GCM Grosvenor Inc. (GCMG) came out with quarterly earnings of $0.14 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.10 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.18 per share when it actually produced earnings of $0.17, delivering a surprise of -5.56%.Over the last four quarters, the company has surpassed consensus EPS estimates two times.GCM Grosvenor, which belongs ...

GCM GROSVENOR 2024 First Quarter Results Earnings Presentation GCM Grosvenor Reports Q1 2024 Results CHICAGO, May 7, 2024 - GCM Grosvenor (Nasdag: GCMG), a leading global alternative asset management solutions provider, today reported results for the first fiscal quarter ended March 31, 2024. Dividend GCM Grosvenor's Board of Directors approved a $0.11 per share dividend payable on June 17, 2024 to shareholders on record June 3, 2024. Conference Call Management will host a webcast and conference call at 10: ...

CHICAGO, April 23, 2024 (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 2024 on Tuesday, May 7, 2024. Management will host a webcast and conference call on Tuesday, May 7, 2024 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.gcm ...

Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) GCM Grosvenor is a global alternative asset manager with $76.9 billion in AUM as of December 31, 2023, providing customized investment solutions across private markets and absolute return strategies - The company's client offerings are structured in two main ways: customized separate accounts, which comprise **73% of AUM ($56.4 billion)**, and specialized commingled funds, which make up the remaining **27% ($20.5 billion)**[40](index=40&type=chunk) - Existing clients are a key growth driver, contributing over **82% of total capital raised in 2023**; **52% of the top 50 clients** by AUM utilized multiple investment strategies[38](index=38&type=chunk) [Investment Strategies](index=7&type=section&id=Investment%20Strategies) The firm's investment strategies are divided into Private Markets ($54.5 billion AUM) and Absolute Return Strategies ($22.4 billion AUM), with a significant focus on Sustainable and Impact Investing - The firm has a dedicated effort in investing with small, emerging, and diverse managers, managing **$19.7 billion in small and emerging managers** and **$15.7 billion in diverse managers** as of December 31, 2023[36](index=36&type=chunk)[105](index=105&type=chunk) - Sustainable and Impact Investing is a significant focus, with **$26.3 billion in AUM**, implemented for over two decades to meet clients' specific goals and risk tolerances[36](index=36&type=chunk)[108](index=108&type=chunk) [Investment Performance](index=14&type=section&id=Investment%20Performance) The company reports strong long-term performance across its private markets strategies, outperforming respective market benchmarks, and consistent returns from Absolute Return Strategies Private Markets Performance (Realized/Partially Realized, as of 09/30/2023) | Strategy | Investment Net IRR | PME Index Return | Outperformance | | :--- | :--- | :--- | :--- | | Private Equity (Primary) | 13.7% | 10.5% (S&P 500) | +3.2% | | Private Equity (Secondaries) | 19.1% | 12.1% (S&P 500) | +7.0% | | Private Equity (Co-Invest) | 21.9% | 16.1% (S&P 500) | +5.8% | | Infrastructure | 12.6% | 6.7% (MSCI World Infra) | +5.9% | | Real Estate | 16.8% | 12.0% (FNERTR Index) | +4.8% | | Diverse Managers | 22.9% | 14.6% (S&P 500) | +8.3% | Absolute Return Strategies Performance (Net, as of 12/31/2023) | Strategy | 1-Year | 3-Year Ann. | 5-Year Ann. | Since Inception | | :--- | :--- | :--- | :--- | :--- | | Absolute Return (Overall) | 7.3% | 2.2% | 5.1% | 5.7% (since 1996) | | GCMLP Diversified Multi-Strategy | 8.1% | 2.4% | 5.5% | 6.4% (since 1993) | [Assets Under Management](index=15&type=section&id=Assets%20Under%20Management) Fee-Paying AUM (FPAUM) grew to $61.7 billion at year-end 2023, with $7.3 billion in Contracted Not Yet Fee-Paying AUM (CNYFPAUM) indicating future growth - As of December 31, 2023, the company had **$61.7 billion in Fee-Paying AUM (FPAUM)** and an additional **$7.3 billion in contracted capital** that is not yet paying fees (CNYFPAUM)[76](index=76&type=chunk)[151](index=151&type=chunk) - Of the **$7.3 billion in CNYFPAUM**, approximately **$2.7 billion** is subject to a scheduled fee ramp-in over the next three years, while the remaining **$4.6 billion** will generate fees as capital is invested[153](index=153&type=chunk) [Regulatory Environment](index=20&type=section&id=Regulatory%20Environment) GCM Grosvenor is subject to extensive regulation in the U.S. by the SEC, Department of Labor, and CFTC, and internationally in jurisdictions like the EU, UK, Japan, and Hong Kong - The company is registered with the SEC as an investment adviser, with the CFTC as a commodity pool operator, and is subject to ERISA regulations for funds holding 'plan assets'[187](index=187&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Internationally, the firm is subject to regulations such as the AIFMD in the European Union and UK, and is also regulated in Japan and Hong Kong[193](index=193&type=chunk)[196](index=196&type=chunk) - The company's funds generally rely on exemptions from registration under the Securities Act and the Investment Company Act, typically by conducting non-public offerings to qualified or institutional investors[198](index=198&type=chunk)[200](index=200&type=chunk) Company Overview (as of Dec 31, 2023) | Metric | Value | | :--- | :--- | | Assets Under Management (AUM) | $76.9 billion | | Employees | 538 | | Investment Professionals | 177 | | Global Offices | 9 | Key Financials (Year Ended Dec 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Total Management Fees | $375 million | $367 million | | Total Operating Revenues | $445 million | $447 million | | Net Income | $13 million | $20 million | | Fee Related Earnings | $140 million | $129 million | | Adjusted Net Income | $103 million | $94 million | AUM Breakdown by Strategy (as of Dec 31, 2023) | Strategy | AUM (billions) | % of Total AUM | | :--- | :--- | :--- | | **Private Markets** | **$54.5** | **71%** | | - Private Equity | $29.4 | - | | - Infrastructure | $13.9 | - | | - Real Estate | $6.1 | - | | **Absolute Return Strategies** | **$22.4** | **29%** | | **Total AUM** | **$76.9** | **100%** | [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks including fund performance dependency, investor redemptions, intense competition, reputational harm, market conditions, reliance on due diligence, leverage, and extensive regulation - **Business & Industry Risks:** Poor fund performance could adversely impact revenues; open-ended fund investors can redeem periodically, and the industry is intensely competitive[208](index=208&type=chunk)[212](index=212&type=chunk)[221](index=221&type=chunk) - **Fund-Related Risks:** Difficult market and geopolitical conditions can reduce investment value and capital deployment; due diligence may not reveal all facts, and reliance on leverage introduces volatility[307](index=307&type=chunk)[319](index=319&type=chunk)[322](index=322&type=chunk) - **Organizational Structure Risks:** The company is a 'controlled company' due to Key Holders' voting power, exempting it from certain Nasdaq governance requirements, and has substantial payment obligations under a Tax Receivable Agreement[360](index=360&type=chunk)[364](index=364&type=chunk) - **Regulatory & Operational Risks:** The business is subject to extensive and evolving government regulation; operational risks, including cybersecurity threats, could disrupt business and harm reputation[259](index=259&type=chunk)[260](index=260&type=chunk)[271](index=271&type=chunk) [Item 1B. Unresolved Staff Comments](index=76&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) None [Item 1C. Cybersecurity](index=76&type=section&id=Item%201C.%20Cybersecurity) The company implements a cybersecurity risk management program based on NIST and CIS frameworks, overseen by the Board's audit committee, with no material risks identified - The cybersecurity program is designed and assessed based on the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and the Center for Internet Security (CIS) Critical Security Controls[415](index=415&type=chunk) - Governance is handled by the Board of Directors' audit committee, receiving periodic reports, while the Chief Technology Officer and Chief Information Security Officer manage day-to-day threats[418](index=418&type=chunk)[421](index=421&type=chunk) [Item 2. Properties](index=77&type=section&id=Item%202.%20Properties) The company leases its principal headquarters in Chicago, with the current lease expiring on September 30, 2026, and considers its office space adequate - The company leases its principal headquarters in Chicago, with the current lease term expiring on **September 30, 2026**[423](index=423&type=chunk) [Item 3. Legal Proceedings](index=77&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various lawsuits in the normal course of business but does not expect any current litigation to materially affect its financial condition [Item 4. Mine Safety Disclosures](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=78&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock and warrants trade on Nasdaq, a quarterly dividend of $0.11 per share was declared, and a $140 million stock repurchase plan is active - On **February 8, 2024**, the company declared a quarterly dividend of **$0.11 per share** of Class A common stock[430](index=430&type=chunk) - The Board of Directors authorized a stock repurchase plan, increased to **$140 million in February 2024**; **$30.3 million** was spent on repurchases and tax withholding settlements during 2023[432](index=432&type=chunk)[403](index=403&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=80&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total operating revenues slightly decreased to $445.0 million in 2023, driven by increased management fees offset by lower incentive fees, leading to an operating loss and decreased net income [Results of Operations](index=86&type=section&id=Results%20of%20Operations) In 2023, management fees grew to $375.4 million, while incentive fees decreased to $64.9 million, and total operating expenses rose 25% to $456.8 million due to higher employee compensation Consolidated Results of Operations (Year Ended Dec 31) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Total operating revenues** | **$444,999** | **$446,530** | | Management fees | $375,444 | $367,242 | | Incentive fees | $64,903 | $75,167 | | **Total operating expenses** | **$456,845** | **$366,218** | | Employee compensation & benefits | $356,044 | $277,311 | | General, administrative & other | $100,801 | $88,907 | | **Operating income (loss)** | **($11,846)** | **$80,312** | | **Net income attributable to GCM Grosvenor Inc.** | **$12,774** | **$19,820** | - The increase in employee compensation was primarily driven by a **$72.1 million increase in partnership interest-based compensation** and a **$19.9 million increase in equity-based compensation**[486](index=486&type=chunk) [Fee-Paying AUM](index=89&type=section&id=Fee-Paying%20AUM) Fee-Paying AUM (FPAUM) increased by $2.8 billion to $61.7 billion in 2023, driven by Private Markets contributions, partially offset by Absolute Return withdrawals, with $7.3 billion in CNYFPAUM FPAUM Rollforward (Year Ended Dec 31, 2023) | (in millions) | Private Markets | Absolute Return | Total | | :--- | :--- | :--- | :--- | | **Balance as of Dec 31, 2022** | **$36,876** | **$21,980** | **$58,856** | | Contributions | $4,485 | $497 | $4,982 | | Withdrawals | ($205) | ($2,365) | ($2,570) | | Distributions | ($1,006) | ($167) | ($1,173) | | Change in market value | $239 | $1,583 | $1,822 | | Foreign exchange and other | ($120) | ($114) | ($234) | | **Balance as of Dec 31, 2023** | **$40,269** | **$21,414** | **$61,683** | [Non-GAAP Financial Measures](index=91&type=section&id=Non-GAAP%20Financial%20Measures) Key non-GAAP measures for 2023 showed improvement, with Fee-Related Earnings increasing to $139.9 million, Adjusted EBITDA to $162.2 million, and Adjusted Net Income to $103.2 million Key Non-GAAP Metrics (Year Ended Dec 31) | (in thousands, except per share) | 2023 | 2022 | | :--- | :--- | :--- | | Fee-Related Revenue | $365,540 | $360,522 | | Fee-Related Earnings | $139,942 | $128,513 | | Adjusted EBITDA | $162,185 | $149,347 | | Adjusted Pre-Tax Income | $137,057 | $124,493 | | Adjusted Net Income | $103,204 | $94,366 | | Adjusted Net Income Per Share | $0.55 | $0.50 | [Liquidity and Capital Resources](index=96&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, the company had $44.4 million in cash, $50.0 million available credit, $389.0 million in debt, and $92.1 million in net cash from operating activities Liquidity Position (as of Dec 31, 2023) | (in millions) | Amount | | :--- | :--- | | Cash and cash equivalents | $44.4 | | Available Revolving Credit Facility | $50.0 | | Outstanding Debt (Term Loan) | $389.0 | Cash Flow Summary (Year Ended Dec 31, 2023) | (in millions) | Amount | | :--- | :--- | | Net cash provided by operating activities | $92.1 | | Net cash used in investing activities | ($18.8) | | Net cash used in financing activities | ($113.7) | - The company has contractual obligations totaling **$677.7 million**, primarily consisting of **debt obligations ($389.0 million)**, **interest on debt ($127.8 million)**, **operating leases ($75.3 million)**, and **capital commitments ($85.6 million)**[547](index=547&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=101&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to price, interest rate, and foreign exchange risks, with primary exposure through fund investment fair values and interest rate risk on its $389.0 million floating-rate debt - The company's main market risk exposure relates to the sensitivity of its management and incentive fees to the fair value of investments in its funds[579](index=579&type=chunk) - The company has **$389.0 million in floating-rate debt**; a **100 basis point increase in interest rates** is estimated to increase annual interest expense by **$3.9 million**[582](index=582&type=chunk)[583](index=583&type=chunk) - To mitigate interest rate risk, the company has a **$300 million notional interest rate swap agreement**, effectively fixing the rate on a portion of its debt[584](index=584&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=103&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023, 2022, and 2021, with an unqualified opinion from Ernst & Young LLP on both financial statements and internal controls - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the company's internal control over financial reporting as of **December 31, 2023**[590](index=590&type=chunk)[591](index=591&type=chunk) Consolidated Balance Sheet Highlights (as of Dec 31) | (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $44,354 | $85,163 | | Total Assets | $504,943 | $488,933 | | Debt | $384,727 | $387,627 | | Total Liabilities | $616,172 | $582,939 | | Total Deficit | ($111,229) | ($94,006) | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=153&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) None [Item 9A. Controls and Procedures](index=153&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with an unqualified opinion from the independent auditor - Management concluded that the company's disclosure controls and procedures and its internal control over financial reporting were effective as of **December 31, 2023**[903](index=903&type=chunk)[905](index=905&type=chunk) [Item 9B. Other Information](index=153&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of 2023, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=154&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) Not Applicable Part III [Items 10-14](index=155&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information for Items 10-14, covering directors, executive compensation, security ownership, related transactions, and accountant fees, is incorporated by reference from the forthcoming 2024 Proxy Statement - The information for these items, including details on directors, executive compensation, and security ownership, is incorporated by reference from the forthcoming **2024 Proxy Statement**[911](index=911&type=chunk)[912](index=912&type=chunk)[913](index=913&type=chunk)[914](index=914&type=chunk)[915](index=915&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=156&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements included in Item 8 and all exhibits filed as part of the Annual Report on Form 10-K, with schedules omitted if not applicable or included elsewhere [Item 16. Form 10-K Summary](index=160&type=section&id=Item%2016.%20Form%2010-K%20Summary) None

Financial Performance - The company's AUM increased by 4% from $73.7 billion to $76.9 billion compared to Q4 2022[4] - Private Markets FPAUM increased by 9% from $36.9 billion to $40.3 billion[4] - Fourth quarter Fee-Related Earnings increased 23% year-over-year[4] - Adjusted EBITDA increased 40% in the fourth quarter[4] - Adjusted Net Income increased 48% in the fourth quarter[4] - GAAP Revenue increased 17% in Q4 2023[4] Strategic Growth & Fundraising - Private Markets was a key growth driver, with FPAUM increasing 9% over prior year and management fees increasing 9% over both prior year QTD and YTD[4] - The firm share of carried interest balance increased from $133 million to $373 million[6] - $30 million of Class A common stock was repurchased during the year ended December 31, 2023[49] - $9.4 billion in fundraising was achieved in 2023[11] Portfolio Composition - Private Markets accounted for 65% of FPAUM, up from 54% in 2020[6] - Direct-Oriented Strategies accounted for 52% of Private Markets AUM, up from 39% in 2020[6]

Financial Data and Key Metrics Changes - Fee-related earnings increased by 16% year-over-year, with private markets management fees growing by 10% year-over-year, marking the tenth consecutive quarter of double-digit growth excluding catch-up fees [13][28] - Assets under management (AUM) reached $76 billion, a 5% increase from the previous year, with total fee-paying AUM also increasing by 5% year-over-year [53] - Adjusted EBITDA and adjusted net income grew by 5% and 7% respectively [28] Business Line Data and Key Metrics Changes - The infrastructure vertical raised approximately $580 million, more than doubling its AUM from $6 billion at the end of 2020 to over $13 billion by the end of Q3 2023 [9] - Private markets now represent 65% of fee-paying AUM, up from 54% at the end of 2020, with private markets management fees growing at a 13% compound annual growth rate over the last three years [23][44] - Absolute return strategies management fees remained stable in Q3 compared to the previous quarter, with expectations for stability in Q4 [24] Market Data and Key Metrics Changes - The company noted a moderate uptick in activity levels in the market, although investors are still not moving as quickly as they did two years ago [15] - The pipeline for fundraising has more than doubled over the past year, indicating strong future capital formation potential [10] Company Strategy and Development Direction - The company is focusing on customized impact solutions, leveraging its open architecture sourcing platform to broaden its funnel of impact investments [20][50] - There is a strong emphasis on maintaining a disciplined cost structure to grow margins, with a fee-related earnings margin of 37% [16] - The company aims to expand its individual investor efforts and bring more products to the individual investor channel [73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued double-digit growth in private markets management fees and stabilization of absolute return strategies management fees [29] - The company anticipates significant growth potential in incentive fee revenues as M&A activity returns [56] - Management highlighted the importance of performance in driving inflows, particularly in the absolute return business [70] Other Important Information - The company has maintained a healthy quarterly dividend of $0.11 per share, with potential for further growth [28] - Non-GAAP general and administrative expenses declined to $17.5 million due to reduced costs [27] Q&A Session Summary Question: Did all expected funds have closes this quarter? - Management confirmed that some capital expected to close in Q3 was pushed to Q4, but they remain confident that second half fundraising will exceed the first half [62][63] Question: What is the outlook for the secondary market? - Management noted that while discounts remain wide, there is pent-up demand for transaction activity, which is expected to pick up next year [71] Question: How is the company addressing the retail fund vehicle? - Management acknowledged the growth in individual investor fundraising and expressed intentions to focus more on this channel in the future [73]

GCM GROSVENOR | 36 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 customized separate accounts and specialized funds from which we derive management fees. We classify customized separate account revenue as management fees if the client is charged an asset-based fee, which includes the vast majority of our discretionary AUM accounts. The FPAUM for our private ...

[Part I - Financial Information](index=4&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited financial statements for Q3 2023 detail the company's financial condition, operations, and cash flows, highlighting a Q3 net income increase despite a nine-month net loss driven by non-cash compensation [Condensed Consolidated Statements of Financial Condition](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets increased to **$504.7 million** as of September 30, 2023, from **$488.9 million**, with liabilities also rising, resulting in a slight increase in the total deficit Condensed Consolidated Statements of Financial Condition (in thousands) | | As of Sep 30, 2023 (Unaudited) | As of Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $55,354 | $85,163 | | Investments | $239,883 | $223,970 | | Total assets | $504,721 | $488,933 | | **Liabilities and Equity (Deficit)** | | | | Debt | $385,451 | $387,627 | | Total liabilities | $598,409 | $582,939 | | Total deficit | $(93,688) | $(94,006) | | Total liabilities and equity (deficit) | $504,721 | $488,933 | [Condensed Consolidated Statements of Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Q3 2023 net income increased to **$17.6 million**, but the nine-month period saw a net loss of **$33.8 million**, primarily due to higher employee compensation expenses Condensed Consolidated Statements of Income (Loss) (in thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $121,714 | $137,214 | $328,443 | $346,702 | | Total operating expenses | $97,810 | $108,484 | $353,407 | $280,169 | | Operating income (loss) | $23,904 | $28,730 | $(24,964) | $66,533 | | Net income (loss) | $17,620 | $14,165 | $(33,778) | $68,075 | | Net income attributable to GCM Grosvenor Inc. | $5,898 | $3,099 | $9,516 | $15,430 | | Diluted EPS | $0.04 | $0.02 | $(0.28) | $0.23 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly decreased to **$65.4 million** for the nine months ended September 30, 2023, primarily due to lower net income, leading to an overall cash decrease Net Cash Flow Summary (in thousands) | | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $65,389 | $159,929 | | Net cash used in investing activities | $(13,031) | $(10,338) | | Net cash used in financing activities | $(80,947) | $(140,219) | | Net (decrease) increase in cash | $(29,809) | $5,390 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes disclose significant accounting policies, revenue components, fair value, debt, equity compensation, and subsequent events, including incentive fees, stock repurchases, and dividends - **Incentive fees** for Q3 2023 were **$26.1 million**, down from **$45.5 million** in Q3 2022, primarily due to a decrease in carried interest from **$44.5 million** to **$25.4 million**[52](index=52&type=chunk) - On August 8, 2023, the Board of Directors increased the stock repurchase authorization by **$25 million**, from **$90 million** to **$115 million**, with **$40.2 million** remaining available as of September 30, 2023[73](index=73&type=chunk)[74](index=74&type=chunk) - Partnership interest-based compensation for the nine months ended September 30, 2023, significantly increased to **$89.2 million** from **$21.5 million**, representing a non-cash charge offset by a deemed equity contribution[83](index=83&type=chunk) - A new 16.3-year lease for the New York office was executed in June 2023, with total future lease payments projected at **$65.7 million**[124](index=124&type=chunk) - A quarterly dividend of **$0.11 per share** of Class A common stock was declared on November 7, 2023, payable on December 15, 2023[152](index=152&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting increased Q3 management fees offset by lower carried interest, a nine-month net loss due to higher non-cash compensation, and growth in Fee-Paying AUM to **$61.0 billion** [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Total operating revenues decreased in Q3 2023 to **$121.7 million** and slightly for the nine-month period, while operating expenses significantly increased to **$353.4 million**, primarily due to higher partnership interest-based compensation Revenue and Expense Comparison (in thousands) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Management fees | $94,573 | $90,715 | $280,382 | $275,655 | | Incentive fees | $26,073 | $45,467 | $44,884 | $67,964 | | **Total operating revenues** | **$121,714** | **$137,214** | **$328,443** | **$346,702** | | Employee compensation and benefits | $76,413 | $86,502 | $277,505 | $213,836 | | General, administrative and other | $21,397 | $21,982 | $75,902 | $66,333 | | **Total operating expenses** | **$97,810** | **$108,484** | **$353,407** | **$280,169** | - Employee compensation for the nine months ended September 30, 2023, increased primarily due to a **$67.7 million** rise in partnership interest-based compensation from new awards and amortization[203](index=203&type=chunk) [Fee-Paying AUM (FPAUM)](index=43&type=section&id=Fee-Paying%20AUM) Fee-Paying AUM (FPAUM) increased by **$2.1 billion** to **$61.0 billion** during the first nine months of 2023, driven by contributions and market appreciation, with **$7.1 billion** in Contracted, not yet Fee-Paying AUM (CNYFPAUM) FPAUM Roll-Forward for Nine Months Ended Sep 30, 2023 (in millions) | | Private Markets Strategies | Absolute Return Strategies | Total FPAUM | | :--- | :--- | :--- | :--- | | Balance, beginning of period | $36,876 | $21,980 | $58,856 | | Contributions | $3,614 | $316 | $3,930 | | Withdrawals | $(68) | $(1,714) | $(1,782) | | Distributions | $(752) | $(58) | $(810) | | Change in market value | $163 | $1,048 | $1,211 | | **Balance, end of period** | **$39,554** | **$21,414** | **$60,968** | - As of September 30, 2023, the company held **$7.1 billion** in Contracted, not yet Fee-Paying AUM (CNYFPAUM)[220](index=220&type=chunk) [Non-GAAP Financial Measures](index=45&type=section&id=Non-GAAP%20Financial%20Measures) Key non-GAAP metrics for Q3 2023 include Fee-Related Earnings (FRE) of **$36.4 million**, Adjusted EBITDA of **$43.6 million**, and Adjusted Net Income per Share of **$0.15**, all showing year-over-year increases Key Non-GAAP Financial Measures (in thousands, except per share) | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Fee-Related Earnings (FRE) | $36,437 | $31,367 | $99,610 | $95,637 | | Adjusted EBITDA | $43,560 | $41,367 | $112,456 | $113,769 | | Adjusted Net Income | $28,427 | $26,567 | $70,769 | $72,420 | | Adjusted Net Income Per Share | $0.15 | $0.14 | $0.38 | $0.38 | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company maintained **$55.4 million** in cash and **$50.0 million** in available borrowing capacity, with an increased stock repurchase authorization and a declared quarterly dividend - As of September 30, 2023, the company held **$55.4 million** in cash and cash equivalents and **$50.0 million** in available borrowing capacity[250](index=250&type=chunk) - On August 8, 2023, the Board of Directors increased the share repurchase authorization by **$25 million** to a total of **$115 million**[265](index=265&type=chunk) - A quarterly dividend of **$0.11 per share** of Class A common stock was declared on November 7, 2023[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes occurred in the company's market risk exposures, including price, interest-rate, financing, liquidity, counterparty, and foreign exchange-rate risks, during the nine months ended September 30, 2023 - No material changes in the company's market risks occurred during the nine months ended September 30, 2023[277](index=277&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during Q3 2023 - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[279](index=279&type=chunk) - No material changes to internal control over financial reporting occurred during Q3 2023[280](index=280&type=chunk) [Part II - Other Information](index=47&type=section&id=Part%20II%20-%20Other%20Information) This section provides disclosures on legal proceedings, risk factors, equity security sales, and other relevant information [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits but does not anticipate any current litigation will materially affect its financial statements - Management does not believe any current litigation will materially affect the Company's Condensed Consolidated Financial Statements[282](index=282&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - No material changes to risk factors have occurred since the fiscal year ended December 31, 2022[284](index=284&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company did not repurchase shares in the open market during Q3 2023 but is deemed to have repurchased **804,046 shares** for **$6.4 million** for RSU tax liabilities, with the repurchase authorization increased to **$115 million** - On August 8, 2023, the Board of Directors increased the share repurchase authorization by **$25 million**, from **$90 million** to **$115 million**[288](index=288&type=chunk) - The company is deemed to have repurchased **804,046 shares** of Class A common stock equivalents for **$6.4 million** during Q3 2023 for vested RSU tax payments[287](index=287&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) On September 15, 2023, CFO Pamela Bentley adopted a Rule 10b5-1 trading plan for the sale of up to **125,000 shares** of Class A common stock - CFO Pamela Bentley adopted a Rule 10b5-1(c) trading plan on September 15, 2023, for the sale of up to **125,000 shares** of Class A common stock, expiring by March 15, 2024[292](index=292&type=chunk)

GCM Grosvenor Inc. (NASDAQ:GCMG) Q2 2023 Earnings Conference Call August 9, 2023 10:00 AM ET Company Participants Stacie Selinger – Head of Investor Relations Michael Sacks – Chairman and Chief Executive Officer Jon Levin – President Pam Bentley – Chief Financial Officer Conference Call Participants Ken Worthington – J.P. Morgan Michael Cyprys – Morgan Stanley Chris Kotowski – Oppenheimer and Company Operator Good day and welcome to the GCM Grosvenor Second Quarter 2023 Results Webcast. Later we will conduc ...

1-3. See Notes towards the end of the document. 14% CAGR $30.1 $34.8 $39.1 $40.1 Q2 21 Q2 22 Q2 23 Q2 21 Q2 22 Q2 23 $ million 35.2 36.0 2% $35.2 $36.0 President Chief Financial Officer Head of Investor Relations • 2023 Private Markets FPAUM increased 12% and Private Markets YTD management fees increased 8% over prior year | --- | --- | --- | --- | |---------------------------------------------------------------|-------|--------------------------------------------------|-------------------| | $ million \nGA ...