7.1 7.5 1.4 $51.2 5.
Slide 9: Significant Embedded Growth and Strong Business Momentum
Significant Embedded Growth and Strong Business Momentum Management fee growth Incentive fee growth Incremental run rate carry earnings from ~$36mm contracted funds and growth in AUM Incremental management fees from $7.5 eligible for annual performance fees, billion of Contracted Not Yet Fee Paying
Slide 10: Incentive Fee Earnings Power
Incentive Fee Earnings Power Run rate annual performance fees1 ($mm) Gross Unrealized Carried Interest 2 29% $491m $41.2 $381m 121 95% 113 Q1 20 Q1 21 Gross unrealized carried interest Programs in unrealized carry $21.1 2008 or 2016+ Earlier 32% 20% Unrealized carry by vintage 2009-2012 2013-2015 23
Slide 11: Financial Results
Financial Results
Slide 12: GAAP Statements of Income (unaudited)
GAAP Statements of Income (unaudited) Three Months Ended Dec 31, 2020 $000, except per share amounts Mar 31, 2020 (restated) Mar 31, 2021 % Change vs 4Q 20 % Change vs 1Q 20 Revenues Management fees $ 77,701 $ 79,639 $ 82,625 4% 6% Incentive fees 3,233 73,602 18,214 (75)% 463 % Other operating incom
Slide 13: Summary of Non-GAAP Financial Measures
1 Summary of Non-GAAP Financial Measures Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 (restated) Mar 31, 2021 % Change vs 4Q 20 % Change vs 1Q 20 Adjusted EBITDA Revenues Private markets strategies $ 36,464 $ 38,390 $ 40,373 5% 11 % Absolute return strategies 39,263 38,808 39,892 3% 2% Manageme
Slide 14: Other Key Items
Other Key Items • Repaid $50 million of term loan in February 2021, extended remaining $290 million term loan and $50 million revolving credit facility by 3 years to February 2028 and February 2026 respectively and reduced cost of debt to L+250bps with a LIBOR floor of 50bps • The Board of Directors
Slide 15: About GCM Grosvenor
About GCM Grosvenor
Slide 16: Only Alternative Asset Solutions Provider Covering the Full Range of Strategies
Only Alternative Asset Solutions Provider Covering the Full Range of Strategies CLIENT VALUE PROPOSITION STRONG BUSINESS MOMENTUM Strong economic value proposition Stable and diversified revenue base ◦ Fee savings and preferential terms ◦ Management and administrative fees are ~90% of ◦ Access to ha
Slide 17: Strong Value Proposition Drives Diversified, Long Tenured Client Base
Strong Value Proposition Drives Diversified, Long Tenured Client Base Our client base is institutional and stable Our client base is global Our client base is diversified % of AUM % AUM % of management fees High Net Worth/ Endowments No single client contributes more than Family Office & Foundations
Slide 18: ESG and Investing with an Impact are Core Values
ESG and Investing with an Impact are Core Values ESG and Impact Investments AUM ($bn) A+ rating From UN Principles of Responsible 13% Investing (PRI)¹ CAGR Approx. $12.8 $13.3 $17.9 billion $11.2 Committed and invested in ESG and Impact $8.9 $9.0 Approx. $13.3 billion Of ESG and Impact AUM 2017 2018
Slide 19: Strong Investment Performance Driven by Proven Investment Process
Strong Investment Performance Driven by Proven Investment Process Total Assets Under Management Fee-Paying AUM Contracted Not Yet Fee-Paying AUM $64.9bn $53.4bn $7.5bn Private Equity Absolute Return Strategies $23.8bn Infrastructure Real Estate $25.5bn $7.3bn $3.2bn Primaries Secondaries Co-Invest/D
Slide 20: Appendix
Appendix
Slide 21: GAAP Balance Sheets (unaudited)
GAAP Balance Sheets (unaudited) Dec 31, 2020 $000 (restated) Mar 31, 2021 Assets Cash and cash equivalents $ 198,146 $ 156,273 Management fees receivable 14,524 15,955 Incentive fees receivable 69,424 25,935 Due from related parties 11,326 8,513 Investments 166,273 180,708 Premises and equipment, ne
Slide 22: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Components of GAAP Employee Compensation and Benefits Cash-based employee compensation and benefits, net1 $ 42,022 $ 38,467 $ 41,192 Cash-based incentive fee related compensation — 11,454 1,833 Carried
Slide 23: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Net Incentive Fees Attributable to GCM Grosvenor Incentive fees Performance fees $ 605 $ 51,105 $ 6,113 Carried interest 2,628 22,497 12,101 Less: Cash-based incentive fee related compensation — (11,454
Slide 24: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Dec 31, 2020 $000 Mar 31, 2020 (restated) Mar 31, 2021 Adjusted Pre-Tax Income & Adjusted Net Income Net income (loss) attributable to GCM Grosvenor Inc. $ — $ 4,049 $ 2,547 Plus: Net income (loss) attributable to GCMH (14,955) (105,235) 703 Inco
Slide 25: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Adjusted EBITDA Adjusted net income $ 9,605 $ 46,057 $ 18,906 Plus: Adjusted Income taxes1 3,202 15,351 6,302 Depreciation expense 696 542 473 Interest expense 5,867 5,931 4,491 Adjusted EBITDA $ 19,370
Slide 26: Reconciliation to adjusted net income per share
Reconciliation to adjusted net income per share Three Months Ended $000, except per share amounts Mar 31, 2020 1 Mar 31, 2021 Adjusted net income $ 9,605 $ 18,906 Weighted-average shares of Class A common stock outstanding - basic (000) 39,985 42,084 Exercise of private warrants - incremental shares
Slide 27: Quarterly Growth in FPAUM and AUM
Quarterly Growth in FPAUM and AUM Quarter Ended March 31, 2021 Private Markets Absolute Return Contracted Not Yet $mm Strategies Strategies Total FPAUM FPAUM Total AUM Fee-Paying AUM Beginning of Period (January 1, 2021) $ 27,839 $ 24,130 $ 51,969 $ 7,057 $ 61,943 Contributions from CNYFPAUM 1,163 9
Slide 28: Management Fee Detail
1 Management Fee Detail Three Months Ended $000 Mar 31, 2020 Dec 31, 2020 Mar 31, 2021 Management Fees Private Markets Specialized Funds $ 10,811 11,678 $ 12,970 Average Fee Rate3 0.74 % 0.73 % 0.74 % Customized Separate Accounts 25,653 26,712 27,403 Average Fee Rate 0.51 % 0.50 % 0.49 % Private Mar
Slide 29: 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 $ 10,762 $ 11,785 $ 18,898 $ 2,186 1.79 13.9 %
Slide 30: 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 $ 20,981 $ 18,867 $ 22,105 $ 8,050 1.60 12.4 % 10.7 % S&P 500 Secondary In
Slide 31: Absolute Return Strategies Performance
Absolute Return Strategies Performance Assets Under Year to Date Returns Ending March 31, Annualized Returns Since Inception Management as of 2021 Through March 31, 2021 March 31, 2021 ($Bn) Gross Net Gross Net Absolute Return Strategies (Overall) $ 25.5 0.45 % 0.28 % 7.20 % 6.08 % GCMLP Diversified
Slide 32: Mosaic Overview and Update as of March 31, 2021
Mosaic Overview and Update as of March 31, 2021 ▪ In 2020, GCM Grosvenor formed Mosaic Acquisitions 2020, L.P. (“Mosaic”), a Cayman Limited Partnership Option call price is the greater of the following ($mm): ◦ GCM Grosvenor is the general partner of the entity and controls the entity ◦ In exchange
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) 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 management. GCM Grosvenor refers to the combined acc
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