Summary of GCM Grosvenor (GCMG) FY Conference Call Company Overview - GCM Grosvenor is a 54-year-old firm headquartered in Chicago with offices in New York, London, Hong Kong, Tokyo, and Seoul [6] - The company manages $82 billion across a broad range of alternative investment strategies, primarily serving institutional clients [7] Core Business Insights - GCM Grosvenor has evolved significantly since its inception, adapting to changes in the alternative investment universe [11] - The firm has a proven track record of growth, managing over 20% of endowments and having multiple strategies on the efficient frontier [12] - The company emphasizes high-touch relationships with clients, which leads to long-term partnerships and a high average tenure of 15 years with top clients [30][31] Growth Strategies - The specialized fund business has grown to 30% of AUM and is experiencing a high growth rate, likely due to higher average fees and margins [16] - GCM Grosvenor employs an open architecture approach across various alternative strategies, including real assets, infrastructure, real estate, private equity, private credit, and hedge funds [18] - The firm is focused on expanding its presence in the individual investor market, which is currently under-allocated to private markets compared to institutional portfolios [54][55] Financial Performance - Since going public through a SPAC merger in Q4 2020, GCM Grosvenor has shown consistent growth in AUM, which drives earnings power [22] - The firm has a significant carry asset valued at approximately $415 million, which has yielded about 5% in revenue over the past few years due to muted transaction activity [24][26] - GCM Grosvenor aims to double its 2023 fee-related earnings by 2028, indicating strong growth expectations [58] Market Trends and Opportunities - There is a growing trend among institutional investors to increase their allocation to alternative investments, with over 70% indicating plans to do so [38][49] - The individual investor market presents a substantial opportunity for growth, as high-net-worth clients are significantly under-allocated to alternatives [54][55] - The firm is actively working to deliver an institutional experience to individual investors, which is expected to drive future growth [57] Client Relationships and Retention - GCM Grosvenor boasts a high re-up rate of over 90% for initial sales, with clients often increasing their investment upon reallocation [39][40] - The firm has established a culture of shared responsibility among its team members, fostering long-term relationships with clients [45][46] Conclusion - GCM Grosvenor is well-positioned for future growth, leveraging its strong client relationships, evolving market strategies, and a focus on both institutional and individual investors [59]

Core Insights - Proteus MHP has secured a $60 million equity commitment from GCM Grosvenor to enhance its operations in manufactured housing communities [1][2] - The partnership aims to create a programmatic joint venture that will provide over $150 million in buying power for acquiring and operating manufactured housing communities across the U.S. [2] - Proteus MHP, founded in 2022, currently owns and operates 21 communities and has three additional assets under contract, focusing on quality, attainable housing [3][4] Company Overview - Proteus MHP is a private real estate investment and operating firm dedicated to acquiring and improving manufactured housing communities [6] - The firm is led by co-founders Bowen Hsu and Marcus Consunji, who have over 30 years of combined real estate experience and have executed transactions exceeding $5 billion [3][6] - The operational platform of Proteus MHP integrates acquisitions, asset management, and property operations to enhance long-term value and resident satisfaction [4] Investment Strategy - GCM Grosvenor's Real Estate platform, managing over $6 billion in assets, focuses on middle-market opportunities through joint ventures and strategic partnerships [5] - The investment in Proteus MHP reflects GCM Grosvenor's strategy to partner with niche operators and scalable platforms to outperform in evolving market conditions [5] - The collaboration is expected to leverage strategic capital improvements and hands-on management to generate attractive, risk-adjusted returns [4][5]

Group 1 - GCM Grosvenor (NASDAQ: GCMG) has shown strong performance with a total return of 73% over the past three years, primarily driven by growth in its private markets business [1] - The company is compared to the S&P 500 Blue Chip Portfolios, which focuses on delivering investment insights on single stocks, ETFs, and CEFs [1]

CHICAGO, May 27, 2025 (GLOBE NEWSWIRE) -- GCM Grosvenor (Nasdaq: GCMG), a global alternative asset management solutions provider, announced today that Jon Levin, President of GCM Grosvenor, will present at the Morgan Stanley 2025 U.S. Financials, Payments & Commercial Real Estate Conference on Tuesday, June 10, 2025, at 3:15 PM EDT. A link to the live audio webcast of the presentation will be available on GCM Grosvenor’s public shareholders website and the event website. For those unable to listen to the li ...

Core Points - GCM Grosvenor will have a presentation at the William Blair 45 Annual Growth Stock Conference on June 4, 2025, at 8:40 a.m. CDT, led by Chairman and CEO Michael Sacks [1] - A live audio webcast of the presentation will be accessible on GCM Grosvenor's public shareholders website, with a replay available for 90 days post-presentation [2] - GCM Grosvenor manages approximately $82 billion in assets across various investment strategies, including private equity, infrastructure, real estate, credit, and absolute return [3] - The firm has over 50 years of experience in alternative asset management and aims to deliver value through a flexible investment platform [3] - GCM Grosvenor employs around 550 professionals and serves a global client base, with offices in major cities worldwide [4]

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited Q1 2025 financial statements, prepared under GAAP, reflect improved operating income from higher revenues and reduced employee compensation [Condensed Consolidated Statements of Financial Condition](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets decreased to **$579.8 million** and liabilities to **$669.5 million** as of March 31, 2025, primarily from reduced incentive fees receivable and accrued compensation Condensed Consolidated Statements of Financial Condition (in thousands) | | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total assets** | **$579,818** | **$612,731** | | Cash and cash equivalents | $94,499 | $89,454 | | Incentive fees receivable | $22,955 | $58,346 | | Investments | $255,206 | $257,807 | | **Total liabilities** | **$669,492** | **$703,070** | | Accrued compensation and employee related obligations | $64,354 | $112,519 | | Debt | $431,136 | $432,039 | | **Total deficit** | **$(89,674)** | **$(90,339)** | [Condensed Consolidated Statements of Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Q1 2025 operating income of **$15.3 million** marks a significant turnaround from a prior-year loss, driven by increased revenues and decreased expenses Condensed Consolidated Statements of Income (Loss) (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total operating revenues** | **$125,846** | **$108,866** | | Management fees | $109,315 | $95,885 | | Incentive fees | $15,068 | $10,118 | | **Total operating expenses** | **$110,516** | **$124,826** | | Employee compensation and benefits | $82,240 | $99,647 | | **Operating income (loss)** | **$15,330** | **$(15,960)** | | Net loss | $(1,090) | $(18,907) | | **Net income attributable to GCM Grosvenor Inc.** | **$463** | **$2,124** | | **Basic EPS** | **$0.01** | **$0.05** | | **Diluted EPS** | **$(0.02)** | **$(0.13)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to **$33.3 million** in Q1 2025, contributing to a **$5.0 million** rise in cash and equivalents to **$94.5 million** Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $33,264 | $24,204 | | Net cash used in investing activities | $(1,140) | $(8,657) | | Net cash used in financing activities | $(27,703) | $(17,249) | | **Net increase (decrease) in cash** | **$5,045** | **$(2,491)** | | **Cash and cash equivalents, end of period** | **$94,499** | **$41,863** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail a new **$15.0 million** joint venture, an increased **$190 million** stock repurchase plan, debt covenant compliance, and a **$49.8 million** subsequent stock offering - On February 28, 2025, the Company closed a joint venture, Grove Lane Partners LLC, to broaden individual investor access to alternative investments, committing **$15.0 million** for a **49%** interest[47](index=47&type=chunk) - On February 6, 2025, the Board of Directors increased the stock repurchase authorization by **$50 million**, bringing the total to **$190 million**. As of March 31, 2025, **$81.7 million** remained available under the plan[68](index=68&type=chunk)[69](index=69&type=chunk) - As of March 31, 2025, the company had **$434.7 million** of its 2028 Term Loans outstanding and was in compliance with all debt covenants[105](index=105&type=chunk)[106](index=106&type=chunk) - Subsequent to the quarter end, on April 14, 2025, the company entered into a share purchase agreement with Sumitomo Mitsui Trust Bank for the sale of 3,752,965 shares of Class A common stock, raising net proceeds of approximately **$49.8 million**[157](index=157&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2025 performance improvement to strong private markets growth, increased fees, and reduced employee compensation, with FPAUM reaching **$66.4 billion** and strong non-GAAP results [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Q1 2025 operating revenues increased **16%** to **$125.8 million** and expenses decreased **11%** to **$110.5 million**, leading to an operating income of **$15.3 million** from a prior-year loss Operating Results Summary (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total operating revenues** | **$125,846** | **$108,866** | | Management fees | $109,315 | $95,885 | | Incentive fees | $15,068 | $10,118 | | **Total operating expenses** | **$110,516** | **$124,826** | | Employee compensation and benefits | $82,240 | $99,647 | | **Operating income (loss)** | **$15,330** | **$(15,960)** | - Management fees increased by **$13.4 million (14%)** YoY, driven by a **$11.3 million (20%)** increase in private markets strategies fees due to capital raising and deployment[207](index=207&type=chunk) - Carried interest increased by **$7.1 million (172%)** YoY due to higher distributions and carry realizations, while performance fees decreased by **$2.2 million (36%)**[210](index=210&type=chunk) - Employee compensation and benefits decreased by **$17.4 million (17%)** YoY, primarily driven by a **$17.8 million (59%)** decrease in partnership interest-based compensation[212](index=212&type=chunk) [Fee-Paying AUM](index=47&type=section&id=Fee-Paying%20AUM) Fee-Paying AUM increased by **$1.6 billion (3%)** to **$66.4 billion** in Q1 2025, driven by **$2.7 billion** in private markets contributions FPAUM Roll-Forward for Q1 2025 (in thousands) | | Private Markets | Absolute Return | Total FPAUM | | :--- | :--- | :--- | :--- | | **Balance, beginning of period** | **$42,717** | **$22,048** | **$64,765** | | Contributions | $2,365 | $327 | $2,692 | | Withdrawals | $(27) | $(376) | $(403) | | Distributions | $(515) | $(9) | $(524) | | **Balance, end of period** | **$44,398** | **$22,001** | **$66,399** | AUM and CNYFPAUM (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted, not yet Fee-Paying AUM | $8,239 | $8,202 | | AUM | $81,955 | $80,077 | [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) Key non-GAAP metrics showed strong growth in Q1 2025, with Fee-Related Earnings (FRE) at **$46.7 million** (up **22%**) and Adjusted EBITDA at **$53.4 million** (up **26%**) Non-GAAP Financial Measures Summary (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Fee-Related Revenue | $106,163 | $94,815 | | Fee-Related Earnings | $46,657 | $38,124 | | Fee-Related Earnings Margin | 44% | 40% | | Adjusted EBITDA | $53,376 | $42,366 | | Adjusted Pre-Tax Income | $47,032 | $36,138 | | Adjusted Net Income | $35,274 | $27,212 | | Adjusted Net Income Per Share | $0.18 | $0.14 | [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$94.5 million** in cash and **$50.0 million** available credit, alongside an increased **$190 million** stock repurchase plan and a declared **$0.11** quarterly dividend - As of March 31, 2025, the company had **$94.5 million** of cash and cash equivalents and **$50.0 million** of available borrowing capacity under its Revolving Credit Facility[253](index=253&type=chunk) - The Board of Directors increased the stock repurchase authorization by **$50 million** to **$190 million** on February 6, 2025[267](index=267&type=chunk) - A quarterly dividend of **$0.11** per share of Class A common stock was declared on May 5, 2025[266](index=266&type=chunk) - The liability under the Tax Receivable Agreement was **$51.4 million** as of March 31, 2025[271](index=271&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are price risk on fund investments and interest-rate risk on floating-rate debt, with a **100 basis point** SOFR increase estimated to raise annual interest expense by **$4.3 million** - The company's main market risks are price risk on fund investments and interest-rate risk on its debt[281](index=281&type=chunk)[282](index=282&type=chunk) - A **100 basis point** increase in SOFR is estimated to increase annual interest expense by **$4.3 million**, before considering the effect of interest rate hedges[283](index=283&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2025[285](index=285&type=chunk) - No material changes were made to internal control over financial reporting during the first quarter of 2025[286](index=286&type=chunk) [Part II - Other Information](index=57&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits but does not expect current litigation to materially affect its financial statements - Management does not expect current litigation to have a material effect on the Company's financial statements[288](index=288&type=chunk) [Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported since the Annual Report on Form 10-K for fiscal year 2024 - No material changes to risk factors were reported for the period[290](index=290&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase Class A common stock or warrants in Q1 2025, but spent **$0.3 million** to settle RSUs - The company did not repurchase any Class A common stock or warrants during Q1 2025[291](index=291&type=chunk)[268](index=268&type=chunk) [Other Information](index=58&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or arrangement during Q1 2025 - No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan during Q1 2025[297](index=297&type=chunk) [Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including agreements, certifications, and XBRL data

Financial Data and Key Metrics Changes - GCM Grosvenor reported strong results in Q1 2025, exceeding profitability expectations with total fundraising of $2.9 billion, the highest quarterly level in over two years [6][10] - Total private markets management fees increased by 20% year over year, with fee-related revenue growing by 12% and adjusted EBITDA rising by 26% [10][22] - Adjusted net income grew by 30% year over year, reflecting solid financial performance [10] Business Line Data and Key Metrics Changes - Infrastructure fundraising accounted for approximately half of the total fundraising, with a final close of nearly $500 million for the second infrastructure advantage fund, IAF II, which reached a total size of $1.3 billion, nearly 50% larger than its predecessor [7][10] - Private equity fundraising contributed over $720 million, including the final close of the private equity co-invest fund, GCF III, which totaled approximately $615 million [8][10] - Absolute return strategies (ARS) business performance was relatively flat but positively viewed by clients due to the drop in equity markets [11] Market Data and Key Metrics Changes - The firm raised $1.6 billion for absolute return strategies since the start of 2024, with a strong late-stage pipeline compared to previous years [12] - The carried interest balance grew to $865 million, an 11% increase from a year ago, indicating strong earnings potential [12][26] - The firm expects full-year private markets fee-related revenue to grow in the mid-single-digit range of 5% to 8% compared to 2024 [15] Company Strategy and Development Direction - GCM Grosvenor announced two strategic initiatives: a joint venture called Grove Lane targeting individual investors and a strategic partnership in Japan [13][21] - The firm aims to leverage its core strengths in open architecture investing and client-centric approaches to develop tailored investment solutions [13] - The company is focused on doubling fee-related earnings (FRE) from 2023 levels by the end of 2028 [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged uncertainty related to trade and tax policy, which may keep deployment and transaction levels depressed in the short term [14] - Despite market volatility, the firm remains confident in its ability to achieve fundraising goals for 2025, projecting it to exceed 2024's total of $7.1 billion [9][15] - The management expressed optimism about the long-term growth potential in the individual investor channel, both domestically and internationally [37] Other Important Information - The firm maintained a healthy quarterly dividend of $0.11 per share, with a 3.5% dividend yield and room for future growth [26][27] - The company continues to repurchase shares under its authorization plan to manage dilution [27] Q&A Session Summary Question: What are the key drivers to get back to the 10% plus range for private markets management fee expectations? - Management indicated that factors affecting revenue realization include how much of the funds raised go directly to fee-paying AUM and the speed of deployment from committed capital [29][30] Question: What are the biggest opportunities internationally? - Management noted significant opportunities globally, emphasizing the individual investor channel as a tremendous opportunity both in the US and abroad [35][37] Question: How does the company view the potential for endowments to reduce their private equity positions? - Management stated that the company is insulated from endowment pullbacks in private markets commitments, as it represents a small part of AUM [56] Question: What is the rationale behind the Grove Lane joint venture structure? - Management explained that the structure allows for attracting solid talent and provides ownership incentives, which can enhance team quality and results over time [66][68]

Financial Data and Key Metrics Changes - GCM Grosvenor reported strong results in Q1 2025, exceeding profitability expectations with adjusted EBITDA growing 26% year over year and adjusted net income increasing 30% year over year [8] - Total private markets management fees for the quarter increased by 20% year over year, driven by significant catch-up fees of $7,600,000 [8][21] - Fee-related revenue grew 12% year over year, while fee-related earnings saw a 22% increase year over year, resulting in a fee-related earnings margin of 44% [8][23] Business Line Data and Key Metrics Changes - Fundraising reached $2,900,000,000 in Q1 2025, the highest quarterly fundraising level in over two years, with approximately half allocated to infrastructure [5][6] - The final close of the Infrastructure Advantage Fund II (IAF II) was nearly $500,000,000, bringing its total size to $1,300,000,000, which is nearly 50% larger than its predecessor [6] - Private equity fundraising contributed over $720,000,000, including the final close of the private equity co-invest fund GCF III, which totaled approximately $615,000,000 [6] Market Data and Key Metrics Changes - The firm raised $1,600,000,000 for absolute return strategies since the start of 2024, indicating strong client interest despite market volatility [10] - The carried interest balance grew to $865,000,000, an 11% increase from the previous year, with the firm's share of carry increasing by 12.5% to $415,000,000 [10][24] Company Strategy and Development Direction - GCM Grosvenor announced two strategic initiatives: a joint venture called Grove Lane targeting individual investors and a partnership in Japan aimed at raising additional assets [11][20] - The company aims to leverage its core strengths in open architecture investing and client-centric approaches to develop tailored investment solutions [11] - The firm is focused on doubling fee-related earnings from 2023 levels by the end of 2028, despite current market uncertainties [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundraising outlook for 2025, expecting it to exceed the 2024 total of $7,100,000,000 despite market volatility [7][12] - There are concerns regarding trade and tax policy uncertainties that may keep deployment and transaction levels depressed in the short term [11][12] - The management noted that while the absolute return strategies business performed relatively flat, it was viewed positively by clients given the broader market downturn [9] Other Important Information - Assets under management grew to $82,000,000,000, with fee-paying AUM increasing to $66,000,000,000, and contracted not yet fee-paying AUM growing 16% year over year [21] - The company maintains a healthy quarterly dividend of $0.11 per share, with a 3.5% dividend yield and potential for future growth [25] Q&A Session Summary Question: What are the key drivers to get private markets management fees back to the 10% plus range? - Management indicated that factors affecting revenue realization include the proportion of funds raised going to fee-paying AUM and the speed of deployment from committed capital [27][28] Question: What are the biggest opportunities for international fundraising? - Management noted significant opportunities both domestically and internationally, emphasizing the individual investor channel as a tremendous opportunity [31][34] Question: Can you discuss the Summa Trust and its potential? - Management highlighted the partnership's potential in the market and clarified that there are no current plans to increase stakes in GCM Grosvenor [41][44] Question: How does the company view the current market volatility affecting deployment? - Management acknowledged the short-term impact of policy volatility on visibility but emphasized that the structural aspects of the business remain strong [46][49] Question: What is the outlook for separate account fee growth? - Management explained that the flat growth in separate account fees is expected due to a mix shift towards higher fee specialized funds, with stability anticipated moving forward [56][60]

Group 1 - GCM Grosvenor Inc. reported $125.85 million in revenue for Q1 2025, a year-over-year increase of 15.6% [1] - The EPS for the same period was $0.18, compared to $0.14 a year ago, indicating a positive growth trend [1] - The reported revenue was a slight miss of -0.53% compared to the Zacks Consensus Estimate of $126.52 million [1] Group 2 - The consensus EPS estimate was $0.19, resulting in an EPS surprise of -5.26% [1] - GCM Grosvenor's shares returned +4.3% over the past month, underperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Group 3 - Fee-paying AUM for Private Markets Strategies was reported at $44.40 billion, exceeding the average estimate of $43.79 billion [4] - Total Fee-paying AUM reached $66.40 billion, slightly above the average estimate of $66.05 billion [4] - Incentive fees were reported at $15.07 million, below the estimated $21.63 million [4]

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 ...