GCM Grosvenor (GCMG) Q4 2025 Earnings Transcript

Core Insights - GCM Grosvenor had a strong performance in 2025, with significant growth in investment results and fundraising, marking it as the best year in the firm's history [1][4][13]. Fundraising and Capital Formation - The firm raised a total of $10.7 billion in 2025, with $3.5 billion raised in the fourth quarter alone, both of which are records for the firm [4][14]. - Fundraising was broad-based across all verticals, with positive flows from all investor channels and geographies [4][14]. - The firm has approximately $12 billion of dry powder available for future investments [1]. Financial Performance - Fee-related earnings, adjusted EBITDA, and adjusted net income increased by 11%, 15%, and 18% respectively compared to 2024 [4][25]. - The fee-related earnings margin for the year was 44%, which is 200 basis points higher than in 2024 [4][25]. - The firm ended 2025 with $91 billion in assets under management (AUM), a 14% increase from 2024, and fee-paying AUM increased by 12% year over year [6][25]. Investment Strategies and Performance - The Absolute Return Strategy generated a 15% gross rate of return in 2025, while the Infrastructure strategy returned approximately 11% [1][4]. - The gross unrealized carried interest balance reached an all-time high of $949 million, up 14% from 2024 [6][25]. - The firm launched new initiatives, including Grove Lane Partners and an infrastructure interval fund, which are expected to contribute to future growth [7][19]. Market Outlook and Strategic Initiatives - The firm remains optimistic about the investment opportunity set and has a strong pipeline of activity entering 2026 [1][4]. - The individual investor channel saw an 18% increase in AUM year over year, indicating growth potential in this segment [7][19]. - The firm is focused on maintaining operational efficiency and margin improvement while investing in technology and scalability [24][49]. Shareholder Returns and Capital Allocation - The firm has increased its share buyback authorization by $35 million, with a total of $91 million available for repurchases [12][26]. - The company is also prepaying $65 million of its term loan, which will reduce leverage and save on interest expenses [12][26]. - The current dividend yield is approximately 5%, and the firm is committed to remaining a capital-light business while providing returns to shareholders [12][29].