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• | “A&R LLLPA” are to the Fifth Amended and Restated Limited Liability Limited Partnership Agreement of GCMH; |
• | “AUM” are to assets under management; |
• | “Business Combination” or “Transaction” are to the transactions contemplated by the Transaction Agreement; |
• | “Business Combination Lock-up Period” are to (a) with respect to the voting parties, the period beginning on the Closing Date and ending on the date that is the 3rd anniversary of the Closing Date and (b) with respect to the CF Sponsor, the period beginning on the Closing Date and ending on the date that is the 18th month anniversary of the Closing Date; |
• | “Bylaws” are to our Amended and Restated Bylaws; |
• | “CAGR” are to compound annual growth rate; |
• | “CFAC” are to CF Finance Acquisition Corp., a Delaware corporation; |
• | “CF Investor” are to CF GCM Investor, LLC, a Delaware limited liability company; |
• | “CF Sponsor” are to CF Finance Holdings, LLC, a Delaware limited liability company; |
• | “Charter” are to our Amended and Restated Certificate of Incorporation; |
• | “Class C Share Voting Amount” are to the “Class C Share Voting Amount,” as such term is defined in the Charter, which is generally a number of votes per share equal to (1) (x) an amount of votes equal to 75% of the aggregate voting power of our outstanding capital stock (including for this purpose any Includible Shares), minus (y) the total voting power of our outstanding capital stock (other than the Class C common stock) owned or controlled, directly or indirectly, by the Key Holders (including any Includible Shares), divided by (2) the number of shares of Class C common stock then outstanding; |
• | “clients” are to persons who invest in our funds, even if such persons are not deemed clients of our registered investment adviser subsidiaries for purposes of the Investment Advisers Act 1940, as amended; |
• | “Closing” are to the consummation of the Business Combination; |
• | “Closing Date” are to November 17, 2020; |
• | “Code” are to the U.S. Internal Revenue Code of 1986, as amended; |
• | “Class A common stock” are to our Class A common stock, par value $0.0001 per share; |
• | “Class B common stock” are to our Class B common stock, par value $0.0001 per share; |
• | “Class C common stock” are to our Class C common stock, par value $0.0001 per share; |
• | “Effective Time” are to the time at which the Merger becomes effective pursuant to the Transaction Agreement; |
• | “FPAUM” are to fee-paying AUM; |
• | “GCM Companies” are to GCM LLC and GCMH; |
• | “GCM Grosvenor” are to GCMH, its subsidiaries, and GCM, LLC; |
• | “GCM LLC” are to GCM, L.L.C., a Delaware limited liability company; |
• | “GCM PubCo” are to GCM Grosvenor Inc., a Delaware corporation; |
• | “GCM PubCo private placement warrants” are to the warrants for Class A common stock (which are in identical form of private placement warrants but in the name of GCM PubCo); |
• | “GCM V” are to GCM V, LLC, a Delaware limited liability company; |
• | “GCMG” are to GCM Grosvenor Inc., was incorporated in Delaware as a wholly owned subsidiary of Grosvenor Capital Management Holdings, LLLP, formed for the purpose of completing the Transaction. Pursuant to the Transaction, Grosvenor Capital Management Holdings, LLLP cancelled its shares in GCM Grosvenor Inc. no longer making GCM Grosvenor Inc. a wholly owned subsidiary of Grosvenor Capital Management Holdings, LLLP. |
• | “GCMH” are to Grosvenor Capital Management Holdings, LLLP, a Delaware limited liability limited partnership; |
• | “GCMH Consideration” refers to the consideration of $1.00 for the general partnership interest of GCMH plus $1,470,375 for the GCM Class B-1 common units previously held by GCMHGP LLC and paid by IntermediateCo to Holdings in connection with the Business Combination; |
• | “GCM Funds” and “our funds” are to GCM Grosvenor’s specialized funds and customized separate accounts; |
• | “GCMHGP LLC” are to GCMH GP, L.L.C., a Delaware limited liability company; |
• | “GCMH Equityholders” are to Holdings, Management LLC and Holdings II; |
• | “GCMLP” are to Grosvenor Capital Management, L.P., an Illinois limited partnership; |
• | “Grosvenor common units” are to units of partnership interests in GCMH entitling the holder thereof to the distributions, allocations, and other rights accorded to holders of partnership interests in GCMH following the Grosvenor Redomicile and LLLPA Amendment; |
• | “H&F Parties” are to HCFP VI AIV, L.P., H&F Chicago AIV I, L.P., and Hellman & Friedman Capital Executives VI, L.P; |
• | “Holdings” are to Grosvenor Holdings, L.L.C., an Illinois limited liability company; |
• | “Holdings II” are to Grosvenor Holdings II, L.L.C., a Delaware limited liability company; |
• | “Includible Shares” are to any shares of our voting stock issuable in connection with the exercise (assuming, solely for this purpose, full exercise and not net exercise) of all outstanding options, warrants, exchange rights, conversion rights or similar rights to receive voting stock of GCM PubCo, in each case owned or controlled, directly or indirectly, by the Key Holders, but excluding the number of shares of Class A common stock issuable in connection with the exchange of Grosvenor common units, as a result of any redemption or direct exchange of Grosvenor common units effectuated pursuant the A&R LLLPA; |
• | “IntermediateCo” are to GCM Grosvenor Holdings, LLC (formerly known as CF Finance Intermediate Acquisition, LLC), a Delaware limited liability company; |
• | “Key Holders” are to Michael J. Sacks, GCM V and the GCMH Equityholders; |
• | “Lock-up Period” are to (a) with respect to the voting parties, the period beginning on the Closing Date and ending on the date that is the 3rd anniversary of the Closing Date and (b) with respect to the CF Sponsor, the period beginning on the Closing Date and ending on the date that is the 18th month anniversary of the Closing Date; |
• | “lock-up shares” are to (a) with respect to the CF Sponsor, the shares of CFAC common stock held by the CF Sponsor on the Closing Date or received by CF Sponsor in connection with the Business Combination, any warrants to purchase shares of CFAC common stock held by the CF Sponsor on the Closing Date or received by Sponsor in connection with the Business Combination, and any shares of CFAC common stock issued to the CF Sponsor upon exercise of any such warrants to purchase CFAC common stock and (b) with respect to the voting parties, (i) the shares of our common stock received by the voting parties on the Closing Date, (ii) any shares of our common stock received by any voting party after the Closing Date pursuant to a direct exchange or redemption of Grosvenor common units held as of the Closing Date under the A&R LLLPA and (iii) the GCM PubCo private placement warrants held by the voting parties as of the Closing Date and any shares of our common stock issued to the voting parties upon exercise thereof; |
• | “Management LLC” are to GCM Grosvenor Management, LLC, a Delaware limited liability company; |
• | “Mosaic” are to Mosaic Acquisitions 2020, L.P.; |
• | “Mosaic Transaction” are to a transaction, effective January 1, 2020, by which GCMH and its affiliates transferred certain indirect partnerships interests related to historical investment funds managed by GCMH and its affiliates to Mosaic; |
• | “NAV” are to net asset value; |
• | “Option Agreement” are to that certain Option Agreement, dated as of October 5, 2017, by and among Holdings and the H&F Parties; |
• | “Option Consideration” are to the consideration of $110,167,894.55, minus the purchase price payable to the H&F Parties by IntermediateCo under the Option Agreement; |
• | “Option Conveyance” are to the assignment, immediately following the Business Combination, by Holdings and assumption by IntermediateCo of all right, title and interest in and to the Option Agreement in exchange for the Option Consideration and the private placement of GCM PubCo warrants; |
• | “PIPE Investors” are to the qualified institutional buyers and accredited investors that have agreed to purchase shares of Class A common stock in a private placement in connection with the execution of the Transaction Agreement and the Business Combination; |
• | “public warrants” are to the warrants sold by CFAC as part of the units in CFAC’s initial public offering; |
• | “Registration Rights Agreement” are to that certain Amended and Restated Registration Rights Agreement to be entered into by and among us, the CF Sponsor, the GCMH Equityholders and the PIPE Investors; |
• | “Sponsor Support Agreement” are to that certain Sponsor Support Agreement, dated as of August 2, 2020, by and among the CF Sponsor, CFAC, GCMH and Holdings; |
• | “Stockholders’ Agreement” are to that certain Stockholders’ Agreement to be entered into by and among us, the GCMH Equityholders and GCM V; |
• | “Sunset Date” are to the date the GCMH Equityholders beneficially own a number of voting shares representing less than 20% of the number of shares of Class A common stock beneficially owned by the GCMH Equityholders immediately following the Closing Date (assuming, for this purpose, that all outstanding Grosvenor common units are and were exchanged at the applicable measurement time by the GCMH Equityholders for shares of Class A common stock in accordance with the A&R LLLPA and without regard to the lock-up or any other restriction on exchange); |
• | “Transaction Agreement” are to the definitive transaction agreement, dated as of August 2, 2020, by and among CFAC, IntermediateCo, the CF Sponsor, GCMH, the GCMH Equityholders, GCMHGP LLC, GCM V and us; |
• | “underlying funds” are to the investment vehicles managed by third-party investment managers in which GCM Funds invest; |
• | “units” are to CFAC’s units sold in its initial public offering, each of which consists of one share of CFAC’s Class A common stock and three-quarters of one public warrant; |
• | “voting party” are to GCM V and the GCMH Equityholders; |
• | “voting shares” are to our securities of that are beneficially owned by a voting party that may be voted in the election of our directors, including any and all of our securities acquired and held in such capacity subsequent to the date of the Transaction Agreement; and |
• | “Warrant Agreement” are to that certain Warrant Agreement, dated as of December 12, 2018, between Continental Stock Transfer & Trust Company and CFAC. |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors; |
• | our expansion plans and opportunities; |
• | our ability to pay dividends on our Class A common stock on the terms currently contemplated or at all; |
• | our ability to grow AUM and the performance of the GCM Funds; |
• | our ability to compete in the asset management industry; |
• | our ability to comply with domestic and foreign regulatory regimes; |
• | our ability to expand our business and enter into new lines of business or geographic markets; |
• | the impact of the novel coronavirus (“COVID-19”) pandemic; |
• | our ability to identify suitable investment opportunities for our clients; |
• | our ability to deal appropriately with conflicts of interest in the ordinary course of our business; and |
• | other factors detailed under the section entitled “Risk Factors.” |
• | The historical performance of our funds should not be considered as indicative of the future results of our operations or any returns expected on an investment in our Class A common stock. |
• | Investors in our open-ended, specialized funds may generally redeem their investments in these funds on a periodic basis. Investors in most of our closed-ended, specialized funds may terminate the commitment periods of these funds or otherwise cause our removal as general partner of these funds under certain circumstances. |
• | The COVID-19 pandemic has caused severe disruptions in the U.S. and global economies and may adversely impact our business, financial condition and results of operations. |
• | Our business and financial condition may be materially adversely impacted by the variable nature of our revenues, and in particular the performance-based aspect of certain of our revenues and cash flows. |
• | The industry in which we operate is intensely competitive. If we are unable to compete successfully, our business and financial condition could be adversely affected. |
• | A decline in the pace or size of fundraising or investments made by us on behalf of our funds may adversely affect our revenues. |
• | We are subject to numerous conflicts of interest that are both inherent to our business and industry and particular to us. |
• | Our entitlement to receive carried interest from many of our funds may create an incentive for us to make more speculative investments and determinations on behalf of a fund than would be the case in the absence of such arrangement. |
• | Our international operations subject us to numerous risks. |
• | Extensive government regulation, compliance failures and changes in law or regulation could adversely affect us. |
• | Difficult market, geopolitical and economic conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by our funds, reducing the number of high-quality investment managers with whom we may invest, and reducing the ability of our funds to raise or deploy capital. |
• | If the investments we make on behalf of our funds perform poorly, we may suffer a decline in our revenues |
• | We operate our business globally, with clients and offices across North America, Europe, Asia-Pacific, Latin America and the Middle East. The ability to easily travel and meet with prospective and current clients in person helps build and strengthen our relationships with them in ways that telephone and video conferences may not always afford. In addition, the ability of our employees to conduct their daily work in our offices helps to ensure a level of productivity that may not be achieved when coming to the office every day is not an option. Further, our investment strategies target opportunities globally. Restrictions on travel and public gatherings as well as stay-at-home orders mean that most of our client and prospect meetings are not currently taking place in person, and the vast majority of our employees are working from home. As a consequence, our ability to market our funds and raise new business has been impeded (which may result in lower or delayed revenue growth), it has become more difficult to conduct due diligence on investments (which can impede the identification of investment risks) and an extended period of remote working by our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk, as remote working environments can be less secure and more susceptible to hacking attacks. |
• | A slowdown in fundraising activity has in the past resulted in delayed or decreased management fees and could result in delayed or decreased management fees in the future compared to prior periods. In addition, in light of declines in public equity markets and other components of their investment portfolios, investors may become restricted by their asset allocation policies to invest in new or successor funds that we provide, or may be prohibited by new laws or regulations from funding existing commitments. We may also experience a slowdown in the deployment of our capital, which could also adversely affect our ability to raise capital for new or successor funds. |
• | To the extent the market dislocation caused by COVID-19 may present attractive investment opportunities due to increased volatility in the financial markets, we may not be able to complete those investments, which could impact revenues, particularly for our funds that charge fees on invested capital. |
• | Our liquidity and cash flows may be adversely impacted by declines or delays in realized incentive fees and management fee revenues. |
• | Our funds invest in industries that have been materially impacted by the COVID-19 pandemic, including healthcare, travel, entertainment, hospitality and retail. Companies in these industries are facing operational and financial hardships resulting from the pandemic, and if conditions do not improve, they could continue to suffer materially, become insolvent or cease operations altogether, any of which would decrease the value of the investments. |
• | COVID-19 presents a threat to our employees’ well-being and morale. If our senior management or other key personnel become ill or are otherwise unable to perform their duties for an extended period of time, we may experience a loss of productivity or a delay in the implementation of certain strategic plans. In addition to any potential impact of such extended illness on our operations, we may be exposed to the risk of litigation by our employees against us for, among other things, failure to take adequate steps to protect their well-being, particularly in the event they become sick after a return to the office. Further, local COVID-19-related laws can be subject to rapid change depending on public health developments, which can lead to confusion and make compliance with laws uncertain and subject us to increased risk of litigation for non-compliance. |
• | We anticipate that regulatory oversight and enforcement will become more rigorous for public companies in general, and for the financial services industry in particular, as a result of the recent volatility in the financial markets. |
• | a number of our competitors have greater financial, technical, marketing and other resources and more personnel than we do; |
• | some of our competitors have recently raised, or are expected to raise, significant amounts of capital, and many of them have investment objectives similar to ours, which may create additional competition for investment opportunities that our funds seek to exploit; |
• | some of our funds may not perform as well as competitors’ funds or other available investment products; |
• | several of our competitors have significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit; |
• | some of our competitors may have a lower cost of capital, which may be exacerbated to the extent potential changes to the Code limit the deductibility of interest expense; |
• | some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities; |
• | some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do; |
• | some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors; |
• | some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do; and |
• | other industry participants may, from time to time, seek to recruit our investment professionals and other employees away from us. |
• | greater difficulties in managing and staffing foreign operations; |
• | differences between the U.S. and foreign capital markets, such as for accounting, auditing, financial reporting and legal standards, practices and disclosure requirements; |
• | fluctuations in foreign currency exchange rates that could adversely affect our results; |
• | additional costs of complying with, and exposure to liability under, foreign regulatory regimes; |
• | unexpected changes in trading policies, regulatory requirements, tariffs and other barriers; |
• | longer transaction cycles; |
• | higher operating costs; |
• | local labor conditions and regulations; |
• | adverse consequences or restrictions on the repatriation of earnings; |
• | potentially adverse tax consequences, such as trapped foreign losses; |
• | less stable political and economic environments; |
• | terrorism, political hostilities, war, public health crises and other civil disturbances or other catastrophic or pandemic events that reduce business activity; |
• | cultural and language barriers and the need to adopt different business practices in different geographic areas; and |
• | difficulty collecting fees and, if necessary, enforcing judgments. |
• | making certain payments in respect of equity interests, including, among others, the payment of dividends and other distributions, redemptions and similar payments, payments in respect of warrants, options and other rights, and payments in respect of subordinated indebtedness; |
• | incurring additional debt; |
• | providing guarantees in respect of obligations of other persons; |
• | making loans, advances and investments; |
• | entering into transactions with investment funds and affiliates; |
• | creating or incurring liens; |
• | entering into negative pledges; |
• | selling all or any part of the business, assets or property, or otherwise disposing of assets; |
• | making acquisitions or consolidating or merging with other persons; |
• | entering into sale-leaseback transactions; |
• | changing the nature of our business; |
• | changing our fiscal year; |
• | making certain modifications to organizational documents or certain material contracts; |
• | making certain modifications to certain other debt documents; and |
• | entering into certain agreements with respect to the repayment of indebtedness, the making of loans or advances, or the transferring of assets. |
• | market conditions and investment opportunities during previous periods may have been significantly more favorable for generating positive performance than those we may experience in the future; |
• | the performance of our funds that distribute carried interest is generally calculated on the basis of the net asset value of the funds’ investments, including unrealized gains, which may never be realized and therefore never generate carried interest; |
• | our historical returns derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed; |
• | our newly established closed-ended funds may generate lower returns during the period that they initially deploy their capital; |
• | competition continues to increase for investment opportunities, which may reduce our returns in the future; |
• | the performance of particular funds also will be affected by risks of the industries and businesses in which they invest; and |
• | we may create new funds that reflect a different asset mix and new investment strategies, as well as a varied geographic and industry exposure, compared to our historical funds, and any such new funds could have different returns from our previous funds. |
• | currency exchange matters, such as exchange rate fluctuations between the U.S. dollar and the foreign currency in which the investments are denominated, and costs associated with conversion of investment proceeds and income from one currency to another; |
• | differences between the U.S. and foreign capital markets, including the absence of uniform accounting, auditing, financial reporting and legal standards, practices and disclosure requirements and less government supervision and regulation; |
• | certain economic, social and political risks, including exchange control regulations and restrictions on foreign investments and repatriation of capital, the risks of political, economic or social instability; and |
• | the possible imposition of foreign taxes with respect to such investments or confiscatory taxation. |
• | Certain of the underlying funds in which we invest are newly established funds without any operating history or are managed by management companies or general partners who may not have as significant track records as an independent manager. |
• | Generally, the execution of these hedge funds’ investment strategies is subject to the sole discretion of the management company or the general partner of such funds. |
• | Hedge funds may engage in speculative trading strategies, including short selling. |
• | Hedge funds are exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem or otherwise, thus causing the fund to suffer a loss. |
• | Credit risk may arise through a default by one of several large institutions that are dependent on one another to meet their liquidity or operational needs, so that a default by one institution causes a series of defaults by the other institutions. |
• | The efficacy of investment and trading strategies depend largely on the ability to establish and maintain an overall market position in a combination of financial instruments. A hedge fund’s trading orders may not be executed in a timely and efficient manner due to various circumstances, including systems failures or human error. In such event, the funds might only be able to acquire some but not all of the components of the position, or if the overall position were to need adjustment, the funds might not be able to make such adjustment. |
• | Hedge funds may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely divestiture or sale of trading positions can be impaired by decreased trading volume, increased price volatility, concentrated trading positions, limitations on the ability to transfer positions in highly specialized or structured transactions to which they may be a party, and changes in industry and government regulations. It may be impossible or costly for hedge funds to liquidate positions rapidly in order to meet margin calls, withdrawal requests or otherwise, particularly if there are other market participants seeking to dispose of similar assets at the same time or the relevant market is otherwise moving against a position or in the event of trading halts or daily price movement limits on the market or otherwise. For example, in 2008 many hedge funds, including some of our funds, experienced significant declines in value. In many cases, these declines in value were both provoked and exacerbated by margin calls and forced selling of assets. Moreover, certain of our funds of hedge funds were invested in third-party hedge funds that halted redemptions in the face of illiquidity and other issues, which precluded those funds of hedge funds from receiving their capital back on request. |
• | Hedge fund investments are subject to risks relating to investments in commodities, futures, options and other derivatives, the prices of which are highly volatile and may be subject to the theoretically unlimited risk of loss in certain circumstances, including if the fund writes a call option. |
• | Ownership of infrastructure assets may present risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental or other applicable laws. |
• | Infrastructure asset investments may face construction risks including shortages of suitable labor and equipment, adverse construction conditions and challenges in coordinating with public utilities, all of which could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent completion of construction activities once undertaken. Certain infrastructure asset investments may remain in construction phases for a prolonged period and, accordingly, may not be cash generative for a prolonged period. Recourse against the contractor may be subject to liability caps or may be subject to default or insolvency on the part of the contractor. |
• | The management of the business or operations of an infrastructure asset may be contracted to a third-party management company unaffiliated with us. Although it would be possible to replace any such operator, the failure of such an operator to adequately perform its duties or to act in ways that are in our best interest, or the breach by an operator of applicable agreements or laws, rules and regulations, could have an adverse effect on the investment’s financial condition and results of operations. |
• | it is an “orthodox” investment company because it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
• | it is an inadvertent investment company because, absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. |
• | general economic and business conditions; |
• | our strategic plans and prospects; |
• | our business and investment opportunities |
• | our financial condition and operating results, including our cash position, net income and realizations on investments made by its investment funds; |
• | working capital requirements and anticipated cash needs; |
• | contractual restrictions and obligations, including payment obligations pursuant to the Tax Receivable Agreement; and |
• | legal, tax and regulatory restrictions. |
• | not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; |
• | reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
• | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation or golden parachute payments not previously approved. |
• | the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; |
• | the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; |
• | the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or |
• | the last day of the fiscal year ending after the fifth anniversary of CFAC’s initial public offering. |
• | the fact that the Class C common stock may be entitled to multiple votes per share until (i) such share of Class C common stock is canceled/redeemed for no consideration upon, subject to certain exceptions, (ii) the disposition of (a) the Grosvenor common units and (b) the shares of Class A common stock (as a result of a redemption of Grosvenor common units) paired with such Class C common stock, as applicable, and (iii) with respect to all shares of Class C common stock, the Sunset Date; |
• | the sole ability of directors to fill a vacancy on the board of directors; |
• | advance notice requirements for stockholder proposals and director nominations; |
• | after we no longer qualify as a “controlled company” under Nasdaq Listing Rule 5605(c)(1), provisions limiting stockholders’ ability to call special meetings of stockholders, to require special meetings of stockholders to be called and to take action by written consent; and |
• | the ability of our governing body to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquiror, likely preventing acquisitions that have not been approved by our governing body. |
• | the realization of any of the risk factors presented in this prospectus; |
• | reductions or lack of growth in our assets under management, whether due to poor investment performance by our funds or redemptions by investors in our funds; |
• | difficult global market and economic conditions; |
• | loss of investor confidence in the global financial markets and investing in general and in alternative asset managers in particular; |
• | competitively adverse actions taken by other fund managers with respect to pricing, fund structure, redemptions, employee recruiting and compensation; |
• | inability to attract, retain or motivate our active executive managing directors, investment professionals, managing directors or other key personnel; |
• | inability to refinance or replace our senior secured term loan facility and revolving credit facility either on acceptable terms or at all; |
• | adverse market reaction to indebtedness we may incur, securities we may grant under our 2020 Incentive Award Plan or otherwise, or any other securities we may issue in the future, including shares of Class A common stock; |
• | unanticipated variations in our quarterly operating results or dividends; |
• | failure to meet securities analysts’ earnings estimates; |
• | publication of negative or inaccurate research reports about us or the asset management industry or the failure of securities analysts to provide adequate coverage of Class A common stock in the future; |
• | changes in market valuations of similar companies; |
• | speculation in the press or investment community about our business; |
• | additional or unexpected changes or proposed changes in laws or regulations or differing interpretations thereof affecting our business or enforcement of these laws and regulations, or announcements relating to these matters; |
• | increases in compliance or enforcement inquiries and investigations by regulatory authorities, including as a result of regulations mandated by the Dodd-Frank Act and other initiatives of various regulators that have jurisdiction over us related to the alternative asset management industry; and |
• | adverse publicity about the alternative asset management industry. |
• | general economic and business conditions; |
• | our strategic plans and prospects; |
• | our business and investment opportunities; |
• | our financial condition and operating results, including its cash position, its net income and its realizations on investments made by its investment funds; |
• | working capital requirements and anticipated cash needs; |
• | contractual restrictions and obligations, including payment obligations pursuant to the Tax Receivable Agreement and restrictions pursuant to any credit facility; and |
• | legal, tax and regulatory restrictions. |
| | Shares | | | % | |
GCM Grosvenor rollover equity | | | 144,235 | | | 78.3 |
Public Shareholder | | | 11,602 | | | 6.3 |
Shares held by Sponsor and other holders of founder shares | | | 8,813 | | | 4.8 |
PIPE Investors | | | 19,500 | | | 10.6 |
Total Class A Shares | | | 184,150 | | | 100.0 |
Class C Shares* | | | 144,235 | | |
* | Shares of GCM Class C common stock carry up to 10 votes per share and represent no more than 75% of the voting power of GCM Grosvenor Inc.’s voting stock. As these shares have no economic or participating rights, they have been excluded from the calculation of earnings per share. The numbers of shares related to GCM Grosvenor rollover equity represents the shares that would be outstanding if all Grosvenor common units were exchanged for GCM Class A common stock. |
| | GCM | | | Mosaic Transaction Accounting Adjustments | | | Business Combination Transaction Accounting Adjustments | | | Pro Forma | |
Revenues | | | (a) | | | | | | ||||
Management fees | | | $310,745 | | | $— | | | $— | | | $310,745 |
Incentive fees | | | 111,650 | | | — | | | — | | | 111,650 |
Other operating income | | | 7,586 | | | — | | | — | | | 7,586 |
Total operating revenues | | | 429,981 | | | — | | | — | | | 429,981 |
Expenses | | | | | | | | | ||||
Employee compensation and benefits | | | 388,465 | | | — | | | — | | | 388,465 |
General, administrative and other | | | 84,631 | | | — | | | — | | | 84,631 |
Total operating expenses | | | 473,096 | | | — | | | — | | | 473,096 |
Operating income (loss) | | | (43,115) | | | — | | | — | | | (43,115) |
Investment income | | | 10,742 | | | — | | | — | | | 10,742 |
Interest income | | | — | | | — | | | — | | | — |
Interest expense | | | (23,446) | | | 660(b) | | | 992(c) | | | (21,794) |
Other expense | | | (9,562) | | | — | | | — | | | (9,562) |
Change in fair value of warrant liabilities | | | (13,315) | | | | | | | (13,315) | ||
Net other income (expense) | | | (35,581) | | | 660 | | | 992 | | | (33,929) |
Income (loss) before income taxes | | | (78,696) | | | 660 | | | 992 | | | (77,044) |
Income taxes | | | 4,506 | | | — | | | 1,977(d) | | | 6,483 |
Net income (loss) | | | (83,202) | | | 660 | | | (986) | | | (83,528) |
Less: Net income (loss) attributable to redeemable noncontrolling interest | | | 14,069 | | | — | | | — | | | 14,069 |
Less: Net income (loss) attributable to noncontrolling interest in subsidiaries | | | 11,617 | | | — | | | — | | | 11,617 |
Less: Net Income (loss) attributable to noncontrolling interest in GCMH | | | (112,937) | | | 660 | | | (8,102)(e) | | | (120,379) |
Net income (loss) attributable to GCM Grosvenor Inc. | | | $4,049 | | | $— | | | $7,118 | | | $11,167 |
| | | | | | | | |||||
Weighted average number of common stock outstanding: | | | | | | | | | ||||
Class A - Basic | | | 39,984,515 | | | | | | | 39,984,515 | ||
Class A - Diluted | | | 184,219,761 | | | | | | | 184,219,761 | ||
| | | | | | | | |||||
Net income (loss) per share: | | | | | | | | | ||||
Class A - Basic | | | 0.19(g) | | | | | | | $0.28(f) | ||
Class A - Diluted | | | $(0.50)(g) | | | | | | | $(0.66)(f) |
(a) | Represents the GCM Grosvenor Inc. historical audited consolidated statement of income for the year ended December 31, 2020. |
(b) | Reflects the pro forma adjustment to interest expense assuming the paydown of a portion of GCM Companies’ debt from the proceeds of the Mosaic Transaction as if it occurred on January 1, 2020 based on the interest rate in effect at the time of each monthly interest payment. |
(c) | Reflects the pro forma adjustment to interest expense assuming the $42 million paydown of GCM Companies’ revolving credit facility balance from the proceeds of the Transactions, net of the incremental unused commitment fee as if it occurred on January 1, 2020. |
(d) | Represents adjustment to record the tax provision of the company on a pro forma basis using a federal statutory tax rate of 21% and a state blended rate of 3.4%, which was calculated assuming the U.S. federal rates currently in effect and the statutory rates applicable to each state, local and foreign jurisdiction where we estimate our income will be apportioned, which was applied to the income attributable to the company. The income attributable to the noncontrolling interest is pass-through income. However, the effective tax rate of the company could differ as a result of actions taken by the company subsequent to the business combination and other factors, including any changes in tax laws and the impact of permanent tax differences. |
(e) | Represents the pro forma adjustment to adjust noncontrolling interests in GCMH for the portion of net income attributable to GCMH Equity Holders based on the ownership upon Closing. Profits and losses, other than partnership interest-based compensation are allocated to noncontrolling interests in proportion to their relative ownership interests regardless of their basis. |
(f) | Represents net income (loss) per common share computed by dividing net income (loss) attributable to GCM Grosvenor Inc. by the pro forma weighted average number of common shares outstanding for the period. GCM Grosvenor Inc. has not considered the effect of the warrants to purchase shares of GCM Class A common stock in the calculation of diluted income per share, since their inclusion would be anti-dilutive. In addition, GCM Grosvenor Common Units may be exchanged for GCM Class A common stock on a one-for-one basis. As such, diluted income per share has been calculated under the “if converted” method. |
Diluted net income (loss) per share for the year ended December 31, 2020: | | | |
Numerator | | | |
Net income (loss) attributable to GCM Grosvenor Inc. | | | $11,167 |
Effect of assumed exchange of GCM Grosvenor common units for Class A common stock, net of tax | | | (132,154) |
Net income (loss) attributable to GCM Grosvenor Inc.—Diluted | | | $(120,988) |
Denominator | | | |
Weighted average number of Class A common stock outstanding—Basic | | | 39,984,515 |
Assumed exchange of GCM Grosvenor common units for Class A common stock | | | 144,235,246 |
Weighted-average shares of Class A common stock outstanding—Diluted | | | 184,219,761 |
Net income (loss) attributable to GCM Grosvenor Inc.—Diluted | | | $(0.66) |
(g) | The historical Net income (loss) per share of GCM Grosvenor Inc. for the year ended December 31, 2020 represents only the period of November 17, 2020 to December 31, 2020. |
• | Private Equity |
• | Infrastructure |
• | Real Estate |
• | Alternative Credit |
• | Absolute Return Strategies |
• | Restrictions on travel and public gatherings as well as stay-at-home orders in the U.S. and abroad have resulted in most of our client and prospect meetings not currently taking place in person, and the vast majority of our employees are working from home. As a consequence, we are conducting client and prospective client dialogue remotely, which has impeded and may continue to impede our ability to market our funds and raise new business, which may result in lower or delayed revenue growth, and it has become more difficult to conduct due diligence on investments. |
• | The pandemic may result in a slowdown of our fundraising activity. A slowdown in fundraising activity has in the past resulted in delayed or decreased management fees and could result in delayed or decreased management fees in the future compared to prior periods. |
• | In light of uncertainty in public equity markets and other components of their investment portfolios, investors may become restricted by their asset allocation policies to invest in new or successor funds that we provide, or may be prohibited by new laws or regulations from funding existing commitments. |
• | Our liquidity and cash flows may be adversely impacted by declines or delays in realized incentive fees and management fee revenues. |
• | Our funds invest in industries that have been materially impacted by the COVID-19 pandemic, including healthcare, travel, entertainment, hospitality and retail, which in turn has impacted and may continue to impact the value of our investments. |
| | Three Months Ended March 31, | ||||||||||
| | 2021 | | | 2020 | | | Change | | | % Change | |
| | (in thousands, unaudited) | ||||||||||
Revenues | | | | | | | | | ||||
Management fees | | | $82,625 | | | $77,701 | | | $4,924 | | | 6% |
Incentive fees | | | 18,214 | | | 3,233 | | | 14,981 | | | 463% |
Other operating income | | | 2,380 | | | 1,683 | | | 697 | | | 41% |
Total operating revenues | | | 103,219 | | | 82,617 | | | 20,602 | | | 25% |
| | | | | | | | |||||
Expenses | | | | | | | | | ||||
Employee compensation and benefits | | | 83,353 | | | 55,477 | | | 27,876 | | | 50% |
General, administrative and other | | | 24,532 | | | 24,596 | | | (64) | | | —% |
Total operating expenses | | | 107,885 | | | 80,073 | | | 27,812 | | | 35% |
Operating income (loss) | | | (4,666) | | | 2,544 | | | (7,210) | | | (283)% |
Investment income | | | 13,048 | | | 3,373 | | | 9,675 | | | 287% |
Interest expense | | | (4,491) | | | (5,867) | | | 1,376 | | | (23)% |
Other income (expense) | | | 1,317 | | | (9,733) | | | 11,050 | | | (114)% |
Change in fair value of warrant liabilities | | | 14,057 | | | — | | | 14,057 | | | NM |
Net other income (expense) | | | 23,931 | | | (12,227) | | | 36,158 | | | (296)% |
Income (loss) before income taxes | | | 19,265 | | | (9,683) | | | 28,948 | | | (299)% |
Provision (benefit) for income taxes | | | (663) | | | 643 | | | (1,306) | | | (203)% |
Net income (loss) | | | 19,928 | | | (10,326) | | | 30,254 | | | (293)% |
Less: Net income attributable to redeemable noncontrolling interest | | | 8,089 | | | 2,093 | | | 5,996 | | | 286% |
| | Three Months Ended March 31, | ||||||||||
| | 2021 | | | 2020 | | | Change | | | % Change | |
| | (in thousands, unaudited) | ||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | | | 8,589 | | | 2,536 | | | 6,053 | | | 239% |
Less: Net income (loss) attributable to noncontrolling interests in GCMH | | | 703 | | | (14,955) | | | 15,658 | | | (105)% |
Net income (loss) attributable to GCM Grosvenor Inc. | | | $2,547 | | | $— | | | $2,547 | | | NM |
| | Three Months Ended March 31, | ||||||||||
| | 2021 | | | 2020 | | | Change | | | % Change | |
| | (in thousands, unaudited) | ||||||||||
Private markets strategies | | | $40,373 | | | $36,464 | | | $3,909 | | | 11% |
Absolute return strategies | | | 39,892 | | | 39,263 | | | 629 | | | 2% |
Fund expense reimbursement revenue | | | 2,360 | | | 1,974 | | | 386 | | | 20% |
Total management fees | | | 82,625 | | | 77,701 | | | 4,924 | | | 6% |
Incentive fees | | | 18,214 | | | 3,233 | | | 14,981 | | | 463% |
Administrative fees | | | 2,105 | | | 1,526 | | | 579 | | | 38% |
Other | | | 275 | | | 157 | | | 118 | | | 75% |
Total other operating income | | | 2,380 | | | 1,683 | | | 697 | | | 41% |
Total operating revenues | | | $103,219 | | | $82,617 | | | $20,602 | | | 25% |
| | Three Months Ended March 31, | ||||||||||
| | 2021 | | | 2020 | | | Change | | | % Change | |
| | (in thousands, unaudited) | ||||||||||
Cash-based employee compensation and benefits | | | $41,780 | | | $44,302 | | | $(2,522) | | | (6)% |
Equity-based compensation | | | 27,036 | | | — | | | 27,036 | | | NM |
Partnership interest-based compensation | | | 4,903 | | | 7,920 | | | (3,017) | | | (38)% |
Carried interest compensation | | | 6,860 | | | 2,190 | | | 4,670 | | | 213% |
Cash-based incentive fee related compensation | | | 1,833 | | | — | | | 1,833 | | | NM |
Other non-cash compensation | | | 941 | | | 1,065 | | | (124) | | | (12)% |
Total employee compensation and benefits | | | $83,353 | | | $55,477 | | | $27,876 | | | 50% |
| | Three Months Ended March 31, 2021 | |||||||
| | (in millions, unaudited) | |||||||
| | Private Markets Strategies | | | Absolute Return Strategies | | | Total | |
Fee-paying AUM | | | | | | | |||
Balance, beginning of period | | | $27,839 | | | $24,130 | | | $51,969 |
Contributions | | | 1,735 | | | 659 | | | 2,394 |
Withdrawals | | | — | | | (450) | | | (450) |
Distributions | | | (907) | | | (4) | | | (911) |
Change in Market Value | | | 223 | | | 123 | | | 346 |
Foreign Exchange and Other | | | (1) | | | 15 | | | 14 |
Balance, end of period | | | $28,889 | | | $24,473 | | | $53,362 |
| | Year Ended December 31, 2020 | |||||||
| | (in millions) | |||||||
| | Private Markets Strategies | | | Absolute Return Strategies | | | Total | |
Fee-paying AUM | | | | | | | |||
Balance, beginning of period | | | $26,477 | | | $23,556 | | | $50,033 |
Contributions | | | 3,563 | | | 1,625 | | | 5,188 |
Withdrawals | | | — | | | (3,386) | | | (3,386) |
Distributions | | | (2,022) | | | (256) | | | (2,278) |
Change in Market Value | | | (2) | | | 2,721 | | | 2,719 |
Foreign Exchange and Other | | | (177) | | | (130) | | | (307) |
Balance, end of period | | | $27,839 | | | $24,130 | | | $51,969 |
| | Three Months Ended March 31, 2021 (unaudited) | | | Year Ended December 31, 2020 | |
| | (in millions) | ||||
Contracted, not yet Fee-Paying AUM at period end | | | $7,454 | | | $7,057 |
AUM at period end | | | $64,862 | | | $61,943 |
• | Private markets strategies FPAUM increased $1.1 billion, or 4%, to $28.9 billion as of March 31, 2021, primarily due to $1.7 billion of contributions, partially offset by $0.9 billion of distributions. |
• | Absolute return strategies FPAUM increased $0.3 billion, or 1%, to $24.5 billion as of March 31, 2021, primarily due to $0.7 billion of contributions, partially offset by $0.5 billion of withdrawals. |
| | Year Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | Change | | | % Change | |
| | (in thousands) | ||||||||||
Revenues | | | | | | | | | ||||
Management fees | | | $310,745 | | | $324,716 | | | $(13,971) | | | (4)% |
Incentive fees | | | 111,650 | | | 84,165 | | | 27,485 | | | 33% |
Other operating income | | | 7,586 | | | 7,513 | | | 73 | | | 1% |
Total operating revenues | | | 429,981 | | | 416,394 | | | 13,587 | | | 3% |
| | | | | | | | |||||
Expenses | | | | | | | | | ||||
Employee compensation and benefits | | | 388,465 | | | 242,967 | | | 145,498 | | | 60% |
General, administrative and other | | | 84,631 | | | 88,458 | | | (3,827) | | | (4)% |
Total operating expenses | | | 473,096 | | | 331,425 | | | 141,671 | | | 43% |
Operating income (loss) | | | (43,115) | | | 84,969 | | | (128,084) | | | (151)% |
Investment income | | | 10,742 | | | 7,521 | | | 3,221 | | | 43% |
Interest expense | | | (23,446) | | | (25,680) | | | 2,234 | | | (9)% |
Other income (expense) | | | (9,562) | | | (4,494) | | | (5,068) | | | 113% |
Change in fair value of warrant liabilities | | | (13,315) | | | — | | | (13,315) | | | NM |
Net other income (expense) | | | (35,581) | | | (22,653) | | | (12,928) | | | 57% |
Income (loss) before income taxes | | | (78,696) | | | 62,316 | | | (141,012) | | | (226)% |
Income taxes | | | 4,506 | | | 2,318 | | | 2,188 | | | 94% |
Net income (loss) | | | (83,202) | | | 59,998 | | | (143,200) | | | (239)% |
Less: Net income attributable to redeemable noncontrolling interest | | | 14,069 | | | — | | | 14,069 | | | NM |
Less: Net income attributable to noncontrolling interests in subsidiaries | | | 11,617 | | | 13,221 | | | (1,604) | | | (12)% |
Less: Net income (loss) attributable to noncontrolling interests in GCMH | | | (112,937) | | | 46,777 | | | (159,714) | | | (341)% |
Net income attributable to GCM Grosvenor Inc. | | | $4,049 | | | $— | | | $4,049 | | | NM |
| | Year Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | Change | | | % Change | |
| | (in thousands) | ||||||||||
Private markets strategies | | | $149,990 | | | $150,985 | | | $(995) | | | (1)% |
Absolute return strategies | | | 152,349 | | | 167,023 | | | (14,674) | | | (9)% |
Fund expense reimbursement revenue | | | 8,406 | | | 6,708 | | | 1,698 | | | 25% |
Total management fees | | | 310,745 | | | 324,716 | | | (13,971) | | | (4)% |
Incentive fees | | | 111,650 | | | 84,165 | | | 27,485 | | | 33% |
Administrative fees | | | 6,775 | | | 6,684 | | | 91 | | | 1% |
Other | | | 811 | | | 829 | | | (18) | | | (2)% |
Total other operating income | | | 7,586 | | | 7,513 | | | 73 | | | 1% |
Total operating revenues | | | $429,981 | | | $416,394 | | | $13,587 | | | 3% |
| | Year Ended December 31, | ||||||||||
| | 2020 | | | 2019 | | | Change | | | % Change | |
| | (in thousands) | ||||||||||
Cash-based employee compensation and benefits | | | $165,829 | | | $169,862 | | | $(4,033) | | | (2)% |
Partnership interest-based compensation | | | 172,358 | | | 30,233 | | | 142,125 | | | 470% |
Carried interest compensation | | | 34,260 | | | 38,842 | | | (4,582) | | | (12)% |
Cash-based incentive fee related compensation | | | 11,454 | | | — | | | 11,454 | | | NM |
Other | | | 4,564 | | | 4,030 | | | 534 | | | 13% |
Total employee compensation and benefits | | | $388,465 | | | $242,967 | | | $145,498 | | | 60% |
| | Year Ended December 31, | ||||||||||
| | 2019 | | | 2018 | | | Change | | | % Change | |
| | (in thousands) | ||||||||||
Revenues | | | | | | | | | ||||
Management fees | | | $324,716 | | | $315,598 | | | $9,118 | | | 3% |
Incentive fees | | | 84,165 | | | 57,059 | | | 27,106 | | | 48% |
Other operating income | | | 7,513 | | | 5,839 | | | 1,674 | | | 29% |
Total operating revenues | | | 416,394 | | | 378,496 | | | $37,898 | | | 10% |
| | | | | | | | |||||
Expenses | | | | | | | | | ||||
Employee compensation and benefits | | | 242,967 | | | 210,414 | | | 32,553 | | | 15% |
General, administrative and other | | | 88,458 | | | 92,955 | | | (4,497) | | | (5)% |
Total operating expenses | | | 331,425 | | | 303,369 | | | 28,056 | | | 9% |
Operating income | | | 84,969 | | | 75,127 | | | 9,842 | | | 13% |
Investment income | | | 7,521 | | | 16,963 | | | (9,442) | | | (56)% |
Interest expense | | | (25,680) | | | (26,468) | | | 788 | | | (3)% |
Other income (expense) | | | (4,494) | | | (542) | | | (3,952) | | | 729% |
Net other income (expense) | | | (22,653) | | | (10,047) | | | (12,606) | | | 125% |
Income before income taxes | | | 62,316 | | | 65,080 | | | (2,764) | | | (4)% |
Income taxes | | | 2,318 | | | 1,395 | | | 923 | | | 66% |
Net income | | | 59,998 | | | 63,685 | | | (3,687) | | | (6)% |
Less: Net income attributable to noncontrolling interests in subsidiaries | | | 13,221 | | | 24,486 | | | (11,265) | | | (46)% |
Less: Net income attributable to noncontrolling interests in GCMH | | | 46,777 | | | 39,199 | | | 7,578 | | | 19% |
Net income attributable to GCM Grosvenor Inc. | | | $— | | | $— | | | $— | | | NM |
| | Year Ended December 31, | ||||||||||
| | 2019 | | | 2018 | | | Change | | | % Change | |
| | (in thousands) | ||||||||||
Private markets strategies | | | $150,985 | | | $131,508 | | | $19,477 | | | 15% |
Absolute return strategies | | | 167,023 | | | 179,948 | | | (12,925) | | | (7)% |
Fund expense reimbursement revenue | | | 6,708 | | | 4,142 | | | 2,566 | | | 62% |
Total management fees | | | 324,716 | | | 315,598 | | | 9,118 | | | 3% |
Incentive fees | | | 84,165 | | | 57,059 | | | 27,106 | | | 48% |
Administrative fees | | | 6,684 | | | 5,839 | | | 845 | | | 14% |
Other | | | 829 | | | — | | | 829 | | | NM |
Total other operating income | | | 7,513 | | | 5,839 | | | 1,674 | | | 29% |
Total operating revenues | | | $416,394 | | | $378,496 | | | $37,898 | | | 10% |
| | Year Ended December 31, | ||||||||||
| | 2019 | | | 2018 | | | Change | | | % Change | |
| | (in thousands) | ||||||||||
Cash-based employee compensation and benefits | | | $169,862 | | | $157,351 | | | $12,511 | | | 8% |
Partnership interest-based compensation | | | 30,233 | | | 19,495 | | | 10,738 | | | 55% |
Carried interest compensation | | | 38,842 | | | 31,780 | | | 7,062 | | | 22% |
Other non-cash compensation | | | 4,030 | | | 1,788 | | | 2,242 | | | 125% |
Total employee compensation and benefits | | | $242,967 | | | $210,414 | | | $32,553 | | | 15% |
| | Year Ended December 31, 2020 | |||||||
| | (in millions) | |||||||
| | Private Markets Strategies | | | Absolute Return Strategies | | | Total | |
Fee-paying AUM | | | | | | | |||
Balance, beginning of period | | | $26,477 | | | $23,556 | | | $50,033 |
Contributions | | | 3,563 | | | 1,625 | | | 5,188 |
Withdrawals | | | — | | | (3,386) | | | (3,386) |
Distributions | | | (2,022) | | | (256) | | | (2,278) |
Change in Market Value | | | (2) | | | 2,721 | | | 2,719 |
Foreign Exchange and Other | | | (177) | | | (130) | | | (307) |
Balance, end of period | | | $27,839 | | | $24,130 | | | $51,969 |
| | Year Ended December 31, 2019 | |||||||
| | (in millions) | |||||||
| | Private Markets Strategies | | | Absolute Return Strategies | | | Total | |
Fee-paying AUM | | | | | | | |||
Balance, beginning of period | | | $24,900 | | | $23,957 | | | $48,857 |
Contributions | | | 3,542 | | | 1,182 | | | 4,724 |
Withdrawals | | | (8) | | | (2,889) | | | (2,897) |
Distributions | | | (2,095) | | | (165) | | | (2,260) |
Change in Market Value | | | 114 | | | 1,461 | | | 1,575 |
Foreign Exchange and Other | | | 24 | | | 10 | | | 34 |
Balance, end of period | | | $26,477 | | | $23,556 | | | $50,033 |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in millions) | |||||||
Contracted, not yet Fee-Paying AUM at period end | | | $7,057 | | | $5,153 | | | $2,318 |
AUM at period end | | | $61,943 | | | $57,746 | | | $53,795 |
• | Private markets strategies FPAUM increased $1.4 billion, or 5%, to $27.8 billion as of December 31, 2020, primarily due to $3.6 billion of contributions, partially offset by $2.0 billion of distributions. |
• | Absolute return strategies FPAUM increased $0.6 billion, or 2%, to $24.1 billion as of December 31, 2020, primarily due to $1.6 billion and $2.7 billion of contributions and change in market value, respectively, partially offset by $3.4 billion of withdrawals. |
• | Private markets strategies FPAUM increased $1.6 billion, or 6%, to $26.5 billion during the year ended December 31, 2019, primarily due to $3.5 billion of contributions, offset by $2.1 billion of distributions. |
• | Absolute return strategies FPAUM decreased $0.4 billion, or 2%, to $23.6 billion during the year ended December 31, 2019, primarily due to $2.9 billion of withdrawals, offset by $1.2 billion of contributions and $1.5 billion increase related to foreign exchange, market value and other adjustments. |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, unaudited) | ||||
Revenues | | | | | ||
Private markets strategies | | | $40,373 | | | $36,464 |
Absolute return strategies | | | 39,892 | | | 39,263 |
Management fees, net(1) | | | 80,265 | | | 75,727 |
Administrative fees and other operating income | | | 2,380 | | | 1,683 |
Fee-Related Revenue | | | 82,645 | | | 77,410 |
Less: | | | | | ||
Cash-based employee compensation and benefits, net(2) | | | (41,192) | | | (42,022) |
General, administrative and other, net(1) | | | (22,171) | | | (22,619) |
Plus: | | | | | ||
Amortization of intangibles | | | 583 | | | 1,876 |
Non-core items(3) | | | 5,328 | | | 2,916 |
Fee-Related Earnings | | | 25,193 | | | 17,561 |
Incentive fees: | | | | | ||
Performance fees | | | 6,113 | | | 605 |
Carried interest | | | 12,101 | | | 2,628 |
Incentive fee related compensation and NCI: | | | | | ||
Cash-based incentive fee related compensation | | | (1,833) | | | — |
Carried interest compensation, net(4) | | | (7,503) | | | (1,201) |
Carried interest attributable to noncontrolling interest | | | (4,430) | | | (1,333) |
Interest income | | | 7 | | | 296 |
Other (income) expense | | | 51 | | | 118 |
Depreciation | | | 473 | | | 696 |
Adjusted EBITDA | | | 30,172 | | | 19,370 |
Depreciation | | | (473) | | | (696) |
Interest expense | | | (4,491) | | | (5,867) |
Adjusted Pre-tax Income | | | 25,208 | | | 12,807 |
Adjusted income taxes(5) | | | (6,302) | | | (3,202) |
Adjusted Net Income | | | $18,906 | | | $9,605 |
(1) | Excludes fund reimbursement revenue of $2.4 million and $2.0 million and for the three months ended March 31, 2021 and 2020, respectively. |
(2) | Excludes severance expense of $0.6 million and $2.3 million for the three months ended March 31, 2021 and 2020, respectively. |
(3) | Includes corporate transaction related costs of $5.3 million and $3.4 million for the three months ended March 31, 2021 and 2020, respectively. |
(4) | Excludes the impact of non-cash carried interest expense of $0.6 million and $1.0 million for the three months ended March 31, 2021 and 2020, respectively. |
(5) | Represents corporate income taxes at a blended statutory rate of 25.0% applied to adjusted pre-tax income for all periods presented. The 25.0% is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 4.0%. As we were not subject to U.S. federal and state income taxes prior to the Transaction, the blended statutory rate of 25.0% has been applied to all periods presented for comparability purposes. |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, unaudited) | ||||
Net incentive fees attributable to GCM Grosvenor | | | | | ||
Incentive fees: | | | | | ||
Performance fees | | | $6,113 | | | $605 |
Carried interest | | | 12,101 | | | 2,628 |
Less: | | | | | ||
Cash-based incentive fee related compensation | | | (1,833) | | | — |
Cash carried interest compensation | | | (6,860) | | | (2,190) |
Non-cash carried interest compensation | | | (643) | | | 989 |
Carried interest expense attributable to redeemable noncontrolling interest holder | | | (1,905) | | | (865) |
Carried interest expense attributable to other noncontrolling interest holders, net | | | (2,525) | | | (468) |
Net incentive fees attributable to GCM Grosvenor | | | $4,448 | | | $699 |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, unaudited) | ||||
Net fees attributable to GCM Grosvenor | | | | | ||
Total operating revenues | | | $103,219 | | | $82,617 |
Less: | | | | | ||
Fund expense reimbursement revenue | | | (2,360) | | | (1,974) |
Cash-based incentive fee related compensation | | | (1,833) | | | — |
Cash carried interest compensation | | | (6,860) | | | (2,190) |
Non-cash carried interest compensation | | | (643) | | | 989 |
Carried interest expense attributable to redeemable noncontrolling interest holder | | | (1,905) | | | (865) |
Carried interest expense attributable to other noncontrolling interest holders, net | | | (2,525) | | | (468) |
Net fees attributable to GCM Grosvenor | | | $87,093 | | | $78,109 |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, unaudited) | ||||
Adjusted pre-tax income & Adjusted net income | | | | | ||
Net income (loss) attributable to GCM Grosvenor Inc. | | | $2,547 | | | $— |
Plus: | | | | | ||
Net income (loss) attributable to GCMH | | | 703 | | | (14,955) |
Income taxes | | | (663) | | | 643 |
Change in fair value of derivatives | | | (1,934) | | | 8,634 |
Change in fair value of warrants | | | (14,057) | | | — |
Amortization expense | | | 583 | | | 1,876 |
Severance | | | 588 | | | 2,280 |
Transaction expenses(1) | | | 5,300 | | | 3,355 |
Loss on extinguishment of debt | | | 675 | | | 1,032 |
Other | | | 8 | | | — |
Partnership interest-based compensation | | | 4,903 | | | 7,920 |
Equity-based compensation | | | 27,036 | | | — |
Other non-cash compensation | | | 941 | | | 1,065 |
Less: | | | | | ||
Investment income, net of noncontrolling interests | | | (779) | | | (32) |
Non-cash carried interest compensation | | | (643) | | | 989 |
Adjusted pre-tax income | | | 25,208 | | | 12,807 |
Less: | | | | | ||
Adjusted income taxes(2) | | | (6,302) | | | (3,202) |
Adjusted net income | | | $18,906 | | | $9,605 |
| | | | |||
Adjusted EBITDA | | | | | ||
Adjusted net income | | | $18,906 | | | $9,605 |
Plus: | | | | | ||
Adjusted income taxes(2) | | | 6,302 | | | 3,202 |
Depreciation expense | | | 473 | | | 696 |
Interest expense | | | 4,491 | | | 5,867 |
Adjusted EBITDA | | | $30,172 | | | $19,370 |
(1) | Represents 2020 expenses related to the Mosaic transaction and 2021 expenses related to a debt offering, other contemplated corporate transactions, and other public company readiness expenses. |
(2) | Represents corporate income taxes at a blended statutory rate of 25.0% applied to adjusted pre-tax income for all periods presented. The 25.0% is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 4.0%. As we were not subject to U.S. federal and state income taxes prior to the Transaction, the blended statutory rate of 25.0% has been applied to all periods presented for comparability purposes. |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020(1) | |
| | (in thousands, except share and per share amounts; unaudited) | ||||
| | | | |||
Adjusted net income | | | $18,906 | | | $9,605 |
| | | | |||
Weighted-average shares of Class A common stock outstanding - basic | | | 42,084,366 | | | 39,984,515 |
Exercise of private warrants - incremental shares under the treasury stock method | | | 307,858 | | | — |
Exercise of public warrants - incremental shares under the treasury stock method | | | 2,244,583 | | | — |
Exchange of partnership units | | | 144,235,246 | | | 144,235,246 |
Weighted-average shares of Class A common stock outstanding - diluted | | | 188,872,053 | | | 184,219,761 |
Effective dilutive warrants, if antidilutive for GAAP | | | — | | | 897,151 |
Adjusted shares - diluted | | | 188,872,053 | | | 185,116,912 |
| | | | |||
Adjusted net income per share - diluted | | | $0.10 | | | $0.05 |
(1) | As Class A common stock did not exist prior to the Transaction, the computation of Adjusted net income per share assumes the same weighted average shares of Class A common stock outstanding, dilutive warrants, and number of adjusted shares outstanding as of December 31, 2020 for all periods prior to the Transaction. |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, unaudited) | ||||
Adjusted EBITDA | | | $30,172 | | | $19,370 |
Less: | | | | | ||
Incentive fees | | | (18,214) | | | (3,233) |
Depreciation expense | | | (473) | | | (696) |
Other non-operating income | | | (58) | | | (414) |
Plus: | | | | | ||
Incentive fee related compensation | | | 9,336 | | | 1,201 |
Carried interest expense attributable to redeemable noncontrolling interest holder | | | 1,905 | | | 865 |
Carried interest expense attributable to other noncontrolling interest holders, net | | | 2,525 | | | 468 |
Fee-Related Earnings | | | $25,193 | | | $17,561 |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands) | |||||||
Revenues | | | | | | | |||
Private markets strategies | | | $149,990 | | | $150,985 | | | $131,508 |
Absolute return strategies | | | 152,349 | | | 167,023 | | | 179,948 |
Management fees, net(1) | | | 302,339 | | | 318,008 | | | 311,456 |
Administrative fees and other operating income | | | 7,586 | | | 7,513 | | | 5,839 |
Less: | | | | | | | |||
Cash-based employee compensation and benefits, net(2) | | | (158,194) | | | (165,212) | | | (152,568) |
General, administrative and other, net(1) | | | (76,225) | | | (81,749) | | | (88,813) |
Plus: | | | | | | | |||
Amortization of intangibles | | | 7,504 | | | 7,794 | | | 7,813 |
Non-core items(3) | | | 12,059 | | | 1,740 | | | 5,246 |
Adjusted Fee Related Earnings | | | 95,069 | | | 88,094 | | | 88,973 |
Incentive fees: | | | | | | | |||
Performance fees | | | 52,726 | | | 14,413 | | | 3,111 |
Carried interest | | | 58,924 | | | 69,752 | | | 53,948 |
Incentive fee related compensation and NCI: | | | | | | | |||
Cash-based incentive fee related compensation | | | (11,454) | | | — | | | — |
Carried interest compensation, net(4) | | | (34,970) | | | (39,560) | | | (27,912) |
Carried interest attributable to noncontrolling interest | | | (16,089) | | | (11,344) | | | (8,963) |
Interest income | | | 377 | | | 1,064 | | | 889 |
Other (income) expense | | | 147 | | | (142) | | | (88) |
Depreciation | | | 2,314 | | | 2,544 | | | 3,850 |
Adjusted EBITDA | | | 147,044 | | | 124,821 | | | 113,808 |
Depreciation | | | (2,314) | | | (2,544) | | | (3,850) |
Interest expense | | | (23,446) | | | (25,680) | | | (26,468) |
Adjusted Pre-tax Net Income | | | 121,284 | | | 96,597 | | | 83,490 |
Adjusted income taxes(5) | | | (30,321) | | | (24,149) | | | (20,873) |
Adjusted Net Income | | | $90,963 | | | $72,448 | | | $62,617 |
(1) | Excludes fund reimbursement revenue of $8.4 million, $6.7 million and $4.1 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
(2) | Excludes incentive fee related compensation of $50.3 million, $42.9 million, and $40.4 million for the years ended December 31, 2020, 2019 and 2018, respectively, and severance expense of $7.6 million, $4.6 million and $4.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
(3) | Includes transaction related costs of $11.6 million, $0.8 million and $4.6 million for the years ended December 31, 2020, 2019 and 2018, respectively, and other non-core operating expenses. |
(4) | Excludes the impact of non-cash carried interest compensation of $0.7 million, $0.7 million, and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
(5) | Represents corporate income taxes at a blended statutory rate of 25.0% applied to pre-tax adjusted net income for all periods presented. The 25.0% is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 4.0%. As we were not subject to U.S. federal and state income taxes prior to the Transaction, the blended statutory rate of 25.0% has been applied to all periods presented for comparability purposes. |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands) | |||||||
Net incentive fees attributable to GCM Grosvenor | | | | | | | |||
Incentive fees: | | | | | | | |||
Performance fees | | | $52,726 | | | $14,413 | | | $3,111 |
Carried Interest | | | 58,924 | | | 69,752 | | | 53,948 |
Less: | | | | | | | |||
Cash-based incentive compensation | | | (11,454) | | | — | | | — |
Carried interest compensation | | | (34,260) | | | (38,842) | | | (31,780) |
Non-cash carried interest compensation | | | (710) | | | (718) | | | 3,868 |
Carried interest expense attributable to redeemable noncontrolling interest holder | | | (7,751) | | | — | | | — |
Carried interest attributable to other noncontrolling interest holders, net | | | (8,338) | | | (11,344) | | | (8,963) |
Net incentive fees attributable to GCM Grosvenor | | | $49,137 | | | $33,261 | | | $20,184 |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands) | |||||||
Net fees attributable to GCM Grosvenor | | | | | | | |||
Total operating revenues | | | $429,981 | | | $416,394 | | | $378,496 |
Less: | | | | | | | |||
Fund expense reimbursement revenue | | | (8,406) | | | (6,708) | | | (4,142) |
Cash-based incentive compensation | | | (11,454) | | | — | | | — |
Carried interest compensation | | | (34,260) | | | (38,842) | | | (31,780) |
Non-cash carried interest compensation | | | (710) | | | (718) | | | 3,868 |
Carried interest expense attributable to redeemable noncontrolling interest holder | | | (7,751) | | | — | | | — |
Carried interest attributable to other noncontrolling interest holders, net | | | (8,338) | | | (11,344) | | | (8,963) |
Net fees attributable to GCM Grosvenor | | | $359,062 | | | $358,782 | | | $337,479 |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands) | |||||||
Adjusted pre-tax income & Adjusted net income | | | | | | | |||
Net income attributable to GCM Grosvenor Inc. | | | $4,049 | | | $— | | | $— |
Plus: | | | | | | | |||
Net income (loss) attributable to GCMH | | | (112,937) | | | 46,777 | | | 39,199 |
Income taxes | | | 4,506 | | | 2,318 | | | 1,395 |
Change in fair value of derivatives | | | 8,572 | | | 5,417 | | | 1,344 |
Change in fair value of warrants | | | 13,315 | | | — | | | — |
Amortization expense | | | 7,504 | | | 7,794 | | | 7,813 |
Severance | | | 7,636 | | | 4,650 | | | 4,783 |
Transaction expenses(1) | | | 11,603 | | | 770 | | | 4,639 |
Other non-cash compensation | | | 4,944 | | | 4,935 | | | 3,787 |
Loss on extinguishment of debt | | | 1,514 | | | — | | | — |
Partnership interest-based compensation | | | 172,358 | | | 30,233 | | | 19,495 |
Less: | | | | | | | |||
Investment income, net of noncontrolling interests | | | (1,070) | | | (5,579) | | | (2,833) |
Non-cash carried interest compensation | | | (710) | | | (718) | | | 3,868 |
Adjusted pre-tax income | | | 121,284 | | | 96,597 | | | 83,490 |
Less: | | | | | | | |||
Adjusted income taxes(2) | | | (30,321) | | | (24,149) | | | (20,873) |
Adjusted net income | | | $90,963 | | | $72,448 | | | $62,617 |
| | | | | | ||||
Adjusted EBITDA | | | | | | | |||
Adjusted net income | | | $90,963 | | | $72,448 | | | $62,617 |
Plus: | | | | | | | |||
Adjusted income taxes(2) | | | 30,321 | | | 24,149 | | | 20,873 |
Depreciation expense | | | 2,314 | | | 2,544 | | | 3,850 |
Interest expense | | | 23,446 | | | 25,680 | | | 26,468 |
Adjusted EBITDA | | | $147,044 | | | $124,821 | | | $113,808 |
(1) | Represents expenses incurred in 2019 related to the Mosaic Transaction. 2020 expenses relate to the Mosaic Transaction, the public offering Transaction and other non-core public company related expenses. |
(2) | Represents corporate income taxes at a blended statutory rate of 25.0% applied to pre-tax adjusted net income for all periods presented. The 25.0% is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 4.0%. As we were not subject to U.S. federal and state income taxes prior to The Transaction, the blended statutory rate of 25.0% has been applied to all periods presented for comparability purposes. |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands, except share and per share amounts) | |||||||
Adjusted net income | | | $90,963 | | | $72,448 | | | $62,617 |
| | | | | |||||
Weighted-average shares of Class A common stock outstanding - basic | | | 39,984,515 | | | 39,984,515 | | | 39,984,515 |
Exchange of partnership units(1) | | | 144,235,246 | | | 144,235,246 | | | 144,235,246 |
Weighted-average shares of Class A common stock outstanding - diluted | | | 184,219,761 | | | 184,219,761 | | | 184,219,761 |
Effect of dilutive warrants(2) | | | 897,152 | | | 897,152 | | | 897,152 |
Adjusted shares - diluted | | | 185,116,913 | | | 185,116,913 | | | 185,116,913 |
| | | | | |||||
Adjusted net income per share - diluted | | | $0.49 | | | $0.39 | | | $0.34 |
(1) | Assumes the full exchange of partnership units in GCMH for Class A common stock of GCM Grosvenor Inc. pursuant to the exchange agreement. |
(2) | Warrants were determined to be antidilutive for GAAP diluted EPS purposes. |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands) | |||||||
Adjusted EBITDA | | | $147,044 | | | $124,821 | | | $113,808 |
Less: | | | | | | | |||
Incentive fees | | | (111,650) | | | (84,165) | | | (57,059) |
Depreciation expense | | | (2,314) | | | (2,544) | | | (3,850) |
Other non-operating income | | | (524) | | | (922) | | | (801) |
Plus: | | | | | | | |||
Incentive fee related compensation | | | 46,424 | | | 39,560 | | | 27,912 |
Carried interest expense attributable to redeemable noncontrolling interest holder | | | 7,751 | | | — | | | — |
Carried interest attributable to other noncontrolling interest holders, net | | | 8,338 | | | 11,344 | | | 8,963 |
Adjusted FRE | | | $95,069 | | | $88,094 | | | $88,973 |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, unaudited) | ||||
Net cash provided by (used in) operating activities | | | $15,791 | | | $(33,037) |
Net cash provided by (used in) investing activities | | | (3,999) | | | (1,684) |
Net cash provided by (used in) financing activities | | | (53,004) | | | 94,540 |
Effect of exchange rate changes on cash | | | (661) | | | (325) |
Net increase (decrease) in cash and cash equivalents | | | $(41,873) | | | $59,494 |
• | net income (loss) of $19.9 million and $(10.3) million for the three months ended March 31, 2021 and 2020, respectively, adjusted for $8.6 million and $18.6 million of non-cash activities, respectively, as well as changes in working capital; and |
• | proceeds received from investments of $3.9 million and $2.6 million for the three months ended March 31, 2021 and 2020, respectively. |
• | contributions/subscriptions to investments of $(8.2) million and $(6.4) million during the three months ended March 31, 2021 and 2020, respectively; and |
• | withdrawals/redemptions from investments of $2.9 million and $5.6 million during the three months ended March 31, 2021 and 2020, respectively. |
• | capital contributions received from noncontrolling interest holders of $1.1 million and $174.6 million during the three months ended March 31, 2021 and 2020, respectively; |
• | capital distributions paid to partners and member of $(11.7) million and $0.0 million during the three months ended March 31, 2021 and 2020, respectively; |
• | capital distributions paid to noncontrolling interest holders of $(13.3) million and $(5.8) million during the three months ended March 31, 2021 and 2020, respectively; |
• | proceeds from the Revolving Credit Facility of $0.0 million and $20.0 million during the three months ended March 31, 2021 and 2020, respectively; |
• | principal payments on the Revolving Credit Facility of $0.0 million and $(3.0) million during the three months ended March 31, 2021 and 2020, respectively; |
• | principal payments on the Term Loan Facility of $(50.3) million and $(91.2) million during the three months ended March 31, 2021, and 2020, respectively; |
• | proceeds from exercise of warrants of $24.5 million during the three months ended March 31, 2021; |
• | dividends paid of $(2.5) million during the three months ended March 31, 2021. |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
| | (in thousands) | |||||||
Net cash provided by operating activities | | | $68,170 | | | $96,193 | | | $117,029 |
Net cash provided by (used in) investing activities | | | (5,531) | | | 6,130 | | | 7,962 |
Net cash provided by (used in) financing activities | | | 54,757 | | | (90,871) | | | (153,772) |
Effect of exchange rate changes on cash | | | 884 | | | 314 | | | (182) |
Net increase (decrease) in cash and cash equivalents | | | $118,280 | | | $11,766 | | | $(28,963) |
• | net income (loss) of $(83.2) million, $60.0 million and $63.7 million for the years ended December 31, 2020, 2019 and 2018, respectively, adjusted for $203.8 million, $44.8 million and $18.7 million of non-cash activities, respectively, as well as changes in working capital; and |
• | proceeds received from investments of $8.1 million, $10.3 million and $18.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
• | purchases of premises and equipment of $(1.3) million, $(4.0) million and $(0.9) million during the years ended December 31, 2020, 2019 and 2018, respectively; |
• | contributions/subscriptions to investments of $(23.9) million, $(21.5) million and $(23.2) million during the years ended December 31, 2020, 2019 and 2018, respectively; and |
• | withdrawals/redemptions from investments of $19.7 million, $31.6 million and $32.0 million during the years ended December 31, 2020, 2019 and 2018, respectively. |
• | capital contributions received from noncontrolling interest holders of $177.8 million, $4.7 million and $6.4 million during the years ended December 31, 2020, 2019 and 2018, respectively; |
• | capital distributions paid to partners and member of $(153.7) million, $(69.6) million and $(82.2) million during the years ended December 31, 2020, 2019 and 2018, respectively; |
• | capital distributions paid to noncontrolling interest holders of $(39.8) million, $(43.7) million and $(49.2) million during the years ended December 31, 2020, 2019 and 2018, respectively; |
• | proceeds from revolving line of credit of $20.0 million and $25.0 million during the years ended December 31, 2020 and 2019, respectively; |
• | principal payments on the Revolving Credit Facility of $(45.0) million during the year ended December 31, 2020; |
• | principal payments on the Term Loan Facility of $(91.2) million, $(7.3) million and $(27.4) million during the years ended December 31, 2020, 2019 and 2018, respectively; |
• | capital contributions related to the Transaction, net of underwriting and offering related costs, of $179.9 million during the year ended December 31, 2020; and |
• | proceeds from exercise of warrants of $6.7 million during the year ended December 31, 2020. |
| | Contractual Obligations | |||||||||||||
| | Total | | | Remainder of 2021 | | | 2022–2023 | | | 2024–2025 | | | Thereafter | |
| | (in thousands, unaudited) | |||||||||||||
Operating leases | | | $29,610 | | | $6,720 | | | $14,828 | | | $5,842 | | | $2,220 |
Debt obligations(1) | | | 290,000 | | | 2,175 | | | 5,800 | | | 5,800 | | | 276,225 |
Interest on debt obligations(2) | | | 58,901 | | | 6,629 | | | 17,355 | | | 17,025 | | | 17,892 |
Capital commitments to our investments(3) | | | 81,628 | | | 81,628 | | | — | | | — | | | — |
Total | | | $460,139 | | | $97,152 | | | $37,983 | | | $28,667 | | | $296,337 |
(1) | Represents scheduled debt obligation payments under our Term Loan Facility and Revolving Credit Facility. |
(2) | Represents interest to be paid on our debt obligations. The interest payments are calculated using the interest rate of 3.0% on our Term Loan Facility in effect as of March 31, 2021. |
(3) | Represents general partner capital funding commitments to several of the GCM Funds. These amounts are generally due on demand and are therefore presented in the less than one-year category, however, based on historical precedent, are likely to be due over a substantially longer period of time. |
• | a right to 80-90% of our share of the carried interest generated by funds raised prior to December 31, 2019 (the “Mosaic Carry”); and |
• | certain funded general partner interests, which at the time of the Mosaic Transaction had a book value of $58.0 million, and to-be-funded general partner interests, as detailed below. |
| | (dollars in millions, unaudited) | |
Net Purchase Price to Exercise Mosaic Call Right (as of March 31, 2021):(1) | | | $175.5 |
Mosaic LTM Carried Interest (as of March 31, 2021):(2) | | | $8.8 |
Net Asset Value of Capital to be Acquired upon Exercise of Mosaic Call Right (as of March 31, 2021): | | | $87.4 |
Liquidation Value of Carried Interest to be Acquired upon Exercise of Mosaic Call Right (as of March 31, 2021): | | | $150.3 |
Mosaic Carry Dollars at Work(3) (as of March 31, 2021): | | | $422.7 |
(1) | Based on a threshold equal to 130% of amounts contributed to Mosaic by the third-party investor, net of $25.1 million of Mosaic cash. As of March 31, 2021, the purchase price to exercise the Mosaic Call Right based on a 12% pre-tax internal rate of return on amounts contributed to Mosaic by the third-party investor would have been $144.9 million, net of Mosaic cash. Upon any exercise of the Mosaic Call Right or the Mosaic Put Right (as defined below), the actual purchase price will be equal to the greater of the two alternatives. |
(2) | The amount shown represents the redeemable noncontrolling interest reflected in our condensed consolidated financial statements for the twelve-month period ended March 31, 2021. Had the transaction occurred on March 31, 2020 and included all tax carry attributable to the Mosaic interests from such time forward, the redeemable noncontrolling interest amount reflected in our condensed consolidated financial statements for the twelve-month period ended March 31, 2021 would have been $14.7 million. |
(3) | We define “Mosaic Carry Dollars at Work” as aggregate limited partner commitments to the relevant GCM fund in which Mosaic has an interest, multiplied by the percentage of carried interest provided for in the governing documents of the relevant fund, multiplied by Mosaic’s share. |
• | Investment income changes along with the realized and unrealized gains of the underlying investments in our specialized funds and certain customized separate accounts in which we have a general partner commitment. Our general partner investments include unique underlying portfolio investments with no significant concentration in any industry or country outside of the United States. |
• | Our management fees from our absolute return strategies are typically based on the NAV of those funds, and therefore the amount of fees that we may charge will increase or decrease in direct proportion to the effect of changes in the fair value of the fund’s investments. Our specialized funds and customized separate accounts attributable to our private markets strategies are not significantly affected |
• | Incentive fees from our specialized funds and customized separate accounts are not materially affected by changes in the fair value of unrealized investments because they are based on realized gains and subject to achievement of performance criteria rather than on the fair value of the specialized fund’s or customized separate account’s assets prior to realization. We had $8.5 million of deferred incentive fee revenue on our Consolidated Statements of Financial Condition as of December 31, 2020. Minor decreases in underlying fair value would not affect the amount of deferred incentive fee revenue subject to clawback. |
1 | AUM as of December 31, 2020. |
• | Private Equity. We are a recognized industry leader in private equity investing with capabilities spanning investment types, investment strategies and manager relationships. As of December 31, 2020, we managed $22.8 billion of AUM in private equity strategies. |
• | Infrastructure. We have a more than 17 year track record of investing across the infrastructure landscape. Over this time, we have gained deep transaction experience across geographies, sectors and implementation methodologies. As of December 31, 2020, we managed $6.0 billion of AUM in infrastructure strategies. |
• | Real Estate. We manage real estate investments through a flexible investment platform to provide differentiated exposure to opportunistic real estate investments, primarily in North America. As of December 31, 2020, we managed $3.2 billion of AUM in real estate strategies. |
• | Alternative Credit. We are a leader in alternative credit with over 30 years of investing experience and investments covering the liquidity spectrum across structured credit, corporate credit, distressed, direct lending, and real assets. As of December 31, 2020, we managed $11.4 billion of AUM in alternative credit strategies, which overlaps with investments in other strategies. |
• | Absolute Return Strategies. We established our first advisory relationship in absolute return strategies in 1994 and have been building and managing customized absolute return strategies portfolios on behalf of institutional clients since 1996. As of December 31, 2020, we managed $25.2 billion of AUM in our absolute return strategies. |
• | Customized separate accounts. We construct customized portfolios to meet our clients’ specific objectives with regards to asset classes, implementation types, return, risk tolerance, diversification, liquidity and other factors. Generally available for commitments of $100 million or more, customized separate accounts comprised $48.0 billion of our AUM as of December 31, 2020. For many of our largest clients, we also provide value-add ancillary services, including fund administration, portfolio risk management and research access. |
• | Specialized funds. We organize, invest and manage specialized primary, secondary and direct/co-investment and multi-asset class funds across both private markets and absolute return strategies. Since 2015, we have increased our focus on building our offering of specialized funds particularly within private market strategies to leverage our existing investment capabilities and expand our investor footprint. Our product offerings have grown steadily since focusing in this area. Our specialized funds comprised $14.0 billion of our AUM as of December 31, 2020. |
| | Customized Separate Accounts | | | Specialized Funds | |
Characteristics | | | • Typically utilized by larger clients | | | • Utilized by both large and small clients • Risk-return objectives and fund strategy developed by GCM Grosvenor to meet the market’s needs • Funds representing our multi-asset class capabilities |
| • Risk-return objectives and program strategy developed in partnership with the client to meet its needs | | ||||
| | |
| | Customized Separate Accounts | | | Specialized Funds | |
Client Benefits | | | ✔ Access to open architecture platform | | ||
| ✔ Specifically tailored program to client objectives and constraints | | ||||
| ✔ Extension of staff | | ||||
| ✔ Provide value-add ancillary services, including administering capital on behalf of certain of our clients | | | ✔ Turnkey solution ✔ Lower required investment to access | ||
| | | | |||
Advantages to GCM Grosvenor | | | ✔ Embedded with the client, providing relationship stability | | ||
| ✔ Opportunity to grow with the clients | | ||||
| ✔ Opportunity to expand the relationship into new areas | | | ✔ Secular tailwinds ✔ Larger addressable market of investors | ||
| | | | |||
Contract | | | • Contract terms vary, including finite life or evergreen programs | | | • Finite life with 8-15 year terms or evergreen |
| | | | |||
AUM | | | $48bn (77% of total) | | | $14bn (23% of total) |
• | High management fee centricity. For each of the years ended December 31, 2019 and 2020, approximately 89% and 84%, respectively, of the net fees attributable to us came from management fees. |
• | Stable management fee base. As of December 31, 2020, more than 70% of our AUM in private markets strategies had a remaining tenor of seven years or more. Additionally, across our customized separate accounts, capital raised from existing clients was more than 85% of the total capital raised in 2020 and has typically been 50%-80% of total capital historically. |
• | Significant earnings opportunity from incentive fees. Though subject to more variability, including on account of factors out of our control, we believe our incentive fees from both private markets and absolute return strategies have the opportunity to increase significantly in the future due to the amount of assets able to earn incentive fees and recent fundraising success. |
• | Embedded operating leverage. We have made significant investments in our platform infrastructure by building out our investment teams across investment strategies and geographies, which we believe positions us well for continued margin expansion. As of December 31, 2020, we had 170 investment professionals, up from 137 as of December 31, 2017. |
1 | Includes pensions, insurance companies, sovereign wealth funds and family offices. |
• | global knowledge of the alternative landscape; |
• | investment professionals with experience in alternative investing; |
• | infrastructure and portfolio analytics to properly monitor investments; and |
• | compliance infrastructure. |
• | Tailored. Bespoke investment portfolio developed specifically for each client that is aligned with their specific time horizon and funding obligations; |
• | Flexible. The client defines the mandate with the flexibility to evolve it as needs change; |
• | Collaborative. The client determines the level of involvement in investment and implementation decisions; |
• | Economically efficient. Each client benefits from our size and global scale. Clients access investments with favorable structures and also leverage our staff and services; and |
• | Service-oriented. Designated coverage team includes investor relations and portfolio management staff. |
• | In private equity, we have outperformed the S&P 500 PME by approximately 414 bps, 1050 bps and 693 bps, respectively, across primary fund investments, secondaries and direct and co-investments, generating annualized returns of 13.8%, 19.9% and 22.6%, respectively, since their respective dates of inception in 1999, 2014 and 2009, respectively; |
• | In infrastructure, we have outperformed the MSCI World Infrastructure PME by approximately 425 bps, generating annualized returns of 10.8% since inception in 2003; and |
• | In real estate, we have outperformed the FTSE Nareit All REITs PME by approximately 953 bps, generating annualized returns of 21.8% since inception in 2010. |
• | Overall, we have generated gross annualized returns of 7.28% in our absolute return strategies since inception in 1996; and |
• | Across the GCMLP Diversified Multi-Strategy Composite (the “Composite”), we have generated gross annualized returns of 8.24% since 1993. The Composite presents the composite performance of all globally diversified, U.S. dollar-denominated, multi-strategy portfolios managed by us pursuant to materially similar investment mandates. |
• | High management fee centricity. For each of the years ended December 31, 2019 and 2020, approximately 90% and 87% of the net fees attributable to us came from management fees, respectively. |
• | Stable management fee base. As of December 31, 2020, more than 70% of our AUM in private markets strategies had a remaining tenor of seven years or more. Additionally, across our customized separate accounts, capital raised from existing clients was more than 85% of the total capital raised in 2020 and has typically been 50%-80% of total capital historically. |
• | Significant visibility into future growth. As of December 31, 2020, we had $7.1 billion of contracted capital on which we will start earning fees as invested or based on a fixed ramp in schedule. Similarly, we have a highly visible pipeline of identified specialized funds that we expect to raise over the next several years, most of which are successors to existing funds in established specialized fund franchises. These funds include our next Secondaries fund, our next Infrastructure Strategies fund, our next Multi-Asset Class fund, our next Labor Infrastructure fund, and our first diverse manager Advance fund, among others. |
• | Additional earnings power from incentive fees. Though subject to more variability, including on account of factors out of our control, we believe our incentive fees from both private markets and absolute return strategies have the opportunity to increase significantly in the future for several reasons. First, we expect our share of unrealized carried interest to grow significantly from the funds that we have already raised through December 31, 2020, driven by three key factors: 1) growth in overall private markets fundraising from 2015 to December 31, 2020; 2) a higher proportion of the funds raised being in strategies that typically have higher carried interest percentages (direct, secondary, co-investments); and 3) the firm’s increased share of retained carried interest. Additionally, our firm AUM eligible for annual performance fees has increased 41% since December 31, 2017 to $14.4 billion as of December 31, 2020, increasing the annual performance fee we would realize today on an equivalent level of historical performance. |
• | Embedded operating leverage. Over the last several years, we have made significant investments in our platform infrastructure by building out our investment teams across investment strategies and geographies. We believe this positions us well for continued margin expansion as we utilize the additional investment capacity of such existing teams to manage larger amounts of FPAUM, particularly in the specialized funds franchises where our teams are raising the second or third scaled funds in those strategies. As of December 31, 2020, we had 170 investment professionals, up from 137 as of December 31, 2017. |
• | Evaluate risk: Determine whether an investment meets our operational due diligence standards |
• | Mitigate risk: Seek to avoid losses and reputational risks arising from operational issues |
• | Structure investments: Evaluate the legal and governance structure and terms of investment |
• | Enhance terms: Negotiate improved terms |
• | market conditions and investment opportunities during previous periods may have been significantly more favorable for generating positive performance than those we may experience in the future; |
• | the performance of our investment programs is generally calculated on the basis of net asset value of the funds’ investments, including unrealized gains, which may never be realized; |
• | our historical returns derive largely from the performance of our earlier investment programs, whereas future returns will depend increasingly on the performance of our newer investment programs or investment programs not yet formed; |
• | our newly established investment programs may generate lower returns during the period that they take to deploy their capital; |
• | in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in alternative investment strategies and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future; and |
• | the performance of particular investment programs also will be affected by risks of the industries and businesses in which they invest. |
• | “Commitments” are the sum of total commitments and investments made by our portfolios to underlying investments of a particular strategy; |
• | “Contributions” are the sum of total amount of capital invested by our portfolios in underlying investments of a particular strategy, plus capitalized expenses paid in respect of such investments; |
• | “Current Value” and “Net Asset Value” of a strategy represent the latest aggregate fair value of the underlying investments in such strategy made by our portfolios, which is typically reported by the underlying investment managers of such investments. No assurance can be given as to the value that may ultimately be realized by any investment; |
• | “Distributions” are the sum of recallable and non-recallable returns of capital, interest, gains and dividend proceeds to our portfolios received from underlying investments. Distributions may include in-kind distributions at the value reported by the managers, if applicable; |
• | “Investment Net IRR” represents the net internal rate of return of our portfolios’ investments in the relevant strategy and reflects the total combined IRR for underlying investments that have been invested in by our portfolios in the relevant strategy. It is calculated using all the outflows to and inflows from the underlying investments, including cash flows for expenses and fees paid by our portfolios to those underlying investments. Performance information for underlying investments with less than 365 days of cash flows has not been annualized. Performance information for underlying investments and underlying investment sub-totals with more than 365 days of cash flows has been calculated using an annualized IRR. Investment Net IRR is not reduced for our management fees, allocable expenses and carried interest, but does reflect such reductions, if any, at the underlying investment level; |
• | “Investment Net TVPI” represents the total value paid-in multiple of our portfolios’ investments in the relevant strategy, and is calculated as adjusted value (i.e., Distributions + Net Asset Value) over total Contributions (i.e., investments, expenses, management fees, organization costs). Investment Net TVPI is not reduced for our management fees, allocable expenses and carried interest, but does reflect such reductions, if any, at the underlying investment level; |
• | “PMEs” are the S&P 500, the MSCI World Infrastructure, and the FTSE Nareit All REITS indices we present for comparison calculated on a Public Market Equivalent basis. We believe these indices are commonly used by private markets investors to evaluate performance. We use the Long Nickels PME calculation methodology, which allows private markets investment performance to be evaluated against a public index and assumes that capital is being invested in, or withdrawn from, the index on the days the capital was called and distributed from the underlying private market investments. The S&P 500 Index is a total return capitalization-weighted index that measures the performance of 500 U.S. large cap stocks. The MSCI World Index is a free float-adjusted market capitalization-weighted index of over 1,600 world stocks that is designed to measure the equity market performance of developed markets. The FTSE Nareit All REITs Index contains all publicly traded US real estate investment trusts (REITs); |
• | The “Composite” represents discretionary, globally diversified, multi-strategy, multi-manager investment portfolios (“Composite Funds”) whose capital is allocated to underlying investment managers that utilize a broad range of alternative investment strategies, including credit, relative value, multi-strategy, event driven, equities, macro, commodities and portfolio hedges. All Composite Funds included in the Composite are denominated in U.S. dollars. In general, the Composite Funds seek to achieve superior long-term, risk-adjusted rates of return with low volatility and low levels of correlation to the broad equity and fixed income markets. |
Strategy | | | Commitments | | | Contributions | | | Distributions | | | Current Value | | | Investment Net TVPI | | | Investment Net IRR | | | PME | | | PME Index |
Private Equity | | | | | | | | | | | | | | | | | ||||||||
Primary fund Investments(1) | | | $10,604.5 | | | $11,631.1 | | | $18,365.0 | | | $2,159.9 | | | 1.76 x | | | 13.8% | | | 9.6% | | | S&P 500 |
Secondary Investments(2) | | | 314.0 | | | 184.4 | | | 227.8 | | | 61.8 | | | 1.57 x | | | 19.9% | | | 9.4% | | | S&P 500 |
Co-Investments/Direct Investments(3) | | | 2,287.4 | | | 2,194.5 | | | 3,830.7 | | | 298.7 | | | 1.88 x | | | 22.6% | | | 15.6% | | | S&P 500 |
Infrastructure(4) | | | 2,181.7 | | | 2,013.3 | | | 2,656.9 | | | 391.8 | | | 1.51 x | | | 10.8% | | | 6.5% | | | MSCI World Infrastructure |
Real Estate(5) | | | 262.0 | | | 290.9 | | | 472.4 | | | 12.6 | | | 1.67 x | | | 21.8% | | | 12.3% | | | FNERTR Index |
| | | | | | | | | | | | | | | | |||||||||
ESG and Impact Strategies | | | | | | | | | | | | | | | | | ||||||||
Diverse Managers(6) | | | 1,132.3 | | | 1,236.3 | | | 1,961.3 | | | 301.8 | | | 1.83 x | | | 24.0% | | | 13.8% | | | S&P 500 |
Labor Impact Investments | | | $— | | | $— | | | $— | | | $— | | | n/a | | | n/a | | | n/a | | | MSCI World Infrastructure |
Strategy | | | Commitments | | | Contributions | | | Distributions | | | Current Value | | | Investment Net TVPI | | | Investment Net IRR | | | PME | | | PME Index |
Private Equity | | | | | | | | | | | | | | | | | ||||||||
Primary fund investments(1) | | | $20,402.9 | | | $18,466.4 | | | $21,420.2 | | | $7,538.5 | | | 1.57 x | | | 12.1% | | | 10.4% | | | S&P 500 |
Secondary Investments(2) | | | 1,165.0 | | | 846.8 | | | 376.3 | | | 659.1 | | | 1.22 x | | | 11.7% | | | 11.3% | | | S&P 500 |
Co-Investments/Direct Investments(3) | | | 5,043.2 | | | 4,786.8 | | | 3,994.1 | | | 3,062.6 | | | 1.47 x | | | 16.9% | | | 14.3% | | | S&P 500 |
Infrastructure(4) | | | 5,711.0 | | | 5,140.1 | | | 3,438.8 | | | 3,417.4 | | | 1.33 x | | | 9.2% | | | 5.6% | | | MSCI World Infrastructure |
Real Estate(5) | | | 1,890.5 | | | 1,398.6 | | | 840.9 | | | 834.6 | | | 1.20 x | | | 10.7% | | | 5.6% | | | FNERTR Index |
Multi-Asset Class Programs | | | 1,343.0 | | | 1,310.0 | | | 494.2 | | | 1,135.2 | | | 1.24 x | | | 20.1% | | | n/a | | | n/a |
ESG and Impact Strategies | | | | | | | | | | | | | | | | | ||||||||
Diverse Managers(6) | | | 5,926.9 | | | 4,572.9 | | | 2,820.4 | | | 3,743.0 | | | 1.44 x | | | 16.7% | | | 13.3% | | | S&P 500 |
Labor Impact Investments | | | $214.8 | | | $157.4 | | | $— | | | $157.4 | | | 1.00 x | | | 0.0% | | | -9.1% | | | MSCI World Infrastructure |
(1) | Reflects primary fund investments since 2000. Excludes certain private markets credit fund investments outside of private equity programs. |
(2) | Reflects secondaries investments since 2014. In September 2014, we established a dedicated private equity secondaries vertical. |
(3) | Reflects co-investments/direct investments since 2009. In December 2008, we established a dedicated Private Equity Co-Investment Sub-Committee and adopted a more targeted, active co-investment strategy. |
(4) | Reflects infrastructure investments since 2003. Infrastructure investments exclude labor impact investments. |
(5) | Reflects real estate investments since 2010. In 2010, we established a dedicated Real Estate team and adopted a more targeted, active real estate strategy. |
(6) | Since 2007. |
| | Assets Under Management as of December 31, 2020 ($Bn) | | | Year to Date Returns Ending December 31, 2020 | | | Annualized Returns Since Inception Through December 31, 2020(1) | |||||||
| | Gross | | | Net | | | Gross | | | Net | ||||
Absolute Return Strategies (Overall) | | | $25.2 | | | 13.67% | | | 12.81% | | | 7.28% | | | 6.16% |
GCMLP Diversified Multi-Strategy Composite | | | $11.8 | | | 15.64% | | | 14.74% | | | 8.24% | | | 6.86% |
(1) | Absolute Return Strategies (Overall) is since 1996. GCMLP Diversified Multi-Strategy Composite is since 1993. |
• | global access to private markets investment opportunities through our size, scale, reputation and strong relationships with fund managers; |
• | brand recognition and reputation within the investing community; |
• | performance of investment strategies; |
• | quality of service and duration of client relationships; |
• | data and analytics capabilities; |
• | ability to customize product offerings to client specifications; |
• | transparent organizational structure; |
• | ability to provide cost effective and comprehensive range of services and products; and |
• | clients’ perceptions of our independence and the alignment of our interests with theirs created through our investment in our own products. |
Name | | | Age | | | Position(s) |
Michael Sacks | | | 58 | | | Chairman of the Board and Chief Executive Officer |
Jonathan Levin | | | 39 | | | President and Director |
Pamela Bentley | | | 49 | | | Chief Financial Officer |
Frederick Pollock | | | 41 | | | Chief Investment Officer |
Francis Idehen | | | 42 | | | Chief Operating Officer |
Sandra Hurse | | | 55 | | | Chief Human Resources Officer |
Angela Blanton | | | 50 | | | Director |
Francesca Cornelli | | | 58 | | | Director |
Stephen Malkin | | | 59 | | | Director |
Blythe Masters | | | 52 | | | Director |
Samuel C. Scott III | | | 76 | | | Lead Independent Director |
• | that a majority of our board of directors consist of directors who qualify as “independent” as defined under Nasdaq rules; |
• | that we have a nominating and corporate governance committee and, if we have such a committee, that it is composed entirely of independent directors; and |
• | that we have a compensation committee and, if we have such a committee, that it is composed entirely of independent directors. |
• | appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; |
• | discussing with our independent registered public accounting firm their independence from management; |
• | reviewing with our independent registered public accounting firm the scope and results of their audit; |
• | approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
• | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; |
• | reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; and |
• | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters. |
• | Michael J. Sacks, Chief Executive Officer and Chairman; |
• | Jonathan R. Levin, President; |
• | Sandra Hurse, Managing Director, Chief Human Resources Officer; |
• | Francis Idehen, Managing Director, Chief Operating Officer; and |
• | Frederick Pollock, Managing Director, Chief Investment Officer. |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($) | | | All Other Compensation ($) | | | Total ($) |
Michael J. Sacks Chief Executive Officer and Chairman | | | 2020 | | | 3,700,000 | | | — | | | 282,540(1) | | | 3,982,540 |
| 2019 | | | 3,585,000 | | | — | | | 2,776,545 | | | 6,361,545 | ||
Jonathan R. Levin President | | | 2020 | | | 500,000 | | | 861,957(2) | | | 25,097,954(3) | | | 26,459,911 |
| 2019 | | | 500,000 | | | 1,600,000 | | | 7,183,700 | | | 9,283,700 | ||
Sandra Hurse Managing Director, Chief Human Resources Officer | | | 2020 | | | 500,000 | | | 1,702,147(4) | | | 757,511(5) | | | 2,959,658 |
| 2019 | | | 500,000 | | | 860,000 | | | 47,081 | | | 1,407,081 | ||
Francis Idehen Managing Director, Chief Operating Officer | | | 2020 | | | 500,000 | | | 2,393,577(6) | | | 1,105,266(7) | | | 3,998,843 |
| 2019 | | | 500,000 | | | 1,283,333 | | | 99,695 | | | 1,883,028 | ||
Frederick Pollock Managing Director, Chief Investment Officer | | | 2020 | | | 500,000 | | | 1,687,500(8) | | | 11,650,523(9) | | | 13,838,023 |
| 2019 | | | 500,000 | | | 1,533,333 | | | 2,718,810 | | | 4,752,143 |
(1) | Amount represents $282,540 reflecting the aggregate incremental cost to the company of providing the executive with access to non-commercial air travel for personal purposes. In 2019, the total amount included the cost for season tickets to events at certain local stadiums and arenas that were sometimes made available to our employees, including our named executive officers, for personal use. |
(2) | Amount represents (i) $729,167 as an annual bonus for 2020, the amount of which is determined in the sole discretion of GCMLP, (ii) $50,000 as the portion of a $150,000 award granted to Mr. Levin in 2017 under the GCM Grosvenor 2017 Asset Pool Award Plan that vested in 2020, and $50,000 as the portion of a $150,000 award granted to Mr. Levin in 2018 under the GCM Grosvenor 2018 Asset Pool Award Plan, that vested in 2020, both of which are described in more detail below and (iii) $32,790 as the portion of a $150,000 award (and associated earnings calculated through December 31, 2019, with respect to such award) granted to Mr. Levin in 2019 under the 2019 Deferred Compensation Plan that vested in 2020, described in more detail below. |
(3) | Amount includes (i) company 401(k) contributions of $4,875, (ii) $294,649 reflecting the aggregate incremental cost to the company of providing the executive with access to non-commercial air travel for personal purposes, (iii) $17,949 in long-term disability insurance premiums in 2020, as described in more detail below, (iv) $7,529 as a tax gross-up payment to make the executive whole for income taxes recognized on the company long-term disability insurance premiums, as described in more detail below and (v) $1,602,952 in distributions received in 2020 under our carried interest arrangements, which are described in more detail below. Mr. Levin holds a membership interest in Holdings, which entitles him to a fixed portion (a “minimum allocable share”) of all profits distributed by Holdings to its members. In 2020, Mr. Levin’s “target amount” (described in more detail below) increased by $16,250,000, which is included in this column. In 2020, Mr. Levin received $6,920,000 of discretionary cash distributions of profits received in respect of his membership interest in Holdings, which figure is also reflected in this column. In 2019, the total amount included the cost for season tickets to events at certain local stadiums and arenas that were sometimes made available to our employees, including our named executive officers, for personal use. |
(4) | Amount represents (i) $1,508,427 as the annual bonus for 2020, the amount of which is determined in the sole discretion of GCMLP, but which in 2020 could not be less than $300,000 under Ms. Hurse’s employment agreement, (ii) $150,000 as an installment of a sign-on bonus, described more fully below and (iii) $43,720 as the portion of a $200,000 award (and associated earnings calculated through December 31, 2019, with respect to such award) granted to Ms. Hurse in 2019 under the 2019 Deferred Compensation Plan that vested in 2020, described in more detail below. |
(5) | Amount represents (i) company 401(k) contributions of $5,581 and (ii) $751,930 of cash distributions of profits received in 2020 in respect of Ms. Hurse’s membership interest in Holdings and Management LLC. In 2019, the total amount included the cost for season tickets to events at certain local stadiums and arenas that were sometimes made available to our employees, including our named executive officers, for personal use. |
(6) | Amount represents (i) $1,988,927 as an annual bonus for 2020, the amount of which is determined in the sole discretion of GCMLP, (ii) $300,000 as an installment of a sign-on bonus, described more fully below, (iii) $50,000 as the portion of a $150,000 award granted to Mr. Idehen in 2018 under the GCM Grosvenor 2018 Asset Pool Award Plan, that vested in 2020, described in more detail below and (iv) $54,650 as the portion of a $250,000 award (and associated earnings calculated through December 31, 2019, with respect to such award) granted to Mr. Idehen in 2019 under the 2019 Deferred Compensation Plan that vested in 2020, described in more detail below. |
(7) | Amount represents (i) company 401(k) contributions of $4,875, (ii) $58,061 reflecting the aggregate incremental cost to the company of providing the executive with access to non-commercial air travel for personal purposes and (iii) $1,042,330 of discretionary cash distributions of profits received in 2020 respect of Mr. Idehen’s membership interests in Holdings and Management LLC. In 2019, the total amount included the cost for season tickets to events at certain local stadiums and arenas that were sometimes made available to our employees, including our named executive officers, for personal use. |
(8) | Amount represents (i) $1,654,167 as an annual bonus for 2020, the amount of which is determined in the sole discretion of GCMLP and (ii) $33,333 as the portion of a $100,000 award granted to Mr. Pollock in 2017 under the GCM Grosvenor 2017 Asset Pool Award Plan, that vested in 2020, described in more detail below. |
(9) | Amount includes (i) company 401(k) contributions of $4,875, (ii) $62,898 reflecting the aggregate incremental cost to the company of providing the executive with access to non-commercial air travel for personal purposes and (iii) $982,750 in cash bonus earned in 2020 calculated by reference to our incentive compensation earned from GCM Grosvenor Special Opportunities Fund, L.P., which is described in more detail below. Mr. Pollock holds a membership interest in Holdings, which entitles him to a fixed portion (a “minimum allocable share”) of all profits distributed by Holdings to its members. In 2020, Mr. Pollock’s target amount (described in more detail below) increased by $10,000,000, which is included in this column. In addition to the fixed portion of his profits distribution from Holdings, for 2020 Mr. Pollock received $600,000 of discretionary cash distributions of profits received in respect of Mr. Pollock’s membership interests in Holdings, which figure is also reflected in this column. In 2019, the total amount included the cost for season tickets to events at certain local stadiums and arenas that were sometimes made available to our employees, including our named executive officers, for personal use. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders. |
• | each person who is known to be the beneficial owner of more than 5% of our voting shares; |
• | each of our executive officers and directors; and |
• | all of our executive officers and directors as a group. |
Name and Address of Beneficial Owner(1) | | | Class A Common Stock | | | Class C Common Stock | | | Combined Voting Power (%)(2) | ||||||
| Number | | | % | | | Number | | | % | | ||||
Five Percent Holders: | | | | | | | | | | | |||||
The Vanguard Group(3) | | | 11,723,019 | | | 27.5% | | | — | | | — | | | 6.2% |
CF Investors(4) | | | 8,251,535 | | | 19.4% | | | — | | | — | | | 4.4% |
Adage Capital Partners, LP(5) | | | 3,500,000 | | | 8.2% | | | — | | | — | | | 1.9% |
Alyeska Investment Group(6) | | | 3,000,000 | | | 7.0% | | | — | | | — | | | 1.6% |
Columbia Acorn Fund(7) | | | 2,724,000 | | | 6.4% | | | — | | | — | | | 1.5% |
M. Klein Associates, Inc.(8) | | | 2,067,690 | | | 4.9% | | | — | | | — | | | 1.1% |
Directors and Executive Officers: | | | | | | | | | | | |||||
Michael Sacks(9) | | | 145,135,246 | | | 77.3% | | | 144,235,246 | | | 100% | | | 75.0% |
Jonathan Levin(10) | | | — | | | — | | | — | | | — | | | — |
Frederick Pollock(11) | | | — | | | — | | | — | | | — | | | — |
Pamela Bentley(12) | | | — | | | — | | | — | | | — | | | — |
Francis Idehen(13) | | | — | | | — | | | — | | | — | | | — |
Sandra Hurse(14) | | | — | | | — | | | — | | | — | | | — |
Angela Blanton | | | — | | | — | | | — | | | — | | | — |
Francesca Cornelli | | | — | | | — | | | — | | | — | | | — |
Stephen Malkin | | | — | | | — | | | — | | | — | | | — |
Blythe Masters | | | — | | | — | | | — | | | — | | | — |
Samuel C. Scott III | | | — | | | — | | | — | | | — | | | — |
All directors and executive officers, as a group (11 individuals) | | | 145,135,246 | | | 77.3% | | | 144,235,246 | | | 100% | | | 75.0% |
(1) | Unless otherwise noted, the business address of each of those listed in the table above is c/o GCM Grosvenor, 900 North Michigan Avenue, Suite 1100, Chicago, IL 60611. |
(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. |
(3) | Pursuant to a Schedule 13G filed with the SEC on February 10, 2021 by The Vanguard Group, The Vanguard Group reported sole dispositive power over 11,723,019 shares of Class A common stock and shared voting power over 913 shares of Class A common stock. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
(4) | Includes (i) 3,500,000 shares of Class A common stock held by the CF Investor (together with the CF Sponsor, the “CF Investors”), (ii) 2,951,535 shares of Class A common stock held by the CF Sponsor, (iii) 1,500,000 shares of Class A common stock underlying warrants held by the CF Investor and (iv) 300,000 shares of Class A common stock underlying warrants held by the CF Sponsor. Cantor Fitzgerald, L.P. (“Cantor”) is the sole member of each of the CF Investors. CF Group Management, Inc. (“CFGM”) is the managing general partner of Cantor. Howard Lutnick is Chairman and Chief Executive of CFGM and trustee of CFGM’s sole stockholder. As such, each of Cantor, CFGM and Mr. Lutnick may be deemed to have beneficial ownership of the securities directly held by the CF Investors. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Amounts include a total of 1,800,000 shares of Class A common stock that may be acquired upon exercise of warrants exercisable within 60 days. The business address for the entities and individual discussed in this footnote is 110 East 59th Street, New York NY 10022. |
(5) | Includes 3,500,000 shares of Class A common stock held by this entity. The address of Adage Capital Partners is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116. |
(6) | Includes (i) 24,000 shares of shares of Class A common stock held by Alyeska Master Fund 3, L.P., and (ii) 2,976,000 shares of Class A common stock of Alyeska Master Fund, L.P. Alyeska Investment Group, L.P., the investment manager of Alyeska Master Fund, L.P. and Alyeska Master Fund 3, L.P. (the “Alyeska Investors”), has voting and investment control of the shares held by the Alyeska Investors. Anand Parekh is the Chief Executive Officer of Alyeska Investment Group, L.P. and may be deemed to be the beneficial owner of such shares. Mr. Parekh, however, disclaims any beneficial ownership of the shares held by the Alyeska Investors. The address of the entities discussed in this footnote and Mr. Parekh is 77 W. Wacker, Suite 700, Chicago, Illinois 60601. |
(7) | Pursuant to a Schedule 13G/A filed with the SEC on February 12, 2021 by Columbia Acorn Fund, Columbia Acorn Fund reported shared voting power and shared dispositive power over 2,724,000 shares of Class A common stock. Columbia Management Investment Advisers, LLC (“CMIA”) and Columbia Wanger Asset Management, LLC (“CWAM”) are the investment advisers to Columbia Acorn Fund. Ameriprise Financial, Inc. (“AFI”) is the parent company of CMIA and CWAM. Each of CMIA, CWAM and AFI may be deemed to have beneficial ownership of the securities directly held by Columbia Acorn Fund. Each such entity disclaims any beneficial ownership of the securities directly held by Columbia Acorn Fund. The business address for AFI is 145 Ameriprise Financial Center, Minneapolis, MN 55474. The business address of CMIA is 225 Franklin St., Boston, MA 02110. The business address for each of CWAM and Columbia Acorn Fund is 71 S Wacker Drive, Suite 2500, Chicago, IL 60606. |
(8) | Pursuant to a Schedule 13G/A filed with the SEC on February 12, 2021 by M. Klein Associates, M. Klein Associates reported shared voting power and shared dispositive power over 2,067,690 shares of Class A common stock. Michael Klein is the sole stockholder of M. Klein Associates, Inc. The shares beneficially owned by M. Klein Associates, Inc. may also be deemed to be beneficially owned by Mr. Klein. The address of each of the foregoing is 640 Fifth Avenue, 12th Floor, New York, New York 10019. |
(9) | Pursuant to a Schedule 13G filed with the SEC on February 11, 2021 by Michael Sacks, Grosvenor Holdings, L.L.C, Grosvenor Holdings II, L.L.C. and GCM Grosvenor Management, LLC, Mr. Sacks reported shared voting power and shared dispositive power over 145,135,246 shares of Class A common stock, Grosvenor Holdings, L.L.C. reported shared voting power and shared dispositive power over 134,858,026 shares of Class A common stock, Grosvenor Holdings II, L.L.C. reported shared voting power and shared dispositive power over 3,226,977 shares of Class A common stock, and GCM Grosvenor Management, LLC reported shared voting power and shared dispositive power over 7,050,243 shares of Class A common stock. Includes 3,226,977 common units of Grosvenor Capital Management Holdings, LLLP (“common units”) held by Grosvenor Holdings II, L.L.C., 7,050,243 common units held by GCM Grosvenor Management, LLC, and 133,958,026 common units and 900,000 shares of Class A common stock issuable upon the exercise of warrants held by Grosvenor Holdings, L.L.C. Grosvenor Holdings, L.L.C, Grosvenor Holdings II, L.L.C., and GCM Grosvenor Management, LLC have executed a pledge agreement with the lenders of the Senior Loan, pursuant to which Grosvenor Holdings, L.L.C. has pledged 133,958,026 common units, Grosvenor Holdings II, L.L.C. has pledged 3,226,977 common units, and GCM Grosvenor Management, LLC has pledged 7,050,243 common units to secure the obligations under the Senior Loan as collateral against the repayment of the senior secured notes. The Pledge Agreement will remain in effect until such time as all obligations relating to the Senior Loans have been fulfilled. Mr. Sacks is the ultimate managing member of each of Grosvenor Holdings, L.L.C., Grosvenor Holdings II, L.L.C. and GCM Grosvenor Management LLC and as a result may be deemed to share beneficial ownership of the securities held by the reporting persons. |
(10) | Does not include 156,666.67 restricted stock units that vested March 1, 2021, which will be delivered at a later date pursuant to the terms of Mr. Levin’s Restricted Stock Unit Grant Notice (as defined in our GCM Grosvenor Inc. 2020 Incentive Award Plan). |
(11) | Does not include 250,000 restricted stock units that vested March 1, 2021, which will be delivered at a later date pursuant to the terms of Mr. Pollock’s Restricted Stock Unit Grant Notice (as defined in our GCM Grosvenor Inc. 2020 Incentive Award Plan). |
(12) | Does not include 86,666.67 restricted stock units that vested March 1, 2021, which will be delivered at a later date pursuant to the terms of Ms. Bentley’s Restricted Stock Unit Grant Notice (as defined in our GCM Grosvenor Inc. 2020 Incentive Award Plan). |
(13) | Does not include 33,333.33 restricted stock units that vested March 1, 2021, which will be delivered at a later date pursuant to the terms of Mr. Idehen’s Restricted Stock Unit Grant Notice (as defined in our GCM Grosvenor Inc. 2020 Incentive Award Plan). |
(14) | Does not include 33,333.33 restricted stock units that vested March 1, 2021, which will be delivered at a later date pursuant to the terms of Ms. Hurse’s Restricted Stock Unit Grant Notice (as defined in our GCM Grosvenor Inc. 2020 Incentive Award Plan). |
Name of Selling Shareholder | | | Before the Offering | | | Number of Shares of Class A Common Stock Being Offered | | | Number of Warrants Being Offered | | | After the Offering | |||||||||
| Number of Shares of Class A Common Stock | | | Number of Warrants | | | Number of Shares of Class A Common Stock | | | Percentage of Outstanding Shares of Class A Common Stock | | | Number of Warrants | ||||||||
GCMH Equityholders(1) | | | 144,235,246 | | | 900,000 | | | 144,235,246 | | | 900,000 | | | — | | | — | | | — |
CF Investors(2) | | | 8,251,535 | | | 1,800,000 | | | 8,251,535 | | | 1,800,000 | | | — | | | — | | | — |
Adage Capital Partners, L.P.(3) | | | 5,946,298 | | | — | | | 3,500,000 | | | — | | | 2,446,298 | | | 6.1% | | | — |
Alyeska Investment Group(4) | | | 3,523,436 | | | — | | | 3,000,000 | | | — | | | 523,436 | | | 1.3% | | | — |
CVI Investments, Inc.(5) | | | 750,000 | | | — | | | 750,000 | | | — | | | — | | | — | | | — |
DSAM Partners(6) | | | 1,000,000 | | | — | | | 1,000,000 | | | — | | | — | | | — | | | — |
Healthcare of Ontario Pension Plan Trust Fund(7) | | | 1,000,000 | | | 750,000 | | | 1,000,000 | | | — | | | — | | | — | | | 750,000 |
Integrated Core Strategies (US) LLC(8) | | | 900,000 | | | 428,760 | | | 900,000 | | | — | | | — | | | — | | | 428,760 |
Kepos Alpha Master Fund L.P.(9) | | | 500,000 | | | — | | | 500,000 | | | — | | | — | | | — | | | — |
Linden Capital L.P.(10) | | | 400,000 | | | 1,198,932 | | | 400,000 | | | — | | | — | | | — | | | 1,198,932 |
M. Klein Associates, Inc.(11) | | | 2,067,690 | | | — | | | 1,000,000 | | | — | | | 1,067,690 | | | 2.7% | | | — |
Magnetar Financial(12) | | | 1,000,000 | | | 291,100 | | | 1,000,000 | | | — | | | — | | | — | | | 291,100 |
MFS Investment Management(13) | | | 2,004,387 | | | — | | | 2,000,000 | | | — | | | 4,387 | | | * | | | — |
MMCAP International Inc. SPC(14) | | | 750,000 | | | — | | | 750,000 | | | — | | | — | | | — | | | — |
Monashee Investment Management(15) | | | 500,000 | | | — | | | 500,000 | | | — | | | — | | | — | | | — |
Moore Global Investments, LLC(16) | | | 2,000,000 | | | — | | | 2,000,000 | | | — | | | — | | | — | | | — |
OHA Partner Global Co-Investment III, LLP(17) | | | 1,283,844 | | | — | | | 500,000 | | | — | | | 783,844 | | | 2.0% | | | — |
Tech Opportunities LLC(18) | | | 800,000 | | | — | | | 800,000 | | | — | | | — | | | — | | | — |
Westchester Capital Management, LLC(19) | | | 400,000 | | | 488,763 | | | 400,000 | | | — | | | — | | | — | | | 488,763 |
* | Less than 1 percent. |
(1) | Mr. Sacks, the chairman of our board of directors and our chief executive officer, is the ultimate managing member of each of 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. Shares of Class A common stock held and being offered includes (i) 144,235,246 shares of Class A common stock that may be received pursuant to a direct exchange or redemption of Grosvenor common units and (ii) 900,000 shares of Class A common stock underlying warrants. The address for Mr. Sacks is c/o GCM Grosvenor, 900 North Michigan Avenue, Suite 1100, Chicago, Illinois 60611. |
(2) | Includes (i) 3,500,000 shares of Class A common stock held by the CF Investor, (ii) 2,951,535 shares of Class A common stock held by the CF Sponsor, (iii) 1,500,000 shares of Class A common stock underlying warrants held by the CF Investor and (ii) 300,000 shares of Class A common stock underlying warrants held by the CF Sponsor. Cantor is the sole member of each of the CF Investors. CFGM is the managing general partner of Cantor. Howard Lutnick is Chairman and Chief Executive of CFGM and trustee of CFGM’s sole stockholder. As such, each of Cantor, CFGM and Mr. Lutnick may be deemed to have beneficial ownership of the securities directly held by the CF Investors. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The business address for the entities and individual discussed in this footnote is 110 East 59th Street, New York NY 10022. |
(3) | Of the 5,946,298 shares of Class A common stock held by this entity, 3,500,000 shares of Class A common stock are being registered hereby. The address of Adage Capital Partners is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116. |
(4) | Includes (i) 28,153 shares of shares of Class A common stock held by Alyeska Master Fund 3, L.P., of which 24,000 shares of Class A common stock are being registered hereby, and (ii) 3,495,283 shares of Class A common stock of Alyeska Master Fund, L.P., of which 2,976,000 shares of Class A common stock are being registered hereby. Alyeska Investment Group, L.P., the investment manager of each of the Alyeska Investors, has voting and investment control of the shares held by the Alyeska Investors. Anand Parekh is the Chief Executive Officer of Alyeska Investment Group, L.P. and may be deemed to be the beneficial owner of such shares. Mr. Parekh, however, disclaims any beneficial ownership of the shares held by the Alyeska Investors. The address of these entities discussed in this footnote and Mr. Parekh is 77 W. Wacker, Suite 700, Chicago, Illinois 60601. |
(5) | Heights Capital Management, Inc., the authorized agent of CVI Investments, Inc. (“CVI”), has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial owner of these shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have investment discretion and voting power over the shares held by CVI. Mr. Kobinger disclaims any such beneficial ownership of the shares. The address of CVI is c/o Heights Capital Management, Inc., 101 California Street, Suite 3250, San Francisco, California 94111. |
(6) | Includes (i) 775,000 shares of shares of Class A common stock held by DSAM+ Master Fund and (ii) 225,000 shares of Class A common stock held by LMA SPC — MAP 112 Segregated Portfolio. DSAM Partners (London) Ltd. (“DSAM Partners”) is the investment advisor to DSAM+ Master Fund and LMA SPC — MAP 112 Segregated Portfolio (the “DSAM Investors”) and, as such, may be deemed to have voting and investment power over the securities held by the DSAM Investors. DSAM Partners is ultimately controlled by Mr. Guy Shahar. The DSAM Investors and Mr. Shahar disclaim beneficial ownership of the securities listed above. The address of the DSAM Investors is c/o Walkers Corporate Services Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-1104. |
(7) | The warrants listed in the table above are not being registered hereby. The address of Healthcare of Ontario Pension Plan Trust Fund is 1 York Street, Suite 1900, Toronto, Ontario, Canada MSJ 0B6. |
(8) | The warrants listed in the table above are not being registered hereby. Millennium Management LLC, a Delaware limited liability company (“Millennium Management”), is the general partner of the managing member of Integrated Core Strategies (US) LLC (“Integrated Core Strategies”) and may be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. Millennium Group Management LLC, a Delaware limited liability company (“Millennium Group Management”), is the managing member of Millennium Management and may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. The managing member of Millennium Group Management is a trust of which Mr. Israel A. Englander, a United States citizen, currently serves as the sole voting trustee. Therefore, Mr. Englander may also be deemed to have shared voting control and investment discretion over securities owned by Integrated Core Strategies. The foregoing should not be construed in and of itself as an admission by Millennium Management, Millennium Group Management or Mr. Englander as to beneficial ownership of the securities owned by Integrated Core Strategies. The address of Integrated Core Strategies is c/o Millennium Management LLC, 666 Fifth Avenue, 8th Floor, New York, New York 10103. |
(9) | The address of Kepos Alpha Master Fund is c/o Kepos Capital LP, 11 Times Square, 35th Floor, New York, New York 10036. |
(10) | The warrants listed in the table above are not being registered hereby. The securities directly held by Linden Capital L.P. are indirectly held by Linden Advisors LP (the investment manager of Linden Capital L.P.), Linden GP LLC (the general partner of Linden Capital L.P.), and Mr. Siu Min (Joe) Wong (the principal owner and the controlling person of Linden Advisors LP and Linden GP LLC). Linden Capital L.P., Linden Advisors LP, Linden GP LLC and Mr. Wong share voting and dispositive power with respect to the securities held by Linden Capital L.P. The address of these individuals and entities is c/o Linden Advisors LP, 590 Madison Avenue, 15th Floor, New York, New York 10022. |
(11) | Michael Klein is the sole stockholder of M. Klein Associates, Inc. The shares beneficially owned by M. Klein Associates, Inc. may also be deemed to be beneficially owned by Mr. Klein. The address of each of the foregoing is 640 Fifth Avenue, 12th Floor, New York, New York 10019. |
(12) | Includes (i) 99,000 shares of shares of Class A common stock and 39,050 warrants held by Magnetar Constellation Fund II, Ltd. (which warrants are not being registered hereby), (ii) 352,000 shares of Class A common stock and 163,300 warrants held by Magnetar Constellation Master Fund, Ltd. (which warrants are not being registered hereby), (iii) 75,000 shares of Class A common stock held by Magnetar Lake Credit Fund LLC, (iv) 57,000 shares of Class A common stock held by Magnetar Longhorn Fund LP, (v) 93,000 shares of Class A common stock held by Magnetar SC Fund Ltd., (vi) 131,000 shares of Class A common stock and 28,400 warrants held by Magnetar Structured Credit Fund, LP (which warrants are not being registered hereby), (vii) 123,000 shares of Class A common stock and 60,350 warrants held by Magnetar Xing He Master Fund Ltd. (which warrants are not being registered hereby), (viii) 47,000 shares of Class A common stock held by Purpose Alternative Credit Fund — F LLC and (ix) 23,000 shares of Class A common stock held by Purpose Alternative Credit Fund — T LLC. Magnetar Financial LLC (“MFL”) serves as investment manager of each Magnetar Constellation Fund II, Ltd., Magnetar Constellation Master Fund, Ltd, Magnetar Longhorn Fund LP, Magnetar SC Fund Ltd and Magnetar Xing He Master Fund Ltd. MFL is the manager of Magnetar Lake Credit Fund LLC, Purpose Alternative Credit Fund — F LLC and Purpose Alternative Credit Fund — T LLC. MFL is the general partner of Magnetar Structured Credit Fund, LP (together with all of the foregoing funds, the “Magnetar Funds”). In such capacities, MFL exercises voting and investment power over the securities held for the accounts of the Magnetar Funds. MFL is a registered investment adviser under Section 203 of the Investment Advisers Act of 1940, as amended. Magnetar Capital Partners LP (“MCP”) is the sole member and parent holding company of MFL. Supernova Management LLC (“Supernova”), is the sole general partner of MCP. The manager of Supernova is Alec N. Litowitz, a citizen of the United States of America. Each of the Magnetar Funds, MFL, MCP, Supernova and Alec N. Litowitz disclaim beneficial ownership of these securities except to the extent of their pecuniary interest in the securities. The address of the entities and individual discussed in this footnote is 1603 Orrington Avenue, 13th Floor, Evanston, Illinois 60201. |
(13) | Includes (i) 19,921 shares of shares of Class A common stock held by AST MFS Growth Allocation Portfolio advised by Massachusetts |
(14) | MM Asset Management Inc. is the investment advisor to MMCAP International Inc. SPC. Matthew MacIsaac is the Secretary of MM Asset Management Inc. and has voting and investment control of the shares held by MMCAP International Inc. SPC. BMO Nesbitt Burns ITF MMCAP International Inc. SPC is the record holder of such shares for and on behalf of MMCAP Master Segregated Portfolio. The address of MMCAP International Inc. SPC is c/o MM Asset Management Inc., 161 Bay St. TD Canada Trust Tower Ste 2240, Toronto, Ontario, M5J 2S1. |
(15) | Includes (i) 227,273 shares of Class A common stock held by BEMAP Master Fund Ltd., (ii) 102,273 shares of Class A common stock held by Monashee Pure Alpha SPV I LP, (iii) 136,363 shares of Class A common stock held by Monashee Solitario Fund LP and (iv) 34,091 shares of Class A common stock held by SFL SPV I LLC. Monashee Investment Management LLC is the investment advisor for each of the entities discussed in this footnote. Jeff Muller, as Chief Compliance Officer of Monashee Investment Management LLC, has the power to direct the vote and disposition of the securities held by such entities and may be deemed to beneficially own such securities. The address of each of the entities and individual discussed in this footnote is c/o Monashee Investment Management LLC, 75 Park Plaza, 2nd Floor, Boston, Massachusetts 02110. |
(16) | Moore Capital Management, LP, the investment manager of Moore Global Investments, LLC (“MGI LLC”), has voting and investment control of the shares held by MGI LLC. Mr. Louis M. Bacon controls the general partner of Moore Capital Management, LP and may be deemed the beneficial owner of the shares held by MGI LLC. Mr. Bacon also is the indirect majority owner of MGI LLC. The address of MGI LLC, Moore Capital Management, LP and Mr. Bacon is 11 Times Square, New York, New York 10036. |
(17) | Of the 1,283,844 shares of Class A common stock held by this entity, 500,000 shares of Class A common stock are being registered hereby. The address of OHA Partner Global Co-Investment III, LLP is 201 Main Street, Suite 1250, Fort Worth, Texas 76102. |
(18) | Hudson Bay Capital Management LP, the investment manager of Tech Opportunities LLC, has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management LP. Each of Tech Opportunities LLC and Sander Gerber disclaims beneficial ownership over these securities. The address of Tech Opportunities LLC is c/o Hudson Bay Capital Management LP, 777 Third Avenue, 30th Floor, New York, New York, 10017. |
(19) | Includes (i) 239,500 shares of shares of Class A common stock and 293,016 warrants held by The Merger Fund (which warrants are not being registered hereby), (ii) 12,500 shares of shares of Class A common stock and 3,888 warrants held by The Merger Fund VL (which warrants are not being registered hereby), (iii) 57,500 shares of shares of Class A common stock and 81,357 warrants held by WCM Alternatives: Event-Driven Fund (which warrants are not being registered hereby), (iv) 24,000 shares of shares of Class A common stock and 525 warrants held by Winchester Global Trust Company Limited, as Trustee of WCM Master Trust (which warrants are not being registered hereby), (v) 42,500 shares of shares of Class A common stock and 109,959 warrants held by JNL Multi-Manager Alternative Fund (which warrants are not being registered hereby) and (vi) 24,000 shares of shares of Class A common stock held by JNL/Westchester Capital Event Driven Fund. Westchester Capital Management, LLC (“WCM”) serves as investment advisor to The Merger Fund, The Merger Fund VL and WCM Alternatives: Event-Driven Fund and as sub-advisor to JNL Multi-Manager Alternative Fund and JNL/Westchester Capital Event Driven Fund. Westchester Capital Partners, LLC (“WCP”) serves as investment advisor to WCM Master Trust. Mr. Roy D. Behren and Mr. Michael T. Shannon each serve as Co-Managers of WCM and Co-Managers of WCP. By virtue of these relationships, WCM, WCP and Messrs. Behren and Shannon may be deemed to beneficially own the securities listed herein, however, each ofWCM, WCP and Messrs. Behren and Shannon disclaim beneficial ownership of the securities listed herein except to the extent of their pecuniary interest in such securities. The address of the entities and individuals discussed in this footnote is 100 Summit Lake Drive, Suite 220, Valhalla, New York 10595. |
• | any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors; |
• | any person who is known by us to be the beneficial owner of more than 5% of our voting shares; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our voting shares, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our voting shares; and |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal, or in a similar position, or in which such person has a 10% or greater beneficial ownership interest. |
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
• | one or more underwritten offerings; |
• | block trades in which the broker-dealer will attempt to sell the shares of Class A common stock or warrants as agent, but may position and resell a portion of the block as principal to facilitate the transaction; |
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its accounts; |
• | an exchange distribution in accordance with the rules of the applicable exchange; |
• | privately negotiated transactions; |
• | distributions to their members, partners or shareholders; |
• | short sales effected after the date of the registration statement of which this prospectus is a part is declared effective by the SEC; |
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
• | in market transactions, including transactions on a national securities exchange or quotations service or over-the-counter market; |
• | directly to one or more purchasers; |
• | through agents; |
• | broker-dealers may agree with the Selling Shareholders to sell a specified number of such shares of Class A common stock or warrants at a stipulated price per share or warrant; and |
• | a combination of any such methods of sale. |
| | As of | ||||
| | March 31, 2021 | | | December 31, 2020 | |
| | (Unaudited) | | | ||
Assets | | | | | ||
Cash and cash equivalents | | | $156,273 | | | $198,146 |
Management fees receivable | | | 15,955 | | | 14,524 |
Incentive fees receivable | | | 25,935 | | | 69,424 |
Due from related parties | | | 8,513 | | | 11,326 |
Investments | | | 180,708 | | | 166,273 |
Premises and equipment, net | | | 6,110 | | | 7,870 |
Intangible assets, net | | | 8,004 | | | 8,588 |
Goodwill | | | 28,959 | | | 28,959 |
Deferred tax assets, net | | | 73,355 | | | 74,153 |
Other assets | | | 31,031 | | | 53,015 |
Total assets | | | 534,843 | | | 632,278 |
Liabilities and Equity (Deficit) | | | | | ||
Accrued compensation and benefits | | | 20,794 | | | 74,681 |
Employee related obligations | | | 26,898 | | | 25,274 |
Debt | | | 284,982 | | | 335,155 |
Payable to related parties pursuant to the tax receivable agreement | | | 60,598 | | | 60,518 |
Warrant liabilities | | | 26,049 | | | 42,793 |
Accrued expenses and other liabilities | | | 35,266 | | | 60,926 |
Total liabilities | | | 454,587 | | | 599,347 |
Commitments and contingencies (Note 15) | | | | | ||
Redeemable noncontrolling interest | | | 117,460 | | | 115,121 |
Preferred stock, $0.0001 par value, 100,000,000 shares authorized, none issued | | | — | | | — |
Class A common stock, $0.0001 par value, 700,000,000 authorized; 42,628,996 and 40,835,093 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | | | 4 | | | 4 |
Class B common stock, $0.0001 par value, 500,000,000 authorized, none issued | | | — | | | — |
Class C common stock, $0.0001 par value, 300,000,000 authorized; 144,235,246 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | | | 14 | | | 14 |
Additional paid-in capital | | | 13,920 | | | 2,705 |
Accumulated other comprehensive loss | | | (1,570) | | | (2,233) |
Retained earnings | | | (33,833) | | | (29,832) |
Total GCM Grosvenor Inc. deficit | | | (21,465) | | | (29,342) |
Noncontrolling interests in subsidiaries | | | 96,158 | | | 94,013 |
Noncontrolling interests in GCMH | | | (111,897) | | | (146,861) |
Total deficit | | | (37,204) | | | (82,190) |
Total liabilities and equity (deficit) | | | $534,843 | | | $632,278 |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
Revenues | | | | | ||
Management fees | | | $82,625 | | | $77,701 |
Incentive fees | | | 18,214 | | | 3,233 |
Other operating income | | | 2,380 | | | 1,683 |
Total operating revenues | | | 103,219 | | | 82,617 |
Expenses | | | | | ||
Employee compensation and benefits | | | 83,353 | | | 55,477 |
General, administrative and other | | | 24,532 | | | 24,596 |
Total operating expenses | | | 107,885 | | | 80,073 |
Operating income (loss) | | | (4,666) | | | 2,544 |
Investment income | | | 13,048 | | | 3,373 |
Interest expense | | | (4,491) | | | (5,867) |
Other income (expense) | | | 1,317 | | | (9,733) |
Change in fair value of warrant liabilities | | | 14,057 | | | — |
Net other income (expense) | | | 23,931 | | | (12,227) |
Income (loss) before income taxes | | | 19,265 | | | (9,683) |
Provision (benefit) for income taxes | | | (663) | | | 643 |
Net income (loss) | | | 19,928 | | | (10,326) |
Less: Net income attributable to redeemable noncontrolling interest | | | 8,089 | | | 2,093 |
Less: Net income attributable to noncontrolling interests in subsidiaries | | | 8,589 | | | 2,536 |
Less: Net income (loss) attributable to noncontrolling interests in GCMH | | | 703 | | | (14,955) |
Net income attributable to GCM Grosvenor Inc. | | | $2,547 | | | $— |
| | | | |||
Earnings (loss) per share of Class A common stock(1): | | | | | ||
Basic | | | $0.06 | | | — |
Diluted | | | $(0.05) | | | — |
Weighted average shares of Class A common stock outstanding(1): | | | | | ||
Basic | | | 42,084,366 | | | — |
Diluted | | | 188,872,053 | | | — |
(1) | There were no shares of Class A common stock outstanding prior to November 17, 2020, therefore no earnings (loss) per share information has been presented for any period prior to that date. |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
Net income (loss) | | | $19,928 | | | $(10,326) |
Other comprehensive income (loss): | | | | | ||
Unrealized gain (loss) on cash flow hedges | | | 3,679 | | | (7,277) |
Foreign currency translation adjustment | | | (615) | | | (293) |
Total other comprehensive income (loss) | | | 3,064 | | | (7,570) |
Comprehensive income (loss) before noncontrolling interests | | | 22,992 | | | (17,896) |
Less: Comprehensive income attributable to redeemable noncontrolling interest | | | 8,089 | | | 2,093 |
Less: Comprehensive income attributable to noncontrolling interests in subsidiaries | | | 8,589 | | | 2,536 |
Less: Comprehensive income (loss) attributable to noncontrolling interests in GCMH | | | 3,075 | | | (22,525) |
Comprehensive income (loss) attributable to GCM Grosvenor Inc. | | | $3,239 | | | $— |
| | Partners’ Deficit | | | Member’s Deficit- GCM, L.L.C. | | | Class A Common Stock | | | Class C Common Stock | | | Additional Paid-in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Noncontrolling Interests in Subsidiaries | | | Noncontrolling Interests in GCMH | | | Total Equity (Deficit) | | | Redeemable Noncontrolling Interest | |
Balance, December 31, 2019 | | | $(308,373) | | | $(66) | | | $— | | | $— | | | $— | | | $— | | | $(6,854) | | | $101,463 | | | $— | | | $(213,830) | | | $— |
Cumulative-effect adjustment from adoption of ASU 2017-12 | | | (650) | | | — | | | — | | | — | | | — | | | — | | | 650 | | | — | | | — | | | — | | | — |
Capital contributions from noncontrolling interest in subsidiaries | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,237 | | | — | | | 1,237 | | | — |
Capital contributions from redeemable noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 173,327 |
Deemed contributions | | | 7,920 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,920 | | | — |
Capital distributions | | | — | | | (15) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (15) | | | — |
Capital distributions paid to noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (5,814) | | | — | | | (5,814) | | | — |
Equity transaction with Mosaic | | | 60,931 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 60,931 | | | (60,931) |
Unrealized loss on cash flow hedge | | | — | | | — | | | — | | | — | | | — | | | — | | | (7,277) | | | — | | | — | | | (7,277) | | | — |
Translation adjustment | | | — | | | — | | | — | | | — | | | — | | | — | | | (293) | | | — | | | — | | | (293) | | | — |
Net income (loss) | | | (14,968) | | | 13 | | | — | | | — | | | — | | | — | | | — | | | 2,536 | | | — | | | (12,419) | | | 2,093 |
Balance, March 31, 2020 | | | $(255,140) | | | $(68) | | | $— | | | $— | | | $— | | | $— | | | $(13,774) | | | $99,422 | | | $— | | | $(169,560) | | | $114,489 |
| | Class A Common Stock | | | Class C Common Stock | | | Additional Paid-in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Noncontrolling Interest in Subsidiaries | | | Noncontrolling Interest in GCMH | | | Total Equity (Deficit) | | | Redeemable Noncontrolling Interest | |
Balance, December 31, 2020 | | | $4 | | | $14 | | | $2,705 | | | $(29,832) | | | $(2,233) | | | $94,013 | | | $(146,861) | | | $(82,190) | | | $115,121 |
Capital contributions from noncontrolling interest in subsidiaries | | | — | | | — | | | — | | | — | | | — | | | 1,083 | | | — | | | 1,083 | | | — |
Capital distributions paid to noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | (7,527) | | | — | | | (7,527) | | | — |
Capital distributions paid to redeemable noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (5,750) |
Issuance of Class A common stock due to exercised warrants | | | — | | | — | | | 5,252 | | | — | | | — | | | — | | | 18,064 | | | 23,316 | | | — |
Partners’ distributions | | | — | | | — | | | — | | | — | | | — | | | — | | | (11,687) | | | (11,687) | | | — |
Deemed contributions | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,903 | | | 4,903 | | | — |
Unrealized gain on cash flow hedge | | | — | | | — | | | — | | | — | | | 831 | | | — | | | 2,848 | | | 3,679 | | | — |
Translation adjustment | | | — | | | — | | | — | | | — | | | (139) | | | — | | | (476) | | | (615) | | | — |
Restricted stock units | | | — | | | — | | | 6,023 | | | — | | | — | | | — | | | 20,609 | | | 26,632 | | | — |
Declared dividends | | | — | | | — | | | — | | | (6,548) | | | — | | | — | | | — | | | (6,548) | | | — |
Deferred tax and other tax adjustments | | | — | | | — | | | (60) | | | — | | | (29) | | | — | | | — | | | (89) | | | — |
Net income (loss) | | | — | | | — | | | — | | | 2,547 | | | — | | | 8,589 | | | 703 | | | 11,839 | | | 8,089 |
Balance, March 31, 2021 | | | $4 | | | $14 | | | $13,920 | | | $(33,833) | | | $(1,570) | | | $96,158 | | | $(111,897) | | | $(37,204) | | | $117,460 |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
Cash flows from operating activities | | | | | ||
Net income (loss) | | | $19,928 | | | $(10,326) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | | | | | ||
Depreciation and amortization expense | | | 1,056 | | | 2,572 |
Equity-based compensation | | | 26,632 | | | — |
Deferred taxes | | | 865 | | | — |
Other non-cash compensation | | | 941 | | | 1,065 |
Non-cash partnership interest-based compensation | | | 4,903 | | | 7,920 |
Amortization of debt issuance costs | | | 261 | | | 855 |
Amortization of terminated swap | | | 536 | | | — |
Loss on extinguishment of debt | | | 675 | | | 1,032 |
Change in fair value of derivatives | | | 212 | | | 8,634 |
Change in fair value of warrant liabilities | | | (14,057) | | | — |
Amortization of deferred rent | | | (397) | | | (128) |
Proceeds received from investments | | | 3,894 | | | 2,596 |
Non-cash investment income | | | (13,048) | | | (3,373) |
Other | | | 28 | | | 30 |
Change in assets and liabilities | | | | | ||
Management fees receivable | | | (1,429) | | | 969 |
Incentive fees receivable | | | 43,489 | | | 13,913 |
Due from related parties | | | 2,813 | | | 820 |
Other assets | | | 20,992 | | | (15,264) |
Accrued compensation and benefits | | | (54,393) | | | (42,188) |
Employee related obligations | | | 563 | | | (2,971) |
Accrued expenses and other liabilities | | | (28,673) | | | 807 |
Net cash provided by (used in) operating activities | | | 15,791 | | | (33,037) |
Cash flows from investing activities | | | | | ||
Purchases of premises and equipment | | | (55) | | | (809) |
Proceeds from assignment of aircraft share interest | | | 1,337 | | | — |
Contributions/subscriptions to investments | | | (8,207) | | | (6,425) |
Withdrawals/redemption from investments | | | 2,926 | | | 5,550 |
Net cash provided by (used in) investing activities | | | (3,999) | | | (1,684) |
Cash flows from financing activities | | | | | ||
Capital contributions received from noncontrolling interest | | | 1,083 | | | 174,564 |
Capital distributions paid to partners and member | | | (11,687) | | | (15) |
Capital distributions paid to the noncontrolling interest | | | (13,277) | | | (5,814) |
Proceeds from credit facility | | | — | | | 20,000 |
Principal payments on credit facility | | | — | | | (3,000) |
Principal payments on senior loan | | | (50,259) | | | (91,195) |
Debt issuance costs | | | (851) | | | — |
Proceeds from exercise of warrants | | | 24,465 | | | — |
Dividends paid | | | (2,478) | | | — |
Net cash provided by (used in) financing activities | | | (53,004) | | | 94,540 |
Effect of exchange rate changes on cash | | | (661) | | | (325) |
Net increase (decrease) in cash and cash equivalents | | | $(41,873) | | | $59,494 |
Cash and cash equivalents | | | | | ||
Beginning of period | | | 198,146 | | | 79,866 |
End of period | | | $156,273 | | | $139,360 |
Supplemental disclosure of cash flow information | | | | | ||
Cash paid during the period for interest | | | $3,622 | | | $5,456 |
Cash paid during the period for income taxes | | | $678 | | | $726 |
Supplemental disclosure of non-cash information from financing activities | | | | | ||
Deemed contributions from GCMH Equityholders | | | $4,903 | | | $7,920 |
Establishment of deferred tax assets, net related to tax receivable agreement and the Transaction | | | $(60) | | | $— |
Dividends declared but not paid | | | $4,070 | | | $— |
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; |
• | Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and |
• | Level 3 – Inputs that are unobservable. |
| | Three Months Ended March 31, | ||||
Management fees | | | 2021 | | | 2020 |
Management fees, net | | | $80,265 | | | $75,727 |
Fund expense reimbursement revenue | | | 2,360 | | | 1,974 |
Management fees | | | $82,625 | | | $77,701 |
| | Three Months Ended March 31, | ||||
Incentive fees | | | 2021 | | | 2020 |
Performance fees | | | $6,113 | | | $605 |
Carried interest | | | 12,101 | | | 2,628 |
Total incentive fees | | | $18,214 | | | $3,233 |
| | As of | ||||
| | March 31, 2021 | | | December 31, 2020 | |
Equity method investments | | | $179,529 | | | $165,095 |
Other investments | | | 1,179 | | | 1,178 |
Total investments | | | $180,708 | | | $166,273 |
| | Fair Value of Assets (Liabilities) as of March 31, 2021 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Money market funds | | | $109,054 | | | $— | | | $— | | | $109,054 |
Interest rate derivatives | | | — | | | 2,930 | | | — | | | 2,930 |
Public warrants | | | (21,621) | | | — | | | — | | | (21,621) |
Private warrants | | | — | | | — | | | (4,428) | | | (4,428) |
Total | | | $87,433 | | | $2,930 | | | $(4,428) | | | $85,935 |
| | Fair Value of Assets (Liabilities) as of December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Money market funds | | | $149,553 | | | $— | | | $— | | | $149,553 |
Interest rate derivatives | | | — | | | (28,442) | | | — | | | (28,442) |
Public warrants | | | (36,421) | | | — | | | — | | | (36,421) |
Private warrants | | | — | | | — | | | (6,372) | | | (6,372) |
Total | | | $113,132 | | | $(28,442) | | | $(6,372) | | | $78,318 |
| | March 31, 2021 | | | December 31, 2020 | |
Risk-free interest rate | | | 0.81% | | | 0.35% |
Expected term (years) | | | 4.6 | | | 4.9 |
Expected volatility | | | 19% | | | 16% |
• | The risk-free interest rate assumption was based on the term-matched U.S. Treasury rate, which was commensurate with the contractual term of the private warrants, which expire on the earlier of five years after the completion of the Transaction or liquidation of the Company. An increase in the risk-free interest rate, in isolation, would result in an increase in the fair value measurement of the warrant liabilities and vice versa. |
• | The expected term was determined to be approximately 5 years, which is commensurate with the contractual maximum term of the private warrants, which expire on the earlier of five years after the completion of the Transaction or liquidation of the Company. A decrease in the expected term, in isolation, would result in an decrease in the fair value measurement of the warrant liabilities. |
• | The expected volatility assumption was based on consideration of the implied volatility from the Company’s publicly-traded warrants and the historical and implied volatility of the Company’s publicly-traded industry peers. An increase in the expected volatility, in isolation, would result in an increase in the fair value measurement of the warrant liabilities. |
| | Three Months Ended March 31, 2021 | |
Balance at beginning of period | | | $(6,372) |
Change in fair value | | | 1,944 |
Balance at end of period | | | $(4,428) |
| | Class A common stock | | | Class B common stock | | | Class C common stock | |
December 31, 2020 | | | 40,835,093 | | | — | | | 144,235,246 |
Exercise of warrants | | | 1,793,903 | | | — | | | — |
March 31, 2021 | | | 42,628,996 | | | — | | | 144,235,246 |
| | As of | ||||
| | March 31, 2021 | | | December 31, 2020 | |
Investments | | | $79,472 | | | $77,511 |
Receivables | | | 13,892 | | | 14,322 |
Maximum exposure to loss | | | $93,364 | | | $91,833 |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
Cash-based employee compensation and benefits | | | $41,780 | | | $44,302 |
Equity-based compensation | | | 27,036 | | | — |
Partnership interest-based compensation | | | 4,903 | | | 7,920 |
Carried interest compensation | | | 6,860 | | | 2,190 |
Cash-based incentive fee related compensation | | | 1,833 | | | — |
Other | | | 941 | | | 1,065 |
Total employee compensation and benefits | | | $83,353 | | | $55,477 |
| | Number of RSUs | | | Weighted-Average Grant-Date Fair Value Per RSUs | |
Balance as of December 31, 2020 | | | — | | | $— |
Granted | | | 4,759,375 | | | 13.04 |
Vested | | | (1,952,685) | | | 13.04 |
Forfeited | | | — | | | — |
Balance as of March 31, 2021 | | | 2,806,690 | | | $13.04 |
| | As of | ||||
| | March 31, 2021 | | | December 31, 2020 | |
Senior loan | | | $290,000 | | | $340,259 |
Less debt issuance costs | | | (5,018) | | | (5,104) |
Total debt | | | $284,982 | | | $335,155 |
Year Ending December 31, | | | |
Remainder of 2021 | | | $2,175 |
2022 | | | 2,900 |
2023 | | | 2,900 |
2024 | | | 2,900 |
2025 | | | 2,900 |
Thereafter | | | 276,225 |
Total | | | $290,000 |
| | | | | | As of March 31, 2021 | ||||||||||||
Derivative | | | Notional Amount | | | Fair Value as of March 31, 2021 | | | Fixed Rate Paid | | | Floating Rate Received | | | Effective Date(2) | | | Maturity Date |
Interest rate swap | | | $232,000 | | | $2,930 | | | 1.33% | | | 1 month LIBOR(1) | | | March 2021 | | | February 2028 |
(1) | Floating rate received subject to a 0.50% Floor. |
(2) | Represents the date at which the derivative is in effect and the Company is contractually required to begin payment of interest under the terms of the agreement. |
| | | | | | As of December 31, 2020 | ||||||||||||
Derivative | | | Notional Amount | | | Fair Value as of December 31, 2020 | | | Fixed Rate Paid | | | Floating Rate Received | | | Effective Date(3) | | | Maturity Date |
Interest rate swap | | | $225,000 | | | $(11,163) | | | 2.48% | | | 1 month LIBOR(1) | | | January 2020 | | | February 2023 |
Interest rate swap | | | 75,000 | | | (4,654) | | | 3.05% | | | 1 month LIBOR(1) | | | January 2020 | | | February 2023 |
Interest rate collar | | | 300,000 | | | (12,625) | | | 3.70% | | | 1 month LIBOR(2) | | | February 2023 | | | February 2025 |
| | | | $(28,442) | | | | | | | | |
(1) | Floating rate received subject to a 0.00% Floor. |
(2) | Floating rate received subject to a 2.45% Floor. |
(3) | Represents the date at which the derivative is in effect and the Company is contractually required to begin payment of interest under the terms of the agreement. |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
Unrealized loss at beginning of period, gross | | | $(11,163) | | | $(6,933) |
Cumulative-effect adjustment from adoption of ASU 2017-12 | | | — | | | 650 |
Amount of recognized in other comprehensive income (loss) | | | 2,559 | | | (7,723) |
Amount reclassified from accumulated other comprehensive loss to interest expense | | | 1,120 | | | 446 |
Unrealized loss at end of period | | | (7,484) | | | (13,560) |
Less: Loss attributable to noncontrolling interests in GCMH | | | (5,894) | | | — |
Unrealized loss at end of period, net | | | $(1,590) | | | $(13,560) |
| | Three Months Ended March 31, | ||||
| | 2021 | | | 2020 | |
Other income (expense) | | | $1,934 | | | $(8,634) |
| | Three Months Ended March 31, 2021 | |
Numerator for earnings (loss) per share calculation: | | | |
Net income attributable to GCM Grosvenor Inc. | | | $2,547 |
Exercise of private warrants | | | (431) |
Exercise of public warrants | | | (2,787) |
Exchange of Partnership units | | | (9,479) |
Net loss attributable to common stockholders, diluted | | | (10,150) |
| | ||
Denominator for earnings (loss) per share calculation: | | | |
Weighted-average shares, basic | | | 42,084,366 |
Exercise of private warrants - incremental shares under the treasury stock method | | | 307,858 |
Exercise of public warrants - incremental shares under the treasury stock method | | | 2,244,583 |
Exchange of Partnership units | | | 144,235,246 |
Weighted-average shares, diluted | | | 188,872,053 |
| | ||
Basic EPS | | | |
Net income attributable to common stockholders, basic | | | $2,547 |
Weighted-average shares, basic | | | 42,084,366 |
Net income per share attributable to common stockholders, basic | | | $0.06 |
| | ||
Diluted EPS | | | |
Net loss attributable to common stockholders, diluted | | | $(10,150) |
Weighted-average shares, diluted | | | 188,872,053 |
Net loss per share attributable to common stockholders, diluted | | | $(0.05) |
| | As of March 31, 2021 | |
Unvested restricted stock units | | | 2,806,690 |
| | As of December 31, | ||||
| | 2020 (As Restated(1)) | | | 2019 | |
Assets | | | | | ||
Cash and cash equivalents | | | $198,146 | | | $79,866 |
Management fees receivable | | | 14,524 | | | 13,896 |
Incentive fees receivable | | | 69,424 | | | 20,771 |
Due from related parties | | | 11,326 | | | 10,226 |
Investments | | | 166,273 | | | 159,358 |
Premises and equipment, net | | | 7,870 | | | 8,871 |
Intangible assets, net | | | 8,588 | | | 16,092 |
Goodwill | | | 28,959 | | | 28,959 |
Deferred tax assets, net | | | 74,153 | | | 126 |
Other assets | | | 53,015 | | | 34,991 |
Total assets | | | 632,278 | | | 373,156 |
Liabilities and Equity (Deficit) | | | | | ||
Accrued compensation and benefits | | | 74,681 | | | 63,668 |
Employee related obligations | | | 25,274 | | | 22,614 |
Debt | | | 335,155 | | | 448,500 |
Payable to related parties pursuant to the tax receivable agreement | | | 60,518 | | | — |
Warrant liabilities | | | 42,793 | | | — |
Accrued expenses and other liabilities | | | 60,926 | | | 52,204 |
Total liabilities | | | 599,347 | | | 586,986 |
Commitments and contingencies (Note 18) | | | | | ||
Redeemable noncontrolling interest | | | 115,121 | | | — |
Partners’ deficit | | | — | | | (308,373) |
Preferred stock, $0.0001 par value, 100,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2020 | | | — | | | — |
Class A common stock, $0.0001 par value, 700,000,000 authorized; 40,835,093 issued and outstanding as of December 31, 2020 | | | 4 | | | — |
Class B common stock, $0.0001 par value, 500,000,000 authorized; 0 shares issued and outstanding as of December 31, 2020 | | | — | | | — |
Class C common stock, $0.0001 par value, 300,000,000 authorized; 144,235,246 issued and outstanding as of December 31, 2020 | | | 14 | | | — |
Additional paid-in capital | | | 2,705 | | | — |
Accumulated other comprehensive loss | | | (2,233) | | | (6,854) |
Retained earnings | | | (29,832) | | | — |
Member’s deficit - GCM, L.L.C. | | | — | | | (66) |
Total GCM Grosvenor Inc. deficit / partners’ and member’s deficit | | | (29,342) | | | (315,293) |
Noncontrolling interests in subsidiaries | | | 94,013 | | | 101,463 |
Noncontrolling interests in GCMH | | | (146,861) | | | — |
Total deficit | | | (82,190) | | | (213,830) |
Total liabilities and equity (deficit) | | | $632,278 | | | $373,156 |
(1) | For discussion on the restatement adjustments, see Note 4. |
| | Year Ended December 31, | |||||||
| | 2020 (As Restated(1)) | | | 2019 | | | 2018 | |
Revenues | | | | | | | |||
Management fees | | | $310,745 | | | $324,716 | | | $315,598 |
Incentive fees | | | 111,650 | | | 84,165 | | | 57,059 |
Other operating income | | | 7,586 | | | 7,513 | | | 5,839 |
Total operating revenues | | | 429,981 | | | 416,394 | | | 378,496 |
Expenses | | | | | | | |||
Employee compensation and benefits | | | 388,465 | | | 242,967 | | | 210,414 |
General, administrative and other | | | 84,631 | | | 88,458 | | | 92,955 |
Total operating expenses | | | 473,096 | | | 331,425 | | | 303,369 |
Operating income (loss) | | | (43,115) | | | 84,969 | | | 75,127 |
Investment income | | | 10,742 | | | 7,521 | | | 16,963 |
Interest expense | | | (23,446) | | | (25,680) | | | (26,468) |
Other income (expense) | | | (9,562) | | | (4,494) | | | (542) |
Change in fair value of warrant liabilities | | | (13,315) | | | — | | | — |
Net other income (expense) | | | (35,581) | | | (22,653) | | | (10,047) |
Income (loss) before income taxes | | | (78,696) | | | 62,316 | | | 65,080 |
Income taxes | | | 4,506 | | | 2,318 | | | 1,395 |
Net income (loss) | | | (83,202) | | | 59,998 | | | 63,685 |
Less: Net income attributable to redeemable noncontrolling interest | | | 14,069 | | | — | | | — |
Less: Net income attributable to noncontrolling interests in subsidiaries | | | 11,617 | | | 13,221 | | | 24,486 |
Less: Net income (loss) attributable to noncontrolling interests in GCMH | | | (112,937) | | | 46,777 | | | 39,199 |
Net income attributable to GCM Grosvenor Inc. | | | $4,049 | | | $— | | | $— |
Earnings (loss) per share of Class A common stock(2): | | | | | | | |||
Basic | | | $0.10 | | | — | | | — |
Diluted | | | $(0.58) | | | — | | | — |
Weighted average shares of Class A common stock outstanding(2): | | | | | | | |||
Basic | | | 39,984,515 | | | — | | | — |
Diluted | | | 184,219,761 | | | — | | | — |
(1) | For discussion on the restatement adjustments, see Note 4. |
(2) | Represents earnings (loss) per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the period from November 17, 2020 through December 31, 2020, the period following the Transaction, as defined in Note 3 (see Note 21). |
| | Year Ended December 31, | |||||||
| | 2020 (As Restated(1)) | | | 2019 | | | 2018 | |
Net income (loss) | | | $(83,202) | | | $59,998 | | | $63,685 |
Other comprehensive income (loss): | | | | | | | |||
Unrealized gain on cash flow hedges | | | (4,880) | | | (6,521) | | | 1,264 |
Foreign currency translation adjustment | | | 778 | | | 253 | | | (110) |
Total other comprehensive income (loss) | | | (4,102) | | | (6,268) | | | 1,154 |
Comprehensive income (loss) before noncontrolling interests | | | (87,304) | | | 53,730 | | | 64,839 |
Less: Comprehensive income attributable to redeemable noncontrolling interest | | | 14,069 | | | — | | | — |
Less: Comprehensive income attributable to noncontrolling interests in subsidiaries | | | 11,617 | | | 13,221 | | | 24,486 |
Less: Comprehensive income (loss) attributable to noncontrolling interests in GCMH | | | (117,288) | | | 40,509 | | | 40,353 |
Comprehensive income (loss) attributable to GCM Grosvenor Inc. | | | $4,298 | | | $— | | | $— |
(1) | For discussion on the restatement adjustments, see Note 4. |
| | Partners’ Deficit | | | Member’s Deficit- GCM, L.L.C. | | | Class A Common Stock | | | Class C Common Stock | | | Additional Paid- in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Noncontrolling Interests in Subsidiaries | | | Noncontrolling Interests in GCMH | | | Total Equity (Deficit) | | | Redeemable Noncontrolling Interest | |
Balance, December 31, 2017 | | | $(302,616) | | | $(17) | | | $— | | | $— | | | $— | | | $— | | | $(1,740) | | | $143,966 | | | $— | | | $(160,407) | | | $— |
Capital contributions from noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,447 | | | — | | | 6,447 | | | — |
Capital contributions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Deemed contributions | | | 19,495 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 19,495 | | | — |
Capital distributions | | | (82,113) | | | (134) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (82,247) | | | — |
Capital distributions paid to noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (49,234) | | | — | | | (49,234) | | | — |
Unrealized gain on cash flow hedge | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,264 | | | — | | | — | | | 1,264 | | | — |
Translation adjustment | | | — | | | — | | | — | | | — | | | — | | | — | | | (110) | | | — | | | — | | | (110) | | | — |
Net income | | | 39,121 | | | 78 | | | — | | | — | | | — | | | — | | | — | | | 24,486 | | | — | | | 63,685 | | | — |
Balance, December 31, 2018 | | | $(326,113) | | | $(73) | | | $— | | | $— | | | $— | | | $— | | | $(586) | | | $125,665 | | | $— | | | $(201,107) | | | $— |
| | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Cumulative-effect adjustment from adoption of ASC 606 | | | 10,343 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,517 | | | — | | | 11,860 | | | — |
Capital contributions from noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,720 | | | — | | | 4,720 | | | — |
Capital contributions | | | — | | | 18 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 18 | | | — |
Deemed contributions | | | 30,233 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 30,233 | | | — |
Capital distributions | | | (69,524) | | | (100) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (69,624) | | | — |
Capital distributions paid to noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (43,660) | | | — | | | (43,660) | | | — |
Unrealized loss on cash flow hedge | | | — | | | — | | | — | | | — | | | — | | | — | | | (6,521) | | | — | | | — | | | (6,521) | | | — |
Translation adjustment | | | — | | | — | | | — | | | — | | | — | | | — | | | 253 | | | — | | | — | | | 253 | | | — |
Net income | | | 46,688 | | | 89 | | | — | | | — | | | — | | | — | | | — | | | 13,221 | | | — | | | 59,998 | | | — |
Balance, December 31, 2019 | | | $(308,373) | | | $(66) | | | $— | | | $— | | | $— | | | $— | | | $(6,854) | | | $101,463 | | | $— | | | $(213,830) | | | $— |
| | Partners’ Deficit | | | Member’s Deficit- GCM, L.L.C. | | | Class A Common Stock | | | Class C Common Stock | | | Additional Paid-in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Noncontrolling Interest in Subsidiaries | | | Noncontrolling Interest in GCMH | | | Total Equity (Deficit) | | | Redeemable Noncontrolling Interest | |
Balance, December 31, 2019 | | | $(308,373) | | | $(66) | | | $— | | | $— | | | $— | | | $— | | | $(6,854) | | | $101,463 | | | $— | | | $(213,830) | | | $— |
Cumulative-effect adjustment from adoption of ASU 2017-12 | | | (650) | | | — | | | — | | | — | | | — | | | — | | | 650 | | | — | | | — | | | — | | | — |
Capital contributions from noncontrolling interest in subsidiaries | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,035 | | | — | | | 4,035 | | | — |
Capital contributions from redeemable noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 173,797 |
Deemed contributions prior to the Transaction | | | 42,410 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 42,410 | | | — |
Capital distributions | | | (153,524) | | | (146) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (153,670) | | | — |
Capital distributions paid to noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (23,102) | | | — | | | (23,102) | | | — |
Capital distributions paid to redeemable noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (16,710) |
Equity transaction with Mosaic | | | 60,935 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 60,935 | | | (60,935) |
Unrealized loss on cash flow hedge prior to the Transaction | | | — | | | — | | | — | | | — | | | — | | | — | | | (5,641) | | | — | | | — | | | (5,641) | | | — |
Translation adjustment prior to the Transaction | | | — | | | — | | | — | | | — | | | — | | | — | | | 393 | | | — | | | — | | | 393 | | | — |
Net income (loss) prior to the Transaction | | | (6,990) | | | 67 | | | — | | | — | | | — | | | — | | | — | | | 3,873 | | | — | | | (3,050) | | | 5,944 |
Issuance of Class A common stock pursuant to the Transaction and PIPE transaction | | | — | | | — | | | 4 | | | — | | | 339,315 | | | — | | | — | | | — | | | — | | | 339,319 | | | — |
Issuance of Class C common stock to existing members | | | — | | | — | | | — | | | 14 | | | (14) | | | — | | | — | | | — | | | — | | | — | | | — |
Effect of the Transaction and purchase of GCMH units | | | 366,192 | | | 145 | | | — | | | — | | | (343,434) | | | (32,817) | | | 8,970 | | | — | | | (141,905) | | | (142,849) | | | — |
Deferred tax adjustments related to TRA | | | — | | | — | | | — | | | — | | | 14,011 | | | — | | | — | | | — | | | 129 | | | 14,140 | | | — |
Deferred costs | | | — | | | — | | | — | | | — | | | (9,878) | | | — | | | — | | | — | | | (35,689) | | | (45,567) | | | — |
Issuance of Class A common stock due to exercised warrants | | | — | | | — | | | — | | | — | | | 2,705 | | | — | | | — | | | — | | | 9,609 | | | 12,314 | | | — |
Deemed contributions subsequent to the Transaction | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 129,948 | | | 129,948 | | | — |
Equity reallocation to redeemable noncontrolling interest | | | — | | | — | | | — | | | — | | | — | | | (1,064) | | | — | | | — | | | (3,836) | | | (4,900) | | | 4,900 |
| | Partners’ Deficit | | | Member’s Deficit- GCM, L.L.C. | | | Class A Common Stock | | | Class C Common Stock | | | Additional Paid-in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Noncontrolling Interest in Subsidiaries | | | Noncontrolling Interest in GCMH | | | Total Equity (Deficit) | | | Redeemable Noncontrolling Interest | |
Unrealized gain on cash flow hedge subsequent to the Transaction | | | — | | | — | | | — | | | — | | | — | | | — | | | 165 | | | — | | | 596 | | | 761 | | | — |
Translation adjustment subsequent to the Transaction | | | — | | | — | | | — | | | — | | | — | | | — | | | 84 | | | — | | | 301 | | | 385 | | | — |
Net income (loss) subsequent to the Transaction | | | — | | | — | | | — | | | — | | | — | | | 4,049 | | | — | | | 7,744 | | | (106,014) | | | (94,221) | | | 8,125 |
Balance, December 31, 2020, as restated(1) | | | $— | | | $— | | | $4 | | | $14 | | | $2,705 | | | $(29,832) | | | $(2,233) | | | $94,013 | | | $(146,861) | | | $(82,190) | | | $115,121 |
(1) | For discussion on the restatement adjustments, see Note 4. |
| | Year Ended December 31, | |||||||
| | 2020 (As Restated(1)) | | | 2019 | | | 2018 | |
Cash flows from operating activities | | | | | | | |||
Net income (loss) | | | $(83,202) | | | $59,998 | | | $63,685 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | | | | | | | |||
Depreciation and amortization expense | | | 9,818 | | | 10,338 | | | 11,663 |
Deferred taxes | | | 629 | | | — | | | — |
Other non-cash compensation | | | 4,564 | | | 4,030 | | | 1,788 |
Non-cash partnership interest-based compensation | | | 172,358 | | | 30,233 | | | 19,495 |
Amortization of debt issuance costs | | | 1,336 | | | 1,643 | | | 1,686 |
Loss on extinguishment of debt | | | 1,514 | | | — | | | — |
Change in fair value of derivatives | | | 8,572 | | | 5,417 | | | 1,344 |
Change in fair value of warrants liabilities | | | 13,315 | | | — | | | — |
Amortization of deferred rent | | | 130 | | | 152 | | | (897) |
Proceeds received from investments | | | 8,050 | | | 10,289 | | | 18,347 |
Non-cash investment income | | | (10,742) | | | (7,521) | | | (16,963) |
Other | | | 2,351 | | | 526 | | | 539 |
Change in assets and liabilities | | | | | | | |||
Management fees receivable | | | (595) | | | 5,132 | | | (291) |
Incentive fees receivable | | | (48,653) | | | (7,242) | | | 7,594 |
Due from related parties | | | (1,100) | | | (3,467) | | | (1,218) |
Other assets | | | (16,568) | | | (5,876) | | | 1,968 |
Accrued compensation and benefits | | | 6,295 | | | (3,531) | | | (459) |
Employee related obligations | | | 2,660 | | | (4,029) | | | 6,583 |
Accrued expenses and other liabilities | | | (2,562) | | | 101 | | | 2,165 |
Net cash provided by operating activities | | | 68,170 | | | 96,193 | | | 117,029 |
Cash flows from investing activities | | | | | | | |||
Purchases of premises and equipment | | | (1,308) | | | (3,995) | | | (868) |
Contributions/subscriptions to investments | | | (23,911) | | | (21,505) | | | (23,210) |
Withdrawals/redemption from investments | | | 19,688 | | | 31,630 | | | 32,040 |
Net cash provided by (used in) investing activities | | | (5,531) | | | 6,130 | | | 7,962 |
Cash flows from financing activities | | | | | | | |||
Capital contributions received from noncontrolling interest | | | 177,832 | | | 4,720 | | | 6,447 |
Capital contributions received from member | | | — | | | 18 | | | — |
Capital distributions paid to partners and member | | | (153,670) | | | (69,624) | | | (82,247) |
Capital distributions paid to the noncontrolling interest | | | (39,812) | | | (43,660) | | | (49,234) |
Proceeds from credit facility | | | 20,000 | | | 25,000 | | | — |
Principal payments on credit facility | | | (45,000) | | | — | | | — |
Principal payments on senior loan | | | (91,195) | | | (7,325) | | | (27,447) |
Debt issuance costs | | | — | | | — | | | (1,291) |
Capital contributions related to the Transaction and PIPE transactions net of underwriting costs | | | 179,857 | | | — | | | — |
Proceeds from exercise of warrants | | | 6,745 | | | — | | | — |
Net cash provided by (used in) financing activities | | | 54,757 | | | (90,871) | | | (153,772) |
Effect of exchange rate changes on cash | | | 884 | | | 314 | | | (182) |
Net increase (decrease) in cash and cash equivalents | | | $118,280 | | | $11,766 | | | $(28,963) |
Cash and cash equivalents | | | | | | | |||
Beginning of year | | | 79,866 | | | 68,100 | | | 97,063 |
End of year | | | $198,146 | | | $79,866 | | | $68,100 |
Supplemental disclosure of cash flow information | | | | | | | |||
Cash paid during the year for interest | | | $21,464 | | | $22,674 | | | $23,587 |
Cash paid during the year for income taxes | | | $3,160 | | | $1,739 | | | $1,352 |
Supplemental disclosure of non-cash information from financing activities | | | | | | | |||
Deemed contributions from GCMH Equityholders | | | $172,358 | | | $30,233 | | | $19,495 |
Establishment of deferred tax assets, net related to tax receivable agreement and the Transaction | | | $14,140 | | | $— | | | $— |
(1) | For discussion on the restatement adjustments, see Note 4. |
• | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; |
• | Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and |
• | Level 3 – Inputs that are unobservable. |
• | CFAC merged with and into GCMG, upon which the separate corporate existence of CFAC ceased and GCMG became the surviving entity; |
• | GCMH cancelled its ownership of the 100 shares of common stock of GCMG; |
• | Each share of CFAC common stock was converted into one share of the GCMG’s Class A common stock, and each whole warrant of CFAC was converted into one warrant of the GCMG; |
• | GCMG received $120.4 million remaining in CFAC’s trust account (the “Trust Account”) following redemptions made in connection with CFAC’s special meeting of stockholders relating to the transactions contemplated by the Transaction Agreement; |
• | Qualified institutional buyers and accredited investors (“PIPE Investors”) purchased 19,500,000 shares of the GCMG’s Class A common stock at $10.00 per share; |
• | The CF Sponsor purchased 3,500,000 shares of the GCMG’s Class A common stock and 1,500,000 of the GCMG's warrants for an aggregate price equal to $30.0 million pursuant to a forward purchase contract; |
• | The CF Sponsor terminated, forfeited and cancelled, for no consideration, 2,351,534 shares of the GCMG’s Class A common stock and 150,000 of the GCMG’s warrants; |
• | GCMG issued 900,000 warrants to purchase Class A common stock to Holdings; |
• | Holdings assigned, and IntermediateCo assumed, all right, title and interest in and to the Option Agreement, dated as of October 5, 2017, by and among Holdings and HCFP VI AIV, L.P., H&F Chicago AIV I, L.P. and Hellman & Friedman Capital Executives VI, L.P. (the “H&F Parties”) in exchange for consideration of $110.2 million, minus the purchase price payable to the H&F Parties by IntermediateCo under the Option Agreement in the Option Conveyance. |
• | Immediately following the Option Conveyance, IntermediateCo consummated the exercise of certain options to purchase all of the Class B-2 common units of GCMH then held by certain investors; |
• | GCMHGP LLC sold all of the outstanding equity interests of GCMH then held by it, including the general partnership and limited partnership interests, to IntermediateCo for $1.5 million and Holdings sold all of the outstanding equity interests of GCM LLC to IntermediateCo for $1.00; |
• | GCMH was redomiciled as a limited liability limited partnership in the State of Delaware and its Limited Liability Limited Partnership Agreement was amended and restated to, among other things, reconstitute all previous classes of partnership interest to economically equivalent common units; |
• | GCMH issued to IntermediateCo 28,316,895 Grosvenor common units and 23,893,809 warrants for Grosvenor common units, in each case in exchange for $227.7 million; |
• | GCMG issued 144,235,246 shares of GCMG’s Class C common stock to GCM V. |
| | As of December 31, 2020 | |||||||
| | As Previously Reported | | | Restatement Impacts | | | As Restated | |
Assets | | | | | | | |||
Cash and cash equivalents | | | $198,146 | | | $— | | | $198,146 |
Management fees receivable | | | 14,524 | | | — | | | 14,524 |
Incentive fees receivable | | | 69,424 | | | — | | | 69,424 |
Due from related parties | | | 11,326 | | | — | | | 11,326 |
Investments | | | 166,273 | | | — | | | 166,273 |
Premises and equipment, net | | | 7,870 | | | — | | | 7,870 |
Intangible assets, net | | | 8,588 | | | — | | | 8,588 |
Goodwill | | | 28,959 | | | — | | | 28,959 |
Deferred tax assets, net | | | 73,766 | | | 387 | | | 74,153 |
Other assets | | | 53,015 | | | — | | | 53,015 |
Total assets | | | 631,891 | | | 387 | | | 632,278 |
Liabilities and Equity (Deficit) | | | | | | | |||
Accrued compensation and benefits | | | 74,681 | | | — | | | 74,681 |
Employee related obligations | | | 25,274 | | | — | | | 25,274 |
Debt | | | 335,155 | | | — | | | 335,155 |
Payable to related parties pursuant to the tax receivable agreement | | | 60,131 | | | 387 | | | 60,518 |
Warrant liabilities | | | — | | | 42,793 | | | 42,793 |
Accrued expenses and other liabilities | | | 60,926 | | | — | | | 60,926 |
Total liabilities | | | 556,167 | | | 43,180 | | | 599,347 |
Commitments and contingencies (Note 18) | | | | | | | |||
Redeemable noncontrolling interest | | | 115,121 | | | — | | | 115,121 |
Partners’ deficit | | | — | | | — | | | — |
Preferred stock, $0.0001 par value, 100,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2020 | | | — | | | — | | | — |
Class A common stock, $0.0001 par value, 700,000,000 authorized; 40,835,093 issued and outstanding as of December 31, 2020 | | | 4 | | | — | | | 4 |
Class B common stock, $0.0001 par value, 500,000,000 authorized; 0 shares issued and outstanding as of December 31, 2020 | | | — | | | — | | | — |
Class C common stock, $0.0001 par value, 300,000,000 authorized; 144,235,246 issued and outstanding as of December 31, 2020 | | | 14 | | | — | | | 14 |
Additional paid-in capital | | | 2,298 | | | 407 | | | 2,705 |
Accumulated other comprehensive income (loss) | | | (2,233) | | | — | | | (2,233) |
Retained earnings | | | (20,098) | | | (9,734) | | | (29,832) |
Member’s deficit - GCM, L.L.C. | | | — | | | — | | | — |
Total GCM Grosvenor Inc. deficit / partners’ and member’s deficit | | | (20,015) | | | (9,327) | | | (29,342) |
Noncontrolling interests in subsidiaries | | | 94,013 | | | — | | | 94,013 |
Noncontrolling interests in GCMH | | | (113,395) | | | (33,466) | | | (146,861) |
Total deficit | | | (39,397) | | | (42,793) | | | (82,190) |
Total liabilities and equity (deficit) | | | $631,891 | | | $387 | | | $632,278 |
| | Year Ended December 31, 2020 | |||||||
| | As Previously Reported | | | Restatement Impacts | | | As Restated | |
Revenues | | | | | | | |||
Management fees | | | $310,745 | | | $— | | | $310,745 |
Incentive fees | | | 111,650 | | | — | | | 111,650 |
Other operating income | | | 7,586 | | | — | | | 7,586 |
Total operating revenues | | | 429,981 | | | — | | | 429,981 |
Expenses | | | | | | | |||
Employee compensation and benefits | | | 388,465 | | | — | | | 388,465 |
General, administrative and other | | | 82,374 | | | 2,257 | | | 84,631 |
Total operating expenses | | | 470,839 | | | 2,257 | | | 473,096 |
Operating loss | | | (40,858) | | | (2,257) | | | (43,115) |
Investment income | | | 10,742 | | | — | | | 10,742 |
Interest income (expense) | | | (23,446) | | | — | | | (23,446) |
Other income (expense) | | | (9,562) | | | — | | | (9,562) |
Change in fair value of warrant liabilities | | | — | | | (13,315) | | | (13,315) |
Net other income (expense) | | | (22,266) | | | (13,315) | | | (35,581) |
Loss before income taxes | | | (63,124) | | | (15,572) | | | (78,696) |
Income taxes | | | 4,506 | | | — | | | 4,506 |
Net loss | | | (67,630) | | | (15,572) | | | (83,202) |
Less: Net income attributable to redeemable noncontrolling interest | | | 14,069 | | | — | | | 14,069 |
Less: Net income attributable to noncontrolling interests in subsidiaries | | | 11,617 | | | — | | | 11,617 |
Less: Net income (loss) attributable to noncontrolling interests in GCMH | | | (100,823) | | | (12,114) | | | (112,937) |
Net income (loss) attributable to GCM Grosvenor Inc. | | | $7,507 | | | $(3,458) | | | $4,049 |
| | | | | | ||||
Earnings (loss) per share of Class A common stock(1): | | | | | | | |||
Basic | | | $0.19 | | | $(0.09) | | | $0.10 |
Diluted | | | $(0.50) | | | $(0.08) | | | $(0.58) |
Weighted average shares of Class A common stock outstanding(1): | | | | | | | |||
Basic | | | 39,984,515 | | | — | | | 39,984,515 |
Diluted | | | 184,219,761 | | | — | | | 184,219,761 |
(1) | Represents earnings (loss) per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the period from November 17, 2020 through December 31, 2020, the period following the Transaction, as defined in Note 3 (see Note 21). |
| | Year Ended December 31, 2020 | |||||||
| | As Previously Reported | | | Restatement Impacts | | | As Restated | |
Net loss | | | $(67,630) | | | $(15,572) | | | $(83,202) |
Other comprehensive income (loss): | | | | | | | |||
Unrealized gain on cash flow hedges | | | (4,880) | | | — | | | (4,880) |
Foreign currency translation adjustment | | | 778 | | | — | | | 778 |
Total other comprehensive income (loss) | | | (4,102) | | | — | | | (4,102) |
Comprehensive income (loss) before noncontrolling interests | | | (71,732) | | | (15,572) | | | (87,304) |
Less: Comprehensive income attributable to redeemable noncontrolling interest | | | 14,069 | | | — | | | 14,069 |
Less: Comprehensive income attributable to noncontrolling interests in subsidiaries | | | 11,617 | | | — | | | 11,617 |
Less: Comprehensive income (loss) attributable to noncontrolling interests in GCMH | | | (105,174) | | | (12,114) | | | (117,288) |
Comprehensive income (loss) attributable to GCM Grosvenor Inc. | | | $7,756 | | | $(3,458) | | | $4,298 |
| | Partners’ Deficit | | | Member’s Deficit- GCM, L.L.C. | | | Class A Common Stock | | | Class C Common Stock | | | Additional Paid-in Capital | | | Retained Earnings | | | Accumulated Other Comprehensive Income (Loss) | | | Noncontrolling Interest in Subsidiaries | | | Noncontrolling Interest in GCMH | | | Total Equity (Deficit) | | | Redeemable Noncontrolling Interest | |
As Previously Reported, For The Year Ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Effect of the Transaction and purchase of GCMH units | | | $366,192 | | | $145 | | | $— | | | $— | | | $(342,945) | | | $(26,541) | | | $8,970 | | | $— | | | $(117,459) | | | $(111,638) | | | $— |
Deferred costs | | | — | | | — | | | — | | | — | | | (10,367) | | | — | | | — | | | — | | | (37,457) | | | (47,824) | | | — |
Issuance of Class A common stock due to exercised warrants | | | — | | | — | | | — | | | — | | | 2,298 | | | — | | | — | | | — | | | 8,283 | | | 10,581 | | | — |
Net income (loss) subsequent to the Transaction | | | — | | | — | | | — | | | — | | | — | | | 7,507 | | | — | | | 7,744 | | | (93,900) | | | (78,649) | | | 8,125 |
Restatement Impacts, For The Year Ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Effect of the Transaction and purchase of GCMH units | | | — | | | — | | | — | | | — | | | (489) | | | (6,276) | | | — | | | — | | | (24,446) | | | (31,211) | | | — |
Deferred costs | | | — | | | — | | | — | | | — | | | 489 | | | — | | | — | | | — | | | 1,768 | | | 2,257 | | | — |
Issuance of Class A common stock due to exercised warrants | | | — | | | — | | | — | | | — | | | 407 | | | — | | | — | | | — | | | 1,326 | | | 1,733 | | | — |
Net income (loss) subsequent to the Transaction | | | — | | | ` | | | — | | | — | | | — | | | (3,458) | | | — | | | — | | | (12,114) | | | (15,572) | | | — |
As Restated, For The Year Ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Effect of the Transaction and purchase of GCMH units | | | 366,192 | | | 145 | | | — | | | — | | | (343,434) | | | (32,817) | | | 8,970 | | | — | | | (141,905) | | | (142,849) | | | — |
Deferred costs | | | — | | | — | | | — | | | — | | | (9,878) | | | — | | | — | | | — | | | (35,689) | | | (45,567) | | | — |
Issuance of Class A common stock due to exercised warrants | | | — | | | — | | | — | | | — | | | 2,705 | | | — | | | — | | | — | | | 9,609 | | | 12,314 | | | — |
Net income (loss) subsequent to the Transaction | | | $— | | | $— | | | $— | | | $— | | | $— | | | $4,049 | | | $— | | | $7,744 | | | $(106,014) | | | $(94,221) | | | $8,125 |
| | Year Ended December 31, 2020 | |||||||
| | As Previously Reported | | | Restatement Impacts | | | As Restated | |
Cash flows from operating activities | | | | | | | |||
Net income (loss) | | | $(67,630) | | | $(15,572) | | | $(83,202) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | | | | | | | |||
Depreciation and amortization expense | | | 9,818 | | | — | | | 9,818 |
Deferred taxes | | | 629 | | | — | | | 629 |
Other non-cash compensation | | | 4,564 | | | — | | | 4,564 |
Non-cash partnership interest-based compensation | | | 172,358 | | | — | | | 172,358 |
Amortization of debt issuance costs | | | 1,336 | | | — | | | 1,336 |
Loss on extinguishment of debt | | | 1,514 | | | — | | | 1,514 |
Change in fair value of derivatives | | | 8,572 | | | — | | | 8,572 |
Change in fair value of warrants liabilities | | | — | | | 13,315 | | | 13,315 |
Amortization of deferred rent | | | 130 | | | — | | | 130 |
Proceeds received from investments | | | 8,050 | | | — | | | 8,050 |
Non-cash investment income | | | (10,742) | | | — | | | (10,742) |
Other | | | 94 | | | 2,257 | | | 2,351 |
Change in assets and liabilities | | | | | | | |||
Management fees receivable | | | (595) | | | — | | | (595) |
Incentive fees receivable | | | (48,653) | | | — | | | (48,653) |
Due from related parties | | | (1,100) | | | — | | | (1,100) |
Other assets | | | (16,568) | | | — | | | (16,568) |
Accrued compensation and benefits | | | 6,295 | | | — | | | 6,295 |
Employee related obligations | | | 2,660 | | | — | | | 2,660 |
Accrued expenses and other liabilities | | | (2,562) | | | — | | | (2,562) |
Net cash provided by operating activities | | | 68,170 | | | — | | | 68,170 |
Cash flows from investing activities | | | | | | | |||
Purchases of premises and equipment | | | (1,308) | | | — | | | (1,308) |
Contributions/subscriptions to investments | | | (23,911) | | | — | | | (23,911) |
Withdrawals/redemption from investments | | | 19,688 | | | — | | | 19,688 |
Net cash provided by (used in) investing activities | | | (5,531) | | | — | | | (5,531) |
Cash flows from financing activities | | | | | | | |||
Capital contributions received from noncontrolling interest | | | 177,832 | | | — | | | 177,832 |
Capital contributions received from member | | | — | | | — | | | — |
Capital distributions paid to partners and member | | | (153,670) | | | — | | | (153,670) |
Capital distributions paid to the noncontrolling interest | | | (39,812) | | | — | | | (39,812) |
Proceeds from credit facility | | | 20,000 | | | — | | | 20,000 |
Principal payments on credit facility | | | (45,000) | | | — | | | (45,000) |
Principal payments on senior loan | | | (91,195) | | | — | | | (91,195) |
Debt issuance costs | | | — | | | — | | | — |
Capital contributions related to the Transaction and PIPE transactions net of underwriting costs | | | 179,857 | | | — | | | 179,857 |
Proceeds from exercise of warrants | | | 6,745 | | | — | | | 6,745 |
Net cash provided by (used in) financing activities | | | 54,757 | | | — | | | 54,757 |
Effect of exchange rate changes on cash | | | 884 | | | — | | | 884 |
Net increase (decrease) in cash and cash equivalents | | | $118,280 | | | $— | | | $118,280 |
Cash and cash equivalents | | | | | | | |||
Beginning of year | | | 79,866 | | | — | | | 79,866 |
End of year | | | $198,146 | | | $— | | | $198,146 |
Supplemental disclosure of cash flow information | | | | | | | |||
Cash paid during the year for interest | | | $21,464 | | | $— | | | $21,464 |
Cash paid during the year for income taxes | | | $3,160 | | | $— | | | $3,160 |
Supplemental disclosure of non-cash information from financing activities | | | | | | | |||
Deemed contributions from GCMH Equityholders | | | $172,358 | | | $— | | | $172,358 |
Establishment of deferred tax assets, net related to tax receivable agreement and the Transaction | | | $14,140 | | | $— | | | $14,140 |
| | Year Ended December 31, | |||||||
Management fees | | | 2020 | | | 2019 | | | 2018 |
Management fees | | | $302,339 | | | $318,008 | | | $311,456 |
Fund expense reimbursement revenue | | | 8,406 | | | 6,708 | | | 4,142 |
Total management fees | | | $310,745 | | | $324,716 | | | $315,598 |
| | Year Ended December 31, | |||||||
Incentive fees | | | 2020 | | | 2019 | | | 2018 |
Performance fees | | | $52,726 | | | $14,413 | | | $3,111 |
Carried interest | | | 58,924 | | | 69,752 | | | 53,948 |
Total incentive fees | | | $111,650 | | | $84,165 | | | $57,059 |
| | As of December 31, | ||||
| | 2020 | | | 2019 | |
Equity method investments | | | $165,095 | | | $154,900 |
Other investments | | | 1,178 | | | 4,458 |
Total investments | | | $166,273 | | | $159,358 |
| | As of December 31, | ||||
| | 2020 | | | 2019 | |
Total Assets | | | $30,860,617 | | | $28,594,587 |
Total Liabilities | | | $2,228,078 | | | $1,324,162 |
Total Equity | | | $28,632,539 | | | $27,270,425 |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Investment income | | | $71,613 | | | $144,667 | | | $115,640 |
Expenses | | | 249,401 | | | 218,037 | | | 200,914 |
Net investment income (loss) | | | (177,788) | | | (73,370) | | | (85,274) |
Net realized and unrealized gain | | | 2,423,252 | | | 2,055,007 | | | 1,465,984 |
Net income | | | $2,245,464 | | | $1,981,637 | | | $1,380,710 |
| | As Restated Fair Value of Assets (Liabilities) as of December 31, 2020 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Money market funds | | | $149,553 | | | $— | | | $— | | | $149,553 |
Interest rate derivatives | | | — | | | (28,442) | | | — | | | (28,442) |
Public warrants | | | (36,421) | | | — | | | — | | | (36,421) |
Private warrants | | | — | | | — | | | (6,372) | | | (6,372) |
Total | | | $113,132 | | | $(28,442) | | | $(6,372) | | | $78,318 |
| | Fair Value of Assets (Liabilities) as of December 31, 2019 | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Money market funds | | | $45,209 | | | $— | | | $— | | | $45,209 |
Interest rate derivatives | | | — | | | (14,990) | | | — | | | (14,990) |
Total | | | $45,209 | | | $(14,990) | | | $— | | | $30,219 |
| | December 31, 2020 | | | November 17, 2020 (Initial Measurement) | |
Risk-free interest rate | | | 0.35% | | | 0.39% |
Expected term (years) | | | 4.9 | | | 5.0 |
Expected volatility | | | 16% | | | 25% |
• | The risk-free interest rate assumption was based on the term-matched U.S. Treasury rate, which was commensurate with the contractual term of the private warrants, which expire on the earlier of five years after the completion of the Transaction or liquidation of the Company. An increase in the risk-free interest rate, in isolation, would result in an increase in the fair value measurement of the warrant liabilities and vice versa. |
• | The expected term was determined to be approximately 5 years, which is commensurate with the contractual maximum term of the private warrants, which expire on the earlier of five years after the completion of the Transaction or liquidation of the Company. A decrease in the expected term, in isolation, would result in an decrease in the fair value measurement of the warrant liabilities. |
• | The expected volatility assumption was based on consideration of the implied volatility from the Company’s publicly-traded warrants and the historical and implied volatility of the Company’s publicly-traded industry peers. An increase in the expected volatility, in isolation, would result in an increase in the fair value measurement of the warrant liabilities. |
| | Private Warrants | |
Balance at beginning of period | | | $— |
Issuances | | | (4,401) |
Change in fair value | | | (1,971) |
Balance at end of period | | | $(6,372) |
| | As of December 31, 2020 | |||||||
| | Gross carrying amount | | | Accumulated amortization | | | Net carrying amount | |
Subject to amortization: | | | | | | | |||
Investment management contracts | | | $36,190 | | | $(35,756) | | | $434 |
Customer relationships | | | 23,518 | | | (15,364) | | | 8,154 |
Technology | | | 2,030 | | | (2,030) | | | — |
Other | | | 620 | | | (620) | | | — |
| | $62,358 | | | $(53,770) | | | $8,588 |
| | As of December 31, 2019 | |||||||
| | Gross carrying amount | | | Accumulated amortization | | | Net carrying amount | |
Subject to amortization: | | | | | | | |||
Investment management contracts | | | $36,190 | | | $(30,648) | | | $5,542 |
Customer relationships | | | 23,518 | | | (13,258) | | | 10,260 |
Technology | | | 2,030 | | | (1,740) | | | 290 |
Other | | | 620 | | | (620) | | | — |
| | $62,358 | | | $(46,266) | | | $16,092 |
Year Ended December 31, | | | |
2021 | | | $2,333 |
2022 | | | 2,316 |
2023 | | | 1,313 |
2024 | | | 1,313 |
2025 | | | 1,313 |
Thereafter | | | — |
| | Class A common stock | | | Class B common stock | | | Class C common stock | |
November 17, 2020 | | | | | | | |||
Issuance of common stock pursuant to the Transaction | | | 39,914,862 | | | — | | | 144,235,246 |
Exercise of warrants | | | 920,231 | | | — | | | — |
December 31, 2020 | | | 40,835,093 | | | — | | | 144,235,246 |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, the last reported sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders. |
| | As of December 31, | ||||
| | 2020 | | | 2019 | |
Investments | | | $77,511 | | | $77,927 |
Receivables | | | 14,322 | | | 9,135 |
Maximum exposure to loss | | | $91,833 | | | $87,062 |
| | As of December 31, | | | Estimated Useful Lives | ||||
| | 2020 | | | 2019 | | |||
Furniture, fixtures and leasehold improvements | | | $36,614 | | | $35,656 | | | 3 – 7 years |
Office equipment | | | 994 | | | 967 | | | 5 years |
Computer equipment and software | | | 17,868 | | | 17,447 | | | 3 – 5 years |
Aircraft | | | 3,100 | | | 3,100 | | | 5 years |
Premises and equipment, at cost | | | 58,576 | | | 57,170 | | | |
Accumulated depreciation and amortization | | | (50,706) | | | (48,299) | | | |
Premises and equipment, net | | | $7,870 | | | $8,871 | | |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Cash-based employee compensation and benefits | | | $165,829 | | | $169,862 | | | $157,351 |
Partnership interest-based compensation | | | 172,358 | | | 30,233 | | | 19,495 |
Carried interest compensation | | | 34,260 | | | 38,842 | | | 31,780 |
Cash-based incentive fee related compensation | | | 11,454 | | | — | | | — |
Other | | | 4,564 | | | 4,030 | | | 1,788 |
Total employee compensation and benefits | | | $388,465 | | | $242,967 | | | $210,414 |
| | As of December 31, | ||||
| | 2020 | | | 2019 | |
Senior loan | | | $340,259 | | | $431,454 |
Credit facility | | | — | | | 25,000 |
Less debt issuance costs | | | (5,104) | | | (7,954) |
Total debt | | | $335,155 | | | $448,500 |
Year Ended December 31, | | | |
2021 | | | $— |
2022 | | | — |
2023 | | | — |
2024 | | | — |
2025 | | | 340,259 |
Thereafter | | | — |
Total | | | $340,259 |
| | | | | | As of December 31, 2020 | ||||||||||||
Derivative | | | Notional Amount | | | Fair Value as of December 31, 2020 | | | Fixed Rate Paid | | | Floating Rate Received | | | Effective Date(3) | | | Maturity Date |
Interest rate swap | | | $225,000 | | | $(11,163) | | | 2.48% | | | 1 month LIBOR(1) | | | January 2020 | | | February 2023 |
Interest rate swap | | | 75,000 | | | (4,654) | | | 3.05% | | | 1 month LIBOR(1) | | | January 2020 | | | February 2023 |
Interest rate collar | | | 300,000 | | | (12,625) | | | 3.70% | | | 1 month LIBOR(2) | | | February 2023 | | | February 2025 |
| | | | $(28,442) | | | | | | | | |
(1) | Floating rate received subject to a 0.00% Floor. |
(2) | Floating rate received subject to a 2.45% Floor. |
(3) | Represents the date at which the derivative is in effect and the Company is contractually required to begin payment of interest under the terms of the agreement. |
| | | | | | As of December 31, 2019 | ||||||||||||
Derivative | | | Notional Amount | | | Fair Value as of December 31, 2019 | | | Fixed Rate Paid | | | Floating Rate Received | | | Effective Date(4) | | | Maturity Date |
Interest rate swap | | | $275,000 | | | $(124) | | | 2.33% | | | 1 month LIBOR(1) | | | January 2014 | | | January 2020 |
Interest rate swap | | | 225,000 | | | (6,159) | | | 2.48% | | | 1 month LIBOR(2) | | | January 2020 | | | February 2023 |
Interest rate swap | | | 75,000 | | | (3,348) | | | 3.05% | | | 1 month LIBOR(2) | | | January 2020 | | | February 2023 |
Interest rate collar | | | 300,000 | | | (5,359) | | | 3.70% | | | 1 month LIBOR(3) | | | February 2023 | | | February 2025 |
| | | | $(14,990) | | | | | | | | |
(1) | Floating rate received subject to a 1.00% Floor. |
(2) | Floating rate received subject to a 0.00% Floor. |
(3) | Floating rate received subject to a 2.45% Floor. |
(4) | Represents the date at which the derivative is in effect and the Company is contractually required to begin payment of interest under the terms of the agreement. |
| | Year Ended December 31, | ||||
| | 2020 | | | 2019 | |
Unrealized loss at beginning of period | | | $(6,933) | | | $(412) |
Cumulative-effect adjustment from adoption of ASU 2017-12 | | | 650 | | | — |
Amount of loss recognized in other comprehensive income (loss) | | | (9,110) | | | (6,688) |
Amount reclassified from accumulated other comprehensive loss to interest expense | | | 4,230 | | | 167 |
Unrealized loss at end of period | | | (11,163) | | | (6,933) |
Less: Loss attributable to noncontrolling interests in GCMH | | | (8,743) | | | — |
Unrealized loss at end of period, net | | | $(2,420) | | | $(6,933) |
| | Year Ended December 31, | ||||
| | 2020 | | | 2019 | |
Other income (expense) | | | $(8,572) | | | $(5,417) |
| | As of December 31, | ||||
| | 2020 | | | 2019 | |
Carried interest payable | | | $3,122 | | | $4,422 |
Deferred revenue | | | 10,033 | | | 12,443 |
Deferred rent | | | 7,015 | | | 6,885 |
Clawback obligation | | | 1,400 | | | 3,600 |
Derivative liability | | | 28,442 | | | 14,990 |
Other liabilities | | | 10,914 | | | 9,864 |
Total accrued expenses and other liabilities | | | $60,926 | | | $52,204 |
Year Ended December 31, | | | |
2021 | | | $8,975 |
2022 | | | 8,323 |
2023 | | | 6,475 |
2024 | | | 2,941 |
2025 | | | 2,900 |
Thereafter | | | 2,220 |
| | $31,834 |
| | Year Ended December 31, | |||||||
| | 2020 | | | 2019 | | | 2018 | |
Current: | | | | | | | |||
Federal | | | $1,118 | | | $— | | | $— |
State and local | | | 1,771 | | | 1,683 | | | 976 |
Foreign | | | 988 | | | 635 | | | 419 |
Total current income taxes expense | | | $3,877 | | | $2,318 | | | $1,395 |
Deferred: | | | | | | | |||
Federal | | | $937 | | | $— | | | $— |
State and local | | | (301) | | | — | | | — |
Foreign | | | (7) | | | — | | | — |
Total deferred income taxes expense | | | 629 | | | — | | | — |
Total income tax expense | | | $4,506 | | | $2,318 | | | $1,395 |
| | Year Ended December 31, | |||||||
| | 2020 (As Restated) | | | 2019 | | | 2018 | |
Statutory U.S. federal income tax rate | | | 21% | | | 21% | | | 21% |
State and local income taxes | | | (2)% | | | 3% | | | 1% |
Impact of noncontrolling interests | | | (24)% | | | (5)% | | | (8)% |
Income passed through to members | | | 1% | | | (16)% | | | (13)% |
Foreign income taxes | | | (1)% | | | 1% | | | 1% |
Other | | | (1)% | | | —% | | | —% |
Effective income tax rate | | | (6)% | | | 4% | | | 2% |
| | As of December 31, | ||||
| | 2020 (As Restated) | | | 2019 | |
Investment in GCMH | | | $101,259 | | | $— |
Loss and credit carryforwards | | | 17 | | | — |
Intangibles and other | | | 836 | | | 126 |
Total deferred tax assets (before valuation allowance) | | | 102,112 | | | 126 |
Valuation allowance | | | (27,715) | | | |
Total deferred tax assets | | | $74,397 | | | $126 |
| | | | |||
Other | | | $(244) | | | $— |
Total deferred tax liabilities | | | $(244) | | | $— |
Deferred tax assets, net | | | $74,153 | | | $126 |
| | November 17, 2020 through December 31, 2020 (As Restated) | |
Numerator for earnings (loss) per share calculation: | | | |
Net income attributable to GCM Grosvenor Inc. | | | $4,049 |
Exchange of Partnership units | | | (111,042) |
Net loss attributable to common stockholders, diluted | | | (106,993) |
| | ||
Denominator for earnings (loss) per share calculation: | | | |
Weighted-average shares, basic | | | 39,984,515 |
Exchange of Partnership units | | | 144,235,246 |
Weighted-average shares, diluted | | | 184,219,761 |
| | ||
Basic EPS | | | |
Net income attributable to common stockholders, basic | | | $4,049 |
Weighted-average shares, basic | | | 39,984,515 |
Net income per share attributable to common stockholders, basic | | | $0.10 |
| | ||
Diluted EPS | | | |
Net loss attributable to common stockholders, diluted | | | $(106,993) |
Weighted-average shares, diluted | | | 184,219,761 |
Net loss per share attributable to common stockholders, diluted | | | $(0.58) |
| | As of December 31, 2020 | |
Warrants | | | 22,973,567 |
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