GCM Grosvenor Inc
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
GCMG$12.66+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001819796-24-000013
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001819796-24-000018
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 182 previous paragraphs and 209 current paragraphs.
112 unchanged; 66 reworded; 22 added; 4 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Organizational Structure
Current report
The diagram below depicts our current organizational structure:
Current report
Note: The diagram depicts a simplified version of our structure and does not include all legal entities in our structure. Approximate ownership percentages are as of August 5, 2024.
Current report
1 Mr. Sacks, the chairman of our board of directors and our chief executive officer, has 100% ownership and control over GCM V. The address for Mr. Sacks is c/o GCM Grosvenor, 900 North Michigan Avenue, Suite 1100, Chicago, Illinois 60611.
Current report
2 Percentage of combined voting power represents voting power with respect to all shares of Class A common stock and Class C common stock, voting together as a single class. Each holder of Class A common stock is entitled to one vote per share, and each holder of Class C common stock is entitled to the lesser of (i) 10 votes per share and (ii) the Class C Share Voting Amount on all matters submitted to stockholders for their vote or approval. From and after the Sunset Date, holders of Class C Common Stock will be entitled to one vote per share. Class C common stock does not have any of the economic rights (including rights to dividends and distributions upon liquidation) associated with Class A common stock.
Current report
3 Each warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment.
Current report
4 Mr. Sacks is the ultimate managing member of each of (i) Holdings, (ii) Management LLC, (iii) Holdings II, and (iv) GCM Progress Subsidiary LLC, a Delaware limited liability company (collectively, the “GCMH Equityholders”). Any distribution of proceeds derived from the securities held by the GCMH Equityholders is shared among the respective members of such entities in accordance with the applicable operating agreements of such entities.
Current report
5 As of August 5, 2024, there were 44,574,194 shares of Class A common stock outstanding and 144,235,246 common units of GCMH (“Common Units”) outstanding held by the GCMH Equityholders, which may be exchanged for shares of Class A common stock on a one-to-one basis, or, at the Company’s election, for cash, pursuant to and subject to the restrictions set forth in the Fifth Amended and Restated Limited Liability Limited Partnership Agreement of GCMH. As of August 5, 2024, 2024, GCM V held 144,235,246 shares of Class C common stock, which corresponds to the number of Common Units held by the GCMH Equityholders.
Current report
Management fees increased $9.9 million, or 5%, to $195.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Private market strategies fees increased $9.6 million, or 9%, primarily due to a $6.0 million increase in private market strategies specialized funds fees and a $3.7 million increase in private market strategies customized separate accounts fees, both as a result of capital raising and deployment. Absolute return strategies fees of $74.1 million for the six months ended June 30, 2024 were generally consistent with those in the six months ended June 30, 2023.
Current report
General, administrative and other of$53.3 million for the six months ended June 30, 2024 was generally consistent with the six months ended June 30, 2023.
Current report
Interest expense was$6.1 million for the three months ended June 30, 2024 compared to$5.7 million for the three months ended June 30, 2023. The increase was primarily driven by higher debt related expense and issuance costs in connection with the amendment of Term Loan Facility during thethree months ended June 30, 2024.
Current report
Interest expense was$12.1 million for the six months ended June 30, 2024, generally consistent with the six months ended June 30, 2023.
Current report
Three Months Ended June 30, 2024
Current report
FPAUM remained generally consistent at $63.2 billion during the three months ended June 30, 2024 due to $1.5 billion of contributions and a $0.5 billion increase in market value, offset by a $1.5 billion and $0.4 billion of withdrawals and distributions, respectively, and a $0.1 billion decrease for foreign exchange and other movements.
Current report
•Absolute return strategies FPAUM decreased $1.0 billion, or 4%, to $21.4 billion during the three months ended June 30, 2024, primarily due to $1.5 billion and $0.1 billion of withdrawals and distributions, respectively, partially offset by a $0.4 billion increase in market value and $0.2 billion of contributions.
Current report
AUM remained generally consistent at $78.7 billion during the three months ended June 30, 2024.
Current report
Six Months Ended June 30, 2024
Current report
•Absolute return strategies FPAUM remained consistent at $21.4 billion during the six months ended June 30, 2024, primarily due to a $1.4 billion increase in market value and $0.6 billion of contributions, partially offset by $1.8 billion of withdrawals.
Current report
CNYFPAUM remained generally consistent at $7.3 billion during the six months ended June 30, 2024.
Current report
•proceeds from the Term Loan Facility amendment of $50.0 million during thesix months ended June 30, 2024;
Current report
•the settlement of equity-based compensation to satisfy withholding tax requirements of $(10.3) million and $(3.8) million during thesix months ended June 30, 2024 and 2023, respectively; and
Current report
•dividends paid of $(10.3) million and $(9.3) million during thesix months ended June 30, 2024 and 2023, respectively.
Removed paragraphs (4)
Previous report
Interest expense was$5.9 million for the three months ended March 31, 2024 compared to$6.7 million for the three months ended March 31, 2023. The decrease was primarily driven bya change in the amount of the amortization of realized gains on interest rate swaps that initially qualified for hedge accounting and were subsequently terminated, and partially offset by a higher effective interest rate on the Term Loan Facility principal amount outstanding during thethree months ended March 31, 2024.
Previous report
Net Cash Provided by (Used in) Operating Activities
Previous report
•dividends paid of $(4.7) million and $(4.6) million during thethree months ended March 31, 2024 and 2023, respectively.
Previous report
In April 2024, the Company repurchased 3,021,060 shares for RSUs that were settled in cash, including amounts withheld in connection with the payment of tax withholding obligations, for $28.0 million, or an average of $9.28 per share. As of April 30, 2024, the Company had $37.0 million remaining under the stock repurchase plan.
Reworded paragraphs (66)
Previous wording
We provided investment management / advisory services on assets of $78.8 billion and $76.9 billion as of March 31, 2024 and December 31, 2023, respectively.
Current wording
We provided investment management / advisory services on assets of $78.7 billion and $76.9 billion as of June 30, 2024 and December 31, 2023, respectively.
Previous wording
Assets under management that are subject to carried interest, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $43.8 billion as of March 31, 2024.
Current wording
Assets under management that are subject to carried interest, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $44.1 billion as of June 30, 2024.
Previous wording
Assets under management that are subject to performance fees, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $13.4 billion as of March 31, 2024.
Current wording
Assets under management that are subject to performance fees, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $13.5 billion as of June 30, 2024.
Previous wording
Employee compensation and benefits primarily consists of (1) cash-based employee compensation and benefits, (2) equity-based compensation, (3) partnership interest-based compensation, (4) carried interest compensation, (5) cash-based incentive fee related compensation and (6) other non-cash compensation. Bonus and incentive fee related compensation is generally determined by our management and is discretionary taking into consideration, among other things, our financial results and the employee’s performance. In addition, various individuals, including certain senior professionals have been awarded partnership interests and/or restricted stock units (“RSUs”). These partnership interests grant the recipient the right to certain cash distributions from GCMH Equityholders’ profits (to the extent such distributions are authorized) and/or to certain net sale proceeds after threshold distributions, resulting in non-cash profits interest compensation expense. The Company recognizes compensation expense attributable to the RSUs on a straight-line basis over the requisite service period, which is generally the vesting period. Certain employees and former employees are also entitled to a portion of the carried interest and performance fees realized from certain GCM Funds, which is payable upon a realization of the carried interest or performance fees.
Current wording
Employee compensation and benefits primarily consists of (1) cash-based employee compensation and benefits, (2) equity-based compensation, (3) partnership interest-based compensation, (4) carried interest compensation, (5) cash-based incentive fee related compensation and (6) other non-cash compensation. Bonus and incentive fee related compensation is generally determined by our management and is discretionary taking into consideration, among other things, our financial results and the employee’s performance. In addition, various individuals, including certain senior professionals have been awarded partnership interests and/or restricted stock units (“RSUs”). These partnership interests grant the recipient the right to certain cash distributions from GCMH Equityholders’ profits (to the extent such distributions are authorized) and/or to certain net sale proceeds after threshold distributions, resulting in non-cash profits interest compensation expense. We recognize compensation expense attributable to the RSUs on a straight-line basis over the requisite service period, which is generally the vesting period. Certain employees and former employees are also entitled to a portion of the carried interest and performance fees realized from certain GCM Funds, which is payable upon a realization of the carried interest or performance fees.
Previous wording
We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by the Company and its subsidiaries. GCMH is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by GCMH flows through to its partners, and is generally not subject to U.S. federal or state income tax at the partnership level. Our non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to local or non-U.S. income taxes. The tax liability with respect to income attributable to noncontrolling interests in GCMH is borne by the holders of such noncontrolling interests.
Current wording
We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by us and our subsidiaries. GCMH is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by GCMH flows through to its partners, and is generally not subject to U.S. federal or state income tax at the partnership level. Our non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to local or non-U.S. income taxes. The tax liability with respect to income attributable to noncontrolling interests in GCMH is borne by the holders of such noncontrolling interests.
Previous wording
The following is a discussion of our consolidated results of operations for thethree months ended March 31, 2024 and 2023. This information is derived from our accompanying Condensed Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Current wording
The following is a discussion of our consolidated results of operations for thethree and six months ended June 30, 2024 and 2023. This information is derived from our accompanying Condensed Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Previous wording
Management fees increased $3.6 million, or 4%, to $95.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Private markets strategies fees increased $3.8 million, or 7%, primarily due to a $1.6 million increase in private market strategies specialized funds fees and a$2.2 million increase in private markets strategies customized separate accounts fees, both as a result of capital raising and deployment. Fund expense reimbursement revenue increased $0.6 million, or 19%, to $3.9 million. These increases were partially offset by a decrease of $0.8 million, or 2%, in absolute return strategies fees primarily driven by lower FPAUM at the beginning of thethree months ended March 31, 2024 compared to FPAUM at the beginning of the three months ended March 31, 2023.
Current wording
Management fees increased $6.3 million, or 7%, to $99.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Private markets strategies fees increased $5.8 million, or 11%, primarily due to a $4.4 million increase in private market strategies specialized funds fees and a$1.4 million increase in private markets strategies customized separate accounts fees, both as a result of capital raising and deployment. Absolute return strategies fees increased$0.9 million or 3% primarily driven by higher FPAUM at the beginning of the three months ended June 30, 2024 compared to FPAUM at the beginning of the three months ended June 30, 2023. These increases were partially offset by adecrease in fund expense reimbursement revenue of $0.5 million, or 13% to $3.3 million.
Previous wording
Incentive fees consisted of carried interest and performance fees. Carried interest decreased $1.4 million, or 26%, to $4.1 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower distributions and lower carry realizations during the three months ended March 31, 2024. Performance fees increased $5.7 million to $6.0 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to fees earned from one fund with a different fiscal year than us. Performance fees are generally determined at the end of the calendar year and are generally minimal in interim periods.
Current wording
Incentive fees consisted of carried interest and performance fees. Carried interest decreased $1.0 million, or 8%, to $11.7 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to lower distributions and lower carry realizations during the three months ended June 30, 2024. Performance fees increased $4.1 million to $4.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to higher returns for absolute return strategies funds with June 30 fiscal year ends during the three months ended June 30, 2024. Performance fees are generally determined at the end of the calendar year and are generally minimal in interim periods.
Previous wording
Employee compensation and benefits increased $13.4 million, or 16%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The overall increase was primarily driven by increases in partnership interest-based compensation andcash-based incentive fee related compensation, partially offset by a decrease in cash-based employee compensation and benefits. Partnership interest-based compensation increased $18.9 million, or 170%, due to award modifications in the first quarter of 2024 and amortization of the Holdings Awards that were granted in the second quarter of 2023 (as further described in Note 9 in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 2 of the Quarterly Report on Form 10-Q). These awards do not dilute Class A common stockholders or impact net cash flows of the Company. Cash-based incentive fee related compensation increased$3.5 millionfor the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to higher performance fees during the three months ended March 31, 2024. Cash-based employee compensation and benefits decreased$7.2 million, or 16%, due to lower employer payroll taxes, severance, and bonus accruals for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Carried interest compensation decreased $1.0 million, or 29%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to lower realized carried interest during the three months ended March 31, 2024.
Current wording
Employee compensation and benefits decreased $33.5 million, or 17%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The overall decrease was primarily driven by decreases in partnership interest-based compensation andcash-based employee compensation and benefits, partially offset by an increase in cash-based incentive fee related compensation. Partnership interest-based compensation decreased $32.6 million, or 44%, due to expense recorded for the Holdings Awards during the six months ended June 30, 2023, partially offset by award modifications in the first quarter of 2024 and amortization of the Holdings Awards that were granted in the second quarter of 2023. Holdings Awards are further described in Note 9 in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 2 of the Quarterly Report on Form 10-Q. These awards do not dilute Class A common stockholders or impact our net cash flows. Cash-based employee compensation and benefits decreased $7.1 million, or 9%, due to lower severance, bonus accruals, and insurance premiums for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Cash-based incentive fee related compensation increased $7.0 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to higher performance fees during the six months ended June 30, 2024.
Previous wording
General, administrative and other of $25.2 million for the three months ended March 31, 2024 was generally consistent with the three months ended March 31, 2023.
Current wording
General, administrative and other of $28.2 million for the three months ended June 30, 2024 was generally consistent with the three months ended June 30, 2023.
Previous wording
Investment income was $5.7 million for the three months ended March 31, 2024 compared to $6.3 million for the three months ended March 31, 2023, primarily due to the change in value of private and public market investments.
Current wording
Investment income was $1.3 million for the three months ended June 30, 2024 compared to $2.1 million for the three months ended June 30, 2023, primarily due to the change in value of private and public market investments.
Previous wording
Other income was$0.6 million for the three months ended March 31, 2024 compared to $0.7 million for the three months ended March 31, 2023 and consisted primarily of interest income in each period.
Current wording
Other income was$0.4 million for the three months ended June 30, 2024 compared to $0.5 million for the three months ended June 30, 2023 and consisted primarily of interest income in each period.
Previous wording
Change in fair value of warrant liabilities of $(2.1) million for the three months ended March 31, 2024 was due to an increase in the fair value of the warrants from December 31, 2023 to March 31, 2024.
Current wording
Change in fair value of warrant liabilities of $0.2 million for the three months ended June 30, 2024 was due to an increase in the fair value of the warrants from March 31, 2024 to June 30, 2024.
Previous wording
Provision for income taxes primarily reflect U.S. federal and state income taxes on our share of taxable income generated by the Company, as well as local and foreign income taxes of certain of the Company’s subsidiaries.
Current wording
Provision for income taxes primarily reflect U.S. federal and state income taxes on our share of taxable income generated by us, as well as local and foreign income taxes of certain of the our subsidiaries.
Previous wording
The Company’s effective tax rate was (6)% and (3)% for the three months ended March 31, 2024 and 2023, respectively. Our overall effective tax rate was less than the statutory rate primarily due to the portion of income allocated to the noncontrolling interest holders, a valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.
Current wording
Our effective tax rate was 20% and (6)% for the three months ended June 30, 2024 and 2023, respectively, and (273)% and (5)% for the six months ended June 30, 2024, respectively. Our overall effective tax rate was less than the statutory rate primarily due to the portion of income allocated to the noncontrolling interest holders, including profit interest expense, as well as a valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.
Previous wording
Net income attributable to noncontrolling interests in subsidiaries was $1.3 million and $2.8 million for the three months ended March 31, 2024 and 2023, respectively. The decrease for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to a decrease in income generated by our consolidated subsidiaries not wholly owned by the Company.
Current wording
Net income (loss) attributable to noncontrolling interests in subsidiaries was $(0.9) million and $1.4 million for the three months ended June 30, 2024 and 2023, respectively, and $0.4 million and $4.2 million for the six months ended June 30, 2024 and 2023, respectively. The decrease for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, was primarily attributable to a decrease in income generated by our consolidated subsidiaries not wholly owned by us.
Previous wording
Net income (loss) attributable to noncontrolling interests in GCMH was $(22.3) million and $(16.7) million for the three months ended March 31, 2024 and 2023, respectively. The increase in the net loss for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to an increase in partnership-interest based compensation as described above, which was fully allocated to noncontrolling interests in GCMH, partially offset by underlying performance of GCMH.
Current wording
Net income (loss) attributable to noncontrolling interests in GCMH was $9.1 million and $(42.5) million for the three months ended June 30, 2024 and 2023, respectively, and $(13.3) million and $(59.2) million for the six months ended June 30, 2024 and 2023, respectively. The change in net income (loss) attributable to noncontrolling interests in GCMH for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, was primarily attributable to a decrease in partnership-interest based compensation as described above, which was fully allocated to noncontrolling interests in GCMH and underlying performance of GCMH.
Previous wording
Of the $7.1 billion CNYFPAUM as of March 31, 2024, approximately $2.3 billion is subject to an agreed upon fee ramp in schedule. The ramp in schedule will result in management fees being charged on approximately $0.3 billion, $0.8 billion and $1.2 billion of such amount in the remainder of 2024, in 2025, and in 2026 and beyond, respectively. Management fees will be charged on the remaining approximately $4.8 billion of CNYFPAUM as such capital is invested, which will depend on a number of factors, including the availability of eligible investment opportunities.
Current wording
Of the $7.3 billion CNYFPAUM as of June 30, 2024, approximately $2.5 billion is subject to an agreed upon fee ramp in schedule. The ramp in schedule will result in management fees being charged on approximately $0.3 billion, $0.9 billion and $1.3 billion of such amount in the remainder of 2024, in 2025, and in 2026 and beyond, respectively. Management fees will be charged on the remaining approximately $4.8 billion of CNYFPAUM as such capital is invested, which will depend on a number of factors, including the availability of eligible investment opportunities.
Previous wording
•Absolute return strategies FPAUM increased $1.0 billion to $22.4 billion during the three months ended March 31, 2024, primarily due to a $0.9 billion increase in market value and $0.4 billion of contributions, partially offset by $0.3 billion of withdrawals.
Current wording
•Private markets strategies FPAUM increased $1.0 billion, or 2%, to $41.8 billion during the three months ended June 30, 2024, primarily due to $1.3 billion of contributions, partially offset by $0.3 billion of distributions.
Previous wording
CNYFPAUM decreased $0.2 billion, or 3%, to $7.1 billion during the three months ended March 31, 2024 due to Contracted, not yet fee-paying AUM that became fee-paying AUM during the period partially offset by the closing of new commitments.
Current wording
CNYFPAUM increased $0.2 billion, or 3%, to $7.3 billion during the three months ended June 30, 2024 due to the closing of new commitments during the period, net of reductions for CNYFPAUM that became FPAUM during the period.
Previous wording
FPAUM increased $1.5 billion, or 2%, to $63.2 billion during the three months ended March 31, 2024, primarily due to $1.6 billion of contributions and a $1.0 billion increase in market value, partially offset by a $0.5 billion decrease for foreign exchange and other movements and $0.3 billion and $0.2 billion of withdrawals and distributions, respectively.
Current wording
FPAUM increased $1.5 billion, or 3%, to $63.2 billion during the six months ended June 30, 2024, primarily due to $3.1 billion of contributions and a $1.5 billion increase in market value, offset by $1.8 billion and $0.6 billion of withdrawals and distributions, respectively, and a $0.6 billion decrease for foreign exchange and other movements.
Previous wording
•Private markets strategies FPAUM increased $0.5 billion, or 1%, to $40.8 billion during the three months ended March 31, 2024, primarily due to $1.2 billion of contributions, partially offset by a $0.5 billion decrease for foreign exchange and other movements and $0.2 billion of distributions.
Current wording
•Private markets strategies FPAUM increased $1.5 billion, or 4%, to $41.8 billion during the six months ended June 30, 2024, primarily due to $2.4 billion of contributions, partially offset by a $0.5 billion decrease for foreign exchange and other movements and $0.5 billion of distributions.
Previous wording
AUM increased $1.9 billion, or 2%, to $78.8 billion during the three months ended March 31, 2024, primarily driven by $1.5 billion increase in FPAUM, as well as mark to market increases that do not impact FPAUM.
Current wording
AUM increased $1.8 billion, or 2%, to $78.7 billion during the six months ended June 30, 2024, primarily driven by a $1.5 billion increase in FPAUM, as well as mark to market increases that do not impact FPAUM.
Previous wording
(1) Excludes fund reimbursement revenue of $3.9 million and $3.3 million for thethree months ended March 31, 2024 and 2023, respectively.
Current wording
(1)Excludes fund reimbursement revenue of $3.3 million and $3.8 million for thethree months ended June 30, 2024 and 2023, respectively, and $7.3 million and $7.1 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
(2) Excludes severance expense of $0.3 million and $4.6 million for thethree months ended March 31, 2024 and 2023, respectively.
Current wording
(2)Excludes severance expense of $0.6 million and $0.2 million for thethree months ended June 30, 2024 and 2023, respectively, and $0.9 million and $4.8 million for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
(3) Excludes amortization of intangibles of $0.3 million for each of the three months ended March 31, 2024 and 2023. Also excludes contemplated corporate transaction related costs of $0.1 million and $2.4 million for thethree months ended March 31, 2024 and 2023, respectively and non-core expenses of $1.2 million and $0.1 million for thethree months ended March 31, 2024 and 2023, respectively. Non-core expenses include office relocation costs of $0.9 million for the three months ended March 31, 2024.
Current wording
(3)Excludes amortization of intangibles of $0.3 million for each of the three months ended June 30, 2024 and 2023, and $0.7 million for each of the six months ended June 30, 2024 and 2023. Also excludes $3.1 million and $3.2 million of a debt amendment and extension expenses for the three and six months ended June 30, 2024, respectively, and $4.4 million and $6.8 million of contemplated corporate transaction related costs for the three and six months ended June 30, 2023, respectively. Also excludes non-core expenses of $1.2 million and $0.7 million for the three months ended June 30, 2024 and 2023, respectively, and $2.3 million and $0.7 million for the six months ended June 30, 2024 and 2023, respectively. Non-core expenses include office relocation costs of $0.9 million and $1.8 million for the three and six months ended June 30, 2024, respectively.
Previous wording
(4) Excludes the impact of non-cash carried interest compensation of $(0.3) million for the three months ended March 31, 2023. The net non-cash carried interest compensation for the three months ended March 31, 2024 was de minimis.
Current wording
(4)Excludes the impact of non-cash carried interest compensation of $(0.1) million for each of the three months ended June 30, 2024 and 2023, and $(0.4) million for the six months ended June 30, 2023. The net non-cash carried interest compensation for the six months ended June 30, 2024 was de minimis.
Previous wording
(5) Investment income or loss is generally realized when the Company redeems all or a portion of its investment or when the Company receives or is due cash, such as a from dividends or distributions.
Current wording
(5)Investment income or loss is generally realized when we redeem all or a portion of our investment or when we receive or is due cash, such as a from dividends or distributions.
Previous wording
(6) Represents corporate income taxes at a blended statutory rate of 24.7% and 24.2% applied to Adjusted Pre-Tax Income for thethree months ended March 31, 2024 and 2023, respectively. The 24.7% and 24.2% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.7% and 3.2%, respectively.
Current wording
(6)Represents corporate income taxes at a blended statutory rate of 24.7% and 24.2% applied to Adjusted Pre-Tax Income for the three andsix months ended June 30, 2024 and 2023, respectively. The 24.7% and 24.2% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.7% and 3.2%, respectively.
Previous wording
Net incentive fees are used to highlight fees earned from incentive fees that are attributable to GCM Grosvenor. Net incentive fees represent incentive fees excluding (a) incentive fees contractually owed to others and (b) cash-based incentive fee related compensation. Net incentive fees are used by management in making compensation and capital allocation decisions and we believe that they provide investors useful information regarding the amount that such fees contribute to the Company’s earnings.
Current wording
Net incentive fees are used to highlight fees earned from incentive fees that are attributable to GCM Grosvenor. Net incentive fees represent incentive fees excluding (a) incentive fees contractually owed to others and (b) cash-based incentive fee related compensation. Net incentive fees are used by management in making compensation and capital allocation decisions and we believe that they provide investors useful information regarding the amount that such fees contribute to our earnings.
Previous wording
The following table shows reconciliations of incentive fees to net incentive fees attributable to GCM Grosvenor for thethree months ended March 31, 2024 and 2023:
Current wording
The following table shows reconciliations of incentive fees to net incentive fees attributable to GCM Grosvenor for thethree and six months ended June 30, 2024 and 2023:
Previous wording
(1) Firm share represents incentive fees net of contractual obligations but before discretionary cash-based incentive compensation.
Current wording
(1)Firm share represents incentive fees net of contractual obligations but before discretionary cash-based incentive compensation.
Previous wording
Adjusted Pre-Tax Income represents net income attributable to GCM Grosvenor Inc. including (a) net income (loss) attributable to GCMH, excluding (b) provision for income taxes, (c) changes in fair value of derivatives and warrant liabilities, (d) amortization expense, (e) partnership interest-based and non-cash compensation, (f) equity-based compensation, including cash-settled equity awards (as we view the cash settlement as a separate capital transaction), (g) unrealized investment income, (h) changes in TRA liability and (i) certain other items that we believe are not indicative of our core performance, including charges related to corporate transactions, employee severance and office relocation costs.
Current wording
Adjusted Pre-Tax Income represents net income attributable to GCM Grosvenor Inc. including (a) net income (loss) attributable to GCMH, excluding (b) provision for income taxes, (c) changes in fair value of derivatives and warrant liabilities, (d) amortization expense, (e) partnership interest-based and non-cash compensation, (f) equity-based compensation, including cash-settled equity awards (as we view the cash settlement as a separate capital transaction), (g) unrealized investment income, (h) changes in TRA liability and (i) certain other items that we believe are not indicative of our core performance, including charges related to corporate transactions, employee severance, office relocation costs and loss on extinguishment of debt.
Previous wording
The following table shows reconciliations of net income attributable to GCM Grosvenor Inc. and Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA for thethree months ended March 31, 2024 and 2023:
Current wording
The following table shows reconciliations of net income attributable to GCM Grosvenor Inc. and Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA for thethree and six months ended June 30, 2024 and 2023:
Previous wording
(1) Represents 2024 and 2023 expenses related to contemplated corporate transactions.
Current wording
(1)Represents 2024 expenses incurred related to a debt amendment and extension and 2023 expenses related to contemplated corporate transactions.
Previous wording
(2) For the three months ended March 31, 2024, includes $0.9 million of office relocation costs.
Current wording
(2)For the three andsix months ended June 30, 2024, includes $0.9 million and $1.8 million of office relocation costs, respectively.
Previous wording
(3) Represents corporate income taxes at a blended statutory rate of 24.7% and 24.2%applied to Adjusted Pre-Tax Income for thethree months ended March 31, 2024 and 2023, respectively. The 24.7% and 24.2% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.7% and 3.2%, respectively.
Current wording
(3)Represents corporate income taxes at a blended statutory rate of 24.7% and 24.2%applied to Adjusted Pre-Tax Income for the three andsix months ended June 30, 2024 and 2023, respectively. The 24.7% and 24.2% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.7% and 3.2%, respectively.
Previous wording
The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted shares outstanding used in the computation of adjusted net income per share for thethree months ended March 31, 2024 and 2023:
Current wording
The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted shares outstanding used in the computation of adjusted net income per share for thethree and six months ended June 30, 2024 and 2023:
Previous wording
The following table shows reconciliations of Total Operating Revenues to Fee-Related Revenue for thethree months ended March 31, 2024 and 2023:
Current wording
The following table shows reconciliations of Total Operating Revenues to Fee-Related Revenue for thethree and six months ended June 30, 2024 and 2023:
Previous wording
The following table shows reconciliations of Adjusted EBITDA to Fee-Related Earnings for thethree months ended March 31, 2024 and 2023:
Current wording
The following table shows reconciliations of Adjusted EBITDA to Fee-Related Earnings for thethree and six months ended June 30, 2024 and 2023:
Showing the first 40 of 66 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Incentive fees consisted of carried interest and performance fees. Carried interest decreased $2.5 million, or 14%, to $15.8 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to lower distributions and lower carry realizations during the six months ended June 30, 2024. Performance fees increased $9.8 million to $10.3 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to fees earned from funds with fiscal year ends different than calendar year end during the six months ended June 30, 2024. Performance fees are generally determined at the end of the year and are generally minimal in interim periods.
Current report — wording carried from elsewhere
Employee compensation and benefits decreased $46.9 million, or 41%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The overall decrease was primarily driven by a decrease in partnership interest-based compensation, partially offset by increases in cash-based incentive fee related compensation and equity-based compensation. Partnership interest-based compensation decreased $51.5 million, or 82%, primarily due to expense recorded for the Holdings Awards during the three months ended June 30, 2023 (as further described in Note 9 in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 2 of the Quarterly Report on Form 10-Q). These awards do not dilute Class A common stockholders or impact our net cash flows. Cash-based incentive fee related compensation increased $3.5 millionfor the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to higher performance fees during the three months ended June 30, 2024. Equity-based compensation increased $1.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by increases in awards granted and vested during the three months ended June 30, 2024.
Current report — wording carried from elsewhere
Investment income was $7.0 million for the six months ended June 30, 2024 compared to $8.4 million for the six months ended June 30, 2023, primarily due to the change in value of private and public market investments.
Current report — wording carried from elsewhere
Other income was$0.9 million for the six months ended June 30, 2024 compared to$1.2 million for the six months ended June 30, 2023, and consisted primarily of interest income in each period.
Current report — wording carried from elsewhere
Change in fair value of warrant liabilities of$2.3 million for the six months ended June 30, 2024 was due to an increase in the fair value of the warrants from December 31, 2023 to June 30, 2024.
Current report — wording carried from elsewhere
Net Cash Provided by Operating Activities
Current report — wording carried from elsewhere
Facility, the “Senior Secured Credit Facilities”). Under the Revolving Credit Facility, $15.0 million is available for letters of credit and $10.0 million is available for swingline loans.
Current report — wording carried from elsewhere
On May 21, 2024, we entered into Amendment No. 8 to the Credit Agreement, which among other things, increased the aggregate principal amount of our Term Loan Facility from $388.0 million to $438.0 million and extended the maturity date from February 24, 2028 to February 25, 2030. Additionally, the amendment reduced the interest rate margin to 2.25% over Term SOFR and removed the Benchmark Replacement Adjustment. The maturity date of all of the outstanding borrowings under the Term Loan Facility is February 25, 2030, and the maturity date for the full amount of the Revolving Credit Facility is February 24, 2028.
Current report — wording carried from elsewhere
K for the fiscal year ended December 31, 2023. There have been no material changes to our risk factors since our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.