Grosvenor Capital Management, L.P. (GCMG) Bundle
A Brief History of GCM Grosvenor Inc.
Company Overview
GCM Grosvenor Inc. is a global investment management firm specializing in alternative investments. As of September 30, 2024, the firm reported an Assets Under Management (AUM) totaling $79.6 billion, up from $76.9 billion at the end of 2023.
Financial Performance
For the three months ended September 30, 2024, GCM Grosvenor reported total operating revenues of $122.9 million, compared to $121.7 million for the same period in 2023. For the nine months, operating revenues reached $348.8 million, an increase from $328.4 million in the prior year.
| Financial Metric | Q3 2024 | Q3 2023 | YTD Q3 2024 | YTD Q3 2023 |
|---|---|---|---|---|
| Total Operating Revenues | $122.9 million | $121.7 million | $348.8 million | $328.4 million |
| Net Income | $12.1 million | $17.6 million | $6.2 million | $(33.8) million |
| Basic EPS | $0.09 | $0.14 | $0.25 | $0.22 |
| AUM | $79.6 billion | $76.9 billion | $79.6 billion | $76.9 billion |
Fee-Paying Assets Under Management (FPAUM)
As of September 30, 2024, FPAUM stood at $63.7 billion, reflecting an increase of 1% from the previous quarter. The breakdown includes:
- Private Markets Strategies: $42.3 billion
- Absolute Return Strategies: $21.5 billion
Expenses and Compensation
Operating expenses for the three months ended September 30, 2024, were $97.9 million, consistent with $97.8 million for the same period in 2023. Employee compensation and benefits decreased to $73.3 million from $76.4 million year-over-year.
| Expense Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Operating Expenses | $97.9 million | $97.8 million |
| Employee Compensation and Benefits | $73.3 million | $76.4 million |
Market Strategy and Growth
GCM Grosvenor's growth strategy focuses on expanding its private market strategies, which increased by 5% year-to-date. The firm continues to leverage its expertise in alternative investments to attract new capital commitments, with contracted, not yet fee-paying AUM (CNYFPAUM) growing to $7.9 billion as of September 30, 2024.
Shareholder Returns and Dividends
The company declared dividends of $5.3 million during the three months ended September 30, 2024. The total equity attributable to GCM Grosvenor Inc. as of September 30, 2024, is $(113.0 million), compared to $(111.2 million) at the end of 2023.
| Equity Metric | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Equity | $(113.0 million) | $(111.2 million) |
| Declared Dividends | $5.3 million | $5.0 million |
A Who Owns Grosvenor Capital Management, L.P. (GCMG)
Ownership Structure
As of 2024, Grosvenor Capital Management, L.P. (GCMG) has a complex ownership structure involving various stakeholders, including equity holders and non-controlling interests. The primary entity is GCM Grosvenor Inc., which owns Class A common stock and Class C common stock.
Class A Common Stock
As of September 30, 2024, there are 44,885,521 shares of Class A common stock issued and outstanding, representing a critical component of the ownership structure.
Class C Common Stock
In addition, GCM Grosvenor Inc. has 144,235,246 shares of Class C common stock outstanding. These shares correspond to the common units held by GCMH Equityholders, which may be exchanged for shares of Class A common stock on a one-to-one basis.
Financial Overview
The following table summarizes key financial metrics relevant to the ownership structure and performance of GCMG as of September 30, 2024:
| Metric | Value |
|---|---|
| Assets Under Management (AUM) | $79.6 billion |
| Fee-Paying AUM (FPAUM) | $63.7 billion |
| Contracted, Not Yet Fee-Paying AUM | $7.9 billion |
| Management Fees (Q3 2024) | $98.5 million |
| Incentive Fees (Q3 2024) | $23.3 million |
| Net Income Attributable to GCM Grosvenor Inc. (Q3 2024) | $4.2 million |
| Debt | $432.9 million |
| Weighted Average Shares of Class A Common Stock Outstanding | 45,163,779 |
| Basic Earnings Per Share (Q3 2024) | $0.09 |
| Diluted Earnings Per Share (Q3 2024) | $0.03 |
Non-Controlling Interests
GCMG also has significant non-controlling interests, which include interests in subsidiaries and GCMH. As of September 30, 2024, net income attributable to non-controlling interests in subsidiaries was $692,000, while the net income attributable to non-controlling interests in GCMH was $7.3 million.
Equity and Capital Contributions
The ownership structure also involves capital contributions from non-controlling interests, which totaled $1.4 million. The company reported a total deficit attributable to GCM Grosvenor Inc. of $31.9 million as of September 30, 2024.
Warrants and Options
As of September 30, 2024, GCMG has 16,784,970 public warrants and 900,000 private warrants outstanding. Each public warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share.
Recent Developments
On November 7, 2024, the Board of Directors declared a quarterly dividend of $0.11 per share of Class A common stock to record holders as of December 2, 2024, with a payment date set for December 16, 2024.
Grosvenor Capital Management, L.P. (GCMG) Mission Statement
Mission Statement Overview
The mission of Grosvenor Capital Management, L.P. (GCMG) is to provide innovative investment solutions that enable clients to achieve their financial objectives while maintaining a commitment to responsible investing and sustainability.
Core Principles
- Client-Centric Approach: GCMG prioritizes the needs and goals of its clients, fostering long-term relationships built on trust and transparency.
- Diverse Investment Strategies: The firm employs a range of investment strategies across private markets, public markets, and absolute return strategies to meet varying client needs.
- Commitment to Sustainability: GCMG integrates environmental, social, and governance (ESG) factors into its investment processes to promote responsible investing.
- Innovation and Adaptability: The firm continuously seeks innovative solutions and adapts to changing market conditions to provide clients with competitive advantages.
Financial Performance Indicators
As of September 30, 2024, GCMG reported significant financial metrics that reflect its operational effectiveness and market position:
| Financial Metric | Value (in millions) |
|---|---|
| Assets Under Management (AUM) | $79,563 |
| Fee-Paying AUM (FPAUM) | $63,700 |
| Contracted, Not Yet Fee-Paying AUM | $7,858 |
| Private Markets Strategies FPAUM | $42,300 |
| Absolute Return Strategies FPAUM | $21,500 |
| Total Management Fees | $294,265 |
| Total Incentive Fees | $49,459 |
| Net Income Attributable to GCM Grosvenor Inc. | $11,080 |
Recent Developments and Strategic Initiatives
In line with its mission, GCMG has undertaken various strategic initiatives:
- Expansion of ESG Integration: GCMG is enhancing its ESG criteria across all investment strategies to align with growing client demand for sustainable investment options.
- Technological Advancements: The firm is implementing advanced analytics and technology to improve investment decision-making and operational efficiency.
- Global Market Reach: GCMG continues to expand its global footprint to tap into emerging markets, providing clients with diverse investment opportunities.
Future Outlook
Looking ahead, GCMG aims to leverage its robust investment framework and commitment to innovation to navigate the evolving market landscape. The firm remains focused on delivering value to its clients by adhering closely to its mission and core principles.
How Grosvenor Capital Management, L.P. (GCMG) Works
Overview of Operations
Grosvenor Capital Management, L.P. (GCMG) operates primarily as an investment management firm focusing on providing investment management services to specialized funds and customized separate accounts. As of September 30, 2024, the firm managed assets totaling $79.6 billion, an increase from $76.9 billion at the end of 2023.
Assets Under Management (AUM)
The firm categorizes its assets under management into two main segments: Fee-Paying AUM (FPAUM) and Contracted, Not Yet Fee-Paying AUM (CNYFPAUM). As of September 30, 2024, GCMG reported:
| Category | AUM (in billions) |
|---|---|
| Fee-Paying AUM (FPAUM) | $63.7 |
| Contracted, Not Yet Fee-Paying AUM (CNYFPAUM) | $7.9 |
| Total AUM | $79.6 |
FPAUM increased by $0.5 billion during the three months ended September 30, 2024, driven by contributions and a rise in market value.
Revenue Streams
GCMG generates revenue primarily through management fees and incentive fees. For the three months ended September 30, 2024, the revenue breakdown was as follows:
| Revenue Source | Amount (in millions) |
|---|---|
| Management Fees | $98.5 |
| Incentive Fees | $23.3 |
| Other Operating Income | $1.1 |
| Total Operating Revenues | $122.9 |
Management fees saw an increase of 4% compared to the previous year, reflecting growth in private markets strategies.
Expenses and Profitability
For the same period, GCMG's operating expenses totaled $97.9 million, leading to an operating income of $25 million. Key expense categories included:
| Expense Type | Amount (in millions) |
|---|---|
| Employee Compensation and Benefits | $73.3 |
| General and Administrative Expenses | $24.6 |
| Total Operating Expenses | $97.9 |
Net income attributable to GCM Grosvenor Inc. for the three months ended September 30, 2024, was $4.2 million, with diluted earnings per share reported at $0.03.
Investment Strategies
GCMG employs various investment strategies, including:
- Private Markets Strategies
- Absolute Return Strategies
As of September 30, 2024, the FPAUM for these strategies was:
| Investment Strategy | FPAUM (in billions) |
|---|---|
| Private Markets Strategies | $42.3 |
| Absolute Return Strategies | $21.5 |
Debt and Financing
As of September 30, 2024, GCMG had total debt of $432.9 million, with a senior loan balance of $436.9 million. The company’s effective tax rate was 21% for the three months ended September 30, 2024.
Cash Flow Analysis
For the nine months ended September 30, 2024, GCMG reported:
| Cash Flow Type | Amount (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $110.7 |
| Net Cash Used in Investing Activities | ($25.1) |
| Net Cash Used in Financing Activities | ($31.5) |
| Net Increase in Cash and Cash Equivalents | $54.1 |
This indicates a strong operational cash flow performance, primarily driven by increased net income.
How Grosvenor Capital Management, L.P. (GCMG) Makes Money
Revenue Streams
Grosvenor Capital Management generates revenue primarily through management fees, incentive fees, and other operating income.
Management Fees
As of September 30, 2024, GCMG reported management fees amounting to $98.5 million for the third quarter of 2024, an increase from $94.6 million in the same period of the previous year.
For the nine months ending September 30, 2024, management fees totaled $294.3 million, up from $280.4 million in the prior year.
The breakdown of management fees includes:
| Category | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Private Markets Strategies | $57.9 million | $54.5 million | $172.3 million | $159.3 million |
| Absolute Return Strategies | $37.2 million | $36.4 million | $111.2 million | $110.3 million |
| Fund Expense Reimbursement Revenue | $3.5 million | $3.7 million | $10.8 million | $10.8 million |
Incentive Fees
Incentive fees, which include performance fees and carried interest, amounted to $23.3 million for Q3 2024, down from $26.1 million in the same quarter of 2023. For the nine-month period ending September 30, 2024, incentive fees totaled $49.5 million, compared to $44.9 million in 2023.
The specifics of the incentive fees are:
| Category | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Performance Fees | $2.7 million | $0.7 million | $13.1 million | $1.2 million |
| Carried Interest | $20.6 million | $25.4 million | $36.4 million | $43.7 million |
Other Operating Income
Other operating income contributed $1.1 million in Q3 2024, slightly up from $1.1 million in Q3 2023. Total other operating income for the nine months of 2024 was $5.0 million, compared to $3.2 million for the same period in 2023.
Total Operating Revenues
Total operating revenues for GCMG reached $122.9 million in Q3 2024, compared to $121.7 million in Q3 2023. For the nine months ended September 30, 2024, total operating revenues were $348.8 million, an increase from $328.4 million in 2023.
Operating Expenses
Operating expenses for the third quarter of 2024 were $97.9 million, consistent with $97.8 million in Q3 2023. For the nine-month period ended September 30, 2024, operating expenses totaled $318.9 million, down from $353.4 million in the prior year.
Major components of operating expenses include:
| Expense Category | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Employee Compensation and Benefits | $73.3 million | $76.4 million | $240.9 million | $277.5 million |
| General, Administrative, and Other | $24.6 million | $21.4 million | $78.0 million | $75.9 million |
Net Income
GCMG reported a net income of $12.1 million for Q3 2024, down from $17.6 million in Q3 2023. For the nine months ended September 30, 2024, net income was $6.2 million, compared to a net loss of $33.8 million in the same period of 2023.
Assets Under Management (AUM)
As of September 30, 2024, GCMG managed assets totaling $79.6 billion, an increase from $76.9 billion as of December 31, 2023. AUM growth was primarily driven by a combination of capital contributions and market appreciation.
Cash Flow
For the nine months ended September 30, 2024, GCMG reported net cash provided by operating activities of $110.7 million, compared to $65.4 million for the same period in 2023.
Conclusion
Grosvenor Capital Management's revenue model is dependent on a diversified approach encompassing management fees, incentive fees, and operating income, supported by a solid growth in AUM and effective cost management.
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Resources:
- Grosvenor Capital Management, L.P. (GCMG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Grosvenor Capital Management, L.P. (GCMG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Grosvenor Capital Management, L.P. (GCMG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.