GCMG

Fundraising Performance

• Total Q2 fundraising reached $2.3 billion, up from $1.5 billion in Q1, bringing first half 2026 total fundraising to ~$3.9 billion, with broad-based growth across the entire platform.
• Individual investor and insurance channels are fast-growing focus areas: they represent 23% and 18% of year-to-date fundraising respectively, compared to just 5% and 4% of starting AUM at the beginning of 2026.

SpaceX Investment Update

• GCM Grosvenor invested a total of ~$150 million in SpaceX across ARS and private market portfolios, via primary fund allocations, direct dedicated vehicle investments, and secondary share purchases, a conservative size relative to the firm's capital base.
• The average cost basis of the investment is ~$6.37 per share; as of the week ending the call, the position was valued at ~$3.5 billion, split evenly between ARS and private markets. This is the largest single-issuer gain in the firm's history.
• Most exit timing is controlled by underlying third-party managers; any distributed shares will be evaluated for action based on real-time market conditions.
• The investment is highlighted as an example of the firm's strong origination platform, and the cross-vertical value the full platform delivers to investors.

Credit Platform Strategic Positioning

• The credit platform is one of the firm's fastest growing segments, with differentiated, diversified capabilities. It successfully closed the inaugural credit secondaries fund, entering a high-growth market as the private credit primary market matures, with a larger total addressable market than private equity.
• The platform has limited exposure to the challenged areas of private credit (direct lending, concentrated software exposure, high leverage, liquidity risk in evergreen/semi-liquid products) that have faced recent market scrutiny.
• The platform sources ~1,400 annual investment opportunities across all private credit sub-segments, building diversified client portfolios across strategy, vintage, geography, and industry, with flexible implementation to meet both new and experienced credit investors' needs.

Balance Sheet and Capital Allocation

• The firm maintains a strong balance sheet with significant financial flexibility. It kept its quarterly dividend at 12 cents per share, while investing for long-term growth and opportunistically repurchasing shares.
• During Q2, the firm repurchased 1.6 million shares for ~$17 million, with $55 million remaining in the repurchase authorization to actively manage dilution.

Expense Management

• The firm maintains disciplined expense control while continuing targeted investments, including AI initiatives across the business, and expects to expand operating margins over time due to the inherent scalability of the business model.

• Management expects second half 2026 fundraising will exceed first half levels, supported by a full, broad-based pipeline of opportunities.
• Private markets management fees are expected to increase mid-single digits year-over-year in Q3 2026, with no material catch-up fees expected in the second half of 2026.
• Q3 2026 ARS management fees are expected to increase ~10% sequentially, equating to a nearly 20% year-over-year growth rate.
• Q3 2026 FRE compensation is expected to be $1 million higher than Q2 2026's $38 million, while non-GAAP G&A expenses are expected to remain relatively consistent with Q2 levels.
• Total unrealized annual performance fees as of the call are estimated at $35 to $40 million, based on an assumed $110 per share SpaceX price; each $10 per share movement in SpaceX's price changes performance fees by ~$4 million. Most performance fees crystallize in Q4, so final realized amounts will depend on second half ARS investment performance, particularly SpaceX share price movements.
• The firm expects a meaningful increase in unrealized carried interest in Q3 2026, driven by the Q2 SpaceX valuation increase (private markets use a one-quarter lag in marking, so Q2 valuations will be reflected in Q3 reports).

Overall firm: Total fee-related revenue was $111 million, up 11% year-over-year. Fee-related earnings hit $50 million, up 21% year-over-year, with a 45% FRE margin. Total fee-paying AUM grew 13% year-over-year to $78 billion; contracted but not yet fee-paying AUM grew 11% year-over-year to $9.7 billion.

Credit Platform: Managed $18 billion in AUM as of quarter end. It was the largest contributor to Q2 2026 fundraising, accounting for over $900 million of the $2.3 billion total Q2 fundraising (≈39.1% of Q2 fundraising), bringing first half credit fundraising to $1.4 billion of the $3.9 billion total first half fundraising (≈35.9% of first half fundraising). Q2 credit fundraising doubled Q1 2026 levels. The inaugural credit secondaries fund closed at ~$1.2 billion across flagship and related vehicles.

Absolute Return Strategies (ARS): ARS management fees grew 11% year-over-year in Q2. ARS fee-paying AUM increased 22% year-over-year as of June 30, driven by strong Q2 investment performance and positive net inflows. The ARS multi-strategy composite delivered gross returns of ~14% in Q2 including the impact of the SpaceX investment.

Private Markets: Private markets management fees increased 10% year-over-year in Q2. All core private market segments (private equity, infrastructure, real estate, private credit) delivered positive quarter-over-quarter performance, excluding the SpaceX IPO marking benefit. As of June 30, total unrealized carried interest was $965 million, with $493 million attributable to GCM Grosvenor's share.

• All forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from projected outcomes, as detailed in the firm's SEC filings.
• Valuation uncertainty, liquidity risk, and leverage concerns exist in parts of the private credit market (particularly direct lending, concentrated software exposure, and evergreen/semi-liquid products), though GCM Grosvenor notes its exposure to these challenged segments is limited.
• Private market deal activity and realizations have not yet returned to robust levels, and the timing of a projected acceleration in activity is unpredictable.
• Unrealized performance fees and carried interest are subject to significant fluctuation based on SpaceX share price volatility, broader ARS investment performance, and marking timing differences between ARS and private markets.
• Gains from the SpaceX investment are unrealized and most are subject to lock-up provisions, so final realized gains may differ from current marked valuations.

Q: What was SpaceX's mark at the end of 2025, is the valuation step-up before IPO typical, and should we expect similar lifts for other upcoming high-profile IPOs? / A: GCM Grosvenor CEO Michael Sacks stated that the SpaceX investment outcome is not typical of pre-IPO investments, and it would be a mistake to extrapolate this valuation lift to other upcoming IPOs. He noted that SpaceX has seen extreme valuation movement from the end of 2025 through its IPO and post-IPO trading, and that the company has performed extremely well, with concerns over expiring lockups overstated. No general projections for other IPOs should be drawn from this outcome.

Q: Where does GCM Grosvenor see the most momentum driving future growth, and what is the outlook for carried interest split and realizations? / A: Management noted that performance is strong across all segments of the business, even without the SpaceX gain, and confirmed confidence that second half fundraising will exceed first half levels per the full pipeline. The firm has historically held ~50% of incentive fees, and management expects the firm can hold a higher share over time as unrealized carry value is realized, but has not set a specific target. While realizations are improving, they are not yet robust, but the total value of unrealized carry is growing, and a material lift from SpaceX will be reflected in next quarter's marks due to the one-quarter lag for private markets.

Q: Is the recent decline in average ARS fee rate driven by fee pressure or other factors? How scalable is the international expansion platform? / A: The lower average fee rate is driven by changes in investor and capital mix, not fee pressure from competition. For international expansion, the platform is already scalable with modest incremental investments, and additional talent will be added selectively to accelerate distribution growth. Management noted that the firm's flexible model, which meets investors at any stage of their alternative allocation journey, supports broad growth across all geographies and channels.

Q: Have investor concerns around credit led to increased demand for real assets, and what is the outlook for infrastructure versus real estate? What is the update on the Grove Lane wealth channel? / A: Infrastructure has had a 10-12 year growth run that management expects to continue, supported by its attractive characteristics: stable returns, inflation protection, and long duration that matches investor liabilities. Growth is broad across all asset classes, not just real assets, and credit is also growing despite market headlines. Wealth channel distribution via Grove Lane is performing well, with early investments paying off, and large untapped growth opportunity for new product development, though meaningful contributions to financial results are still over the longer term.