Gcm Grosvenor Inc. · NASDAQ:GCMG
Gcm Grosvenor — Q1 2024 Earnings Presentation
37 slides from Gcm Grosvenor's earnings presentation, May 7, 2024
Slide 1: 2024 First Quarter Results Earnings Presentation
2024 First Quarter Results Earnings Presentation
Slide 2: GCM Grosvenor Reports Q1 2024 Results
GCM Grosvenor Reports Q1 2024 Results CHICAGO, May 7, 2024 – GCM Grosvenor (Nasdaq: GCMG), a leading global alternative asset management solutions provider, today reported results for the first fiscal quarter ended March 31, 2024. “The first quarter of Dividend 2024 was strong from GCM Grosvenor's B
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: First Quarter 2024 Results
Third Quarter 2023 Results First Quarter 2024 Results • Raised $1.6 billion of new capital in the quarter, an increase of 74% compared to prior year QTD, diversified across investment strategies and channels • Solid financial results for the quarter ◦ First quarter 2024 GAAP Net Income attributable
Slide 5: 53 Years of Alternative Asset Management Investing
53 Years of Alternative Asset Management Investing 1971 73% 545 179 First year in business of AUM in customized Employees4 Investment professionals separate accounts Real Estate Absolute Return $6.1bn $23.6bn DIRECT SEEDING/ PRIMARY STAKES Alternative Credit $79bn Private Equity $13.6bn AUM5 $30.0bn
Slide 6: Growth in Key Business Drivers
Growth in Key Business Drivers December 31, 2020 March 31, 2024 Growing Earnings Power $62bn $79bn AUM Private Markets Growing as a Percentage 54% 65% Private Markets % of FPAUM Shifting Towards Direct- Oriented Strategies 39% 52% Direct-Oriented Strategies % of Private Markets AUM Operating Leverag
Slide 7: Long Term Tailwinds for Alternatives Persist
Long Term Tailwinds for Alternatives Persist The Majority of Investors Plan to Maintain or Increase Target Alternative Investments AUM ($T) Allocation to Alternative Investments Over the Longer Term 93% 93% 94% +10% 84% $24.5 CAGR 76% $16.3 $10.1 Private Equity Hedge Funds Infrastructure Real Privat
Slide 8: Growing and Diversifying AUM and Earnings Power
Growing and Diversifying AUM and Earnings Power AUM by Strategy (bn) 8% CAGR $78.8 $76.9 $73.7 $72.1 $61.9 $30.0 9% $29.4 Private Equity $26.2 $29.1 CAGR 13% $22.8 Private6 Markets CAGR $13.1 $20.0 $20.1 27% $16.6 $9.2 Real Assets CAGR $25.2 $26.6 $23.0 $22.4 $23.6 (2)% Absolute Return Strategies CA
Slide 9: Diversified Fundraising Drives Stability & Growth
Diversified Fundraising Drives Stability & Growth Diversified by Channel Diversified by Geography 40% Pensions 18% Corporation 14% Government/Sovereign Entity 54% Americas LTM LTM 8% Individual Investor 25% EMEA Fundraising Fundraising 7% Financial Institutions 21% APAC 6% Insurance 7% Other Diversi
Slide 10: Customized Separate Accounts are Highly Valuable
Customized Separate Accounts are Highly Valuable Illustrative client relationship assuming $100M initial account size Sticky Relationships 600 500 90% average re-up rate on initial sale 8 400 28% FPAUM ($M) 300 average size increase on each re-up 9 200 100 15 years average relationship across top 25
Slide 11: Growing Private Markets Business
Growing Private Markets Business $55bn Private Markets Management Fees10 (mm) Private Markets Total AUM 12% CAGR $213.7 $217.1 $193.6 65% $169.4 Private Markets % of Total FPAUM $149.3 $19bn Private Markets Fundraising in Last 2020 2021 2022 2023 LTM Three Years 10. Excludes catch up management fees
Slide 12: 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 140 programs with unrealized carried interest (mm) Unrealized Carried Interest by Vintage Year (mm)11 $779 $494 224 410 55% Firm Share
Slide 13: 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 14: Growth in Sustainable and Impact Investments
Growth in Sustainable and Impact Investments13 $27bn Sustainable Investing AUM14 Energy Workforce Regionally Other Diverse Essential Social Transition / Standards / Targeted / Sustainable Managers Services Climate Labor Impact Inclusive Finance Investments $15.9 bn $6.9 bn $6.0 bn $2.3 bn $1.6 bn $0
Slide 15: Adjusted Earnings
Adjusted Earnings Fee-Related Earnings (mm) Adjusted EBITDA (mm) Adjusted Net Income (mm) 26% 29% 39% $42.4 $38.1 $27.2 $32.9 27.2 $30.4 $19.6 19.6 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Longer-Term Trends 17% $171.7 55% $147.7 $147.0 22% $110.8 $91.0 110.8 $95.1 91.0 2020 LTM 2020 LTM 2020
Slide 16: Key 2023 and Long-Term Growth Drivers
Key 2023 and Long-Term Growth Drivers Key Long-Term Growth Drivers 1. 2. 3. 17 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 O
Slide 17: Supplemental Information
Supplemental Information GCM GROSVENOR | 17
Slide 18: Selected Private Markets Specialized Funds
Selected Private Markets Specialized Funds RECENTLY CLOSED FUNDS VINTAGE FUND NAME ASSET CLASS DESCRIPTION YEAR18 CLOSED SIZE (mm) Co-Investment Opportunities II Single point of entry to a diversified portfolio of middle Private Equity 2018 $539 (GCF II) market private equity co-investments Advance
Slide 19: Other Key Items
Other Key Items • $65 million remained in the approved share and warrant repurchase program as of March 31, 2024. GCM Grosvenor was deemed to have repurchased $0.1 million of Class A common stock during the quarter ended March 31, 2024. ◦ In April 2024, GCM Grosvenor was deemed to have repurchased $
Slide 20: GAAP Statements of Income
GAAP Statements of Income $000, EXCEPT PER SHARE AMOUNTS AND WHERE OTHERWISE NOTED THREE MONTHS ENDED MAR 31, 2023 MAR 31, 2024 Revenues Management fees $ 92,245 $ 95,885 Incentive fees 5,815 10,118 Other operating income 1,056 2,863 Total operating revenues 99,116 108,866 Expenses Employee compensa
Slide 21: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures24 $000, except per share amounts and where otherwise noted THREE MONTHS ENDED ADJUSTED EBITDA MAR 31, 2023 MAR 31, 2024 Revenues Private markets strategies2 $ 51,802 $ 55,577 Absolute return strategies2 37,136 36,375 Management fees, net2 88,938 91,952 Administ
Slide 22: GAAP Balance Sheets
GAAP Balance Sheets $000, except per share amounts and where otherwise noted DEC 31, 2023 MAR 31, 2024 Assets Cash and cash equivalents $ 44,354 $ 41,863 Management fees receivable 24,996 18,165 Incentive fees receivable 27,371 14,151 Due from related parties 13,581 10,285 Investments 240,202 248,43
Slide 23: Components of GAAP Expenses
Components of GAAP Expenses $000 THREE MONTHS ENDED MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Components of GAAP Employee Compensation and Benefits Cash-based employee compensation and benefits, net25 $ 39,890 $ 32,918 $ 36,987 Cash-based incentive fee related compensation 737 8,451 4,189 27 Carried in
Slide 24: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED NET INCENTIVE FEES ATTRIBUTED TO GCM GROSVENOR MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Incentive fees: Performance fees $ 244 $ 14,139 $ 5,987 Carried interest 5,571 5,880 4,131 Total Incentive Fees $ 5,815 $ 20,019 $ 10,118 Less incentive fe
Slide 25: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED ADJUSTED PRE-TAX INCOME & ADJUSTED NET INCOME MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Net income (loss) attributable to GCM Grosvenor Inc. $ (1,230) $ 3,258 $ 2,124 Plus: Net income (loss) attributable to noncontrolling interests in GCMH (16,
Slide 26: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics $000 THREE MONTHS ENDED ADJUSTED EBITDA MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Adjusted Net Income $ 19,623 $ 32,435 $ 27,212 Plus: Adjusted income taxes3 6,266 11,260 8,926 Depreciation expense 347 314 305 Interest expense 6,655 5,720 5,923 Adjusted EBITDA $ 32,89
Slide 27: 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 ADJUSTED NET INCOME PER SHARE MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Adjusted Net Income $ 19,623 $ 32,435 $ 27,212 Weighted-average shares of Class A common stock outstanding
Slide 28: Change in FPAUM and AUM
Change in FPAUM and AUM Three Months Ended March 31, 2024 PRIVATE MARKET ABSOLUTE RETURN CONTRACTED $mm STRATEGIES STRATEGIES TOTAL FPAUM NOT YET FPAUM TOTAL AUM Fee-Paying AUM Beginning of Period (January 1, 2024) $ 40,269 $ 21,414 $ 61,683 $ 7,304 $ 76,908 Contributions from CNYFPAUM 954 — 954 Con
Slide 29: Management Fee Detail
Management Fee Detail2 $000 THREE MONTHS ENDED MANAGEMENT FEES MAR 31, 2023 DEC 31, 2023 MAR 31, 2024 Private Markets Specialized Funds $ 19,450 $ 20,971 $ 21,001 Average Fee Rate31 0.79 % 0.77 % 0.77 % Customized Separate Accounts 32,352 34,090 34,576 Average Fee Rate 0.47 % 0.46 % 0.46 % Private M
Slide 30: 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 Investments33 $ 13,643 $ 14,857 $ 24,560 $ 2,736 1.84 13
Slide 31: 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 Investments33 $ 24,942 $ 23,328 $ 27,801 $ 10,560 1.64 12
Slide 32: Absolute Return Strategies Performance
Absolute Return Strategies Performance AS OF THREE MONTHS ANNUALIZED RETURNS PERIODS ENDED MAR 31, 2024 MAR 31, 2024 ENDED SINCE MAR 31, 2024 ONE YEAR THREE YEAR FIVE YEAR INCEPTION Assets Under Management (bn) Gross Net Gross Net Gross Net Gross Net Gross Net Absolute Return Strategies (Overall) $
Slide 33: Notes
Notes Data in the presentation is as of March 31, 2024 unless otherwise noted. 1. Of the $7.1 billion CNYFPAUM as of March 31, 2024, approximately $2.3 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 am
Slide 34: Notes (Continued)
Notes (Continued) 26. General, administrative and other, net is comprised of the following: $000 THREE MONTHS ENDED COMPONENTS OF GENERAL, ADMINISTRATIVE AND OTHER, NET MAR 31, 2023 MAR 31, 2024 General, administrative and other $ (25,779) $ (25,179) Plus: Transaction expenses 2,359 56 Fund reimburs
Slide 35: 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 36: 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 37: 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