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01/11 16:02
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong financial performance, with significant growth in unrealized carried interest and fee-paying AUM. The Q&A section revealed positive sentiments towards strategic initiatives, strong re-ups, and no significant fee pressures, although some uncertainties in AI's financial impact were noted. The overall positive outlook, including robust fundraising expectations and consistent fee growth guidance, suggests a likely positive stock price movement.
Fee-related earnings, adjusted EBITDA, and adjusted net income Fee-related earnings, adjusted EBITDA, and adjusted net income were up 6%, 9%, and 9%, respectively, compared to Q2 2024. Year-to-date, these metrics were up 14%, 17%, and 19% compared to the first half of 2024. The increases were attributed to strong investment performance, fundraising, and positive business developments.
Fee-related earnings margin The fee-related earnings margin for the quarter was 42%, which is 200 basis points higher than Q2 2024. This improvement reflects operational efficiencies and strong financial performance.
Total assets under management (AUM) Total AUM reached $86 billion, a 5% increase compared to the end of Q1 2025. Growth was driven by excellent ARS performance, moderate ARS inflows, and strong fundraising for private market strategies.
Fundraising The company raised $2.4 billion in Q2 2025, bringing the first half of the year fundraising to $5.3 billion, a 52% increase from the first half of 2024. This was the highest first-half fundraising total on record, driven by strong demand for infrastructure and private credit strategies.
Infrastructure fundraising Infrastructure fundraising accounted for $1.9 billion in the first half of 2025, contributing significantly to growth. This was driven by persistent and accelerating demand for infrastructure investments.
Private credit fundraising Private credit was the highest contributor to fundraising in Q2 2025, reflecting strong market conditions and the firm's ability to offer diversified investment options.
Absolute return strategies (ARS) ARS had $1 billion in gross fund flows for the first half of 2025, with net inflows of approximately $400 million in Q2 2025. Fee-paying AUM in ARS increased 7% year-to-date and 10% over the last 12 months, driven by strong investment performance and improved sentiment.
Unrealized carried interest at NAV Unrealized carried interest at NAV surpassed $900 million in Q2 2025, with the firm's share at approximately $450 million, up 9% or $35 million from the previous quarter. This growth reflects strong investment performance and value creation.
Fee-paying AUM Fee-paying AUM grew to $69 billion, a 9% increase year-over-year. Contracted not-yet-fee-paying AUM grew 19% year-over-year to $8.7 billion, providing a foundation for future growth.
Private markets management fees Year-to-date private markets management fees grew 11% year-over-year, driven by solid fundraising and conversion of contracted not-yet-fee-paying AUM.
Incentive fees In Q2 2025, $16 million in incentive fees were realized, including $1 million in annual performance fees and $15 million in carried interest. Unrealized carried interest stood at over $900 million, indicating substantial future earnings potential.
Infrastructure Interval Fund: Launched this year with a $320 million seeded portfolio, targeting individual investors. Early traction is encouraging.
FT Wilshire Private Markets Infrastructure Index: Partnership with Wilshire Indexes to launch the first comprehensive benchmark for private infrastructure. Plans to launch investment vehicles tracking the index.
Fundraising Growth: Raised $2.4 billion in Q2 2025, bringing the first half total to $5.3 billion, a 52% increase from H1 2024. Infrastructure accounted for 35% of total capital raised.
Japanese Partnership: Strategic partnership in Japan to enhance capital raising efforts in the region.
Fee-Related Earnings (FRE): Increased 6% in Q2 2025 compared to Q2 2024. Year-to-date FRE grew 14% year-over-year, with a margin expansion to 43%.
Assets Under Management (AUM): Total AUM grew to $86 billion, a 5% increase from Q1 2025. Fee-paying AUM grew 9% year-over-year to $69 billion.
Compensation and Expenses: Disciplined expense management with stable FRE compensation at $37 million and non-GAAP general expenses at $21 million.
AI Adoption: AI is a key strategic focus, with increasing adoption expected to enhance efficiency and profitability.
Collateralized Fund Obligation (CFO): Second CFO transaction in progress, contributing to fundraising and expected to close in H2 2025.
Volatility in macroeconomic environment: The company acknowledges ongoing volatility around interest rates, tariffs, and general policy, which could impact investment decisions and fundraising activities.
Caution in fundraising projections: While fundraising has been strong, the company remains cautious about overoptimistic short-term assumptions, particularly in the individual investor channel.
Dependence on infrastructure growth: The company’s growth heavily relies on the infrastructure platform, which, while promising, is subject to market demand and competition.
Unrealized carried interest dependency: A significant portion of potential earnings is tied to unrealized carried interest, which is subject to market conditions and may not materialize as expected.
Limited catch-up fees in H2 2025: The company does not expect material catch-up fees in the second half of 2025, which could limit revenue growth.
Expense management challenges: While expenses are stable, maintaining discipline in compensation and administrative costs is critical to sustaining margins.
Market competition in private credit: The private credit market is evolving, and while the company is well-positioned, increased competition could impact its growth in this segment.
Dependence on alternative investments demand: The company’s success is tied to the continued demand for alternative investments, which could be affected by broader economic or market shifts.
Fundraising Projections: The company expects 2025 fundraising to exceed 2024 levels, with the second half of the year weighted towards the fourth quarter. The fundraising pipeline is strong, and demand for alternative investments remains robust.
Infrastructure Growth: Infrastructure remains a key growth driver, with $1.9 billion raised in the first half of 2025. The company anticipates continued growth in this segment, supported by global demand for infrastructure investments and innovation in offerings such as the infrastructure interval fund and private markets infrastructure index.
Private Credit Market: The private credit market is evolving in ways that benefit the company. GCM Grosvenor expects increased investor demand for diversification within private credit allocations, positioning the company for growth in this vertical.
Absolute Return Strategies (ARS): ARS had strong performance and fundraising in the first half of 2025. Fee-paying AUM in ARS is up 7% year-to-date, and the company expects continued solid performance and flows in this segment.
Individual Investor Channel: The company is optimistic about the long-term potential of its individual investor channel, with progress in operational milestones and sales for the infrastructure interval fund. However, it cautions against overoptimistic short-term assumptions.
Structured Alternative Investment Solutions: GCM Grosvenor is in the market with a structured alternative investment solution (CFO) tied to its credit strategy, expected to close in the second half of 2025. The company plans to continue sponsoring collateralized fund obligations in the future.
Macro Environment and Market Trends: The macro environment shows signs of improvement, with increased transaction activity, a recovering IPO market, and better clarity on tax policy. However, the company remains cautious due to volatility in interest rates, tariffs, and policy.
Unrealized Carried Interest: The company has over $900 million in unrealized carried interest at NAV, with $450 million owned by the firm. This represents a significant potential value for shareholders.
Fee-Related Earnings (FRE) Growth: The company aims to double its 2023 FRE by 2028, supported by strong fundraising, investment performance, and disciplined expense management.
Quarterly Dividend: The company continues to pay a healthy quarterly dividend of $0.11 per share with potential for future increases as earnings momentum builds.
Share Buyback Program: The company actively managed dilution from employee stock-based compensation through its buyback program and repurchased approximately $25 million of Class A stock. Additionally, a $30 million increase to the buyback authorization was announced, bringing the remaining amount available to $87 million.
The earnings call reflects strong financial performance with record fundraising, high returns, and increased dividends. The Q&A indicates recurring revenue streams and optimism about future fund obligations, despite some uncertainty in timing of carry realizations. While ARS flows are slightly positive, the company's guidance remains cautious. Overall, the financial metrics and shareholder returns are positive, indicating a likely stock price increase.
The earnings call summary shows strong financial performance, with significant growth in unrealized carried interest and fee-paying AUM. The Q&A section revealed positive sentiments towards strategic initiatives, strong re-ups, and no significant fee pressures, although some uncertainties in AI's financial impact were noted. The overall positive outlook, including robust fundraising expectations and consistent fee growth guidance, suggests a likely positive stock price movement.
The earnings call highlights strong financial performance, including record fundraising, increased management fees, and robust earnings growth. Optimistic guidance for future fundraising and fee-related earnings, along with a stable dividend and share repurchase plan, further boosts sentiment. Although management was vague on some specifics, the overall tone remains positive, especially with international opportunities and partnerships. The absence of major negative factors and strong financial metrics suggest a positive stock price movement over the next two weeks.
The earnings call reveals strong financial performance with significant growth in fundraising, AUM, and earnings. Additionally, the company maintains a steady dividend and share repurchase program, both positive indicators. While some questions in the Q&A highlighted uncertainties, such as market volatility and fee growth dynamics, management's responses indicated resilience and strategic opportunities. The overall sentiment leans positive due to robust financial metrics and optimistic future fundraising expectations, suggesting a likely 2% to 8% stock price increase over the next two weeks.
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