GCM Grosvenor (GCMG) 46th Annual William Blair Growth Stock Conference summary

Business overview and strategy

• Operates as a $91 billion alternative asset management solutions provider with 55 years of history and a dual role as both allocator and capital provider in the alternatives ecosystem.

• Offers a broad range of strategies: hedge funds, private equity, infrastructure, credit, and real estate, with 70% of client relationships as customized separate accounts.

• Maintains a predominantly institutional client base with long-term, sticky relationships; 92% of largest clients have added capital in the past seven years.

• Sees significant growth opportunities across all verticals over the next five years, aiming to double FRE and reach $1.20 after-tax adjusted net income by 2028.

• Individual investor channel is underpenetrated, presenting a major growth opportunity through shelf products and private label solutions.

Market trends and client demand

• Alternatives industry continues to benefit from strong institutional demand, with infrastructure and private credit seeing the fastest growth.

• Fundraising cycles have lengthened due to macroeconomic factors, but demand remains robust, with record fundraising in the past year.

• Direct-oriented strategies (secondaries, co-invest, direct invest) are gaining traction, offering higher revenues and margins.

• Over half of clients invest in multiple strategies, and cross-selling is a key driver of fundraising and growth.

Financial performance and outlook

• AUM and earnings power have grown significantly, with higher growth rates in private markets and improving flows in absolute return strategies.

• Maintains a flat flow budgeting approach but notes a strong pipeline and potential for net inflows in hedge fund strategies.

• Customized separate accounts provide high visibility and recurring revenue, with 90%+ re-up rates and strong cross-sell momentum.

• Significant earnings power from incentive fees, with carried NAV growing from $133 million in 2020 to $510 million, plus $1 billion in dry powder carry.