GCM Grosvenor(US:GCMG)2023-02-14 19:52Financial Data and Key Metrics Changes - Private markets management fees, excluding catch-up fees, rose by 10% in Q4 2022 compared to Q4 2021 and increased by 12% for the full year 2022 [28][73] - Fee-related earnings for the full year increased by 7%, with the fee-related earnings margin improving by 100 basis points to 36% [28][31] - The company raised $7.8 billion in total funds for 2022, with $1.5 billion raised in Q4 alone [33][40] Business Line Data and Key Metrics Changes - Private markets now represent 69% of total AUM, with 93% of fundraising in 2022 coming from private markets [40] - The Elevate strategy, focusing on seeding small, emerging, and diverse private equity managers, launched with a $500 million anchor investment [61][69] - The company expects continued strong private market management fee growth of 11% to 13% in Q1 2023 compared to Q1 2022 [35][73] Market Data and Key Metrics Changes - The fundraising environment for private markets is expected to be stronger in 2023, with a focus on back-end weighted fundraising [62][112] - Demand for alternatives remains strong, with existing clients contributing 85% of new commitments in 2022 [66][68] - The company anticipates modest redemptions in 2023, but overall demand for hedge funds is expected to remain stable [100][101] Company Strategy and Development Direction - The company aims to leverage its expertise in partnering with successful firm founders to make catalytic seed investments through the Elevate strategy [43][106] - There is a focus on expanding the Sponsor Solutions category, which includes investing in small, emerging, and diverse managers [42][69] - The company plans to continue growing its specialized fund franchises and expects successor funds to achieve larger sizes than their predecessors [37][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-teens growth in fee-related earnings for 2023, even with lower fundraising levels than in 2022 [29][111] - The company believes that as transaction levels increase, commitments to new funds and programs will also rise [8][57] - Management noted that the current macro environment has led to a slowdown in transaction levels, but they expect this to improve [4][86] Other Important Information - The company has returned $0.74 in cumulative dividends per share since going public, with an annualized quarterly dividend of 4.7% [65] - The firm has $789 million in gross unrealized carried interest across 131 programs, which is 11% higher than the previous year [46] Q&A Session Summary Question: What is the outlook for the Elevate program? - Management is excited about the Elevate program, noting that it has a strong anchor investment and will be raising funds for the next 18 to 24 months [81][82] Question: How does the company view the fundraising environment for private markets? - Management believes that fundraising will be higher in 2023 than in 2022, with a solid pipeline across all verticals [112] Question: What is the expectation for redemptions in 2023? - The company is budgeting for modest redemptions in 2023, which are expected to be less than in the previous year [100][101]