GCM Grosvenor (GCMG) Q1 2025 Earnings Call May 07, 2025 10:00 AM ET Speaker0 Good day, and welcome to the GCM Grosvenor First Quarter twenty twenty five Results Webcast. Later, we will conduct a question and answer session. If you're interested in asking a question, please ensure you dial in using the numbers you've been provided for this call and press star one on your keypad to join the queue. As a reminder, this call will be recorded. I would now like to hand the call over to Stacy Selinger, Head of Inve ...

GCM Grosvenor Inc. (GCMG) came out with quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectati ...

2025 First Quarter Results Earnings Presentation GCM Grosvenor Reports Q1 2025 Results CHICAGO, May 7, 2025 – GCM Grosvenor (Nasdaq: GCMG), a leading global alternative asset management solutions provider, today reported results for the first fiscal quarter ended March 31, 2025. Dividend GCM Grosvenor's Board of Directors approved a $0.11 per share dividend payable on June 16, 2025 to shareholders on record June 6, 2025. Conference Call Management will host a webcast and conference call at 10:00 a.m. ET tod ...

```markdown [First Quarter 2025 Performance Highlights](index=7&type=section&id=First%20Quarter%202025%20Results) [Financial and Operational Summary](index=7&type=section&id=First%20Quarter%202025%20Results) GCM Grosvenor achieved strong Q1 2025 financial growth, including a 12% rise in Fee-Related Revenue and 26% in Adjusted EBITDA Q1 2025 Key Financial and AUM Metrics (vs. Q1 2024) | Metric | Q1 2025 | % Change vs Q1 2024 | | :--- | :--- | :--- | | **AUM** | | | | Total AUM | $82.0 billion | 4% | | Fee-Paying AUM (FPAUM) | $66.4 billion | 5% | | Private Markets FPAUM | $44.4 billion | 9% | | **Financials (Three Months Ended)** | | | | GAAP Revenue | $125.8 million | 16% | | Fee-Related Revenue | $106.2 million | 12% | | Fee-Related Earnings | $46.7 million | 22% | | Adjusted EBITDA | $53.4 million | 26% | | Adjusted Net Income | $35.3 million | 30% | | Adjusted Net Income Per Share - Diluted | $0.18 | 29% | - Capital raising was exceptionally strong, with **$2.9 billion** raised in Q1 2025 (**+77% YoY**) and **$8.4 billion** over the last twelve months (**+46% YoY**)[15](index=15&type=chunk) - Strategic initiatives announced include a partnership in Japan targeting **$1.5 billion** of incremental capital by 2030 and the launch of Grove Lane Partners, a joint venture, for individual investor distribution[15](index=15&type=chunk) [Adjusted Earnings Trends](index=9&type=section&id=Adjusted%20Earnings) The company demonstrated robust growth in adjusted earnings for Q1 2025, with Fee-Related Earnings up 22% and Adjusted Net Income up 30% Q1 Adjusted Earnings Growth (YoY) | Metric | Q1 2024 ($ million) | Q1 2025 ($ million) | % Growth | | :--- | :--- | :--- | :--- | | Fee-Related Earnings | $38.1 million | $46.7 million | 22% | | Adjusted EBITDA | $42.4 million | $53.4 million | 26% | | Adjusted Net Income | $27.2 million | $35.3 million | 30% | Longer-Term Adjusted Earnings Growth (2020 LTM vs. Q1 2025 LTM) | Metric | 2020 LTM ($ million) | Q1 2025 LTM ($ million) | % Growth | | :--- | :--- | :--- | :--- | | Fee-Related Earnings | $91.0 million | $148.8 million | 64% | | Adjusted EBITDA | $95.1 million | $174.9 million | 84% | | Adjusted Net Income | $147.0 million | $224.9 million | 53% | [Business Growth and Strategy](index=11&type=section&id=Business%20Growth%20and%20Strategy) [Key Business Drivers Evolution](index=11&type=section&id=Growth%20in%20Key%20Business%20Drivers) GCM Grosvenor significantly expanded AUM to $82 billion and shifted towards private markets, increasing unrealized carried interest to $415 million Comparison of Key Business Drivers (Dec 2020 vs. Mar 2025) | Driver | Metric | Dec 31, 2020 (Amount) | Mar 31, 2025 (Amount) | | :--- | :--- | :--- | :--- | | Earnings Power | AUM | $62 billion | $82 billion | | Business Mix | Private Markets % of FPAUM | 54% | 67% | | Strategy Shift | Direct-Oriented Strategies % of Private Markets AUM | 39% | 53% | | Operating Leverage | LTM FRE Margin | 31% | 43% | | Incentive Potential | Firm Share of Unrealized Carried Interest | $133 million | $415 million | [Long-Term Growth Initiatives](index=13&type=section&id=Key%20Long-Term%20Growth%20Drivers) The company's long-term strategy focuses on scaling core capabilities, targeting individual investors and real assets, and enhancing earnings quality - **Scaling Core Capabilities:** Achieved through high client retention (**approx. 90% private markets re-up rate**) and expanding relationships, with **over 50%** of top clients invested in more than one vertical[24](index=24&type=chunk) - **Planting Seeds for Future Growth:** Targeting the individual investor channel (raised **$3.5 billion** since 2020) and expanding in real assets (raised **$16 billion** since 2020)[24](index=24&type=chunk) - **Growing Earnings Quality and Power:** Driven by a business shift to private markets (**67% of FPAUM**), margin expansion (**~1,200 bps** since Q4 2020), and growth in unrealized carried interest[24](index=24&type=chunk) [AUM Growth and Diversification](index=15&type=section&id=Growing%20and%20Diversifying%20AUM%20and%20Earnings%20Power) GCM Grosvenor's AUM grew at a 7% CAGR to $82.0 billion, driven by strong expansion in diversified Private Markets strategies AUM by Strategy as of March 31, 2025 | Strategy | AUM ($ billion) | | :--- | :--- | | Private Equity | $30.5 | | Infrastructure | $16.0 | | Real Estate | $6.3 | | Alternative Credit | $14.5 | | Absolute Return | $23.4 | | **Total AUM** | **$82.0** | - Total AUM grew from $61.9 billion in Q4 2020 to **$82.0 billion** in Q1 2025, representing a **7% Compound Annual Growth Rate (CAGR)**[32](index=32&type=chunk) - The growth was primarily led by Private Markets (Private Equity and Real Assets), which saw a combined **12% CAGR**, while Absolute Return Strategies AUM declined slightly with a **(2)% CAGR** over the same period[32](index=32&type=chunk) [Fundraising Performance](index=19&type=section&id=Diversified%20Fundraising%20Drives%20Stability%20%26%20Growth) The firm's fundraising is highly diversified, with $2.9 billion raised in Q1 2025 and $8.4 billion LTM from global client channels - LTM fundraising is diversified by client channel: Pensions (**60%**), Government/Sovereign (**11%**), Individual Investor (**8%**), Insurance (**8%**), and Financial Institutions (**7%**)[35](index=35&type=chunk) - LTM fundraising is also geographically diverse: Americas (**58%**), EMEA (**20%**), and APAC (**22%**)[35](index=35&type=chunk) - Fundraising has been consistent across various strategies, with Private Equity, Infrastructure, and Alternative Credit being significant contributors over the last several years[38](index=38&type=chunk) [Segment and Earnings Power Analysis](index=21&type=section&id=Segment%20and%20Earnings%20Power%20Analysis) [Private Markets Business Growth](index=21&type=section&id=Private%20Markets%20Specialized%20Fund%20Franchises) The Private Markets segment is a key growth engine, with AUM reaching $59 billion and management fees growing at a 13% CAGR since 2020 - Private Markets management fees have grown steadily, from **$150.0 million** in 2020 to **$249.9 million** in the last twelve months (LTM), a **13% CAGR**[48](index=48&type=chunk)[49](index=49&type=chunk) - The firm has raised **$33 billion** for its Private Markets strategies since 2020[51](index=51&type=chunk) - Cumulative closings for selected private market specialized funds have increased from **$2.2 billion** in 2018 to over **$12.2 billion** through Q1 2025[42](index=42&type=chunk) [Carried Interest and Incentive Fees](index=25&type=section&id=Growing%20Carried%20Interest%20Earnings%20Power) The firm's unrealized carried interest reached $865 million, with its share increasing to 48%, supported by growing AUM subject to incentive fees Growth in Unrealized Carried Interest (mm) | Metric | Q4 2020 ($ million) | Q1 2025 ($ million) | | :--- | :--- | :--- | | Total Unrealized Carried Interest | $395 | $865 | | Firm Share of Carried Interest | $133 | $415 | | Firm Share % | **34%** | **48%** | - The unrealized carried interest is spread across 142 programs, with a significant portion from more recent vintages (2017+), where the firm's share is higher (**53%**)[53](index=53&type=chunk) - AUM subject to incentive fees has grown from **$45.9 billion** in 2020 to **$59.8 billion** in Q1 2025, a **10% CAGR**, underpinning future earnings potential[59](index=59&type=chunk) [Financial Position and Shareholder Information](index=29&type=section&id=Other%20Key%20Items) [Key Balance Sheet and Ownership Metrics](index=29&type=section&id=KEY%20CASH,%20INVESTMENT%20AND%20DEBT%20METRICS) The company maintained a solid financial position with $304 million in cash and investments, and management owning 76% of shares Key Financial Metrics as of March 31, 2025 ($mm) | Metric | Amount ($ million) | | :--- | :--- | | Cash and Cash Equivalents | $94 | | Investments | $210 | | **Cash and Investments** | **$304** | | Unrealized Carried Interest (Firm Share) | $415 | | **Cash, Investments and Unrealized Carry** | **$719** | | Debt | $435 | Ownership Summary as of March 31, 2025 | Holder | Shares (mm) | % Ownership | | :--- | :--- | :--- | | Management Owned | 144.2 | 76% | | Publicly Traded | 45.2 | 24% | | **Total Shares** | **189.4** | **100%** | [Shareholder Returns and Strategic Updates](index=29&type=section&id=Shareholder%20Returns%20and%20Strategic%20Updates) GCM Grosvenor returns capital via dividends and repurchases, and finalized a strategic partnership in Japan with a $50 million equity investment - The Board of Directors approved a quarterly dividend of **$0.11 per share**, payable on June 16, 2025[64](index=64&type=chunk) - The company repurchased **$19.3 million** of Class A common stock in Q1 and April/May 2025. As of May 1, 2025, **$63 million** remained available under the share and warrant repurchase program[64](index=64&type=chunk) - Subsequent to quarter end, a strategic partner in Japan purchased approximately **3.8 million shares** of Class A stock for **$50 million**[64](index=64&type=chunk) [Supplemental Information (Appendix)](index=31&type=section&id=Supplemental%20Information) [GAAP Financial Statements](index=33&type=section&id=GAAP%20Financial%20Statements) The GAAP financial statements detail Q1 2025 performance, showing $125.8 million in revenues and $0.5 million net income attributable to GCM Grosvenor Inc GAAP Statement of Income Highlights (Three Months Ended Mar 31, 2025) | Metric ($000) | Amount ($ thousand) | | :--- | :--- | | Total operating revenues | $125,846 | | Total operating expenses | $110,516 | | Operating income | $15,330 | | Net loss | $(1,090) | | Net income attributable to GCM Grosvenor Inc. | $463 | GAAP Balance Sheet Highlights (As of Mar 31, 2025) | Metric ($000) | Amount ($ thousand) | | :--- | :--- | | Total assets | $579,818 | | Total liabilities | $669,492 | | Total deficit | $(89,674) | GAAP Statements of Income](index=33&type=section&id=GAAP%20Statements%20of%20Income) GAAP Balance Sheets](index=37&type=section&id=GAAP%20Balance%20Sheets) [Non-GAAP Financial Measures and Reconciliations](index=35&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides detailed reconciliations for key non-GAAP measures, with Q1 2025 FRE at $46.7 million and Adjusted EBITDA at $53.4 million Summary of Non-GAAP Measures (Three Months Ended Mar 31, 2025) | Metric ($000) | Amount ($ thousand) | | :--- | :--- | | Fee-Related Revenue | $106,163 | | Fee-Related Earnings | $46,657 | | Fee-Related Earnings Margin | 44% | | Adjusted EBITDA | $53,376 | | Adjusted EBITDA Margin | 44% | | Adjusted Net Income | $35,274 | Summary of Non-GAAP Measures (Adjusted EBITDA & ANI)](index=35&type=section&id=Summary%20of%20Non-GAAP%20Financial%20Measures) Reconciliation to Non-GAAP Metrics](index=41&type=section&id=Reconciliation%20to%20Non-GAAP%20Metrics) [Key Performance Indicators (KPIs)](index=49&type=section&id=Key%20Performance%20Indicators%20(KPIs)) The firm's FPAUM increased by 3% to $66.4 billion, driven by new capital, with stable average management fee rates across strategies FPAUM Rollforward (Three Months Ended Mar 31, 2025) | ($mm) | Beginning Balance ($ million) | End of Period Balance ($ million) | % Change | | :--- | :--- | :--- | :--- | | Private Market Strategies | $42,717 | $44,398 | 4% | | Absolute Return Strategies | $22,048 | $22,001 | 0% | | **Total FPAUM** | **$64,765** | **$66,399** | **3%** | Average Management Fee Rates (Q1 2025) | Strategy | Average Fee Rate | | :--- | :--- | | Private Markets | 0.55% | | Absolute Return Strategies | 0.69% | AUM and FPAUM Rollforward](index=49&type=section&id=Change%20in%20FPAUM%20and%20AUM) Management Fee Detail](index=51&type=section&id=Management%20Fee%20Detail) [Investment Performance Metrics](index=53&type=section&id=Investment%20Performance%20Metrics) The report details strong Private Markets performance, with PE Co-Investments/Direct achieving 2.08x net TVPI and 20.7% net IRR Private Markets Performance Highlights (Realized/Partially Realized) | Strategy | Investment Net TVPI | Investment Net IRR | | :--- | :--- | :--- | | PE Primary Fund Investments | 1.82x | 13.4% | | PE Co-Investments/Direct | **2.08x** | **20.7%** | | Infrastructure Direct-Oriented | 1.78x | 14.5% | Absolute Return Strategies Performance (Annualized Net Returns) | Period Ended Mar 31, 2025 | Net Return | | :--- | :--- | | One Year | **7.2%** | | Three Year | 5.8% | | Five Year | 7.7% | | Since Inception | 5.9% | Private Markets Strategies Performance](index=53&type=section&id=Private%20Markets%20Strategies%20Performance%20Metrics) Absolute Return Strategies Performance](index=57&type=section&id=Absolute%20Return%20Strategies%20Performance) ```

CHICAGO, April 23, 2025 (GLOBE NEWSWIRE) -- GCM Grosvenor (NASDAQ:GCMG), a global alternative asset management solutions provider, announced today that it will release its results for the first quarter 2025 on Wednesday, May 7, 2025. Management will host a webcast and conference call on Wednesday May 7, 2025, at 10:00 a.m. ET to discuss the results and provide a business update. The conference call will be available via public webcast through the Public Shareholders section of GCM Grosvenor's website at www ...

CHICAGO, April 22, 2025 (GLOBE NEWSWIRE) -- GCM Grosvenor (NASDAQ:GCMG), a leading global alternative asset management solutions provider, announced the final close of its Infrastructure Advantage Fund II ("IAF II" or the "Fund") was held on March 31, 2025, securing $1.3 billion in commitments, a substantial increase over its predecessor, "Fund I", which closed in 2020 at $893 million. GCM Grosvenor's Infrastructure Advantage Strategy focuses on partnership with organized labor and other stakeholders to inv ...

Core Viewpoint - Sumitomo Mitsui Trust Bank and GCM Grosvenor have formed a strategic partnership to enhance alternative investment offerings in Japan, aiming to capture growing market demand and expand their global presence [1][2][3] Group 1: Partnership Details - The partnership aims to leverage SuMi TRUST's strong presence in Japan and GCM Grosvenor's expertise in private markets to develop and distribute alternative investment products [2][3] - Both firms are targeting an additional $1.5 billion in assets under management by 2030 as a result of this collaboration [2] Group 2: Company Backgrounds - SuMi TRUST Group is a leading trust bank in Japan with a diverse client base and one of the largest asset bases in Asia, focusing on asset management and wealth management [5] - GCM Grosvenor manages approximately $80 billion in assets across various investment strategies and has over 50 years of experience in alternative asset management [6]

Core Viewpoint - Sumitomo Mitsui Trust Bank and GCM Grosvenor have formed a strategic partnership to enhance alternative investment offerings in Japan, aiming to capture growing market demand and expand their global presence [1][2][3] Group 1: Partnership Details - The partnership aims to leverage SuMi TRUST's strong presence in Japan and GCM Grosvenor's expertise in private markets to develop and distribute alternative investment products [2][3] - Both firms are targeting an additional $1.5 billion in assets under management by 2030 as a result of this collaboration [2] Group 2: Company Backgrounds - SuMi TRUST Group is a leading trust bank in Japan with a diverse client base and one of the largest asset bases in Asia, focusing on asset management and wealth management [5] - GCM Grosvenor manages approximately $80 billion in assets across various investment strategies and has over 50 years of experience in alternative asset management [6] Group 3: Historical Collaboration - The two companies have been collaborating since 2016 in areas such as private equity, credit, and infrastructure strategies, indicating a strong foundation for this new partnership [3]

Core Insights - GCM Grosvenor has appointed Martin Laguerre as Co-Head of Global Diversified Private Equity, bringing 25 years of investment experience to the firm [1][2] - Laguerre's previous role was as a Senior Advisor at Warburg Pincus, and he has held significant positions at CDPQ, CPP Investments, and General Electric [2] - The firm currently manages $30 billion in private equity assets and has a total of approximately $80 billion in assets under management across various investment strategies [3][5] Company Overview - GCM Grosvenor is a global alternative asset management solutions provider with over 50 years of experience in alternatives [5] - The firm serves a diverse client base of institutional and individual investors, supported by a team of approximately 550 professionals [6] - GCM Grosvenor has a strong presence with offices in major financial hubs including Chicago, New York, Toronto, London, Frankfurt, Tokyo, Hong Kong, Seoul, and Sydney [6] Leadership and Strategy - Martin Laguerre will focus on enhancing GCM Grosvenor's private equity platform and leveraging the firm's extensive sourcing network [3] - The firm aims to strengthen its investment capabilities and deliver strong outcomes for clients through Laguerre's leadership [3][4] - Laguerre holds advanced degrees in finance and management, including an MBA from the University of Chicago [4]

Core Viewpoint - GCM Grosvenor has announced a strategic joint venture, Grove Lane Partners, to create a distribution platform for individual investors, focusing on registered investment advisors, independent broker-dealers, and family offices, in response to the growing demand for alternative investments among individual investors [1][3]. Group 1: Joint Venture Details - The joint venture will be led by Ryan Chapman, who has extensive experience in scaling alternative investment platforms and has previously worked at Blackstone [2]. - GCM Grosvenor holds a minority interest in the joint venture with an option to acquire full ownership in the future [4]. Group 2: Strategic Goals - The partnership aims to provide individual investors with access to institutional-quality private alternative investments managed by GCM Grosvenor and third-party managers [3]. - The initiative is designed to enhance GCM Grosvenor's capabilities in serving individual investors and to expand its channel reach [3][5]. Group 3: Company Background - GCM Grosvenor manages approximately $80 billion in assets across various investment strategies, including private equity, infrastructure, real estate, credit, and absolute return [6]. - The firm has over 50 years of experience in alternative investments and serves a global client base of institutional and individual investors [6][7].