CHICAGO, Sept. 18, 2020 /PRNewswire/ -- GCM Grosvenor
today reported its results for the second fiscal quarter ended
June 30, 2020, including GAAP Net
Income of $5.9 million, Adjusted
Pre-Tax Income of $19.8 million,
Adjusted EBITDA of $26.2 million and
Adjusted Fee-Related Earnings of $25.1
million, all of which increased over prior quarter ended
March 31, 2020.
Based on financial results through the first six months of the
fiscal year and continued positive trends in July and August, GCM
Grosvenor management expects to outperform its prior full year 2020
forecast. Key drivers include outperformance on Fee-Paying
AUM ("FPAUM"), Contracted Not Yet Fee-Paying AUM ("CNFPAUM"),
expenses and investment performance.
SECOND QUARTER FISCAL 2020 HIGHLIGHTS
- Assets under management ("AUM") increased to $56.9 billion, an increase of $1.1 billion (or 2.0%) versus the quarter ended
March 31, 2020.
- Fee-paying AUM increased to $49.6
billion, an increase of $1.8
billion (or 3.8%) versus the quarter ended March 31,2020.
- Contracted Not Yet FPAUM increased to $5.6 billion, an increase of $0.2 billion (or 3.5%) versus the quarter ended
March 31,2020.
- Net Fees Attributable to GCM Grosvenor of $75.7 million for the quarter were comprised of
97% management fees.
- GAAP Net Income increased to $5.9
million, an increase of $20.9
million versus the quarter ended March 31, 2020.
- Adjusted Pre-Tax Income increased to $19.8 million, an increase of $7.0 million (or 54%) versus the quarter ended
March 31, 2020.
- Adjusted EBITDA increased to $26.2
million, an increase of $6.8
million (or 35%) versus the quarter ended March 31,2020.
- Adjusted FRE increased to $25.1
million, an increase of $7.5
million (or 43%) versus the quarter ended March 31,2020.
THIRD QUARTER INTERIM UPDATE
- Continued positive trends in July and August resulted in
$14.4 million of unrealized, accrued
annual performance fees that are eligible to be realized in 2020,
as of August 31
GCM Grosvenor CEO Michael Sacks
commented: "We are enthusiastic about our ability to drive value
for clients and our emergence as a public company. While we
are pleased to be ahead of plan, we remain focused on delivering
for all stakeholders over appropriate time periods."
GCM Grosvenor issued a more detailed presentation on second
fiscal quarter 2020 results, which is available at
https://www.cantor.com/our-business/affiliates/.
GCM Grosvenor announced on August 3,
2020 that it will become a public company through a merger
with CF Finance Acquisition Corp. ("CFAC") (NASDAQ: CFFA), a
special purpose acquisition company sponsored by Cantor
Fitzgerald.
In connection with the transaction announcement, GCM Grosvenor
issued an investor presentation, which contained a forecast for the
full fiscal year 2020, which is available at
https://www.cantor.com/our-business/affiliates/.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws, including
statements regarding the expected future performance of GCM
Grosvenor's business. These forward-looking statements generally
are identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would" and similar
expressions. Forward-looking statements are predictions,
projections and other statements about future events that are based
on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. Many factors could cause actual
future events to differ materially from the forward-looking
statements in this presentation. You should carefully consider the
foregoing factors and the other risks and uncertainties described
in the "Risk Factors" section of the joint registration
statement/proxy statement on Form S-4 discussed below and other
documents filed by CF Finance Acquisition Corp. ("CFAC") and GCM
Grosvenor Inc. from time to time with the U.S. Securities and
Exchange Commission (the "SEC"). These filings identify and address
other important risks and uncertainties that could cause actual
events and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and GCM Grosvenor and
CFAC assume no obligation and do not intend to update or revise
these forward-looking statements, whether as a result of new
information, future events, or otherwise. Neither GCM Grosvenor nor
CFAC gives any assurance that GCM Grosvenor will achieve its
expectations.
Use of Projections
This press release contains reference to financial forecasts
with respect to GCM Grosvenor's projected financial results. The
assumptions and estimates underlying the prospective financial
information are inherently uncertain and are subject to a wide
variety of significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially
from those contained in the prospective financial information.
Accordingly, there can be no assurance that the prospective results
are indicative of the future performance of GCM Grosvenor or that
actual results will not differ materially from those presented in
the prospective financial information. Reference the
prospective financial information in this press release should not
be regarded as a representation by any person that the results
contained in the prospective financial information will be
achieved.
Additional Information and Where to Find It
This press release relates to a proposed transaction between GCM
Grosvenor and CFAC. This press release does not constitute an offer
to sell or exchange, or the solicitation of an offer to buy or
exchange, any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. CFAC and GCM Grosvenor
Inc. have filed a registration statement on Form S-4 that includes
a joint proxy statement/prospectus. The proxy statement/prospectus
will be sent to all CFAC stockholders. CFAC and GCM Grosvenor Inc.
also will file other documents regarding the proposed transaction
with the SEC. Before making any voting decision, investors and
security holders of CFAC are urged to read the registration
statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC in connection
with the proposed transaction as they become available because they
will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free
copies of the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC by CFAC through
the website maintained by the SEC at www.sec.gov.
Participants in Solicitation
CFAC and GCM Grosvenor Inc. and their respective directors and
officers may be deemed to be participants in the solicitation of
proxies from CFAC's stockholders in connection with the proposed
transaction between CFAC and GCM Grosvenor. Information about
CFAC's directors and executive officers and their ownership of
CFAC's securities is set forth in the Form S-4 registration
statement filed by GCM Grosvenor that includes a joint proxy
statement/prospectus. Additional information regarding the
interests of those persons and other persons who may be deemed
participants in the proposed transaction may be obtained by reading
the proxy statement/prospectus regarding the proposed transaction.
You may obtain free copies of these documents as described in the
preceding paragraph.
Use of Non-GAAP Financial Measures
This presentation includes certain non-GAAP financial measures.
These non-GAAP measures are in addition to , and not a substitute
for or superior to, measures of financial performance prepared in
accordance with GAAP, and should not be considered as an
alternative to revenue, net income, operating income or any other
performance measures derived in accordance with GAAP.
Reconciliations of historical non-GAAP measures to their most
directly comparable GAAP counterparts are included in below.
GCM Grosvenor believes that these non-GAAP measures of financial
results provide useful supplemental information to investors about
GCM Grosvenor. GCM Grosvenor's management uses these non-GAAP
measures to evaluate GCM's projected financial and operating
performance. However, there are a number of limitations related to
the use of these non-GAAP measures and their nearest GAAP
equivalents. For example other companies may calculate non-GAAP
measures differently, or may use other measures to calculate their
financial performance, and therefore GCM Grosvenor's non-GAAP
measures may not be directly comparable to similarly titled
measures of other companies.
This press release also includes reference to certain
projections of non-GAAP financial measures. Due to the high
variability and difficulty in making accurate forecasts and
projections of some of the information excluded from these
projected measures, together with some of the excluded information
not being ascertainable or accessible, GCM Grosvenor is unable to
quantify certain amounts that would be required to be included in
the most directly comparable GAAP financial measures without
unreasonable effort. Consequently, no disclosure of estimated
comparable GAAP measures is included and no reconciliation of the
forward looking non GAAP financial measures is included.
Reconciliation to Non-GAAP Metrics
|
Three Months Ended
2020
|
|
Six Months
Ended 2020
|
(in thousands of
dollars)
|
31-Mar
|
|
30-Jun
|
|
30-Jun
|
Net fees
attributable to GCM Grosvenor
|
|
|
|
|
|
Total operating
revenues
|
82,617
|
|
90,130
|
|
172,747
|
Less:
|
|
|
|
|
|
Fund expense
reimbursement revenue
|
(1,974)
|
|
(1,827)
|
|
(3,801)
|
Carried interest
expense attributable to employees and former employees
|
(1,201)
|
|
(7,819)
|
|
(9,020)
|
Carried interest
expense attributable to redeemable noncontrolling interest
holder
|
(865)
|
|
(2,804)
|
|
(3,669)
|
Carried interest
attributable to other noncontrolling interest holders,
net
|
(468)
|
|
(1,969)
|
|
(2,437)
|
Net fees
attributable to GCM Grosvenor
|
78,109
|
|
75,711
|
|
153,820
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted pre-tax
income &
Adjusted net income attributable to GCM Grosvenor
|
|
|
|
|
|
Net income (loss)
attributable to GCM Grosvenor
|
(14,955)
|
|
5,927
|
|
(9,028)
|
Plus:
|
|
|
|
|
|
Income
taxes
|
643
|
|
526
|
|
1,169
|
Change in fair value
of derivatives
|
8,634
|
|
1,417
|
|
10,051
|
Amortization
expense
|
1,876
|
|
1,876
|
|
3,752
|
Severance
expense
|
2,280
|
|
8
|
|
2,288
|
Transaction
expenses
|
3,355
|
|
145
|
|
3,500
|
Loss on
extinguishment of debt
|
1,032
|
|
482
|
|
1,514
|
Other
|
-
|
|
4
|
|
4
|
Partnership
interest-based compensation
|
7,920
|
|
8,856
|
|
16,776
|
Other non-cash
compensation
|
1,065
|
|
1,160
|
|
2,225
|
Less:
|
|
|
|
|
|
Investment income,
net of noncontrolling interest
|
(33)
|
|
(110)
|
|
(143)
|
Net compensation
expense associated with deferred revenue carry
|
990
|
|
(508)
|
|
482
|
Adjusted pre-tax
income attributable to GCM Grosvenor
|
12,807
|
|
19,783
|
|
32,590
|
Less:
|
|
|
|
|
|
Income
taxes
|
(643)
|
|
(526)
|
|
(1,169)
|
Adjusted net
income attributable to GCM Grosvenor
|
12,164
|
|
19,257
|
|
31,421
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
attributable to GCM Grosvenor
|
|
|
|
|
|
Adjusted net
income attributable to GCM Grosvenor
|
12,164
|
|
19,257
|
|
31,421
|
Plus:
|
|
|
|
|
|
Income
taxes
|
643
|
|
526
|
|
1,169
|
Depreciation
expense
|
696
|
|
536
|
|
1,232
|
Interest
expense
|
5,867
|
|
5,841
|
|
11,708
|
Adjusted EBITDA
attributable to GCM Grosvenor
|
19,370
|
|
26,160
|
|
45,530
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Fee-related earnings attributable to GCM Grosvenor
|
|
|
|
|
|
Adjusted EBITDA
attributable to GCM Grosvenor
|
19,370
|
|
26,160
|
|
45,530
|
Less:
|
|
|
|
|
|
Incentive
fees
|
(3,233)
|
|
(13,041)
|
|
(16,274)
|
Depreciation
expense
|
(696)
|
|
(536)
|
|
(1,232)
|
Other non-operating
income
|
(414)
|
|
(67)
|
|
(481)
|
Plus:
|
|
|
|
|
|
Carried interest
expense attributable to employees and former employees
|
1,201
|
|
7,819
|
|
9,020
|
Carried interest
expense attributable to redeemable noncontrolling interest
holder
|
865
|
|
2,804
|
|
3,669
|
Carried interest
attributable to other noncontrolling interest holders,
net
|
468
|
|
1,969
|
|
2,437
|
Adjusted
Fee-related earnings attributable to GCM Grosvenor
|
17,561
|
|
25,108
|
|
42,669
|
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SOURCE GCM Grosvenor