Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments

The Company was required to pay a fixed management fee of $0.5 million per year for a five year period that commenced in 2019 pursuant to its 12.5% interest in an aircraft. On March 11, 2021, GCMH entered into an agreement to

assign 50% of its 12.5% share interest in an aircraft to Holdings, for cash consideration of approximately $1.3 million. The Company is now required to pay a fixed management fee of $0.3 million per year.

The Company had $85.6 million and $83.5 million of unfunded investment commitments as of June 30, 2022 and December 31, 2021, respectively, representing general partner capital funding commitments to several of the GCM Funds.

Leases

The Company has entered into operating lease agreements for office space. The Company leases office space in various countries around the world and maintains its headquarters in Chicago, Illinois, where it leases primary office space under a lease agreement expiring September 2026 with an option to terminate early between September 2022 to September 2023 subject to a termination fee. The leases contain rent escalation clauses based on increases in base rent, real estate taxes and operating expenses.

The components of operating lease expense recorded within general, administrative and other in the Condensed Consolidated Statements of Income were as follows:


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Operating lease cost(1)	$	1,938	$	3,784
Variable lease cost(2)	1,069		2,177
Less: sublease income	48		96
Total lease cost	$	2,959	$	5,865

____________

(1)Includes less than $0.1 million and $0.2 million of short term lease expense for the three months and six months ended June 30, 2022, respectively.

(2)Includes common area maintenance charges and other variable costs not included in the measurement of ROU assets and lease liabilities.

The following table summarizes cash flows and other supplemental information related to our operating leases:


	Six Months Ended June 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	4,353
Non-cash ROU assets obtained in exchange for new operating leases	$	693
Weighted average remaining lease term in years	3.1
Weighted average discount rate	3.7		%

As of June 30, 2022, the maturities of operating lease liabilities were as follows:


Remainder of 2022	$	4,370
2023	6,628
2024	2,941
2025	2,907
2026	1,974
Thereafter	—
Total lease payments	18,820
Less imputed interest	(1,094)
Total operating lease liabilities	$	17,726

Litigation

In the normal course of business, the Company may enter into contracts that contain a number of representations and warranties, which may provide for general or specific indemnifications. The Company’s exposure under these contracts is not currently known, as any such exposure would be based on future claims, which could be made against the Company. The Company’s management is not currently aware of any such pending claims and based on its experience, the Company believes the risk of loss related to these arrangements to be remote.

From time to time, the Company is a defendant in various lawsuits related to its business. The Company’s management does not believe that the outcome of any current litigation will have a material effect on the Company’s Condensed Consolidated Financial Statements.

Off-Balance Sheet Risks

The Company may be exposed to a risk of loss by virtue of certain subsidiaries serving as the general partner of GCM Funds organized as limited partnerships. As general partner of a GCM Fund organized as a limited partnership, the Company’s subsidiaries that serve as the general partner have exposure to risk of loss that is not limited to the amount of its investment in such GCM Fund. The Company cannot predict the amount of loss, if any, which may occur as a result of this exposure; however, historically, the Company has not incurred any significant losses and management believes the likelihood is remote that a material loss will occur.