GCM Grosvenor Inc. · NASDAQ:GCMG
GCM Grosvenor — Q3 2020 Earnings Presentation
27 slides from GCM Grosvenor's earnings presentation, Nov 19, 2020
Slide 1: 2020 Third Quarter Results Earnings Presentation
2020 Third Quarter Results Earnings Presentation November 19, 2020
Slide 2: GCM Grosvenor Business Combination with CFAC
GCM Grosvenor Business Combination with CFAC Transaction Overview Equity sources2 ▪ On August 3, 2020, GCM Grosvenor announced the firm would $mm % become a public company through a business combination CFAC cash-in-trust $120 6.8% with CF Acquisition Corp (“CFAC”) PIPE financing 225 12.8% ▪ Simulta
Slide 3: Equity Ownership Summary
Equity Ownership Summary Sponsors GCM Grosvenor Ownership Shares (mm) % 5.4%1 existing shareholders GCM Grosvenor Existing Shareholders 144.2 78.3% 78.3% CFAC shares 11.6 6.3% PIPE shares 18.5 10.0% PIPE shares 10.0% Sponsors1 9.8 5.4% Total Shares2 184.2 100% CFAC shares 6.3% Warrants Units (mm) %
Slide 4: Largest Independent Open Architecture Alternative Asset Platform
Largest Independent Open Architecture Alternative Asset Platform GCM Grosvenor is at the center of the alternatives universe Broad and deep investment capabilities Flexible implementation platform % of AUM1 Specialized funds 23% AUM: AUM: $59bn¹ $59bn¹ Customized separate accounts 77% 1. AUM as of S
Slide 5: Deep, Tenured and Diversified Client Relationships
Deep, Tenured and Diversified Client Relationships Our client base is institutional and stable Our client base is global Our client base is diversified % of AUM1 % AUM1 % of management fees High Net Worth/ Endowments No single client contributes more than Family Office & Foundations 5% of our manage
Slide 6: GCM Grosvenor is Reaffirming Revised 2020 Guidance
GCM Grosvenor is Reaffirming Revised 2020 Guidance 2020 Forecast As of Merger Presentation as of Revised October 22, August 3, 2020 2020 Fee-paying AUM $51.1 billion $50 - 52 billion Management fees1 $302.9 million $300 - 303 million Net incentive fees attributable to GCM Grosvenor $12.5 million $23
Slide 7: GCM Grosvenor Third Quarter 2020 Results
GCM Grosvenor Third Quarter 2020 Results Fee-Paying Assets Under Management Contracted Not Yet FPAUM Assets Under Management ($Bn) (“FPAUM”) ($Bn) (“CNYFPAUM”) ($Bn) 1% 3% 19% $58.6 $6.6 Third Quarter $49.6 $49.9 $56.9 $5.6 Key Highlights Q2 20 Q3 20 Q2 20 Q3 20 Q2 20 Q3 20 ($mm) 3Q 20 % Change vs.
Slide 8: Continued FPAUM, CNYFPAUM and AUM Growth
Continued FPAUM, CNYFPAUM and AUM Growth FPAUM and CNYFPAUM($bn) Absolute return strategies FPAUM¹ Private markets FPAUM¹ Contracted not yet fee-paying² Quarter-Over-Quarter Estimated incremental management fees from CNYFPAUM $27 MM $32 MM $55.2 $55.2 $56.5 Increase in $53.2 19% Contracted not yet $
Slide 9: Continued Strong Fundraising Driving FPAUM and CNYFPAUM Growth
Continued Strong Fundraising Driving FPAUM and CNYFPAUM Growth $1.4Bn $0.3Bn $1.1Bn of new capital of Q3 of Q3 FPAUM raised in Q3 CNYFPAUM Fundraising By Strategy Fundraising By Implementation Type Q3 2020 9-Months Ended 9/30 Q3 2020 9-Months Ended 9/30 Absolute Return Strategies Specialized Special
Slide 10: Incentive Fee Drivers
Incentive Fee Drivers Absolute Return Strategies Private Markets ▪ The amount of firm AUM eligible for an annual performance fee ▪ Gross unrealized carried interest increased 12% to $339 million as has increased 29% since 2017, from $10.1 billion to $13.0 billion as of September 30, 2020, driven by
Slide 11: Financial Highlights
Financial Highlights
Slide 12: Quarter-Over-Quarter Comparison ($mm)
Quarter-Over-Quarter Comparison ($mm) Management fees Adjusted FRE2 2% 4% $25 $26 $76 $73 Q2 20 Q3 20 Q2 20 Q3 20 Net Incentive Fees Attributable to GCM Grosvenor1 Adjusted EBITDA2 29% $7 $34 1,548% $26 $0 Q2 20 Q3 20 Q2 20 Q3 20 Net Fees Attributable to GCM Grosvenor1 Adjusted Pre-Tax Income3 38% 1
Slide 13: Assets Under Management – Q3 2020
Assets Under Management – Q3 2020 Private Markets Absolute Return Contracted Not $mm Strategies Strategies Total FPAUM Yet FPAUM Total AUM Fee-Paying AUM Beginning of Period (July 1, 2020) $ 27,083 $ 22,514 $ 49,597 $ 5,584 $ 56,890 Contributions from CNYFPAUM 347 7 354 Contributions from New Capita
Slide 14: Assets Under Management – Year to Date 2020
Assets Under Management – Year to Date 2020 Private Markets Absolute Return Contracted Not $mm Strategies Strategies Total FPAUM Yet FPAUM Total AUM Fee-Paying AUM Beginning of Period (January 1, 2020) $ 26,477 $ 23,556 $ 50,033 $ 5,153 $ 57,746 Contributions from CNYFPAUM 1,361 218 1,579 Contributi
Slide 15: Condensed GAAP Statements of Income (unaudited)
Condensed GAAP Statements of Income (unaudited) Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 QoQ % Change Sept 30, 2019 Sept 30, 2020 YoY % Change Management Fees $ 82,837 $ 75,136 $ 78,269 4% $ 243,708 $ 231,106 (5%) Incentive Fees 33,342 13,041 21,774 67% 65,
Slide 16: Summary of Non-GAAP Financial Measures
Summary of Non-GAAP Financial Measures Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 QoQ % Change Sept 30, 2019 Sept 30, 2020 YoY % Change Management Fees1 $ 81,532 $ 73,309 $ 76,105 4% $ 240,040 $ 225,141 (6%) Other Operating Income 2,383 1,953 1,703 (13%) 5,57
Slide 17: Appendix: Financial Information
Appendix: Financial Information
Slide 18: Condensed GAAP Balance Sheets (unaudited)
Condensed GAAP Balance Sheets (unaudited) $000 Sept 30, 2019 Dec 31, 2019 Sept 30, 2020 Cash and cash equivalents $ 54,609 $ 79,866 $ 158,186 Management fees receivable 25,124 13,896 12,534 Incentive fees receivable 40,882 20,771 11,570 Due from related parties 9,546 10,226 10,791 Investments 158,53
Slide 19: Condensed GAAP Statements of Cash Flows (unaudited)
Condensed GAAP Statements of Cash Flows (unaudited) Nine Months Ended $000 Sept 30, 2019 Sept 30, 2020 Net cash provided by (used in) operating activities $ 34,832 $ 43,131 Net cash provided by (used in) investing activities 7,739 (2,701) Net cash provided by (used in) financing activities (55,936)
Slide 20: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020 Net incentive fees attributable to GCM Grosvenor Incentive fees $ 33,342 $ 13,041 $ 21,774 $ 65,819 $ 38,048 Less: Carried interest expense attributable
Slide 21: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020 Adjusted pre-tax income & Adjusted net income Net income (loss) attributable to GCM Grosvenor $ 23,890 $ 5,927 $ 1,326 $ 41,430 $ (7,702) Plus: Income ta
Slide 22: Reconciliation to Non-GAAP Metrics
Reconciliation to Non-GAAP Metrics Three Months Ended Nine Months Ended $000 Sept 30, 2019 June 30, 2020 Sept 30, 2020 Sept 30, 2019 Sept 30, 2020 Adjusted EBITDA Adjusted net income $ 33,941 $ 19,174 $ 26,623 $ 71,572 $ 57,852 Plus: Income taxes 527 526 541 1,643 1,710 Tax effect of non-GAAP adjust
Slide 23: Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments
Private Markets Strategies Performance Metrics – Realized and Partially Realized Investments $mm unless otherwise noted Realized and Partially Realized Investments Investment Investment Strategy Commitments Contributions Distributions Current Value Net TVPI Net IRR PME IRR PME Index Private Equity P
Slide 24: Private Markets Strategies Performance Metrics – All Investments
Private Markets Strategies Performance Metrics – All Investments $mm unless otherwise noted All Investments Investment Investment Strategy Commitments Contributions Distributions Current Value Net TVPI Net IRR PME IRR PME Index Private Equity Primary Fund Investments1 $ 20,058.7 $ 18,215.7 $ 21,074.
Slide 25: 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 excluding (a) income
Slide 26: 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 27: 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 and anticipated recommendation of