GCM Grosvenor Inc. Q1 FY2025 earnings call

• Fundraising: Q1 total $2.9B, highest in over 2 years; IAF II final close $1.3B, 50% larger than predecessor; private equity raised over $720M.
• Performance: Adjusted EBITDA up 26%, adjusted net income up 30% y/y; carry balance $865M, 11% increase y/y.
• Strategic Initiatives: Grove Lane joint venture (RIA distribution in US) and Japan partnership (aims to raise $1.5B by 2030).
• Expenses: FRE compensation $38M, consistent with 2024 average; G&A expenses $21M in Q1.
• Dividend: $0.11 per share quarterly dividend, 3.5% yield as of May 1.

GCM Grosvenor had strong first quarter results. Fundraising was robust with $2.9 billion raised in Q1, the highest quarterly level in over two years. Approximately half of this was for infrastructure, including a $1.3 billion final close of IAF II, nearly 50% larger than its predecessor. Private equity contributed over $720 million, including the final close of GCF III at $615 million. Absolute Return Strategies raised $1.6 billion since 2024 with strong multiyear performance. Private markets management fees grew 20% y/y, and carry balance was $865 million, an 11% increase from a year ago. Fee-related revenue grew 12% y/y, adjusted EBITDA 26% y/y, and adjusted net income 30% y/y.

• 2025 fundraising expected to exceed 2024's $7.1B.
• Private markets fee-related revenue to grow mid-single-digit 5%-8% y/y.
• ARS management fees expected same as 2024.
• Goal to double FRE from 2023 by 2028 remains intact.

• Trade and tax policy uncertainty depressing deployment and transaction levels.
• Challenging equity markets may limit ARS returns to last year's levels.
• Tariff and tax uncertainty limiting ARS/FCOM compounding and private markets deployment of dry powder.

Q: Crispin Love on 2025 markets and international fundraising A: Michael Sacks notes factors like pay on invested vs committed capital impact revenue timing; Jon Levin says individual investor opportunity globally is massive but short-term trends hard to predict Q: Bill Katz on SuMi TRUST and deployment A: Michael Sacks says partnership with SuMi Trust has potential beyond stated capital raise; deployment affected by policy volatility limiting visibility Q: Ken Worthington on endowments and separate accounts A: Michael Sacks says endowment pull back on private markets is small part of business; secondaries and liquidity alts are opportunities Q: Tyler Mulier on Grove Lane JV A: Michael Sacks says investor universe underallocated to alternatives, JV structure enables talent attraction and growth Q: Bill Katz on ARS pipeline A: Jon Levin says ARS raised $1.6B since 2024, sees modest net inflows in Q2, demand for liquid alts with alpha Q: Bill Katz on share count A: Pam Bentley says SuMi transaction was ~2% dilution, as of May 1st, dilution from RSU vesting and Sumitomo issuance is modest