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GCM Grosvenor (GCMG)

CM Grosvenor is a global alternative asset management solutions provider with approximately $59 billion in assets under management across private equity, infrastructure, real estate, credit, and absolute return investment strategies. The firm is in its 50th year of operation and is dedicated to delivering value for clients in the growing alternative investment asset classes. GCM Grosvenor’s experienced team of approximately 500 professionals serves a global client base of institutional and high net worth investors. The firm is headquartered in Chicago, with offices in New York, Los Angeles, London, Tokyo, Hong Kong, and Seoul.

Company profile

Ticker
GCMG, GCMGW
Exchange
Employees
Incorporated
Location
Fiscal year end
Industry (SIC)
SEC CIK
Subsidiaries
GCM Grosvenor Holdings, LLC • GCM, L.L.C. • Grosvenor Capital Management Holdings • Grosvenor Capital Management, L.P. • GCM Customized Fund Investment Group, LP • GCM Investments GP, LLC • CFIG Holdings, LLC • Mosaic Acquisitions 2020, L.P. • GCM Fiduciary Services, LLC • GCM Investments Hong Kong Limited ...

GCMG stock data

Analyst ratings and price targets

Last 3 months

Calendar

9 Aug 22
3 Oct 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 78.48M 78.48M 78.48M 78.48M 78.48M 78.48M
Cash burn (monthly) (no burn) 15.61M (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) n/a 48.85M n/a n/a n/a n/a
Cash remaining n/a 29.64M n/a n/a n/a n/a
Runway (months of cash) n/a 1.9 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
15 Aug 22 Pamela L Bentley Class A Common Stock Payment of exercise Dispose F No No 8.61 43,221 372.13K 100,193.01
15 Aug 22 Sandra Hurse Class A Common Stock Payment of exercise Dispose F No No 8.61 16,566 142.63K 59,267.33
15 Aug 22 Frederick Pollock Class A Common Stock Payment of exercise Dispose F No No 8.61 101,982 878.07K 296,434.67
15 Aug 22 Jonathan Reisin Levin Class A Common Stock Payment of exercise Dispose F No No 8.61 73,465 632.53K 249,035.01
15 Aug 22 Kathleen Patricia Sullivan Class A Common Stock Payment of exercise Dispose F No No 8.61 15,137 130.33K 36,668.34
13F holders Current Prev Q Change
Total holders 26 28 -7.1%
Opened positions 0 17 EXIT
Closed positions 2 76 -97.4%
Increased positions 2 3 -33.3%
Reduced positions 6 1 +500.0%
13F shares Current Prev Q Change
Total value 1.82B 1.83B -0.8%
Total shares 153.64M 154.76M -0.7%
Total puts 0 0
Total calls 2.43M 2.9M -16.3%
Total put/call ratio
Largest owners Shares Value Change
Michael Jay Sacks 134.86M $1.8B 0.0%
CF Finance 8.25M $0 0.0%
Greenhaven Road Investment Management 2.45M $924K +9.7%
Cantor Fitzgerald, L. P. 1.8M $829K 0.0%
LMR Partners 1.27M $8.68M 0.0%
Schonfeld Strategic Advisors 1.26M $475K NEW
Ionic Capital Management 1.08M $408K +1.1%
Integrated Core Strategies 782.88K $8.22M 0.0%
Context Capital Management 301.06K $114K -10.3%
Aequim Alternative Investments 243.29K $92K 0.0%
Largest transactions Shares Bought/sold Change
Northern Right Capital Management 0 -2.39M EXIT
Schonfeld Strategic Advisors 1.26M +1.26M NEW
Greenhaven Road Investment Management 2.45M +216.86K +9.7%
Fort Baker Capital Management 155.26K -67.69K -30.4%
Boothbay Fund Management 33.5K -65.96K -66.3%
Context Capital Management 301.06K -34.73K -10.3%
Warberg Asset Management 66.22K -31.92K -32.5%
Ionic Capital Management 1.08M +12.2K +1.1%
Jane Street 0 -10.79K EXIT
UBS UBS Group AG - Registered Shares 2.52K -510 -16.8%

Financial report summary

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Risks
  • The historical performance of our funds should not be considered as indicative of the future results of our operations or any returns expected on an investment in our Class A common stock; however, poor performance of our funds, or lack of growth in our assets under management, could have a materially adverse impact on our revenues, and, consequently, the returns on our Class A common stock.
  • Investors in our open-ended, specialized funds may generally redeem their investments in these funds on a periodic basis. Investors in most of our closed-ended, specialized funds may terminate the commitment periods of these funds or otherwise cause our removal as general partner of these funds under certain circumstances. Our customized separate account clients may generally terminate our management of these relationships on short notice. Any of these events would lead to a decrease in our revenues, which could be substantial.
  • The COVID-19 pandemic has caused severe disruptions in the U.S. and global economies and may adversely impact our business, financial condition and results of operations.
  • Our business and financial condition may be materially adversely impacted by the variable nature of our revenues, and in particular the performance-based aspect of certain of our revenues and cash flows, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may lead to large adverse movements or general increased volatility in the price of our Class A common stock.
  • The industry in which we operate is intensely competitive. If we are unable to compete successfully, our business and financial condition could be adversely affected.
  • A decline in the pace or size of fundraising or investments made by us on behalf of our funds may adversely affect our revenues.
  • We could suffer losses if our reputation or the reputation of our industry is harmed.
  • We are subject to numerous conflicts of interest that are both inherent to our business and industry and particular to us. Our failure to deal appropriately with conflicts of interest could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.
  • Conflicts of interest may arise in our allocation of co-investment opportunities.
  • Conflicts of interest may arise in our allocation of costs and expenses, and increased regulatory scrutiny and uncertainty with regard to expense allocation may increase the risk of harm.
  • Certain policies and procedures implemented to mitigate potential conflicts of interest and address certain regulatory requirements may reduce the synergies that may otherwise exist across our various businesses.
  • A significant portion of our consolidated financial statements include financial information, including net assets and revenues, that is attributable to noncontrolling interests holders and not attributable to us. As a result, the net assets and revenues presented in our consolidated financial statements may not represent our economic interests in those net assets and revenues.
  • Our international operations subject us to numerous risks.
  • The U.K.’s withdrawal from the European Union could have a material adverse effect on our business, financial condition and results of operations.
  • Our indebtedness may expose us to substantial risks.
  • We may be unable to remain in compliance with the financial or other covenants contained in our debt instruments.
  • The loss of experienced and senior personnel could have a material adverse effect on our business and financial condition.
  • We intend to expand our business and may enter into new lines of business or geographic markets, which may result in additional risks and uncertainties in our business.
  • Restrictions on our ability to collect and analyze data regarding our clients’ investments could adversely affect our business.
  • Operational risks may disrupt our business, damage our reputation, result in financial losses or limit our growth.
  • Failure to maintain the security of our information and technology networks or data security breaches could harm our reputation and have a material adverse effect on our results of operations, financial condition and cash flow.
  • Rapidly developing and changing privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage.
  • Extensive government regulation, compliance failures and changes in law or regulation could adversely affect us.
  • Federal, state and foreign anti-corruption and sanctions laws create the potential for significant liabilities and penalties and reputational harm.
  • Misconduct by our employees, advisors or third-party service providers could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
  • We may face damage to our professional reputation and legal liability if our services are not regarded as satisfactory or for other reasons.
  • Our failure or inability to obtain, maintain, protect and enforce our trademarks, service marks and other intellectual property rights could adversely affect our business, including the value of our brands.
  • Our inability to obtain adequate insurance could subject us to additional risk of loss or additional expenses.
  • Difficult market, geopolitical and economic conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our funds, reducing the number of high-quality investment managers with whom we may invest, and reducing the ability of our funds to raise or deploy capital, each of which could materially reduce our revenues, earnings and cash flow and materially and adversely affect our business, financial condition and results of operations.
  • If the investments we make on behalf of our funds perform poorly, we may suffer a decline in our revenues and earnings, and our ability to raise capital for future funds may be materially and adversely affected.
  • The success of our business depends on the identification and availability of suitable investment opportunities for our clients.
  • Competition for access to investment funds and other investments we make for our clients is intense.
  • The due diligence process that we undertake in connection with investments may not reveal all facts that may be relevant in connection with an investment.
  • Dependence on leverage by certain funds, underlying investment funds and portfolio companies subjects us to volatility and contractions in the debt financing markets and could adversely affect the ability of our funds to achieve attractive rates of return on their investments.
  • Defaults by clients and third-party investors in certain of our funds could adversely affect that fund’s operations and performance.
  • Our failure to comply with investment guidelines set by our clients could result in damage awards against us or a reduction in AUM, either of which would cause our earnings to decline and adversely affect our business.
  • Valuation methodologies for certain assets in our funds can be significantly subjective, and the values of assets established pursuant to such methodologies may never be realized, which could result in significant losses for our funds.
  • Our investment management activities may involve investments in relatively high-risk, illiquid assets, and we and our clients may lose some or all of the amounts invested in these activities or fail to realize any profits from these activities for a considerable period of time.
  • Our funds make investments in companies that are based outside of the United States, which may expose us to additional risks not typically associated with investing in companies that are based in the United States.
  • Our funds may face risks relating to undiversified investments.
  • Our funds make investments in underlying funds and companies that we do not control.
  • Investments by our funds may in many cases rank junior to investments made by other investors.
  • Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks.
  • We are subject to increasing scrutiny from certain investors and regulators with respect to environmental, social and governance (“ESG”) matters, which may constrain investment opportunities and adversely impact our ability to raise capital from such investors.
  • The short-term and long-term impact of the Basel III capital standards on our clients is uncertain.
  • Hedge fund investments are subject to numerous additional risks.
  • Our fund investments in infrastructure assets may expose our funds to increased risks that are inherent in the ownership of real assets.
  • Our historical financial results included elsewhere in this Annual Report on Form 10-K may not be indicative of what our actual financial position or results of operations would have been if we had been a public company.
  • The multi-class structure of our common stock has the effect of concentrating voting power with our Chief Executive Officer, which will limit an investor’s ability to influence the outcome of important transactions, including a change of control.
  • We cannot predict the impact our multi-class structure may have on the stock price of our Class A common stock.
  • We are required to pay over to the GCMH Equityholders most of the tax benefits we receive from tax basis step-ups attributable to our acquisition of Grosvenor common units from GCMH equityholders and certain other tax attributes, and the amount of those payments could be substantial.
  • Our only material asset is our interest in GCMH, and we are accordingly dependent upon distributions from GCMH to pay dividends, taxes and other expenses.
  • In certain circumstances, GCMH will be required to make distributions to us and the GCMH Equityholders, and the distributions that GCMH will be required to make may be substantial and may be made in a manner that is not pro rata among the holders of Grosvenor common units.
  • We may bear certain tax liabilities that are attributable to audit adjustments for taxable periods (or portions thereof) ending prior to the Business Combination, or that are disproportionate to our ownership interest in GCMH in the taxable period for which the relevant adjustment is imposed.
  • If we were deemed an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”), applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
  • A change of control of our Company could result in an assignment of our investment advisory agreements.
  • Because members of our senior management team hold most or all of their economic interest in GCMH through other entities, conflicts of interest may arise between them and holders of shares of our Class A common stock or us.
  • Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third-party.
  • In the event of a merger, consolidation or tender or exchange offer, holders of our Class A common stock will not be entitled to receive excess economic consideration for their shares over that payable to the holders of our Class B common stock.
  • The provisions of our Charter requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against its directors and officers.
  • If we were to convert into a public benefit corporation, our status as such may not result in the benefits that we anticipate.
  • We expect to continue to pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.
  • We may change our dividend policy at any time.
  • We previously identified a material weakness in our internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act, which could have a material adverse effect on our business and stock price.
  • We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors.
  • Warrants are exercisable for our Class A common stock, which may increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
  • We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding public warrants. As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number of shares of Class A common stock purchasable upon exercise of a warrant could be decreased, all without a warrant holder’s approval.
  • Registration of the shares of our Class A common stock issuable upon exercise of the warrants under the Securities Act may not be in place when an investor desires to exercise warrants.
  • We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.
  • The valuation of our warrants could increase the volatility in our net income (loss) in our consolidated statements of income and consolidated statements of comprehensive income.
  • Purchases of shares of our Class A common stock and warrants pursuant to our stock repurchase plan may affect the value of our Class A common stock, and there can be no assurance that our stock repurchase plan will enhance stockholder value.
  • The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may divert from our business operations.
  • The market price and trading volume of our securities may be volatile.
  • We may be subject to securities class action litigation, which may harm our business, financial condition and results of operations.
  • An active trading market for our securities may not be maintained.
  • Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.
Management Discussion
  • Management fees increased $7.2 million, or 8%, to $92.8 million, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Private markets strategies fees increased $8.0 million, primarily due to a $4.9 million increase in fees related to private markets strategies specialized funds and a $3.2 million increase in fees related to private markets strategies customized separate accounts. The increase was partially offset by a $0.6 million decrease in absolute return strategies fees.
  • Incentive fees consisted of carried interest of $10.2 million and $29.3 million and performance fees of $0.3 million and $2.9 million for the three months ended June 30, 2022 and 2021, respectively. The decrease in carried interest is primarily due to several large funds realizing distributions during the three months ended June 30, 2021, as compared to the three months ended June 30, 2022. The decrease in performance fees is primarily due to lower returns for absolute return strategies funds with a June 30 fiscal year end during the three months ended June 30, 2022, as compared to in the three months ended June 30, 2021.
  • Management fees increased $16.7 million, or 10%, to $184.9 million, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. Private markets strategies fees increased $14.5 million, primarily due to a $9.0 million increase in fees related to private markets strategies specialized funds and a $5.5 million increase in fees related to private markets strategies customized separate accounts. Additionally, there was a $2.3 million increase in absolute return strategies fees, primarily due to increases in FPAUM as of January 1, 2022 from investment gains during the year ended December 31, 2021. The decrease in market value of absolute return strategies FPAUM during the six months ended June 30, 2022, as discussed below, did not impact the majority of absolute return strategies management fees for the six months ended June 30, 2022 as most of such management fees are earned based on beginning of period FPAUM.

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