GCM Grosvenor(US:GCMG)2022-02-15 19:00Financial Data and Key Metrics Changes - For Q4 and full year 2021, fee related revenue grew by 17% and 12% respectively, fee related earnings increased by 37% and 27%, adjusted EBITDA rose by 19% and 22%, and adjusted net income was up by 23% and 31% compared to the same periods in 2020 [9][31][38] - The firm’s fee related earnings margin improved to 35% in 2021, up from 31% a year ago, indicating significant operating leverage [38] Business Line Data and Key Metrics Changes - Infrastructure fundraising captured the largest share at $3.5 billion in 2021, with a 34% increase in assets under management (AUM) to $9.1 billion [12][25] - The private equity vertical had exceptional returns, exceeding 30% last year, contributing to a doubling of total unrealized carry [23] - The real estate vertical is recovering strongly post-pandemic, with positive forecasts for client returns [24] Market Data and Key Metrics Changes - The firm raised $1.5 billion for diverse managers in 2021, with $1 billion for private equity and $500 million for real estate [11] - Absolute return strategies had flat net flows in 2021, with gross performance at 7.2% for the year [12][21] Company Strategy and Development Direction - The company aims for fee related revenue growth of 12% to 15% and fee related earnings growth of 20% to 25% in 2022, supported by a larger fundraising pipeline than the previous year [10][15] - The focus on co-investments, secondaries, and direct investments is expected to drive significant growth, with 70% of private equity flows directed towards these strategies [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundraising pipeline and the potential for growth in the insurance channel, anticipating consistent growth through 2022 and beyond [49] - The current market environment, characterized by volatility and rising interest rates, is seen as favorable for alternative strategies, particularly absolute return offerings [53] Other Important Information - The company has increased its stock repurchase program to $45 million, reflecting a commitment to returning capital to shareholders [43][44] - The firm maintained a dividend of $0.10 per share, indicating strong free cash flow generation [44] Q&A Session Summary Question: Update on the insurance side of the business - Management noted modest success in Q4 but highlighted a robust pipeline and significant potential for growth in 2022 and beyond [48][49] Question: Performance of the absolute return business - Management emphasized that their results exceed client expectations and that the current market conditions are favorable for alternative strategies [52][53] Question: Fundraising expectations for 2022 - Management confirmed that the fundraising pipeline is larger than the previous year and expressed confidence in achieving their targets [58][60] Question: Infrastructure fundraising compared to private equity - Management indicated that the interest in infrastructure has been strong and is expected to continue, with a balanced approach across various sectors and geographies [62][64] Question: Separate account fundraising outlook - Management reported strong reup rates and a larger pipeline, expecting the cadence of fundraising to remain steady [69] Question: Retail distribution strategy - Management highlighted the potential for growth in high-net-worth channels and wealth management platforms, with expectations for continued success in this area [71]