September 18, 2020

GCM Grosvenor Reports Strong Second Quarter Fiscal 2020 Results, Continued Positive Trends in July and August. Management expects to outperform prior full year 2020 forecast.

CHICAGO, IL – September 18, 2020 – GCM Grosvenor today reported its results for the second fiscal quarter ended June 30, 2020, including GAAP Net Income of $5.9 million, Adjusted Pre-Tax Income of $19.8 million, Adjusted EBITDA of $26.2 million and Adjusted Fee-Related Earnings of $25.1 million, all of which increased over prior quarter ended March 31, 2020.  

Based on financial results through the first six months of the fiscal year and continued positive trends in July and August, GCM Grosvenor management expects to outperform its prior full year 2020 forecast.  Key drivers include outperformance on Fee-Paying AUM (“FPAUM”), Contracted Not Yet Fee-Paying AUM (“CNFPAUM”), expenses, and investment performance.

SECOND QUARTER FISCAL 2020 HIGHLIGHTS

  • Assets under management (“AUM”) increased to $56.9 billion, an increase of $1.1 billion (or 2.0%) versus the quarter ended March 31, 2020.  
  • Fee-paying AUM increased to $49.6 billion, an increase of $1.8 billion (or 3.8%) versus the quarter ended March 31,2020.  
  • Contracted Not Yet FPAUM increased to $5.6 billion, an increase of $0.2 billion (or 3.5%) versus the quarter ended March 31,2020.
  • Net Fees Attributable to GCM Grosvenor of $75.7 million for the quarter were comprised of 97% management fees.
  • GAAP Net Income increased to $5.9 million, an increase of $20.9 million versus the quarter ended March 31, 2020.
  • Adjusted Pre-Tax Income increased to $19.8 million, an increase of $7.0 million (or 54%) versus the quarter ended March 31, 2020.
  • Adjusted EBITDA increased to $26.2 million, an increase of $6.8 million (or 35%) versus the quarter ended March 31,2020.
  • Adjusted FRE increased to $25.1 million, an increase of $7.5 million (or 43%) versus the quarter ended March 31,2020.

THIRD QUARTER INTERIM UPDATE

  • Continued positive trends in July and August resulted in $14.4 million of unrealized, accrued annual performance fees that are eligible to be realized in 2020, as of August 31

GCM Grosvenor CEO Michael Sacks commented: “We are enthusiastic about our ability to drive value for clients and our emergence as a public company.  While we are pleased to be ahead of plan, we remain focused on delivering for all stakeholders over appropriate time periods.”

GCM Grosvenor issued a more detailed presentation on second fiscal quarter 2020 results, which is available at https://www.cantor.com/our-business/affiliates/.

GCM Grosvenor announced on August 3, 2020 that it will become a public company through a merger with CF Finance Acquisition Corp. (“CFAC”) (NASDAQ: CFFA), a special purpose acquisition company sponsored by Cantor Fitzgerald. 

In connection with the transaction announcement, GCM Grosvenor issued an investor presentation, which contained a forecast for the full fiscal year 2020, which is available at https://www.cantor.com/our-business/affiliates/

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the expected future performance of GCM Grosvenor’s business. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this presentation. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the joint registration statement/proxy statement on Form S-4 discussed below and other documents filed by CF Finance Acquisition Corp. (“CFAC”) and GCM Grosvenor Inc. from time to time with the U.S. Securities and Exchange Commission (the “SEC”). These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and GCM Grosvenor and CFAC assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Neither GCM Grosvenor nor CFAC gives any assurance that GCM Grosvenor will achieve its expectations.

Use of Projections

This press release contains reference to financial forecasts with respect to GCM Grosvenor’s projected financial results. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of GCM Grosvenor or that actual results will not differ materially from those presented in the prospective financial information.  Reference the prospective financial information in this press release should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.

Additional Information and Where to Find It

This press release relates to a proposed transaction between GCM Grosvenor and CFAC. This press release does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. CFAC and GCM Grosvenor Inc. have filed a registration statement on Form S-4 that includes a joint proxy statement/prospectus. The proxy statement/prospectus will be sent to all CFAC stockholders. CFAC and GCM Grosvenor Inc. also will file other documents regarding the proposed transaction with the SEC. Before making any voting decision, investors and security holders of CFAC are urged to read the registration statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC in connection with the proposed transaction as they become available because they will contain important information about the proposed transaction.

Investors and security holders will be able to obtain free copies of the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by CFAC through the website maintained by the SEC at www.sec.gov.

Participants in Solicitation

CFAC and GCM Grosvenor Inc. and their respective directors and officers may be deemed to be participants in the solicitation of proxies from CFAC’s stockholders in connection with the proposed transaction between CFAC and GCM Grosvenor. Information about CFAC’s directors and executive officers and their ownership of CFAC’s securities is set forth in the Form S-4 registration statement filed by GCM Grosvenor that includes a joint proxy statement/prospectus. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the proxy statement/prospectus regarding the proposed transaction. You may obtain free copies of these documents as described in the preceding paragraph.

Use of Non-GAAP Financial Measures

This presentation includes certain non-GAAP financial measures. These non-GAAP measures are in addition to , and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and should not be considered as an alternative to revenue, net income, operating income or any other performance measures derived in accordance with GAAP. Reconciliations of historical non-GAAP measures to their most directly comparable GAAP counterparts are included in below.

GCM Grosvenor believes that these non-GAAP measures of financial results provide useful supplemental information to investors about GCM Grosvenor. GCM Grosvenor’s management uses these non-GAAP measures to evaluate GCM’s projected financial and operating performance. However, there are a number of limitations related to the use of these non-GAAP measures and their nearest GAAP equivalents. For example other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore GCM Grosvenor’s non-GAAP measures may not be directly comparable to similarly titled measures of other companies.

This press release also includes reference to certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, GCM Grosvenor is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.

Reconciliation to Non-GAAP Metrics

Three Months Ended 2020 Six Months Ended 2020
(in thousands of dollars)31-Mar30-Jun 30-Jun

Net fees attributable to GCM Grosvenor
  

Total operating revenues

82,617

90,130
 
172,747

Less:
  

Fund expense reimbursement revenue

(1,974)

(1,827)
 
(3,801)

Carried interest expense attributable to employees and former employees

(1,201)

(7,819)
 
(9,020)

Carried interest expense attributable to redeemable noncontrolling interest holder

(865)

(2,804)
 
(3,669)

Carried interest attributable to other noncontrolling interest holders, net

(468)

(1,969)
 
(2,437)

Net fees attributable to GCM Grosvenor

78,109

75,711
 
153,820
      
      
Adjusted pre-tax income &
Adjusted net income attributable to GCM Grosvenor
  

Net income (loss) attributable to GCM Grosvenor

(14,955)

5,927
 
(9,028)

Plus:
  

Income taxes

643

526
 
1,169

Change in fair value of derivatives

8,634

1,417
 
10,051

Amortization expense

1,876

1,876
 
3,752

Severance expense

2,280

8
 
2,288

Transaction expenses

3,355

145
 
3,500

Loss on extinguishment of debt

1,032

482
 
1,514

Other
–  
4
 
4

Partnership interest-based compensation

7,920

8,856
 
16,776

Other non-cash compensation

1,065

1,160
 
2,225

Less:
  

Investment income, net of noncontrolling interest

(33)

(110)
 
(143)

Net compensation expense associated with deferred revenue carry

990

(508)
 
482

Adjusted pre-tax income attributable to GCM Grosvenor

12,807

19,783
 
32,590

Less:
  

Income taxes

(643)

(526)
 
(1,169)

Adjusted net income attributable to GCM Grosvenor

12,164

19,257
 
31,421
  
  
Adjusted EBITDA attributable to GCM Grosvenor  

Adjusted net income attributable to GCM Grosvenor

12,164

19,257
 
31,421

Plus:
  

Income taxes

643

526
 
1,169

Depreciation expense

696

536
 
1,232

Interest expense

5,867

5,841
 
11,708

Adjusted EBITDA attributable to GCM Grosvenor

19,370

26,160
 
45,530
      
      
Adjusted Fee-related earnings attributable to GCM Grosvenor     

Adjusted EBITDA attributable to GCM Grosvenor

19,370
 
26,160
 
45,530

Less:
     

Incentive fees

(3,233)
 
(13,041)
 
(16,274)

Depreciation expense

(696)
 
(536)
 
(1,232)

Other non-operating income

(414)
 
(67)
 
(481)

Plus:
     

Carried interest expense attributable to employees and former employees

1,201
 
7,819
 
9,020

Carried interest expense attributable to redeemable noncontrolling interest holder

865
 
2,804
 
3,669

Carried interest attributable to other noncontrolling interest holders, net

468
 
1,969
 
2,437

Adjusted Fee-related earnings attributable to GCM Grosvenor

17,561
 25,108 
42,669

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