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What changed in GCM Grosvenor Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GCM Grosvenor Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+601 added−592 removedSource: 10-K (2025-02-21) vs 10-K (2024-03-01)

Top changes in GCM Grosvenor Inc.'s 2024 10-K

601 paragraphs added · 592 removed · 488 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

162 edited+35 added−35 removed124 unchanged
Biggest changeHistorical Performance of Private Market Strategies Realized and Partially Realized Investments As of September 30, 2023 ($ in millions, unless otherwise mentioned) Strategy Commitments Contributions Distributions Current Value Investment Net TVPI Investment Net IRR PME PME Index Private Equity Primary Fund Investments (1) $ 13,396 $ 14,652 $ 24,167 $ 2,742 1.84 13.7 % 10.5 % S&P 500 Secondary Investments (2) $ 554 $ 485 $ 630 $ 195 1.70 19.1 % 12.1 % S&P 500 Co-Investments/Direct Investments (3) $ 3,403 $ 3,255 $ 5,517 $ 1,245 2.08 21.9 % 16.1 % S&P 500 Infrastructure (4) $ 3,062 $ 3,097 $ 4,084 $ 1,300 1.74 12.6 % 6.7 % MSCI World Infrastructure Real Estate (5) $ 639 $ 658 $ 920 $ 47 1.47 16.8 % 12.0 % FNERTR Index Sustainable and Impact Investments Diverse Managers (6) $ 2,454 $ 2,599 $ 3,685 $ 1,800 2.11 22.9 % 14.6 % S&P 500 Infrastructure Advantage Strategy (7) — — — — N/A N/A N/A MSCI World Infrastructure Note: Returns for each strategy are presented from the date the firm established a dedicated team focused on such strategy through September 30, 2023.
Biggest changeIn 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. 22 Historical Performance of Private Market Strategies Realized and Partially Realized Investments As of September 30, 2024 ($ in millions, unless otherwise mentioned) Strategy Commitments Contributions Distributions Current Value Investment Net TVPI Investment Net IRR PME PME Index Private Equity Primary Fund Investments (1) $ 14,103 $ 15,377 $ 25,695 $ 2,292 1.82 13.5 % 9.9 % S&P 500 Secondary Investments (2) $ 585 $ 518 $ 717 $ 190 1.75 18.4 % 12.0 % S&P 500 Co-Investments/Direct Investments (3) $ 3,771 $ 3,587 $ 6,016 $ 1,466 2.09 20.8 % 14.9 % S&P 500 Infrastructure (4) Primary Fund Investments (4) $ 321 $ 358 $ 484 $ 155 1.79 12.4 % 6.4 % MSCI World Infrastructure Direct-Oriented Investments (4) $ 2,713 $ 2,653 $ 3,816 $ 952 1.80 14.7 % 5.9 % MSCI World Infrastructure Real Estate (5) $ 793 $ 808 $ 1,053 $ 56 1.37 13.9 % 9.7 % FNERTR Index Note: Returns for each strategy are presented from the date the firm established a dedicated team focused on such strategy through September 30, 2024.
Investment net returns are net of investment-related fees and expenses, including fees paid to underlying managers, but do not reflect management fees, performance fees, or carried interest to GCM Grosvenor or any expenses of any account or vehicle GCM Grosvenor manages.
Investment net returns are net of investment-related fees and expenses, including fees paid to underlying managers, but do not reflect management fees, performance fees, or carried interest to GCM Grosvenor or any expenses of any account or vehicle GCM Grosvenor manages.
Investment net returns are net of investment-related fees and expenses, including fees paid to underlying managers, but do not reflect management fees, performance fees, or carried interest to GCM Grosvenor or any expenses of any account or vehicle GCM Grosvenor manages.
Investment net returns are net of investment-related fees and expenses, including fees paid to underlying managers, but do not reflect management fees, performance fees, or carried interest to GCM Grosvenor or any expenses of any account or vehicle GCM Grosvenor manages.
In general, these requirements relate to registration, licenses for our personnel, periodic inspections, the provision and filing of periodic reports, and obtaining certifications and other approvals. Across the EU, we are subject to the European Union Alternative Investment Fund Managers Directive (“AIFMD”) and to AIFMD as implemented into domestic law in the U.K.
In general, these requirements relate to registration, licenses for our personnel, periodic inspections, the provision and filing of periodic reports, and obtaining certifications and other approvals. Across the EU, we are subject to the requirements of the European Union Alternative Investment Fund Managers Directive (“AIFMD”) and to AIFMD as implemented into domestic law in the U.K.
Historically, we have competed principally on the basis of the factors listed below: • 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; 28 • 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 a 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.
Historically, we have competed principally on the basis of the factors listed below: • 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 a 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.
Applicable requirements relate to, among other things, disclosure and reporting obligations, maintaining an effective compliance program and appointing a chief compliance officer, fiduciary duties to clients, engaging in transactions with clients, 29 client solicitation arrangements, disclosing and managing conflicts of interest, using promotional materials, and recordkeeping. The Advisers Act regulates the assignment of advisory contracts by the investment advisor.
Applicable requirements relate to, among other things, disclosure and reporting obligations, maintaining an effective compliance program and appointing a chief compliance officer, fiduciary duties to clients, engaging in transactions with clients, client solicitation arrangements, disclosing and managing conflicts of interest, using promotional materials, and recordkeeping. The Advisers Act regulates the assignment of advisory contracts by the investment advisor.
In addition, our reputation as a longstanding, value-added limited partner with significant access to primary capital makes us an attractive buyer from the manager’s perspective. Further, because we have capital available from our specialized funds and customized separate accounts, we have flexibility to invest in secondary transactions of various sizes on behalf of our clients.
In addition, our reputation as a longstanding, value-added limited partner with significant access to primary capital makes us an 18 attractive buyer from the manager’s perspective. Further, because we have capital available from our specialized funds and customized separate accounts, we have flexibility to invest in secondary transactions of various sizes on behalf of our clients.
GDPR”) with respect to individuals residing in the United Kingdom (the “U.K.”), and various other privacy laws applicable to individuals residing in jurisdictions in which we may operate. Any failure or perceived failure to comply with such laws or regulations could result in fines, penalties and/or sanctions, which could be substantial, litigation (including class actions) as well as reputational harm.
GDPR”) with respect to individuals residing in the United Kingdom (the “U.K.”), and various other privacy laws applicable to individuals residing in jurisdictions in which we operate. Any failure or perceived failure to comply with such laws or regulations could result in fines, penalties and/or sanctions, which could be substantial, litigation (including class actions) as well as reputational harm.
Similar to private markets, for large relationships, we may adjust the fixed fee component and/or performance fee component based on an analysis of the total economics of the relationship. Expenses In addition to fees, both our absolute return and private markets programs also typically bear reasonable expenses incurred in connection with their organization.
Similar to private markets, for large relationships, we may adjust the fixed fee component and/or performance fee component based on an analysis of the total economics of the relationship. 28 Expenses In addition to fees, both our absolute return and private markets programs also typically bear reasonable expenses incurred in connection with their organization.
We believe our proactive sourcing enables us to get a head start on the identification and evaluation of investment opportunities. Global offices. With multiple investment offices located in the U.S., Europe and Asia, we maintain a global footprint and perspective, allowing us to source idiosyncratic deal flow from local markets.
We believe our proactive sourcing enables us to get a head start on the identification and evaluation of investment opportunities. Global offices. With multiple investment offices located in the U.S., Europe, Asia, and Australia, we maintain a global footprint and perspective, allowing us to source idiosyncratic deal flow from local markets.
Moreover, to the extent that these laws and regulations or the enforcement of the same become more stringent, or if new laws or regulations are enacted, including the SEC’s proposed rules related to cybersecurity risk management for registered investment advisers, our financial performance or plans for growth may be adversely impacted.
Moreover, to the extent that these laws and regulations or the 32 enforcement of the same become more stringent, or if new laws or regulations are enacted, including the SEC’s proposed rules related to cybersecurity risk management for registered investment advisers, our financial performance or plans for growth may be adversely impacted.
We believe that one of our competitive advantages is our comprehensive and robust sourcing and investment process. Our deal flow is sourced through multiple channels and reviewed through a rigorous, multi-step selection process that includes independent investment and operational due diligence. We maintain a robust pipeline of primary fund investments, secondaries, direct and co-investments.
We believe that one of our competitive advantages is our comprehensive and robust sourcing and investment process. Our deal flow is sourced through multiple channels and reviewed through a rigorous, multi-step selection process that includes independent investment and operational due diligence. 19 We maintain a robust pipeline of primary fund investments, secondaries, direct and co-investments.
With respect to our specialized funds, we primarily compete with the private and absolute return investment businesses of a number of large international financial institutions and established local and regional competitors based in the United States, Europe and Asia, including managers offering funds-of-funds, secondary funds and co-investment funds in the alternative investment strategies.
With respect to our specialized funds, we primarily compete with the private and absolute return investment businesses of a number of large international financial institutions and established local and regional competitors based in the United States, Europe, Asia and Australia, including managers offering funds-of-funds, secondary funds and co-investment funds in the alternative investment strategies.
The goals of operational due diligence process are to: • Evaluate risk: Determine whether an investment meets our operational due diligence standards; • Mitigate risk (2) : Seek to avoid losses and reputational risks arising from operational issues; • Structure investments: Evaluate the legal and governance structure and terms of investment; and • Enhance terms: Negotiate improved terms.
The goals of operational due diligence process are to: • Evaluate risk: Determine whether an investment meets our operational due diligence standards; 20 • Mitigate risk (2) : Seek to avoid losses and reputational risks arising from operational issues; • Structure investments: Evaluate the legal and governance structure and terms of investment; and • Enhance terms: Negotiate improved terms.
The management fee rate also depends on the total fee-paying assets of a given client. 27 The management fee base for a given program can be based on committed capital, invested capital or a ramp-in /ramp-down schedule based on a percent of total committed capital. Programs may employ one or more of these methodologies.
The management fee rate also depends on the total fee-paying assets of a given client. The management fee base for a given program can be based on committed capital, invested capital or a ramp-in /ramp-down schedule based on a percent of total committed capital. Programs may employ one or more of these methodologies.
Investment Strategies Across Asset Classes Middle Market and Small, Emerging and Diverse Managers For the past 30 years we have developed a market-leading, dedicated effort to investing in and alongside middle market and small and emerging managers, which we believe adds significant, differentiated value to our clients.
Investment Strategies Across Asset Classes Middle Market and Small and Emerging Managers For the past 30 years we have developed a market-leading, dedicated effort to investing in and alongside middle market and small and emerging managers, which we believe adds significant, differentiated value to our clients.
To the extent they admit 31 U.S. investors, our offshore funds must apply the same criteria to these investors as our domestic funds apply to their investors in order to be exempt from registration and regulation under the Investment Company Act.
To the extent they admit U.S. investors, our offshore funds must apply the same criteria to these investors as our domestic funds apply to their investors in order to be exempt from registration and regulation under the Investment Company Act.
Privacy and Cyber Security Regulation Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the California Consumer Privacy Act (the “CCPA”), as amended by the California Privacy Rights Act, and similar state comprehensive privacy laws, which provide enhanced privacy rights for state residents; the European Union General Data Protection Regulation (“EU GDPR”), a regulation designed to protect privacy rights of individuals residing in the European Economic Area (the “EEA”); the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (“U.K.
Privacy and Cyber Security Regulation Many jurisdictions in which we operate have laws and regulations relating to data privacy, cybersecurity and protection of personal information, including the California Consumer Privacy Act as amended by the California Privacy Rights Act (the “CCPA”), and similar comprehensive privacy laws of other states, which provide enhanced privacy rights for state residents; the European Union General Data Protection Regulation (“EU GDPR”), a regulation designed to protect privacy rights of individuals residing in the European Economic Area (the “EEA”); the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (“U.K.
This approach allows us to access investments where proprietary 16 sourcing, value-add capabilities and differentiated underwriting can lead to lower entry values and better risk return profiles.
This approach allows us to access investments where proprietary sourcing, value-add capabilities and differentiated underwriting can lead to lower entry values and better risk return profiles.
The partnership-centric nature of our private markets customized separate account relationships has resulted in long-tenure programs and high re-up rates of approximately 90% from January 1, 2018 through December 31, 2023. For closed-end programs, capital deployment is typically highly programmatic, meaning re-ups typically occur every few years.
The partnership-centric nature of our private markets customized separate account relationships has resulted in long-tenure programs and high re-up rates of approximately 90% from January 1, 2018 through December 31, 2024. For closed-end programs, capital deployment is typically highly programmatic, meaning re-ups typically occur every few years.
Unlike a typical anchor LP commitment, because seed investors participate at the management company level, they may participate in management fees and/or carried interest from current and future funds and any other cash flows that accrue to the management company. 19 Our differentiated approach to seed investing leverages our 30-year track record sourcing and investing in small, emerging and diverse managers.
Unlike a typical anchor LP commitment, because seed investors participate at the management company level, they may participate in management fees and/or carried interest from current and future funds and any other cash flows that accrue to the management company. Our differentiated approach to seed investing leverages our 30-year track record sourcing and investing in small and emerging managers.
Our affiliated U.S. broker-dealer GRV Securities is registered with the SEC as a broker-dealer and is a member of FINRA and accordingly is subject to Exchange Act and FINRA rules and regulations that cover all aspects of its business, including anti-money laundering, advertising, compensation, fiduciary standards, sales practices, recordkeeping and the conduct of directors, officers and employees.
Our affiliated U.S. broker-dealer GRV Securities is registered with the SEC as a broker-dealer and is a member of FINRA and accordingly is subject to Exchange Act and FINRA rules and regulations that cover all aspects of its business, including registration, licensing, anti-money laundering, advertising, compensation, fiduciary standards, sales practices, recordkeeping and the conduct of directors, officers and employees.
(“UK AIFMD”) requirements regarding, among other things, registration for marketing activities, the structure of remuneration for certain of our personnel and reporting obligations. Individual member states of the EU have imposed additional requirements that may include internal arrangements with respect to risk management, liquidity risks, asset valuations, and the establishment and security of depository and custodial requirements.
(“UK AIFMD”) regarding, among other things, registration for marketing activities, the structure of remuneration for certain of our personnel and reporting obligations. Individual member states of the EU have imposed additional requirements that may include internal arrangements with respect to risk management, liquidity risks, asset valuations, and the establishment of and adherence to depository and custodial requirements.
Our relationships with a large pool of high-quality managers and management teams serve as a source of investment opportunities including secondaries and co-investments. We have experience and access across the spectrum of market and manager size. As of December 31, 2023, we tracked over 6,300 managers in our database. Proactive sourcing log.
Our relationships with a large pool of high-quality managers and management teams serve as a source of investment opportunities including secondaries and co-investments. We have experience and access across the spectrum of market and manager size. As of December 31, 2024, we tracked over 6,300 managers in our database. Proactive sourcing log.
Our clients include some of the world’s largest pension funds, sovereign wealth entities, corporations, financial institutions, and insurance corporations. Our individual investor base includes family offices and high-net-worth and mass affluent individuals. 8 Note: AUM as of December 31, 2023. Management fees for the twelve months ended December 31, 2023.
Our clients include some of the world’s largest pension funds, sovereign wealth entities, corporations, financial institutions, and insurance corporations. Our individual investor base includes family offices and high-net-worth and mass affluent individuals. 8 Note: AUM as of December 31, 2024. Management fees for the twelve months ended December 31, 2024.
In the U.S., the Investment Company Act imposes substantive regulation on virtually all aspects of a registered investment company’s operation, including limitations on borrowing and leveraged capital structures, requiring that it be managed by a board of directors (or similar body), a majority of whom are not interested persons of the fund or its adviser, prohibitions on most transactions with affiliates, compliance program requirements, limitations on the payment of performance fees to advisers, and advertising, recordkeeping, reporting and disclosure requirements.
In the U.S., the Investment Company Act imposes substantive regulation on virtually all aspects of a registered investment company’s operation, including limitations on borrowing and leveraged capital structures, requiring that it be managed by a board of directors (or similar body), a majority of whose members are not interested persons of the fund or its adviser, prohibitions on most transactions with affiliates, compliance program requirements, limitations on the payment of performance fees to advisers, and advertising, recordkeeping, reporting and disclosure requirements.
In addition to pension funds, sovereign wealth funds, corporate pension funds, multiemployer pension funds and financial institutions, which have historically comprised a significant portion of our AUM, in 15 recent periods we have extended our investment strategies and marketing efforts increasingly to insurance companies and to individual investors, which we believe remain under-allocated to alternative assets.
In addition to pension funds, sovereign wealth funds, corporate pension funds, multiemployer pension funds and financial institutions, which have historically comprised a significant portion of our AUM, in recent periods we have extended our investment strategies and marketing efforts increasingly to insurance companies and to individual investors, both of which we believe remain under-allocated to alternative assets.
Direct-oriented strategies AUM has grown to represent 52% of total firm AUM as of December 31, 2023, compared to 39% as of December 31, 2020. Primary Fund Investments Primary fund investments are investments in funds, either at the time the funds are initially launched (for private markets strategies) or on an ongoing basis (for absolute return strategies).
Direct-oriented strategies AUM has grown to represent 52% of total firm AUM as of December 31, 2024, compared to 39% as of December 31, 2020. Primary Fund Investments Primary fund investments are investments in funds, either at the time the funds are initially launched (for private markets strategies) or on an ongoing basis (for absolute return strategies).
Whilst, the U.K. and EU ratified a trade deal, it does not include provision for U.K. regulated firms to continue to be able to passport their services into EU member states, which has had direct implications to our business. For example, our subsidiaries that are authorized and regulated by the U.K.
While the U.K. and EU ratified a trade deal, it does not include provision for U.K. regulated firms to continue to be able to passport their services into EU member states, which has had direct implications to our business. For example, our subsidiaries that are authorized and regulated by the U.K.
In private markets, clients generally commit to invest over a multi-year time period and have an expected duration of seven years or more. As of December 31, 2023, 52% of Private Markets AUM was in direct-oriented strategies (secondaries, co-investments, direct investments, and seed investments).
In private markets, clients generally commit to invest over a multi-year time period and have an expected duration of seven years or more. As of December 31, 2024, 52% of Private Markets AUM was in direct-oriented strategies (secondaries, co-investments, direct investments, and seed investments).
Taken together, (i), (ii) and (iii) will likely result in divergence between the U.K. and EU regulatory frameworks. This divergence is likely to include (amongst other areas) AIFMD, as the European Parliament is expected to implement EU AIFMD 2 in 2026, which will not be transposed in to U.K. law.
Taken together, (i), (ii) and (iii) will likely result in divergence between the U.K. and EU regulatory frameworks. This divergence is likely to include (among other areas) AIFMD, as the European Parliament is expected to implement EU AIFMD 2 in 2026, which will not be transposed in to U.K. law.
Financial Conduct Authority have lost “passporting” privileges under certain EU directives, such as the AIFMD and the Markets in Financial Instruments Directive II (“MiFID II”), which certain of our specialized funds and customized separate accounts have relied upon for access to markets throughout the EU.
Financial Conduct Authority have lost “passporting” privileges under certain EU directives, such as the AIFMD and the Markets in Financial Instruments Directive II (“MiFID II”), which certain of our specialized funds and customized separate accounts had previously relied upon for access to markets throughout the EU.
The data for these investments is presented from the date indicated through September 30, 2023 for private markets strategies and through December 31, 2023 for absolute return strategies and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.
The data for these investments is presented from the date indicated through September 30, 2024 for private markets strategies and through December 31, 2024 for absolute return strategies and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.
We have mitigated the impact of this by establishing relationships with third-party European-domiciled alternative investment fund managers (“AIFMs”) necessary for them to serve as AIFM for certain of our funds and certain customized separate accounts.
We have mitigated the impact of this by establishing relationships with third-party European-domiciled alternative investment fund managers (“AIFMs”) necessary for them to serve as AIFMs for certain of our funds and certain customized separate accounts.
We make available on our website at www.gcmgrosvenor.com, free of charge, copies of these reports and any amendments as soon as reasonably practicable after filing or furnishing them with the SEC. 32
We make available on our website at www.gcmgrosvenor.com, free of charge, copies of these reports and any amendments as soon as reasonably practicable after filing or furnishing them with the SEC. 33
As of December 31, 2023, 52% of our top 50 clients by AUM worked with us in multiple investment strategies. We Are a Market Leader in Customized Alternative Investment Solutions The institutional investor community has increasingly embraced tailored investment programs that are different from the one-size-fits-all solution offered by specialized funds.
As of December 31, 2024, 50% of our top 50 clients by AUM worked with us in multiple investment strategies. We Are a Market Leader in Customized Alternative Investment Solutions The institutional investor community has increasingly embraced tailored investment programs that are different from the one-size-fits-all solution offered by specialized funds.
(2) GCM Grosvenor established a dedicated private equity secondaries vertical in September 2014. Track record reflects all secondaries investments since the new vertical was formed. (3) GCM Grosvenor established a dedicated Private Equity Co-Investment Sub-Committee and adopted a more targeted, active co-investment strategy in December 2008. Track record reflects co-investments/direct investments made since 2009. (4) Reflects infrastructure investments since 2006.
(2) GCM Grosvenor established a dedicated private equity secondaries vertical in September 2014. Track record reflects all secondaries investments since the new vertical was formed. (3) GCM Grosvenor established a dedicated Private Equity Co-Investment Sub-Committee and adopted a more targeted, active co-investment strategy in December 2008. Track record reflects co-investments/direct investments made since 2009.
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.
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; • “PMEs” and “PME Index” 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.
As of December 31, 2023, 52% of our top 50 clients by AUM worked with us in multiple investment strategies (i.e., private equity, infrastructure, real estate, alternative credit and absolute return strategies), compared to 46% as of the end of 2020.
As of December 31, 2024, 50% of our top 50 clients by AUM worked with us in multiple investment strategies (i.e., private equity, infrastructure, real estate, alternative credit and absolute return strategies), compared to 46% as of the end of 2020.
ERISA-Related Regulation Some of our funds are treated as holding “plan assets” as defined under ERISA, as a result of investments in those funds by benefit plan investors. By virtue of our role as investment manager of these funds, we are a “fiduciary” under ERISA with respect to such benefit plan investors.
ERISA-Related Regulation Some of our funds are treated as holding “plan assets” as defined under ERISA, as a result of investments in those funds by benefit plan investors. By virtue of the role of our investment adviser as an investment manager of these funds, we are a “fiduciary” under ERISA with respect to such benefit plan investors.
The difference between AUM and FPAUM is primarily due to approximately $7.3 billion of contracted capital on which we expect to start charging management fees, under existing contracts, over the course of approximately the next three years as capital is invested or based on an agreed upon fee ramp in schedule.
The difference between AUM and FPAUM is primarily due to approximately $8.2 billion of contracted capital on which we expect to start charging management fees, under existing contracts, over the course of approximately the next three years as capital is invested or based on an agreed upon fee ramp in schedule.
Our clients include prominent institutional investors globally including in the United States, Europe, the Middle East, Asia, Australia and Latin America. As of December 31, 2023, approximately 40% of our AUM came from clients based outside of the Americas, reflecting the strength and breadth of our relationships within the global investor community.
Our clients include prominent institutional investors globally including in the United States, Europe, the Middle East, Asia, Australia and Latin America. As of December 31, 2024, approximately 41% of our AUM came from clients based outside of the Americas, reflecting the strength and breadth of our relationships within the global investor community.
Regulations Related to Our Funds Agencies that regulate investment advisers and broker-dealers, including the SEC, have broad administrative powers, including the power to limit, restrict or prohibit an investment adviser such as us or a broker-dealer such as GRV Securities from carrying on its business in the event that it fails to comply with applicable laws and regulations.
Regulations Related to Our Funds Agencies that regulate investment advisers and broker-dealers, including the SEC, have broad administrative powers, including the power to limit, restrict or prohibit an investment adviser such as GCM Grosvenor L.P. or a broker-dealer such as GRV Securities from carrying on its business in the event that it fails to comply with applicable laws and regulations.
Contracted Not Yet Fee-Paying AUM Contracted not yet fee-paying AUM (“CNYFPAUM”) represents limited partner commitments which are expected to be invested and begin charging fees over the ensuing five years. As of December 31, 2023, our CNYFPAUM was near an all-time highs of $7.3 billion, up from $2.3 billion at the end of 2018.
Contracted Not Yet Fee-Paying AUM CNYFPAUM represents limited partner commitments which are expected to be invested and begin charging fees over the ensuing five years. As of December 31, 2024, our CNYFPAUM was near an all-time highs of $8.2 billion, up from $2.3 billion at the end of 2018.
When considering the data presented below, you should note that the historical results of our discretionary investments are not indicative of the future results you should expect from such investments, from any future investment funds we may raise or from any investment in our Class A common stock or warrants, in part because: • 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; • the current sustained inflationary environment and rising interest rates may impact the ability to generate returns for a given investment; and • the performance of particular investment programs also will be affected by risks of the industries and businesses in which they invest.
When considering the data presented below, you should note that the historical results of our discretionary investments are not indicative of the future results you should expect from such investments, from any future investment funds we may raise or from any investment in our Class A common stock or warrants, in part because: • 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; (2) Risk management, diversification and due diligence processes seek to mitigate, but cannot eliminate risk, nor do they imply low risk. 21 • 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; • the current sustained inflationary environment and rising interest rates may impact the ability to generate returns for a given investment; and • the performance of particular investment programs also will be affected by risks of the industries and businesses in which they invest.
We evaluate the performance of our business development professionals by using data-driven technology systems like Salesforce. Operations As of December 31, 2023, our operations team consisted of 291 professionals across multiple offices who perform critical functions in support of our corporate, client and investment activities.
We evaluate the performance of our business development professionals by using data-driven technology systems like Salesforce. 27 Operations As of December 31, 2024, our operations team consisted of 299 professionals across multiple offices who perform critical functions in support of our corporate, client and investment activities.
Private Equity Private equity is our largest private markets investment strategy with $29.4 billion in AUM as of December 31, 2023. We are a recognized industry leader in private equity investing with over 20 years of experience.
Private Equity Private equity is our largest private markets investment strategy with $30.4 billion in AUM as of December 31, 2024. We are a recognized industry leader in private equity investing with over 20 years of experience.
Mark-to-market changes in AUM for funds that charge on commitments is another key difference between our AUM and our FPAUM. 25 Our overall FPAUM has grown from $48.9 billion at the end of 2018 to $61.7 billion as of December 31, 2023, representing a total CAGR of 5%, including a CAGR of 10% for FPAUM for our private markets strategy during the same period.
Mark-to-market changes in AUM for funds that charge on commitments is another key difference between our AUM and our FPAUM. 25 Our overall FPAUM has grown from $48.9 billion at the end of 2018 to $64.8 billion as of December 31, 2024, representing a total CAGR of 5%, including a CAGR of 9% for FPAUM for our private markets strategy during the same period.
Over the last three years 72% of our top 25 clients have expanded their investment relationship with us, and during 2023, over 82% of our gross capital inflows were derived from existing clients.
Over the last three years 72% of our top 25 clients have expanded their investment relationship with us, and during 2024, over 91% of our gross capital inflows were derived from existing clients.
Of the $7.3 billion, approximately $2.7 billion is subject to an agreed upon fee ramp in schedule that will result in management fees being charged on approximately $0.9 billion of such amount in 2024, approximately $0.7 billion of such amount in 2025, and the remaining approximately $1.1 billion in 2026 and beyond.
Of the $8.2 billion, approximately $3.0 billion is subject to an agreed upon fee ramp in schedule that will result in management fees being charged on approximately $1.0 billion of such amount in 2025, approximately $0.8 billion of such amount in 2026, and the remaining approximately $1.2 billion in 2027 and beyond.
Run rate annual performance fees, which reflect the potential annual performance fees generated by performance fee-eligible AUM at an 8% gross return for both multi-strategy and credit strategies, and a 10% gross return for specialized opportunity strategies, were $28.0 million as of December 31, 2023 . • Embedded operating leverage .
Run rate annual performance fees, which reflect the potential annual performance fees generated by performance fee-eligible AUM at an 8% gross return for both multi-strategy and credit strategies, and a 10% gross return for specialized opportunity strategies, were $30.4 million as of December 31, 2024 . • Embedded operating leverage .
Our failure to comply with applicable laws or regulations could result in fines, censure, suspensions of personnel or other sanctions, including revocation of the registration of our subsidiary as an investment adviser or the revocation of the registration of GRV Securities as a broker-dealer.
Our failure to comply with applicable laws or regulations could result in fines, censure, suspensions of personnel or other sanctions, including revocation of the registration of GCM Grosvenor L.P. as an investment adviser or the revocation of the registration of GRV Securities as a broker-dealer.
Total Sustainable Investments AUM is $26.3 billion as of December 31, 2023. 7 Client Offerings and Value Proposition We strive to put our clients’ needs first, and a key to doing that is by providing solutions across alternatives strategies with a high degree of flexibility.
Total Sustainable Investments AUM is $27.8 billion as of December 31, 2024. 7 Client Offerings and Value Proposition We strive to put our clients’ needs first, and a key to doing that is by providing solutions across alternatives strategies with a high degree of flexibility.
In addition, as of December 31, 2023, $37.3 billion of our AUM, or 69% of our AUM in private markets strategies, had a remaining tenor of seven years or more. • Significant visibility into future management fee growth . We have experienced steady growth in the fee-paying AUM (“FPAUM”) that drives our management fees.
In addition, as of December 31, 2024, $37.6 billion of our AUM, or 66%, of our AUM in private markets strategies, had a remaining tenor of seven years or more. • Significant visibility into future management fee growth . We have experienced steady growth in the fee-paying AUM (“FPAUM”) that drives our management fees.
Today, we seek to capture the benefits of these relationships, further amplified by our scale as a $76.9 billion investor as of December 31, 2023, to our clients. Depending on the program, we offer our clients fee savings and preferential terms, access to hard to access managers, and proprietary deal flow.
Today, we seek to capture the benefits of these relationships, further amplified by our scale as a $80.1 billion investor as of December 31, 2024, to our clients. Depending on the program, we offer our clients fee savings and preferential terms, access to hard to access managers, and proprietary deal flow.
Investment Strategies As described below, we provide our clients with access to a full range of alternatives strategies across both private markets and absolute return investment strategies, and diversified across liquidity profile, geographic regions and industries. Private Markets We had $54.5 billion in Private Markets AUM as of December 31, 2023.
Investment Strategies As described below, we provide our clients with access to a full range of alternatives strategies across both private markets and absolute return investment strategies, and diversified across liquidity profile, geographic regions and industries. Private Markets We had $56.8 billion in Private Markets AUM as of December 31, 2024.
We Use our Size, Scale and More Than 50-Year History to Drive a Strong Value Proposition Over 52-years of industry participation and leadership has afforded us with a vast network of relationships across the full spectrum of the alternatives landscape.
Our Size, Scale and More Than 50-Year History to Drive a Strong Value Proposition and Sourcing Engine Over 53-years of industry participation and leadership has afforded us with a vast network of relationships across the full spectrum of the alternatives landscape.
Historical Performance of Absolute Return Strategies Assets Under Management as of December 31, 2023 ($Bn) Annualized Returns Periods Ended December 31, 2023 One Year Three Year Five Year Since Inception Gross Net Gross Net Gross Net Gross Net Absolute Return Strategies (Overall) $ 22.4 8.0 % 7.3 % 2.9 % 2.2 % 5.8 % 5.1 % 6.8 % 5.7 % GCMLP Diversified Multi-Strategy Composite $ 10.8 8.9 % 8.1 % 3.1 % 2.4 % 6.3 % 5.5 % 7.7 % 6.4 % Note: Absolute Return Strategies (Overall) is since 1996.
Historical Performance of Absolute Return Strategies Assets Under Management as of December 31, 2024 ($Bn) Annualized Returns Periods Ended December 31, 2024 One Year Three Year Five Year Since Inception Gross Net Gross Net Gross Net Gross Net Absolute Return Strategies (Overall) $ 23.3 12.2 % 11.4 % 4.5 % 3.8 % 6.8 % 6.1 % 7.0 % 5.9 % GCMLP Diversified Multi-Strategy Composite $ 10.5 14.3 % 13.4 % 5.5 % 4.7 % 7.8 % 7.0 % 7.9 % 6.6 % Note: Absolute Return Strategies (Overall) is since 1996.
We are an experienced and scaled platform with a leading capability in providing custo mized solutions. As of December 31, 2023, we managed $22.4 billion of AUM in our absolute return strategies, or 29% of our total AUM . Strategies Across Private Markets and Absolute Return Strategies • Middle Market and Small, Emerging, and Diverse Managers .
We are an experienced and scaled platform with a leading capability in providing custo mized solutions. As of December 31, 2024, we managed $23.3 billion of AUM in our absolute return strategies, or 29% of our total AUM . Strategies Across Private Markets and Absolute Return Strategies • Middle Market and Small and Emerging Managers .
We are a leader in seeding new platforms, joint venture investing, and other creative and innovative implementation methods to access attractive real estate returns. A s of December 31, 2023, we managed $6.1 billion of AUM in real estate strategies . Absolute Return Strategies • Absolute Return Strategies. We have been investing in hedge fund strategies for over 52 years.
We are a leader in seeding new platforms, joint venture investing, and other creative and innovative implementation methods to access attractive real estate returns. A s of December 31, 2024, we managed $5.9 billion of AUM in real estate strategies . Absolute Return Strategies • Absolute Return Strategies. We have been investing in hedge fund strategies for over 53 years.
Over our history we have continued to expand our global footprint, which we believe provides us with the opportunity to in turn continue to benefit from the ongoing global growth of the alternative asset management industry. We operate in nine primary offices in eight countries, including our newest office in Sydney, Australia, which we opened in 2023.
Over our history we have continued to expand our global footprint, which we believe provides us with the opportunity to in turn continue to benefit from the ongoing global growth of the alternative asset management industry. We operate in nine primary offices in eight countries.
Infrastructure Infrastructure has been our fastest growing alternative investment strategy over the last three years, with AUM increasing by 132% to $13.9 billion as of December 31, 2023 from December 31, 2020. Since our first infrastructure investment in 2003, we have grown into one of the leaders in alternative infrastructure investing across power, utilities, renewables, transportation and telecom/technology infrastructure.
Infrastructure Infrastructure has been our fastest growing alternative investment strategy over the last three years, with AUM increasing by 144% to $14.6 billion as of December 31, 2024 from December 31, 2020. Since our first infrastructure investment in 2003, we have grown into one of the leaders in alternative infrastructure investing across power, utilities, renewables, transportation 16 and telecom/technology infrastructure.
As of December 31, 2023, 52% of our top 50 clients by AUM worked with us in multiple investment strategies (i.e., private equity, infrastructure, real estate and absolute return strategies), compared to 50% as of December 31, 2022. We had over 500 institutional clients as of December 31, 2023, which were broadly diversified by type, size, geography, and revenue.
As of December 31, 2024, 50% of our top 50 clients by AUM worked with us in multiple investment strategies (i.e., private equity, infrastructure, real estate, and absolute return strategies). We had over 550 institutional clients as of December 31, 2024, which were broadly diversified by type, size, geography, and revenue.
For example, as of December 31, 2023, the firm’s share of unrealized carried interest, which relates to cumulative performance for longer duration private markets programs, grew by 180% to $373 million, as compared to December 31, 2020 1 .
For example, as of December 31, 2024, the firm’s share of unrealized carried interest, which relates to cumulative performance for longer duration private markets programs, grew by 201% to $401 million, as compared to December 31, 2020 1 .
It is also responsible for legal and structuring issues associated with investments in private equity, infrastructure, real estate, alternative credit and absolute return strategies, as well as structuring and negotiating documents relating to our specialized funds and our customized separate accounts, including any client-related legal matters related thereto. We utilize the services of outside counsel as we deem necessary.
It is also responsible for legal and structuring issues associated with investments in private equity, infrastructure, real estate, alternative credit and absolute return strategies, as well as structuring and negotiating documents relating to our specialized funds and our customized separate accounts, including any client-related legal matters related thereto.
As of December 31, 2023, we had 538 employees, including 177 investment professionals, operating in nine offices throughout the United States and in Frankfurt, Hong Kong, London, Seoul, Sydney, Tokyo, and Toronto.
As of December 31, 2024, we had 549 employees, including 181 investment professionals, operating in nine offices throughout the United States and in Frankfurt, Hong Kong, London, Seoul, Sydney, Tokyo and Toronto.
We expect that this additional $7.3 billion of capital will bolster our FPAUM growth over the next several years.
We expect that this additional $8.2 billion of capital will bolster our FPAUM growth over the next several years.
While we believe these relationships have, and will continue to, help to ensure that we are able to continue to market certain of our funds in the EU, there remains some uncertainty as to the full extent to which our business could be adversely affected by, among other things, the legal status of the U.K. in relation to the EU, the political conditions in the U.K., the trade relations of the U.K. vis-à-vis other countries and the economic outlook in the U.K.
While we believe these relationships have, and will continue to, help to ensure that we are able to continue to market certain of our funds in the EU, there remains some uncertainty as to the full extent to which our business could be adversely affected by, among other things, the legal status of the U.K. in relation to the EU, the political conditions in the U.K., the trade relations of the U.K. vis-à-vis other countries and the economic outlook in the U.K. 31 In Japan, we are subject to regulation by the Japanese Financial Services Agency and the Kanto Local Finance Bureau.
Investments Team As of December 31, 2023 our investments team consisted of 177 employees. Each of our investment strategies is led by its own leadership team of highly accomplished investment professionals. While primarily focused on managing strategies within their own investment group, these senior professionals are integrated within our platform through economic, cultural and structural measures.
Each of our investment strategies is led by its own leadership team of highly accomplished investment professionals. While primarily focused on managing strategies within their own investment group, these senior professionals are integrated within our platform through economic, cultural and structural measures.
This process is followed for each potential investment regardless of size, stage, strategy, or geography. Sourcing of Opportunities All of our investment strategies benefit from our scale ($76.9 billion in AUM as of December 31, 2023), our extensive track record (over 52 years of experience), our culture of compliance and the depth of our investment team (177 investment professionals).
This process is followed for each potential investment regardless of size, stage, strategy, or geography. Sourcing of Opportunities All of our investment strategies benefit from our scale ($80.1 billion in AUM as of December 31, 2024), our extensive track record (over 53 years of experience), our culture of compliance and the depth of our investment team (181 investment professionals).
Alternatives Are Now Increasingly a Portfolio Mainstay Alternative investment strategies have established a track record of strong returns and outperformance versus both the fixed income and public equity markets in the longer term.
Alternative investment strategies have established a track record of strong returns and outperformance versus both the fixed income and public equity markets in the longer term.
Real Estate Our real estate AUM as of December 31, 2023 was $6.1 billion, a 90% increase compared to December 31, 2020. Since our first real estate investment in 2002, our team has targeted value-add and opportunistic returns through equity and credit investments.
Real Estate Our real estate AUM as of December 31, 2024 was $5.9 billion, a 86% increase compared to December 31, 2020. Since our first real estate investment in 2002, our team has targeted value-add and opportunistic returns through equity and credit investments.
With respect to approximately $4.6 billion of the $7.3 billion, management fees will be charged as such capital is invested, which will depend on a number of factors, including the availability of eligible investment opportunities.
With respect to approximately $5.2 billion of the $8.2 billion, management fees will be charged as such capital is invested, which will depend on a number of factors, including the availability of eligible investment opportunities.
This is because the U.K.: (i) is no longer required to transpose EU law into U.K. law; (ii) has 30 elected to transpose certain EU legislation into U.K. law subject to various amendments and subject to the FCA’s oversight rather than that of EU regulators; and (iii) is looking to implement its own vision for its financial services industry through the Edinburgh Reforms and the Financial Services and Markets Act 2023, which will, over time, repeal and replace assimilated EU law.
This is because the U.K.: (i) is no longer required to transpose EU law into U.K. law; (ii) has elected to transpose certain EU legislation into U.K. law subject to various amendments and subject to the UK’s Financial Conduct Authority’s oversight rather than that of EU regulators; and (iii) is looking to implement its own vision for its financial services industry through various statutes and regulations which will, over time, repeal and replace assimilated EU law.
Annualized Returns Since Inception - Period Ended December 31, 2023 Inception Date Absolute Return Strategies 6.8 % 1996 GCMLP Diversified Multi-Strategy Composite 7.7 % 1993 Note: Absolute Return Strategies (Overall) is since 1996. GCMLP Diversified Multi-Strategy Composite is since 1993. For additional details on our investment performance and explanatory footnotes, please see “— Investment Performance”.
Annualized Returns Since Inception - Period Ended December 31, 2024 Inception Date Absolute Return Strategies 7.0 % 1996 GCMLP Diversified Multi-Strategy Composite 7.9 % 1993 For additional details on our investment performance and explanatory footnotes, please see “— Investment Performance”.
For each of the years ended December 31, 2023 and 2022, net management fees were $360.9 million and $356.4 million, respectively, compared to $15.6 million and $13.9 million of net incentive fees attributable to GCM Grosvenor, respectively. • Stable management fee base. Our management fee stability is rooted in the long-dated nature of our investment programs.
For each of the years ended December 31, 2024 and 2023, net management fees were $387.0 million and $360.9 million, respectively, compared to $36.5 million and $15.6 million of net incentive fees attributable to GCM Grosvenor, respectively. • Long-duration capital and stable management fee base. Our management fee stability is rooted in the long-dated nature of our investment programs.
($ in millions, unless otherwise mentioned) Outperformance of PME by PME Index Annualized Returns Since Inception Inception Date Private Equity Primary Fund Investments (1) 3.2 % S&P 500 13.7 % 2000 Secondaries Investments (2) 7.0 % S&P 500 19.1 % 2014 Co-Investments/Direct Investments (3) 5.8 % S&P 500 21.9 % 2009 Infrastructure (4) 5.9 % MSCI World Infrastructure 12.6 % 2006 Real Estate (5) 4.8 % FNERTR Index 16.8 % 2010 Sustainable and Impact Investments Diverse Managers (6) 8.3 % S&P 500 22.9 % 2007 Infrastructure Advantage Strategy (7) N/A MSCI World Infrastructure N/A N/A Note: Returns for each strategy are presented from the date the firm established a dedicated team focused on such strategy through September 30, 2023.
($ in millions, unless otherwise mentioned) Outperformance of PME by PME Index Annualized Returns Since Inception Inception Date Private Equity Primary Fund Investments (1) 3.6 % S&P 500 13.5 % 2000 Secondaries Investments (2) 6.4 % S&P 500 18.4 % 2014 Co-Investments/Direct Investments (3) 5.9 % S&P 500 20.8 % 2009 Infrastructure (4) Primary Fund Investments (4) 6.0 % MSCI World Infrastructure 12.4 % 2009 Direct-Oriented Investments (4) 8.8 % MSCI World Infrastructure 14.7 % 2009 Real Estate (5) 4.2 % FNERTR Index 13.9 % 2010 Note: Returns for each strategy are presented from the date the firm established a dedicated team focused on such strategy through September 30, 2024.
Track record reflects all secondaries investments since the new vertical was formed. (3) GCM Grosvenor established a dedicated Private Equity Co-Investment Sub-Committee and adopted a more targeted, active co-investment strategy in December 2008. Track record reflects co-investments/direct investments made since 2009. (4) Reflects infrastructure investments since 2006.
Track record reflects all secondaries investments since the new vertical was formed. (3) GCM Grosvenor established a dedicated Private Equity Co-Investment Sub-Committee and adopted a more targeted, active co-investment strategy in December 2008. Track record reflects co-investments/direct investments made since 2009. (4) Reflects infrastructure investments since 2009, when we formalized our global approach and launched the first infrastructure specialized fund.
Our compliance team is led by our global chief compliance officer. The compliance team is responsible for ensuring we maintain a robust compliance program that ensures we comply with the various federal, state, and international regulations applicable to our business.
We utilize the services of outside counsel as we deem necessary. 29 Our compliance team is led by our global chief compliance officer. The compliance team is responsible for ensuring we maintain a robust compliance program that ensures we comply with the various federal, state, and international regulations applicable to our business.
Generally available for commitments of $100 million or more, customized separate accounts comprised $56.4 billion, or 73% of our AUM as of December 31, 2023. • Specialized funds . We continue to expand our offering of specialized funds, which are products through which multiple investors can access a particular investment strategy through a commingled vehicle.
Generally available for commitments of $100 million or more, customized separate accounts comprised $56.7 billion, or 71% of our AUM as of December 31, 2024. • Specialized funds . Our specialized funds are products through which multiple investors can access a particular investment strategy through a commingled vehicle.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe believe that the adverse impact on our business, financial condition and results of operations of another pandemic or global health crisis like COVID-19 will be significantly driven by a number of factors that we are unable to predict or control, including, for example: the severity and duration of the health crisis; the emergence and spread of disease; the health crisis’s impact on the U.S. and global economies; the timing, scope and effectiveness of additional governmental responses to the health crisis; the timing and path of economic recovery; and the negative impact on our clients, counterparties, vendors and other business partners that may indirectly adversely affect us. 52 Risks Related to Our Funds 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, each of which could materially reduce our revenues, earnings and cash flow and materially and adversely affect our business, financial condition and results of operations.
Biggest changeRisks Related to Our Funds Difficult or volatile market, economic and geopolitical 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, each of which could materially reduce our revenues, earnings and cash flow and materially and adversely affect our business, financial condition and results of operations.
In addition, the occurrence of such an event would likely have a negative reputational impact on us.
In addition, the occurrence of such an event would likely have a negative reputational impact on us.
There can be no assurance that co-investments will become available and we will take into account a variety of factors and considerations we deem relevant in our sole discretion in allocating co-investment opportunities, including, without limitation, whether a potential co-investor has expressed an interest in evaluating co-investment opportunities, whether a potential co-investor has a history of participating in such opportunities with us, the size and interest of the opportunity, the economic terms applicable to such investment for such investor and us, whether allocating to a potential co-investor will help establish, recognize, strengthen and/or cultivate existing relationships with an existing or prospective investor and such other factors as we deem relevant under the circumstances.
There can be no assurance that co-investments will become available and we will take into account a variety of factors and considerations we deem relevant in our sole discretion in allocating co-investment opportunities, including, without limitation, whether a potential co-investor has expressed an interest in evaluating co-investment opportunities, whether a potential co-investor has a history of participating in such opportunities with us, the size and interest of the opportunity, the economic terms applicable to such investment for such investor and us, whether allocating to a potential co-investor will help establish, recognize, strengthen and/or cultivate relationships with an existing or prospective investor and such other factors as we deem relevant under the circumstances.
These include ongoing cybersecurity threats to and attacks on our and their IT Systems that are intended to gain unauthorized access to our sensitive or proprietary information, destroy data or disable, degrade or sabotage our systems, and risks from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists.
These include ongoing cybersecurity threats and attacks on our and their IT Systems that are intended to gain unauthorized access to our sensitive or proprietary information, destroy data or disable, degrade or sabotage our systems, and risks from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists.
For example, members of our senior management team may have different tax positions from those of our company and/or our Class A common stockholders, which could influence their decisions regarding whether and when to enter into certain transactions or dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when we should terminate the Tax Receivable Agreement and accelerate the obligations thereunder.
For example, certain members of our senior management team may have different tax positions from those of our company and/or our Class A common stockholders, which could influence their decisions regarding whether and when to enter into certain transactions or dispose of assets, whether and when to incur new or refinance existing indebtedness, and whether and when we should terminate the Tax Receivable Agreement and accelerate the obligations thereunder.
The market price of our Class A common stock and warrants could fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: • t he realization of any of the risk factors presented in this Annual Report on Form 10-K; • 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; 73 • 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 Amended and Restated 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.
The market price of our Class A common stock and warrants could fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: • t he realization of any of the risk factors presented in this Annual Report on Form 10-K; • 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; 75 • 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 Amended and Restated 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.
Such non-U.S. investments involve certain factors not typically associated with U.S. investments, including risks related to: • 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; 58 • 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.
Such non-U.S. investments involve certain factors not typically associated with U.S. investments, including risks related to: • 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.
If any of these systems, or the systems of third-party service providers we utilize, do not operate properly or are disabled or fail, including the loss of or unauthorized access to data, whether caused by fire, other natural disaster, power or telecommunications failure, computer viruses, malicious actors, negligence, acts of terrorism or war or otherwise, or if our third-party service providers fail to perform as expected, we could suffer a disruption of our business, financial loss, liability to clients, regulatory intervention or reputational damage, which could have a material and adverse effect on our business, financial condition and results of operations.
If any of these systems, or the systems of our third-party service providers, do not operate properly or are disabled or fail, including the loss of or unauthorized access to data, whether caused by fire, other natural disaster, power or telecommunications failure, computer viruses, malicious actors, negligence, acts of terrorism or war or otherwise, or if our third-party service providers fail to perform as expected, we could suffer a disruption of our business, financial loss, liability to clients, regulatory intervention or reputational damage, which could have a material and adverse effect on our business, financial condition and results of operations.
Certain losses of a catastrophic nature, such as public health crises, wars, earthquakes, typhoons, terrorist attacks or other similar events, may be uninsurable or may only be insurable at rates that are so high that maintaining coverage would cause an adverse impact on our business, in which case we may choose not to maintain such coverage.
Certain losses of a catastrophic nature, such as public health crises or pandemics, wars, earthquakes, typhoons, terrorist attacks or other similar events, may be uninsurable or may only be insurable at rates that are so high that maintaining coverage would cause an adverse impact on our business, in which case we may choose not to maintain such coverage.
To the extent periods of volatility are coupled with lack of realizations from clients’ existing private markets portfolios, such clients may be left with disproportionately outsized remaining commitments, which significantly limits their ability to make new commitments. 53 Our business could generate lower revenues in a general economic downturn or a tightening of global credit markets.
To the extent periods of volatility are coupled with lack of realizations from clients’ existing private markets portfolios, such clients may be left with disproportionately outsized remaining commitments, which significantly limits their ability to make new commitments. Our business could generate lower revenues in a general economic downturn or a tightening of global credit markets.
For example: • 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, worker, public health and safety or other applicable laws or government actions, which may have a material adverse effect on the operations, financial condition and liquidity of particular assets and ultimately affect investment returns. 63 • Infrastructure asset investments may face construction and development risks including, without limitation: shortages of suitable labor and equipment, adverse construction conditions, challenges in coordinating with public utilities, political or local opposition, failure to obtain regulatory approvals or permits, and catastrophic events such as explosions, fires, war, terrorist activities, natural disasters and other similar events.
For example: • 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, worker, public health and safety or other applicable laws or government actions, which may have a material adverse effect on the operations, financial condition and liquidity of particular assets and ultimately affect investment returns. 65 • Infrastructure asset investments may face construction and development risks including, without limitation: shortages of suitable labor and equipment, adverse construction conditions, challenges in coordinating with public utilities, political or local opposition, failure to obtain regulatory approvals or permits, and catastrophic events such as explosions, fires, war, terrorist activities, natural disasters and other similar events.
Such reform includes, among other things, additional regulation of investment funds, as well as their managers and activities, including compliance, risk management and anti-money laundering procedures; restrictions on specific types of investments and the provision and use of leverage; implementation of capital requirements; limitations on compensation to managers; and books and records, reporting and disclosure requirements.
Such reform includes, among other things, additional regulation of investment funds, as well as their managers 46 and activities, including compliance, risk management and anti-money laundering procedures; restrictions on specific types of investments and the provision and use of leverage; implementation of capital requirements; limitations on compensation to managers; and books and records, reporting and disclosure requirements.
The absence of available sources of sufficient debt financing for extended periods of time or an increase in either the general levels of interest rates or in the risk spread demanded by sources of indebtedness would make it more expensive to finance those investments, and, in the case of rising interest rates, decrease the value of fixed-rate debt investments made by our funds.
The absence of available sources of sufficient debt financing for extended periods of time or an increase in either the general levels of interest rates or in the risk spread demanded by sources of indebtedness would make it more expensive to finance those investments, and, in the case of interest rates, decrease the value of fixed-rate debt investments made by our funds.
Our clients may decide to redeem or withdraw previously committed capital from our funds (where such withdrawal is permitted) or to not invest or commit capital to future funds based on their assessment of how we approach and consider the cost of these investments and whether the return-driven objectives of our funds align with their investment priorities.
Our clients may decide to redeem or withdraw previously committed capital from our funds (where such withdrawal is permitted) or to not invest or commit capital to future funds based on their assessment of how we approach and consider the cost of these investments and whether the return-driven objectives of our funds align with their investment priorities or investment requirements.
This may expose us to increased disclosure risks, for example due to a lack of available or credible data, and the potential for conflicting disclosures may also expose us to an increased risk of misstatement litigation or misselling allegations. Failure to manage these risks could result in a material adverse effect on our business in a number of ways.
This may expose us to increased disclosure risks, for example due to a lack of available or credible data, and the potential for conflicting disclosures may also expose us to an increased risk of misstatement litigation or misselling allegations. Failure to manage these risks could result in a 62 material adverse effect on our business in a number of ways.
Future dividends may also be affected by factors that our board of directors deems relevant, including, without limitation: • 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. 70 Risks Related to Being a Public Company Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.
Future dividends may also be affected by factors that our board of directors deems relevant, including, without limitation: • 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. 72 Risks Related to Being a Public Company Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.
Personal data is generally defined as information that can be used to identify, locate or contact a natural person or otherwise be associated with such natural person, including names, photos, email addresses, or computer IP addresses. This data is wide ranging and relates to our clients, employees, counterparties and other third parties.
Personal data is generally defined as information that can be used to identify, locate or contact a natural person or otherwise be associated with such natural person, including names, photos, email addresses, or computer IP addresses. This data is wide ranging and relates to our clients, 45 employees, counterparties and other third parties.
Complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us, our funds or the companies in which they invest to comply with them could expose us to significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny and reputational harm.
Complying with these laws imposes potentially significant costs and complex additional burdens, and any 48 failure by us, our funds or the companies in which they invest to comply with them could expose us to significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny and reputational harm.
Such increases and uncertainty surrounding interest rates can make it difficult for us to obtain financing at attractive rates, and impact our ability to execute on our growth strategies or future acquisitions, which could have a material adverse effect on our business, financial condition and results of operations.
Such uncertainty surrounding interest rates can make it difficult for us to obtain financing at attractive rates, and impact our ability to execute on our growth strategies or future acquisitions, which could have a material adverse effect on our business, financial condition and results of operations.
If any of the foregoing were to occur, the values of our investments and the investments we have made on behalf of clients could decrease and our financial condition, results of operations and cash flow could suffer as a result. Investments by our funds may in many cases rank junior to investments made by other investors.
If any of the foregoing were to occur, the values of our investments and the investments we have made on behalf of clients could decrease and our financial condition, results of operations and cash flow could suffer as a result. 60 Investments by our funds may in many cases rank junior to investments made by other investors.
In an effort to mitigate potential and actual conflicts of interest and address regulatory, legal and contractual requirements and contractual restrictions, we have implemented certain policies and procedures (for example, information sharing policies) that may reduce the positive synergies that would otherwise exist across our various businesses.
In an effort to mitigate potential and actual conflicts of interest and address regulatory, legal and contractual requirements and contractual restrictions, we have implemented certain policies and procedures (for example, information sharing policies) that may reduce the synergies that would otherwise exist across our various businesses.
If we fail to comply with these laws and regulations, we could be exposed to claims for damages, civil or criminal financial penalties, reputational harm, incarceration of our employees, restrictions on our operations and other liabilities, which could materially and adversely affect our business, results of operations and financial condition.
If we fail to comply with these laws and regulations, we could be exposed to claims for damages, civil or criminal financial penalties, reputational harm, incarceration of our employees, restrictions on our operations and other liabilities, which could materially and adversely affect our business, results of 50 operations and financial condition.
Nevertheless, when conducting due diligence and making an assessment regarding an investment, we rely on the information available to us, including information provided by the target of the investment and, in some circumstances, third-party investigations, and such an investigation will not necessarily result in the investment ultimately being successful.
Nevertheless, when conducting due diligence and making an assessment regarding an investment, we rely on the information available to us, including information provided by the target of the investment and, in some circumstances, third-party investigations, and such an investigation will not necessarily result in 56 the investment ultimately being successful.
We also cannot guarantee that applicable insurance will be available to us in the future on economically reasonable terms or at all. Rapidly developing and changing privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage.
We also cannot guarantee that applicable insurance will be available to us in the future on economically reasonable terms or at all. Rapidly developing and changing privacy and cybersecurity laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage.
For example, investors in our closed-ended funds make capital commitments to those funds that we are entitled to call from those investors at any time during prescribed periods. We depend on investors fulfilling and honoring their commitments when we call capital from them for those funds to consummate investments and otherwise pay their obligations when due.
For example, investors in our closed-ended funds make capital commitments to those funds and we are entitled to call capital from those investors at any time during prescribed periods. We depend on investors fulfilling and honoring their commitments when we call capital from them for those funds to consummate investments and otherwise pay their obligations when due.
Co-investment arrangements may be structured through one or more of our investment vehicles, and in such circumstances, co-investors will generally bear the costs and expenses thereof (which could lead to conflicts of interest regarding the allocation of costs and expenses between such co-investors and investors in our other investment funds).
Co-investment arrangements may be structured 38 through one or more of our investment vehicles, and in such circumstances, co-investors will generally bear the costs and expenses thereof (which could lead to conflicts of interest regarding the allocation of costs and expenses between such co-investors and investors in our other investment funds).
Further, we often engage 57 third-party valuation agents to assist us with the valuations. It is possible that a material fact related to the target of the valuation might be inadvertently omitted from our communications with them, resulting in an inaccurate valuation.
Further, we often engage third-party valuation agents to assist us with the valuations. It is possible that a material fact related to the target of the valuation might be inadvertently omitted from our communications with them, resulting in an inaccurate valuation.
Difficult market conditions or slowdowns affecting a particular asset class, geographic region or other category of investment could have a significant adverse impact on a given fund if its investments are concentrated in that area, which would result in lower investment returns.
Difficult market conditions or slowdowns affecting a particular asset class, geographic region or other category of investment could have a significant adverse impact on a given fund if its investments are concentrated in that area, which could result in lower investment returns.
Our share price may decline if our actual results do not match the projections of these securities research analysts. 74 Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price could decline.
Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price could decline.
In September 2023, the SEC adopted amendments to Rule 35d-1 (the Names Rule) that expands the Names Rule to require that any fund whose name includes terms suggesting that the fund focuses on investments that have, or whose issuers have, particular characteristics, have an 80% investment policy.
In addition, in September 2023, the SEC adopted amendments to Rule 35d-1 (the Names Rule) that expands the Names Rule to require that any fund whose name includes terms suggesting that the fund focuses on investments or issuers that have, particular characteristics, have an 80% investment policy.
K., Germany, Canada, Hong Kong, Japan and South Korea, among other places, and may grow our business into new regions with which we have less familiarity and experience, and this growth is important to our overall success.
K., Germany, Canada, Hong Kong, Japan, South Korea, and Australia among other places, and may grow our business into new regions with which we have less familiarity and experience, and this growth is important to our overall success.
The value of the fund investments of our funds is determined periodically by us based in general on the fair value of such investments as reported by the underlying fund managers. Our valuation of the funds in which we invest is largely dependent upon the processes employed by the managers of those funds.
The value of the fund investments of our funds is determined 58 periodically by us based in general on the fair value of such investments as reported by the underlying fund managers. Our valuation of the funds in which we invest is largely dependent upon the processes employed by the managers of those funds.
These statistical methods may not accurately quantify our risk exposure if circumstances arise that were not observed in our historical data. In particular, as we enter new lines of business or offer new 59 products, our historical data may be incomplete.
These statistical methods may not accurately quantify our risk exposure if circumstances arise that were not observed in our historical data. In particular, as we enter new lines of business or offer new products, our historical data may be incomplete.
Because members of our senior management team hold most or all of their economic interest in GCMH through other entities, conflicts of interest could arise between them and holders of shares of our Class A common stock or us.
Because many members of our senior management team hold most or all of their economic interest in GCMH through other entities, conflicts of interest could arise between them and holders of shares of our Class A common stock or us.
If we or our supervising regulators were to determine that we have improperly allocated such expenses, we could be required to refund amounts to our funds and could be subject to regulatory censure, litigation from our clients and/or reputational harm, each of which could have a material adverse effect on our business, financial condition and results of operations. 38 Certain policies and procedures implemented to mitigate potential and actual conflicts of interest and address certain regulatory requirements may reduce the synergies that may otherwise exist across our various businesses.
If we or our supervising regulators were to determine that we have improperly allocated such expenses, we could be required to refund amounts to our funds and could be subject to regulatory censure, litigation from our clients and/or reputational harm, each of which could have a material adverse effect on our business, financial condition and results of operations. 39 Certain policies and procedures implemented to mitigate potential and actual conflicts of interest and address certain regulatory requirements may reduce the synergies that may otherwise exist across our various businesses.
Also, if investors in 56 our funds default on their obligations to fund commitments, there may be adverse consequences on the investment process, and we could incur losses and be unable to meet underlying capital calls.
Also, if investors in our funds default on their obligations to fund commitments, there may be adverse consequences on the investment process, and we could incur losses and be unable to meet underlying capital calls.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our board of directors consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) director nominees be selected or recommended to the board by independent directors. 64 We rely on certain of these exemptions.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our board of directors consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) director nominees be selected or recommended to the board by independent directors. 66 We rely on certain of these exemptions.
An issuer will generally be deemed to be an “investment company” for purposes of the Investment Company Act if: • 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 67 • 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.
An issuer will generally be deemed to be an “investment company” for purposes of the Investment Company Act if: • 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 69 • 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.
In addition, we may be subject to successor 49 liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or other export control laws committed by companies in which we or our funds invest or which we or our funds acquire.
In addition, we may be subject to successor liability for FCPA violations or other acts of bribery, or violations of applicable sanctions or other export control laws committed by companies in which we or our funds invest or which we or our funds acquire.
We have little or no control over their due diligence process, and any shortcomings in their due diligence could be reflected in the performance of the investment we make 55 with them on behalf of our clients.
We have little or no control over their due diligence process, and any shortcomings in their due diligence could be reflected in the performance of the investment we make with them on behalf of our clients.
Financial Conduct Authority published final rules on its Sustainable Disclosure Requirements (“SDR”), introducing new rules and guidance for asset managers to make mandatory disclosures at both the manager and product levels, which aim to address potential greenwashing risks through the introduction of sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing, as well as through the introduction of disclosures consistent with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”).
Financial Conduct Authority published final rules on its Sustainable Disclosure Requirements (“SDR”) introducing new rules and guidance for asset managers to make mandatory disclosures at both the manager and product levels, which aims to address potential greenwashing risks through the introduction of sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing, as well as through the introduction of disclosures consistent with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”).
In addition, our reputation may be harmed if certain stakeholders, such as our clients, stockholders or other third parties, believe that we are not adequately or appropriately responding to climate change, including through the way in which we operate our business, the composition of our funds’ and accounts’ existing portfolios, the new investments made by them, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.
In addition, our reputation may be harmed if certain stakeholders, such as our clients, stockholders or other third parties, believe that we are not adequately or appropriately responding to climate change or excessively factoring in climate change, including through the way in which we operate our business, the composition of our funds’ and accounts’ existing portfolios, the new investments made by them, or the decisions we make to continue to conduct or change our activities in response to climate change considerations.
In recent years, our business has been subject to increasing scrutiny from clients, investors, regulators, elected officials, stockholders and other stakeholders with respect to Sustainable and Impact investing matters.
In recent years, our business has been subject to increasing and diverging scrutiny from clients, investors, regulators, elected officials, stockholders and other stakeholders with respect to Sustainable and Impact investing matters.
In addition, in October 2020, the DOL finalized a rule intended to clarify the fiduciary requirements for investment managers of “plan assets” considering non-pecuniary factors (including sustainability) when investing.
In October 2020, the DOL finalized a rule intended to clarify the fiduciary requirements for investment managers of “plan assets” considering non-pecuniary factors (including sustainability) when investing.
Any circumvention or failure of our or our service providers’ cyber security measures and risk management program could potentially jeopardize our, our employees’ or our clients’ or counterparties’ sensitive, confidential, personal proprietary and other information processed and stored in, and transmitted through, our IT Systems, or otherwise cause interruptions or malfunctions in our, our employees’, our clients’, our counterparties’ or third parties’ operations, which could result in material financial losses, increased costs, disruption of our business, liability to clients and other counterparties, regulatory intervention, proceedings, orders, litigation (including class actions), indemnity obligations, damages for contract breach or fines or penalties for violation of applicable laws or regulations, or reputational damage, which, in turn, could cause a decline in our earnings and/or stock price.
Any circumvention or failure of our or our service providers’ cybersecurity measures and risk management program could potentially jeopardize our, our employees’ or our clients’ or counterparties’ sensitive, confidential, personal proprietary and other information processed and stored in, and transmitted through, our IT Systems, or otherwise cause interruptions or malfunctions in our, our employees’, our clients’, our counterparties’ or third parties’ operations, which could result in material financial losses, increased costs, disruption of our business, liability to clients and other counterparties, regulatory intervention, proceedings, orders, litigation (including class actions), indemnity obligations, damages for contract breach or fines or penalties for violation of applicable laws or regulations, or reputational damage, which, in turn, could cause a decline in our earnings and/or stock price.
These market conditions can also have an impact on our ability and the ability of our funds and the investments made by our funds to liquidate positions in a timely and efficient manner.
These market conditions can also have an impact 54 on our ability and the ability of our funds and the investments made by our funds to liquidate positions in a timely and efficient manner.
We are subject to various requirements, risks and costs associated with the collection, processing, storage and transmission of personal data and other sensitive and confidential information.
We are subject to various requirements, risks and costs associated with the collection, storage, transmission, disclosure and other processing of personal data and other sensitive and confidential information.
Because members of our senior management team hold most or all of their economic interest in GCMH directly through holding companies and other vehicles rather than through ownership of shares of our Class A common stock, they could have interests that do not align with, or conflict with, those of the holders of our Class A common stock or with us.
Because many members of our senior management team hold most or all of their economic interest in GCMH through holding companies and other vehicles rather than through ownership of shares of our Class A common stock, they could have interests that do not align with, or conflict with, those of the holders of our Class A common stock or with us.
Notwithstanding the foregoing, our Charter provides that the exclusive forum provisions do not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. 69 These provisions may have the effect of discouraging lawsuits against our directors and officers.
Notwithstanding the foregoing, our Charter provides that the exclusive forum provisions do not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. 71 These provisions may have the effect of discouraging lawsuits against our directors and officers.
The governing agreements of most of our closed-ended, specialized funds provide that, subject to certain conditions, investors comprising a certain percentage of commitments to these funds, which may be as low as 75%, have the right to suspend or terminate the commitment periods of these funds or cause our removal as general partner and investment manager of 33 these funds without cause.
The governing agreements of most of our closed-ended, specialized funds provide that, subject to certain conditions, investors comprising a certain percentage of commitments to these funds, which may be as low as 75%, have the right to suspend or terminate the commitment periods of these funds or cause our removal as general partner and investment manager of 34 these funds without cause.
We will have no obligation to distribute such cash balances to our stockholders, 66 and no adjustments will be made to the consideration provided to an exchanging holder in connection with a direct exchange or redemption of Grosvenor common units under the A&R LLLPA as a result of any retention of cash by us.
We will have no obligation to distribute such cash balances to our stockholders, 68 and no adjustments will be made to the consideration provided to an exchanging holder in connection with a direct exchange or redemption of Grosvenor common units under the A&R LLLPA as a result of any retention of cash by us.
In addition, if any of our clients, investors, suppliers or other parties with whom we conduct business are unable to access funds pursuant to their lending arrangements with such a financial institution, their ability to pay their obligations to us, provide services to us or enter into new commercial arrangements requiring additional payments to us could be adversely affected, which could have a material adverse affect on our operations and cash flows. 40 We may be unable to remain in compliance with the financial or other covenants contained in our debt instruments.
In addition, if any of our clients, investors, suppliers or other parties with whom we conduct business are unable to access funds pursuant to their lending arrangements with such a financial institution, their ability to pay their obligations to us, provide services to us or enter into new commercial arrangements requiring additional payments to us could be adversely affected, which could have a material adverse affect on our operations and cash flows. 41 We may be unable to remain in compliance with financial or other covenants contained in our debt instruments.
In some cases, there may be trademark or service mark owners who have prior rights to our trademarks and service marks or to similar trademarks and service marks.
In 52 some cases, there may be trademark or service mark owners who have prior rights to our trademarks and service marks or to similar trademarks and service marks.
Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our funds’ portfolio companies’ operations. If such portfolio companies are unable to pass any increases in the costs of their operations along to their customers, it could adversely affect their operating results.
Recent inflationary pressures have increased the costs of labor, energy and raw materials and have adversely affected consumer spending, economic growth and our funds’ portfolio companies’ operations. If these inflationary pressures persist, and such portfolio companies are unable to pass any increases in the costs of their operations along to their customers, it could adversely affect their operating results.
In addition, the structuring of future transactions and investments may take into consideration the members’ tax considerations even where no similar benefit would accrue to us. 68 Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third-party.
In addition, the structuring of future transactions and investments may take into consideration the members’ tax considerations even where no similar benefit would accrue to us. 70 Provisions in our organizational documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third-party.
In the U.S., the Committee on Foreign Investment in the United States has the authority to review and potentially block, unwind or impose conditions on certain foreign investments in U.S. companies or real estate, which may reduce the number of potential buyers and limit the ability of our funds to realize value from certain existing and future investments.
In the U.S., the Committee on Foreign Investment in the U.S. has the authority to review and potentially block, unwind or impose conditions on certain foreign investments in U.S. companies or real estate, which may reduce the number of potential buyers and limit the ability of our funds to realize value from certain existing and future investments.
Access to secondary investment opportunities is also highly competitive and is often controlled by a limited number of general partners, fund managers and intermediaries. The due diligence process that we undertake in connection with investments may not reveal all facts that may be relevant in connection with an investment.
Access to secondary investment opportunities is also highly competitive and is often controlled by a limited number of general partners, fund managers and intermediaries. The due diligence process that we undertake in connection with investments may not detect all facts that may be relevant in connection with an investment.
Also, a situation in which asset values turn out to be materially different from values reflected in fund net asset values, whether due to misinformation or otherwise, could cause investors to lose confidence in us and may, in turn, result in difficulties in our ability to raise additional capital, retain clients or attract new clients.
Also, a situation in which asset values turn out to be materially different from values reflected in fund net asset values, whether due to error or otherwise, could cause investors to lose confidence in us and may, in turn, result in difficulties in our ability to raise additional capital, retain clients or attract new clients.
In addition, the majority stakeholders or our management may take risks or otherwise act in a manner that does not serve our interests.
In addition, the majority stakeholders or their management may take risks or otherwise act in a manner that does not serve our interests.
In addition, during periods of adverse economic conditions, our funds may have difficulty accessing financial markets, which could make it more difficult or impossible for them to obtain funding for additional investments and harm their assets under management and results of operations.
In addition, during periods of adverse market, economic or geopolitical conditions, our funds may have difficulty accessing financial markets, which could make it more difficult or impossible for them to obtain funding for additional investments and harm their assets under management and results of operations.
Such conflicts of interest could adversely affect one or more of our funds and/or the performance of our funds or returns to their investors.
Such conflicts of interest could affect our objectivity and adversely affect one or more of our funds and/or the performance of our funds or returns to their investors.
We expect that the payments that we are required to make under the Tax Receivable Agreement could be substantial. 65 The TRA Parties will not reimburse us for any payments previously made if any covered tax benefits are subsequently disallowed, except that excess payments made to the TRA Parties will be netted against future payments that would otherwise be made under the Tax Receivable Agreement.
We expect that the payments that we are required to make under the Tax Receivable Agreement could be substantial. 67 The TRA Parties will not reimburse us for any payments previously made if any covered tax benefits are subsequently disallowed, except that excess payments made to the TRA Parties will be netted against future payments that would otherwise be made under the Tax Receivable Agreement.
The loss of the services of one or more members of our senior team could have a material adverse effect on our business, financial 41 condition and results of operations, including on the performance of our funds, our ability to retain and attract clients and highly qualified employees and our ability to raise new funds.
The loss of the services of one or more members of our senior team could have a material adverse effect on our business, financial 42 condition and results of operations, including on the performance of our funds, our ability to retain and attract clients and highly qualified employees and our ability to raise new funds.
In addition, if we are unable to deploy capital at a pace that is sufficient to offset the pace of realizations that we return to our clients, our fee revenues could decrease. 35 The nature of closed-ended funds involves the perpetual return of capital to investors. This return of capital to investors in our funds reduces our FPAUM.
In addition, if we are unable to deploy capital at a pace that is sufficient to offset the pace of realizations that we return to our clients, our fee revenues could decrease. 36 The nature of closed-ended funds involves the perpetual return of capital to investors. This return of capital to investors in our funds reduces our FPAUM.
If the SEC were to investigate and find errors in our methodologies or procedures, we and/or members of our management could be subject to penalties and fines, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations.
If the SEC were to investigate and find errors in our policies or procedures, we and/or members of our management could be subject to penalties and fines, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations.
The change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding warrants issued in connection with the Transaction. Significant changes in our stock price or number of warrants outstanding 72 may adversely affect our net income (loss) in our consolidated statements of income and consolidated statements of comprehensive income.
The change in fair value of warrant liabilities represents the mark-to-market fair value adjustments to the outstanding 74 warrants issued in connection with the Transaction. Significant changes in our stock price or number of warrants outstanding may adversely affect our net income (loss) in our consolidated statements of income and consolidated statements of comprehensive income.
A number of factors serve to increase our competitive risks: 34 • 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 or 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 more successful than us in deployment of new products to address investor demand for new or different investment strategies and/or regulatory changes; • developments in financial technology (or fintech), such as distributed ledger technology (or blockchain) have the potential to disrupt the financial industry and change the way financial institutions, as well as investment managers, do business and could exacerbate these competitive pressures; • some of our competitors may be more successful than us in the development and implementation of new technology to address investor demand for product and strategy innovation; • some of our competitors may have instituted, or may institute, low cost, high speed financial applications and services based on artificial intelligence, and new competitors may enter the investment management space using new investment platforms based on artificial intelligence; • 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.
A number of factors serve to increase our competitive risks: 35 • 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 or 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 more successful than us in deployment of new products to address investor demand for new or different investment strategies and/or regulatory changes; • further innovations in financial technology (or fintech) have the potential to disrupt the financial industry and change the way financial institutions, as well as investment managers, do business and could exacerbate these competitive pressures; • some of our competitors may be more successful than us in the development and implementation of new technology to address investor demand for product and strategy innovation; • some of our competitors may have instituted, or may institute, low cost, high speed financial applications and services based on artificial intelligence, and new competitors may enter the investment management space using new investment platforms based on artificial intelligence; • 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.
In the wake of highly publicized financial failures, including the recent banking failures in 2023, investors exhibited concerns over the integrity of the U.S. financial markets, and the regulatory environment in which we operate is subject to further regulation in addition to those rules already promulgated.
In the wake of highly publicized financial failures, including the banking failures in 2023, investors exhibited concerns over the integrity of the U.S. financial markets, and the regulatory environment in which we operate is subject to further 47 regulation in addition to those rules already promulgated.
Department of State. The FCPA is intended to prohibit bribery of foreign governments and their officials and political parties, and requires public companies in the United States to keep books and records that accurately and fairly reflect those companies’ transactions. OFAC, the U.S. Department of Commerce and the U.S.
Department of State. The FCPA is intended to prohibit bribery of foreign governments and their officials and political parties, and requires public companies in the U.S. to keep books and records that accurately and fairly reflect those companies’ transactions. OFAC, the U.S. Department of Commerce and the U.S.
However, we may not exercise our redemption right if the issuance of shares of Class A common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.
Moreover, we may not exercise our redemption right if the issuance of shares of Class A common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification.
As a result, we do not have a compensation committee consisting entirely of independent directors and our directors were not nominated or selected solely by independent directors. We may also rely on the other exemptions so long as we qualify as a controlled company.
As a result, we do not have a compensation committee consisting entirely of independent directors and our directors are not nominated or selected solely by independent directors. We may also rely on the other exemptions so long as we qualify as a controlled company.
The leveraged capital structure of such businesses increases the exposure of the funds’ portfolio companies to adverse economic factors such as rising interest rates, financial institution risks, downturns in the economy or deterioration in the condition of such business or its industry.
The leveraged capital structure of such businesses increases the exposure of the funds’ portfolio companies to adverse economic factors such as fluctuating interest rates, financial institution risks, downturns in the economy or deterioration in the condition of such business or its industry.
Our and our third-party service providers’ IT Systems are also vulnerable to unauthorized or unlawful access, theft, misuse, computer viruses, bugs, ransomware or other malicious code, employee, vendor or contractor error or malfeasance, technological error and other events that could have a negative impact on the security, confidentiality, integrity and availability of our IT systems and data.
Our and our third-party service providers’ IT Systems are also vulnerable to unauthorized or unlawful access, theft, misuse, social engineering/phishing, computer viruses, bugs, ransomware or other malicious code, employee, vendor or contractor error or malfeasance, technological error and other events that could have a negative impact on the security, confidentiality, integrity and availability of our IT Systems and data.
Misconduct by our employees, advisors or third-party service providers could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm. Our employees, advisors or third-party service providers could engage in misconduct that adversely affects our business.
Misconduct by our employees, advisors or third-party service providers could harm us by impairing our ability to attract and retain clients and subject us to significant legal liability and reputational harm. Our employees, advisors or third-party service providers could engage in misconduct that adversely affects our business.
Moreover, the due diligence investigation that we will carry out with respect to any investment opportunity may not reveal or highlight all relevant facts or risks that are necessary or helpful in evaluating such investment opportunity.
Moreover, the due diligence investigation that we will carry out with respect to any investment opportunity may not detect or highlight all relevant facts or risks that are necessary or helpful in evaluating such investment opportunity.
In June 2011, the Basel Committee on Banking Supervision, an international body comprised of senior representatives of bank supervisory authorities and central banks from 27 countries, including the United States, announced the final framework for a comprehensive set of capital and liquidity standards, commonly referred to as “Basel III,” for internationally active banking organizations and certain other types of financial institutions, which were revised in 2017.
In June 2011, the Basel Committee on Banking Supervision, an international body comprised of senior representatives of bank supervisory authorities and central banks from 27 countries, including the U.S., announced the final framework for a comprehensive set of capital and liquidity standards, commonly referred to as “Basel III,” for internationally active banking organizations and certain other types of financial institutions, which were revised in 2017.
Pursuant to our publicly announced stock repurchase plan, as of December 31, 2023 we were authorized to repurchase up to $115 million in the aggregate of our Class A common stock and warrants to purchase our Class A common stock, including through the repurchase of outstanding shares of our Class A common stock and warrants and through a reduction of shares of Class A common stock to be issued to employees to satisfy associated obligations in connection with the settlement of equity-based awards granted under our Amended and Restated 2020 Incentive Award Plan (and any successor equity plan thereto).
Pursuant to our publicly announced stock repurchase plan, as of December 31, 2024 we were authorized to repurchase up to $140 million in the aggregate of our Class A common stock and warrants to purchase our Class A common stock, including through the repurchase of outstanding shares of our Class A common stock and warrants and through a reduction of shares of Class A common stock to be issued to employees to satisfy associated obligations in connection with the settlement of equity-based awards granted under our Amended and Restated 2020 Incentive Award Plan (and any successor equity plan thereto).
Our international operations carry special financial and business risks, which could include the following: • 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; • potentially heightened risk of theft or compromise of data and intellectual property, in particular in those jurisdictions that do not have levels comparable to the U.S. of protection of proprietary information and assets, such as intellectual property, trademarks, trade secrets, know-how and client information and records; • potentially compromised protections or rights to technology, data and intellectual property due to government regulation; • 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 39 • difficulty collecting fees and, if necessary, enforcing judgments.
Our international operations carry special financial and business risks, which could include the following: • 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 and licensing 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; • potentially heightened risk of theft or compromise of data and intellectual property, in particular in those jurisdictions that do not have levels comparable to the U.S. of protection of proprietary information and assets, such as intellectual property, trademarks, trade secrets, know-how and client information and records; • potentially compromised protections or rights to technology, data and intellectual property due to government regulation; • terrorism, political hostilities, war, public health crises and other civil disturbances or other catastrophic or pandemic events, which may reduce business activity, threaten the safety of our international offices, employees and clients, and affect our plans to expand in particular regions; 40 • 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.
We regularly are subject to requests for information, inquiries and informal or formal examinations by the SEC, FINRA and other regulatory authorities, with which we routinely cooperate.
We regularly are subject to requests for information, inquiries and routine informal or formal examinations by the SEC, FINRA and other regulatory authorities, with which we cooperate.
Our loss of these clients, or inability to raise additional investment amounts from these clients, may adversely impact our revenues. 62 Hedge fund investments are subject to numerous additional risks.
Our loss of these clients, or inability to raise additional investment amounts from these clients, may adversely impact our revenues. 64 Hedge fund investments are subject to numerous additional risks.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changePlease see the section entitled “Risk Factors – Failure to maintain the security of our information and technology networks, or those of our third-party service providers, or cyber security incidents could harm our reputation and have a material adverse effect on our results of operations, financial condition and cash flow ,” for more information.
Biggest changePlease see the section entitled “Risk Factors – Failure to maintain the security of our information technology networks, or those of service providers and other our third-parties, or cybersecurity incidents could harm our 77 reputation and have a material adverse effect on our results of operations, financial condition and cash flow ,” for more information.
Cybersecurity Governance Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the audit committee oversight of cybersecurity and other information technology risks. The audit committee oversees management’s implementation of our cybersecurity risk management program. 75 The audit committee receives periodic reports from management on our cybersecurity risks.
Cybersecurity Governance Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the audit committee oversight of cybersecurity and other information technology risks. The audit committee oversees management’s implementation of our cybersecurity risk management program. The audit committee receives periodic reports from management on our cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMichigan Avenue, Suite 1100, Chicago, IL 60611 from 900 North Michigan, LLC, a Delaware limited liability company. The term of the Lease expires September 30, 2026. The Lease provides for monthly rent and payment of operating expenses on a triple-net basis.
Biggest changeMichigan Avenue, Suite 1100, Chicago, IL 60611 from 900 North Michigan, LLC, a Delaware limited liability company. The term of the Lease expires September 30, 2037. The Lease provides for monthly rent and payment of operating expenses on a triple-net basis.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHowever, the payment of cash dividends on shares of our Class A common stock in the future, in this amount or otherwise, will be within the discretion of our Board of Directors at such time, and will depend on numerous factors, including: • 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; • our 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. 77 Issuer Purchases of Equity Securities On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan which may be used to repurchase shares of our outstanding Class A common stock and warrants to purchase shares of Class A common stock, as well as to retire (by cash settlement or the payment of tax withholding amounts upon net settlement) equity-based awards granted under our 2020 Incentive Award Plan (and any successor plan thereto).
Biggest changeHowever, the payment of cash dividends on shares of our Class A common stock in the future, in this amount or otherwise, will be within the discretion of our Board of Directors at such time, and will depend on numerous factors, including: • 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; • our 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.
GCMG’s Board of Directors has made subsequent increases to its stock repurchase authorization for shares and warrants. As of December 31, 2022, the total authorization was $90.0 million, excluding fees and expenses. On August 8, 2023, GCM Grosvenor’s Board of Directors increased the firm’s existing repurchase authorization by $25 million, from $90 million to $115 million.
GCMG’s Board of Directors has made subsequent increases to its stock repurchase authorization for shares and warrants. As of December 31, 2023, the total authorization was $115 million, excluding fees and expenses. On February 8, 2024, GCMG’s Board of Directors increased the firm's existing repurchase authorization by $25 million , from $115 million to $140 million.
On February 8, 2024, GCM Grosvenor’s Board of Directors further increased the firm’s existing repurchase authorization by $25 million , from $115 million to $140 million. During the three months ended December 31, 2023 , we did not purchase any shares of Class A common stock or warrants to purchase shares of Class A Common stock.
On February 6, 2025, GCMG’s Board of Directors increased the firm's existing repurchase authorization by $50 million, from $140 million to $190 million. During the three months ended December 31, 2024 , we did not purchase any shares of Class A common stock or warrants to purchase shares of Class A Common stock.
Holders of Record As of February 27, 2024, there were approximately 42,996,776 shares of our Class A common stock outstanding and 17,684,970 warrants to purchase our Class A common stock outstanding, with 1 and 2 holders of record of our Class A common stock and warrants, respectively.
Holders of Record As of February 14, 2025, there were approximately 44,911,734 shares of our Class A common stock outstanding and 17,684,370 warrants to purchase our Class A common stock outstanding, with 1 and 2 holders of record of our Class A common stock and warrants, respectively.
See Note 8 of our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K Stock Performance Graph The following graph depicts the total return to stockholders from the closing price on November 18, 2020 (the date our Class A common stock began trading on Nasdaq) through December 31, 2023, relative to the performance of S&P 500 and S&P Composite 1500 Financials.
Stock Performance Graph The following graph depicts the total return to stockholders from the closing price on November 18, 2020 (the date our Class A common stock began trading on Nasdaq) through December 31, 2024, relative to the performance of S&P 500 and S&P Composite 1500 Financials.
The number of record holders does not include persons who held shares of our Class A common stock in nominee or “street name” accounts through brokers. Dividend Policy On February 8, 2024, the Company declared a quarterly dividend of $0.11 per share of Class A common stock to record holders as of the close of business on March 1, 2024.
The number of record holders does not include persons who held shares of our Class A common stock in nominee or “street name” accounts through brokers.
The payment date will be March 15, 2024. We expect we will continue to pay a comparable cash dividend on a quarterly basis.
Dividend Policy On February 6, 2025, the GCMG’s Board of Directors declared a quarterly dividend of $0.11 per share of Class A common stock to record holders as of the close of business on March 3, 2025. The payment date will be March 17, 2025. We expect we will continue to pay a comparable cash dividend on a quarterly basis.
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Issuer Purchases of Equity Securities On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan which may be used to repurchase shares of our outstanding Class A common stock and warrants to purchase shares of Class A common stock, as well as to retire (by cash settlement or the payment of tax withholding amounts upon net settlement) equity-based awards granted under our 2020 Incentive Award Plan (and any successor plan thereto).
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As of December 31, 2024, $32.0 million remained available under our 79 stock repurchase plan. See Note 7 of our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur definition of FPAUM is not based on any definition that is set forth in the agreements governing the customized separate accounts or specialized funds that we manage. 87 Private Markets Strategies Absolute Return Strategies Total Fee-paying AUM (in millions) Balance as of December 31, 2021 $ 33,080 $ 25,575 $ 58,655 Contributions 5,859 571 6,430 Withdrawals (167) (2,464) (2,631) Distributions (1,436) (31) (1,467) Change in market value (85) (1,562) (1,647) Foreign exchange and other (375) (109) (484) Balance as of December 31, 2022 $ 36,876 $ 21,980 $ 58,856 Contributions 4,485 497 4,982 Withdrawals (205) (2,365) (2,570) Distributions (1,006) (167) (1,173) Change in market value 239 1,583 1,822 Foreign exchange and other (120) (114) (234) Balance as of December 31, 2023 $ 40,269 $ 21,414 $ 61,683 Contracted, not yet fee-paying AUM (“CNYFPAUM”) represents limited partner commitments which are expected to be invested and begin charging fees over the ensuing five years.
Biggest changePrivate Markets Strategies Absolute Return Strategies Total Fee-paying AUM (in millions) Balance as of December 31, 2022 $ 36,876 $ 21,980 $ 58,856 Contributions 4,485 497 4,982 Withdrawals (205) (2,365) (2,570) Distributions (1,006) (167) (1,173) Change in market value 239 1,583 1,822 Foreign exchange and other (120) (114) (234) Balance as of December 31, 2023 $ 40,269 $ 21,414 $ 61,683 Contributions 4,749 1,277 6,026 Withdrawals (105) (2,641) (2,746) Distributions (1,381) (292) (1,673) Change in market value 212 2,430 2,642 Foreign exchange and other (1,027) (140) (1,167) Balance as of December 31, 2024 $ 42,717 $ 22,048 $ 64,765 Contracted, not yet fee-paying AUM (“CNYFPAUM”) represents limited partner commitments which are expected to be invested and begin charging fees over the ensuing five years. 89 As of December 31, 2024 2023 2022 (in millions) Contracted, not yet Fee-Paying AUM $ 8,202 $ 7,304 $ 7,603 AUM $ 80,077 $ 76,908 $ 73,667 Of the $8.2 billion CNYFPAUM as of December 31, 2024, approximately $3.0 billion is subject to an agreed upon fee ramp in schedule.
Carried interest is ultimately realized when underlying investments distribute proceeds or are sold and therefore carried interest is highly susceptible to market factors, judgments and actions of third parties that are outside of our control.
Carried interest is ultimately realized when underlying investments distribute proceeds or are sold and therefore carried interest is highly susceptible to market factors, judgments and actions of third parties that are outside of our control.
Agreements generally include a clawback provision that, if triggered, would require us to return up to the cumulative amount of carried interest distributed, typically net of tax, upon liquidation of those funds, if the aggregate amount paid as carried interest exceeds the amount actually due based upon the aggregate performance of each fund.
Agreements generally include a clawback provision that, if triggered, would require us to return up to the cumulative amount of carried interest distributed, typically net of tax, upon liquidation of those funds, if the aggregate amount paid as carried interest exceeds the amount actually due based upon the aggregate performance of each fund.
We analyze our tax filing positions in the U.S. federal, state, local and foreign tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we determine that uncertainties in tax positions exist, a liability is established.
We analyze our tax filing positions in the U.S. federal, state, local and foreign tax jurisdictions where we are required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis, we 101 determine that uncertainties in tax positions exist, a liability is established.
Components of Results of Operations Revenues We generate revenues from management fees and incentive fees, which includes carried interest and performance fees. Management Fees Management Fees We earn management fees from providing investment management services to specialized funds and customized separate account clients. Specialized funds are generally structured as partnerships or companies having multiple investors.
Components of Results of Operations Revenues We generate revenues from management fees and incentive fees, which includes carried interest and performance fees. 83 Management Fees Management Fees We earn management fees from providing investment management services to specialized funds and customized separate account clients. Specialized funds are generally structured as partnerships or companies having multiple investors.
Performance fees 82 may or may not be subject to a hurdle or a preferred return, which requires that clients earn a specified minimum return before a performance fee can be assessed. These performance fees are determined based upon investment performance at the end of a specified measurement period, generally the end of the calendar year.
Performance fees may or may not be subject to a hurdle or a preferred return, which requires that clients earn a specified minimum return before a performance fee can be assessed. These performance fees are determined based upon investment performance at the end of a specified measurement period, generally the end of the calendar year.
General, Administrative and Other General, administrative and other consists primarily of professional fees, travel and related expenses, IT operations, communications and information services, occupancy, fund expenses, depreciation and amortization, and other costs associated with our operations. Net Other Income (Expense) Investment Income (Loss) Investment income (loss) primarily consists of gains and losses arising from our equity method investments.
General, Administrative and Other General, administrative and other consists primarily of professional fees, travel and related expenses, IT operations, communications and information services, occupancy, fund expenses, depreciation and amortization, and other costs associated with our operations. Net Other Income (Expense) Investment Income Investment income primarily consists of gains and losses arising from our equity method investments.
Fees paid to a decision maker or service provider are not deemed variable interests in an entity if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services; (ii) the service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length; and (iii) the decision maker does not 98 hold other interests in the entity that individually, or in the aggregate, would absorb more than an insignificant amount of the entity’s expected losses or receive more than an insignificant amount of the entity’s expected residual returns.
Fees paid to a decision maker or service provider are not deemed variable interests in an entity if (i) the fees are compensation for services provided and are commensurate with the level of effort required to provide those services; (ii) the service arrangement includes only terms, conditions, or amounts that are customarily present in arrangements for similar services negotiated at arm’s length; and (iii) the decision maker does not 99 hold other interests in the entity that individually, or in the aggregate, would absorb more than an insignificant amount of the entity’s expected losses or receive more than an insignificant amount of the entity’s expected residual returns.
Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities are non-cash changes and consist of fair value adjustments related to the outstanding public and private warrants issued in connection with the Transaction.
Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities are non-cash and consist of fair value adjustments related to the outstanding public and private warrants issued in connection with the Transaction.
Customized separate account clients may be structured using an affiliate-managed entity or may involve an investment management 81 agreement between us and a single client.
Customized separate account clients may be structured using an affiliate-managed entity or may involve an investment management agreement between us and a single client.
Finally, the opportunities in private markets continue to expand as firms raise new funds and launch new vehicles and products to access private markets across the globe. 79 In addition to the trends discussed above, we believe the following factors, among others, will influence our future performance and results of operations: Our ability to retain existing investors and attract new investors in our funds.
Finally, the opportunities in private markets continue to expand as firms raise new funds and launch new vehicles and products to access private markets across the globe. 81 In addition to the trends discussed above, we believe the following factors, among others, will influence our future performance and results of operations: Our ability to retain existing investors and attract new investors in our funds.
See Note 14 of our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a summary of our outstanding indebtedness. The terms of the Company’s current debt instruments contain covenants that may restrict the Company and its subsidiaries from paying distributions to its members.
See Note 13 of our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a summary of our outstanding indebtedness. The terms of the Company’s current debt instruments contain covenants that may restrict the Company and its subsidiaries from paying distributions to its members.
This section of the Annual Report on Form 10-K discusses activity as of and for the years ended December 31, 2023 and 2022. For discussion on activity for the year ended December 31, 2021 and period-over-period analysis on results for the year ended December 31, 2022 to 2021, refer to Part II, “Item 7.
This section of the Annual Report on Form 10-K discusses activity as of and for the years ended December 31, 2024 and 2023. For discussion on activity for the year ended December 31, 2022 and period-over-period analysis on results for the year ended December 31, 2023 to 2022, refer to Part II, “Item 7.
The ability to attract and retain clients is partially dependent on returns we are able to deliver versus client objectives, our peers and industry benchmarks. The capital we are able to attract drives the growth of our assets under management and the management and incentive fees we earn.
Our ability to generate competitive returns. The ability to attract and retain clients is partially dependent on returns we are able to deliver versus client objectives, our peers and industry benchmarks. The capital we are able to attract drives the growth of our assets under management and the management and incentive fees we earn.
The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted shares outstanding used in the computation of adjusted net income per share for the years ended December 31, 2023, 2022 and 2021, respectively.
The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted shares outstanding used in the computation of adjusted net income per share for the years ended December 31, 2024, 2023 and 2022, respectively.
Adjusted Pre-Tax Income represents net income attributable to GCM Grosvenor Inc. including (a) net income (loss) attributable to GCMH, excluding (b) provision for income taxes, (c) changes in fair value of derivatives and warrant liabilities, (d) amortization expense, (e) partnership interest-based and non-cash compensation, (f) equity-based compensation, including cash-settled equity awards (as we view the cash settlement as a separate capital transaction), (g) unrealized investment income, (h) changes in TRA liability and (i) certain other items that we believe are not indicative of our core performance, including charges related to corporate transactions, employee severance, and New York office relocation costs.
Adjusted Pre-Tax Income represents net income attributable to GCM Grosvenor Inc. including (a) net income (loss) attributable to GCMH, excluding (b) provision for income taxes, (c) changes in fair value of derivatives and warrant liabilities, (d) amortization expense, (e) partnership interest-based and non-cash compensation, (f) equity-based compensation, including cash-settled equity awards (as we view the cash settlement as a separate capital transaction), (g) unrealized investment income, (h) changes in TRA liability and (i) certain other items that we believe are not indicative of our core performance, including charges related to corporate transactions, employee severance, office relocation costs, and loss on extinguishment of debt.
Revenue Recognition of Incentive Fees Incentive fees are based on the results of our funds, in the form of performance fees and carried interest, which together comprise incentive fees. 99 Performance Fees We may receive performance fees from certain GCM Funds investing in public market investments.
Revenue Recognition of Incentive Fees Incentive fees are based on the results of our funds, in the form of performance fees and carried interest, which together comprise incentive fees. 100 Performance Fees We may receive performance fees from certain GCM Funds investing in public market investments.
Indebtedness On January 2, 2014, GCMH entered into a credit agreement (as amended, amended and restated, supplemented or otherwise modified, the “Credit Agreement”) that provides GCMH with a senior secured term loan facility (the “Term Loan Facility”) and a $50.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”).
Indebtedness On January 2, 2014, GCMH entered into a credit agreement (as amended, amended and restated, supplemented or otherwise modified, the “Credit Agreement”) that provides GCMH with a senior secured term loan facility (along with subsequent amendments, the “Term Loan Facility”) and a $50.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”).
The 24.7%, 24.2% and 24.5% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.7%, 3.2% and 3.5%, respectively. Net Incentive Fees Attributable to GCM Grosvenor Net incentive fees are used to highlight fees earned from incentive fees that are attributable to GCM Grosvenor.
The 25.0%, 24.7% and 24.2% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 4.0%, 3.7%, and 3.2%, respectively. Net Incentive Fees Attributable to GCM Grosvenor Net incentive fees are used to highlight fees earned from incentive fees that are attributable to GCM Grosvenor.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023. Overview We are a leading alternative asset management solutions provider that invests across all major alternative investment strategies.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 29, 2024. Overview We are a leading alternative asset management solutions provider that invests across all major alternative investment strategies.
We expect that the payments we are required to make under the Tax Receivable Agreement could be substantial. Based on current projections, we anticipate having sufficient taxable income to utilize these tax attributes and receive corresponding tax deductions in future periods. As of December 31, 2023, the Tax Receivable Agreement results in a liability of $54 million.
We expect that the payments we are required to make under the Tax Receivable Agreement could be substantial. Based on current projections, we anticipate having sufficient taxable income to utilize these tax attributes and receive corresponding tax deductions in future periods. As of December 31, 2024, the Tax Receivable Agreement results in a liability of $51 million.
In the event that a client redeems from one of the GCM Funds prior to the end of a measurement period, any accrued performance fee is ordinarily due and payable by such redeeming client as of the redemption date. For the year ended December 31, 2023, the Company recorded $15 million of performance fees.
In the event that a client redeems from one of the GCM Funds prior to the end of a measurement period, any accrued performance fee is ordinarily due and payable by such redeeming client as of the redemption date. For the year ended December 31, 2024, the Company recorded $55 million of performance fees.
Profits and losses, other than partnership interest-based compensation, are allocated to the noncontrolling interests in GCMH in proportion to their relative ownership interests regardless of their basis. 84 Results of Operations The following is a discussion of our consolidated results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022 .
Profits and losses, other than partnership interest-based compensation, are allocated to the noncontrolling interests in GCMH in proportion to their relative ownership interests regardless of their basis. 86 Results of Operations The following is a discussion of our consolidated results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023 .
(2) Represents interest to be paid on our debt obligations. The interest payments are calculated using the interest rate of 8.0% on our Term Loan Facility in effect as of December 31, 2023 and exclude the impact of interest rate hedges. (3) Represents general partner capital funding commitments to several of the GCM Funds.
(2) Represents interest to be paid on our debt obligations. The interest payments are calculated using the interest rate of 6.8% on our Term Loan Facility in effect as of December 31, 2024 and exclude the impact of interest rate hedges. (3) Represents general partner capital funding commitments to several of the GCM Funds.
Accordingly, the amount of carried interest, typically net of tax, that we would be required to return if all remaining investments had no value as of the end of each reporting period is deferred at each reporting period. For the year ended December 31, 2023, the Company recorded $50 million of carried interest.
Accordingly, the amount of carried interest, typically net of tax, that we would be required to return if all remaining investments had no value as of the end of each reporting period is deferred at each reporting period. For the year ended December 31, 2024, the Company recorded $51 million of carried interest.
Provision for Income Taxes We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by the Company and its subsidiaries. GCMH is treated as a pass-through entity for U.S. federal and state income tax purposes.
Provision for Income Taxes We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by us and our subsidiaries. GCMH is treated as a pass-through entity for U.S. federal and state income tax purposes.
Assets under management that are subject to performance fees, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $12.8 billion as of December 31, 2023.
Assets under management that are subject to performance fees, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $13.8 billion as of December 31, 2024.
Stock Repurchase Plan On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan which may be used to repurchase the Company’s outstanding Class A common stock and warrants to purchase Class A common stock.
Stock Repurchase Plan On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan which may be used to repurchase our outstanding Class A common stock and warrants to purchase Class A common stock.
Any such expense previously recorded is reversed if the target amount is canceled or forfeited or if the required service period is not provided. For the year ended December 31, 2023, the Company recorded approximately $104 million of partnership interest-based compensation.
Any such expense previously recorded is reversed if the target amount is canceled or forfeited or if the required service period is not provided. For the year ended December 31, 2024, the Company recorded approximately $72 million of partnership interest-based compensation.
The unrealized gains or losses are reclassified from accumulated other comprehensive income into interest expense over the original life of the swap. 83 Other Income (Expense) Other income (expense) consists primarily of other non-operating items, including write-off of unamortized debt issuance costs due to prepayments and refinancing of debt and interest income.
The unrealized gains or losses are reclassified from accumulated other comprehensive income into interest expense over the original life of the swap for terminated derivative instruments. Other Income Other income consists primarily of other non-operating items, including write-off of unamortized debt issuance costs due to prepayments and refinancing of debt and interest income.
The 24.7%, 24.2% and 24.5% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.7%, 3.2% and 3.5%, respectively. 92 Adjusted Net Income Per Share Adjusted net income per share is a non-GAAP measure that is calculated by dividing Adjusted Net Income by adjusted shares outstanding.
The 25.0%, 24.7% and 24.2% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 4.0%, 3.7%, and 3.2%, respectively. 93 Adjusted Net Income Per Share Adjusted net income per share is a non-GAAP measure that is calculated by dividing Adjusted Net Income by adjusted shares outstanding.
(2) Excludes severance expense of $6.8 million, $1.6 million and $3.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. (3) Excludes amortization of intangibles of $1.3 million, $2.3 million and $2.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
(2) Excludes severance expense of $1.5 million, $6.8 million and $1.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. (3) Excludes amortization of intangibles of $1.3 million, $1.3 million and $2.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Management fees will be charged on the remaining approximately $4.6 billion of CNYFPAUM as such capital is invested, which will depend on a number of factors, including the availability of eligible investment opportunities.
Management fees will be charged on the remaining approximately $5.2 billion of CNYFPAUM as such capital is invested, which will depend on a number of factors, including the availability of eligible investment opportunities.
Net Income (Loss) Attributable to Noncontrolling Interests Net income attributable to noncontrolling interests in subsidiaries was $5.0 million and $6.8 million for the years ended December 31, 2023 and 2022, respectively. The decrease was primarily attributable to a decrease in income generated by our consolidated subsidiaries not wholly owned by the Company.
Net Income (Loss) Attributable to Noncontrolling Interests Net income attributable to noncontrolling interests in subsidiaries was $2.5 million and $5.0 million for the years ended December 31, 2024 and 2023, respectively. The decrease was primarily attributable to a decrease in income generated by our consolidated subsidiaries not wholly owned by the Company.
On June 29, 2023, the Company entered into Amendment No. 7 to the Credit Agreement to incorporate changes for the contemplated transition to the Term Secured Overnight Financing Rate (“Term SOFR”), and on July 1, 2023, in conjunction with a Benchmark Transition Event, the interest rate defaulted to the Term SOFR plus a Benchmark Replacement Adjustment as recommended by the Relevant Governmental Body (all terms as defined in the Amended Credit Agreement).
On June 29, 2023, the Company amended the Term Loan Facility to incorporate changes for the contemplated transition to the Term Secured Overnight Financing Rate (“Term SOFR”), and on July 1, 2023, in conjunction with a Benchmark Transition Event, the interest rate defaulted to the Term SOFR plus a Benchmark Replacement Adjustment as recommended by the Relevant Governmental Body (all terms as defined in the Amended Credit Agreement).
Approximate ownership percentages are as of February 27, 2024. 1 Mr. Sacks, the chairman of our board of directors and our chief executive officer, ultimately owns and controls GCM V. The address for Mr.
Approximate ownership percentages are as of February 14, 2025. 1 Mr. Sacks, the chairman of our board of directors and our Chief Executive Officer, ultimately owns and controls GCM V. The address for Mr.
Interest Expense Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred debt issuance costs incurred from debt issued by us, including the Term Loan Facility and the Revolving Credit Facility entered into by us.
Interest Expense Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred debt issuance costs incurred from debt issued by us, including the Term Loan Facility and the Revolving Credit Facility (each of 85 which defined below) entered into by us.
Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies and expectations of future earnings. As of December 31, 2023, the Company has $58 million of deferred tax assets.
Items considered in this analysis include the ability to carry back losses, the reversal of temporary differences, tax planning strategies and expectations of future earnings. As of December 31, 2024, the Company has $51 million of net deferred tax assets.
We provided investment management / advisory services on assets of $76.9 billion, $73.7 billion and $72.1 billion as of December 31, 2023, 2022 and 2021, respectively.
We provided investment management / advisory services on assets of $80.1 billion, $76.9 billion and $73.7 billion as of December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023, GCMH had borrowings of $389.0 million outstanding under the Term Loan Facility and no outstanding balance under the Revolving Credit Facility. As of December 31, 2023, we had available borrowing capacity of $50.0 million under our Revolving Credit Facility.
As of December 31, 2024, GCMH had borrowings of $435.8 million outstanding under the Term Loan Facility and no outstanding balance under the Revolving Credit Facility. As of December 31, 2024, we had available borrowing capacity of $50.0 million under our Revolving Credit Facility.
For the years ended December 31, 2023 and 2022 , we spent $25.8 million and $6.4 million, respectively, to reduce Class A shares to be issued to employees to satisfy tax obligations in connection with the settlement of RSUs; and $4.5 million and $26.4 million, respectively, to repurchase shares of Class A common stock.
For the years ended December 31, 2024 and 2023 , we spent $33.2 million and $25.8 million, respectively, to reduce Class A shares to be issued to employees to satisfy tax obligations in connection with the settlement of RSUs; and for the year ended December 31, 2023 we spent $4.5 million to repurchase shares of Class A common stock.
Net Cash Used in Investing Activities Net cash used in investing activities was $(18.8) million and $(10.1) million for the years ended December 31, 2023 and 2022 , respectively.
Net Cash Used in Investing Activities Net cash used in investing activities was $(31.8) million and $(18.8) million for the years ended December 31, 2024 and 2023 , respectively.
Absent an event of default under the Credit Agreement governing the terms of the Term Loan Facility, GCMH may make unlimited distributions when the Total Leverage Ratio (as defined in the Credit Agreement) is below 2.75x. As of December 31, 2023, the Total Leverage Ratio was below 2.75x and the Company was in compliance with all financial covenants.
Absent an event of default under the Credit Agreement governing the terms of the Term Loan Facility, GCMH may make unlimited distributions when the Total Leverage Ratio (as defined in the Credit Agreement) is below stated thresholds. As of December 31, 2024, the Total Leverage Ratio was below 3.00x and the Company was in compliance with all financial covenants.
Also excludes completed and contemplated corporate transaction-related costs of $6.4 million, $2.1 million and $7.8 million for the years ended December 31, 2023, 2022 and 2021, respectively, and non-core expenses of $2.2 million, $0.6 million 89 and $0.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Also excludes completed and contemplated corporate transaction-related costs of $6.1 million, $6.4 million and $2.1 million for the years ended December 31, 2024, 2023 and 2022, respectively, and non-core expenses of $2.5 million, $2.2 million and $0.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Provision for Income Taxes The Company’s effective tax rate was (36)% and 11% for the years ended December 31, 2023 and 2022, respectively.
Provision for Income Taxes The Company’s effective tax rate was 27% and (36)% for the years ended December 31, 2024 and 2023, respectively.
As of December 31, 2023 we are in compliance with these regulatory requirements. 94 Cash Flows Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by operating activities $ 92,065 $ 216,513 $ 178,803 Net cash used in investing activities (18,840) (10,073) (28,114) Net cash used in financing activities (113,662) (215,067) (251,274) Effect of exchange rate changes on cash (372) (2,395) (1,376) Net decrease in cash and cash equivalents $ (40,809) $ (11,022) $ (101,961) Net Cash Provided by Operating Activities Net cash provided by operating activities is generally comprised of our net income (loss) in the respective periods after adjusting for significant non-cash activities, including equity-based compensation for equity-classified awards, non-cash partnership interest-based compensation, the change in fair value of warrant liabilities and the change in equity value of our investments, all of which are included in earnings; proceeds received from return on investments; inflows for receipt of management and incentive fees; and outflows for operating expenses, including cash-based compensation.
As of December 31, 2024 we are in compliance with these regulatory requirements. 95 Cash Flows Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 148,774 $ 92,065 $ 216,513 Net cash used in investing activities (31,834) (18,840) (10,073) Net cash used in financing activities (70,378) (113,662) (215,067) Effect of exchange rate changes on cash (1,462) (372) (2,395) Net increase (decrease) in cash and cash equivalents $ 45,100 $ (40,809) $ (11,022) Net Cash Provided by Operating Activities Net cash provided by operating activities is generally comprised of our net income (loss) in the respective periods after adjusting for significant non-cash activities, including equity-based compensation for equity-classified awards, non-cash partnership interest-based compensation, the change in fair value of warrant liabilities and the change in equity value of our investments, all of which are included in earnings; proceeds received from return on investments; inflows for receipt of management and incentive fees; and outflows for operating expenses, including cash-based compensation.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 FPAUM increased $2.8 billion, or 5%, to $61.7 billion during the year ended December 31, 2023 primarily due to $5.0 billion of contributions and a $1.8 billion increase in market value, partially offset by $2.6 billion and $1.2 billion of withdrawals and distributions, respectively. • Private markets strategies FPAUM increased $3.4 billion, or 9%, to $40.3 billion during the year ended December 31, 2023 primarily due to $4.5 billion of contributions, partially offset by $1.0 billion of distributions. • Absolute return strategies FPAUM decreased $0.6 billion, or 3%, to $21.4 billion during the year ended December 31, 2023 primarily due to $2.4 billion of withdrawals, partially offset by a $1.6 billion increase in market value and $0.5 billion of contributions.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 FPAUM increased $3.1 billion, or 5%, to $64.8 billion during the year ended December 31, 2024 primarily due to $6.0 billion of contributions and a $2.6 billion increase in market value, partially offset by $2.7 billion and $1.7 billion of withdrawals and distributions, respectively. • Private markets strategies FPAUM increased $2.4 billion, or 6%, to $42.7 billion during the year ended December 31, 2024 primarily due to $4.7 billion of contributions, partially offset by $1.4 billion of distributions. • Absolute return strategies FPAUM increased $0.6 billion, or 3%, to $22.0 billion during the year ended December 31, 2024 primarily due to a $2.4 billion increase in market value and $1.3 billion of contributions. partially offset by $2.6 billion of withdrawals.
GCMG’s Board of Directors has made subsequent increases to its stock repurchase authorization for shares and warrants. As of December 31, 2022, the total authorization was $90 million, excluding fees and expenses. On August 8, 2023, GCM Grosvenor's Board of Directors increased the firm’s existing share repurchase authorization by $25 million, from $90 million to $115 million.
GCMG’s Board of Directors has made subsequent increases to its stock repurchase authorization for shares and warrants. As of December 31, 2023, the total authorization was $115 million, excluding fees and expenses. On February 8, 2024, GCMG’s Board of Directors increased the firm's existing repurchase authorization by $25 million , from $115 million to $140 million.
The ramp in schedule will result in management fees being charged on approximately $0.9 billion, $0.7 billion and $1.1 billion of such amount beginning in 2024, in 2025 and in 2026 and beyond, respectively.
The ramp in schedule will result in management fees being charged on approximately $1.0 billion , $0.8 billion and $1.2 billion of such amount beginning in 2025, 2026 and 2027 and beyond, respectively.
These financing cash flows were driven by: • capital contributions received from noncontrolling interest holders of $2.3 million and $1.8 million during the years ended December 31, 2023 and 2022 , respectively; • capital distributions paid to partners and member of $(58.3) million and $(118.3) million during the years ended December 31, 2023 and 2022 , respectively; • capital distributions paid to noncontrolling interest holders of $(15.4) million and $(37.4) million during the years ended December 31, 2023 and 2022 respectively; 95 • principal payments on the Term Loan Facility of $(4.0) million during each of the years ended December 31, 2023 and 2022; • payments to repurchase Class A common stock of $(4.5) million and $(26.4) million during the years ended December 31, 2023 and 2022, respectively; • payments to repurchase warrants of $(2.6) million during the year ended December 31, 2022 ; • the settlement of equity-based compensation to satisfy withholding tax requirements of $(10.2) million and $(6.4) million during the years ended December 31, 2023 and 2022, respectively; • dividends paid of $(20.3) million and $(18.4) million during the years ended December 31, 2023 and 2022, respectively; and • payments to related parties, pursuant to tax receivable agreement of $(3.2) million and $(3.3) million during the years ended December 31, 2023 and 2022.
These financing cash flows were driven by: • capital contributions received from noncontrolling interest holders of $1.9 million and $2.3 million during the years ended December 31, 2024 and 2023 , respectively; • capital distributions paid to partners and member of $(69.6) million and $(58.3) million during the years ended December 31, 2024 and 2023 , respectively; • capital distributions paid to noncontrolling interest holders of $(12.4) million and $(15.4) million during the years ended December 31, 2024 and 2023 respectively; 96 • proceeds from the Term Loan Facility amendment of $50.0 million during the year ended December 31, 2024; • principal payments on the Term Loan Facility of $(3.2) million and $(4.0) million during the years ended December 31, 2024 and 2023, respectively; • payments to repurchase Class A common stock of $(4.5) million during the year ended December 31, 2023; • the settlement of equity-based compensation to satisfy withholding tax requirements of $(12.7) million and $(10.2) million during the years ended December 31, 2024 and 2023, respectively; • dividends paid of $(20.5) million and $(20.3) million during the years ended December 31, 2024 and 2023, respectively; and • payments to related parties, pursuant to tax receivable agreement of $(3.2) million and $(3.2) million during the years ended December 31, 2024 and 2023, respectively.
Net income (loss) attributable to noncontrolling interests in GCMH was $(47.0) million and $52.8 million for the years ended December 31, 2023 and 2022, respectively. The decrease was primarily attributable to an increase in partnership-interest based compensation as described above, which was fully allocated to noncontrolling interests in GCMH, and underlying performance of GCMH.
Net income (loss) attributable to noncontrolling interests in GCMH was $15.4 million and $(47.0) million for the years ended December 31, 2024 and 2023, respectively. The change was primarily attributable to a decrease in partnership-interest based compensation as described above, which was fully allocated to noncontrolling interests in GCMH, and underlying performance of GCMH.
P erformance fees increased $12.7 million, to $15.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase in performance fees was primarily due to higher returns for absolute return strategies funds during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
P erformance fees increased $40.0 million, to $55.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase in performance fees was primarily due to higher returns for absolute return strategies funds during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
As of December 31, 2023, we had $44.4 million of cash and cash equivalents and available borrowing capacity of $50.0 million under our Revolving Credit Facility.
As of December 31, 2024, we had $89.5 million of cash and cash equivalents and available borrowing capacity of $50.0 million under our Revolving Credit Facility.
These investing cash flows were driven by: • purchases of premises and equipment of $(3.8) million and $(0.8) million during the years ended December 31, 2023 and 2022 , respectively; and • contributions/subscriptions to investments of $(27.6) million and $(29.4) million during the years ended December 31, 2023 and 2022 , respectively; partially offset by • distributions received from investments of $12.6 million and $20.1 million during the years ended December 31, 2023 and 2022 , respectively.
These investing cash flows were driven by: • purchases of premises and equipment of $(16.7) million and $(3.8) million during the years ended December 31, 2024 and 2023 , respectively; and • contributions/subscriptions to investments of $(26.2) million and $(27.6) million during the years ended December 31, 2024 and 2023 , respectively; partially offset by • distributions received from investments of $11.1 million and $12.6 million during the years ended December 31, 2024 and 2023 , respectively.
Net cash provided by operating activities was $92.1 million and $216.5 million for the years ended December 31, 2023 and 2022 , respectively.
Net cash provided by operating activities was $148.8 million and $92.1 million for the years ended December 31, 2024 and 2023 , respectively.
Net Cash Used in Financing Activities Net cash used in financing activities was $(113.7) million and $(215.1) million, for the years ended December 31, 2023 and 2022, respectively.
Net Cash Used in Financing Activities Net cash used in financing activities was $(70.4) million and $(113.7) million, for the years ended December 31, 2024 and 2023, respectively.
We recognize interest and penalties related to 100 unrecognized tax benefits, if any, within provision for income taxes in the Consolidated Statements of Income (Loss). Accrued interest and penalties, if any, would be included within accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.
We recognize interest and penalties related to unrecognized tax benefits, if any, within provision for income taxes in the Consolidated Statements of Income (Loss). Accrued interest and penalties, if any, would be included within accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. As of December 31, 2024, the Company has $1 million in uncertain tax positions.
Significant judgment is required in determining tax expense and in evaluating tax positions, including evaluating uncertainties under GAAP. We review our tax positions quarterly and adjust our tax balances as new legislation is enacted or new information becomes available. Tax Receivable Agreement In connection with the Transaction, we entered into the Tax Receivable Agreement with the GCMH Equityholders.
We review our tax positions quarterly and adjust our tax balances as new legislation is enacted or new information becomes available. Tax Receivable Agreement In connection with the Transaction, we entered into the Tax Receivable Agreement with the GCMH Equityholders.
Further, these measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these measurements in isolation or as a substitute for GAAP measures including revenues and net income (loss).
These non-GAAP measures should not be considered a substitute for the most directly comparable GAAP measures, which are reconciled below. Further, these measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these measurements in isolation or as a substitute for GAAP measures including revenues and net income (loss).
These operating cash flows were primarily driven by: • net income of $93.3 million and $125.6 million for the years ended December 31, 2023 and 2022, respectively, after adjusting for $122.6 million and $46.1 million of net non-cash activities, respectively; • a decrease in working capital of $(11.8) million during the year ended December 31, 2023, as compared to an increase in working capital of $28.8 million during the year ended December 31, 2022, largely due to higher receipts of incentive fees in the year ended December 31, 2022, partially offset by lower payments for cash-based compensation in the year ended December 31, 2023; • proceeds received from investments of $10.5 million and $21.8 million for the years ended December 31, 2023 and 2022 , respectively; and • proceeds received for terminated interest rate derivatives of $40.3 million in the year ended December 31, 2022 .
These operating cash flows were primarily driven by: • net income of $152.6 million and $93.3 million for the years ended December 31, 2024 and 2023, respectively, after adjusting for $116.0 million and $122.6 million of net non-cash activities for the years ended December 31, 2024 and 2023, respectively; • a decrease in working capital of $16.9 million during the year ended December 31, 2024, as compared to a decrease in working capital of $11.8 million during the year ended December 31, 2023, largely due to an increase in incentive fees earned during the year ended December 31, 2024, partially offset by lower cash-based compensation during the year ended December 31, 2024; and • proceeds received from investments of $13.1 million and $10.5 million for the years ended December 31, 2024 and 2023 , respectively.
Net income attributable to noncontrolling interests in subsidiaries represents the economic interests of third parties in certain consolidated subsidiaries. Net income (loss) attributable to noncontrolling interests in GCMH represents the economic interests of GCMH Equityholders in GCMH.
Net income (loss) attributable to noncontrolling interests in GCMH represents the economic interests of GCMH Equityholders in GCMH.
The following table shows reconciliations of Total Operating Revenues to Fee-Related Revenue for the years ended December 31, 2023, 2022 and 2021, respectively: 93 Year Ended December 31, 2023 2022 2021 (in thousands) Fee-Related Revenue Total Operating Revenues $ 444,999 $ 446,530 $ 531,592 Less: Incentive fees (64,903) (75,167) (173,853) Fund reimbursement revenue (14,556) (10,841) (10,372) Fee-Related Revenue $ 365,540 $ 360,522 $ 347,367 The following table shows reconciliations of Adjusted EBITDA to Fee-Related Earnings for the years ended December 31, 2023, 2022 and 2021, respectively: Year Ended December 31, 2023 2022 2021 (in thousands) Adjusted EBITDA $ 162,185 $ 149,347 $ 179,131 Less: Incentive fees (64,903) (75,167) (173,853) Depreciation expense (1,383) (1,540) (1,688) Other non-operating expense (2,130) (708) (78) Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (1) (3,103) (4,699) (1,496) Plus: Incentive fee-related compensation 44,181 52,869 97,081 Carried interest attributable to redeemable noncontrolling interest holder — — 8,059 Carried interest attributable to other noncontrolling interest holders, net 5,095 8,411 13,245 Fee-Related Earnings $ 139,942 $ 128,513 $ 120,401 ____________ (1) Investment income or loss is generally realized when the Company redeems all or a portion of its investment or when the Company receives or is due cash, such as a from dividends or distributions.
The following table shows reconciliations of Total Operating Revenues to Fee-Related Revenue for the years ended December 31, 2024, 2023 and 2022, respectively: 94 Year Ended December 31, 2024 2023 2022 (in thousands) Fee-Related Revenue Total Operating Revenues $ 514,012 $ 444,999 $ 446,530 Less: Incentive fees (106,237) (64,903) (75,167) Fund reimbursement revenue (14,694) (14,556) (10,841) Fee-Related Revenue $ 393,081 $ 365,540 $ 360,522 The following table shows reconciliations of Adjusted EBITDA to Fee-Related Earnings for the years ended December 31, 2024, 2023 and 2022, respectively: Year Ended December 31, 2024 2023 2022 (in thousands) Adjusted EBITDA $ 213,844 $ 162,185 $ 149,347 Less: Incentive fees (106,237) (64,903) (75,167) Depreciation expense (2,007) (1,383) (1,540) Other non-operating expense (2,355) (2,130) (708) Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (1) (6,676) (3,103) (4,699) Plus: Incentive fee-related compensation 66,445 44,181 52,869 Carried interest attributable to other noncontrolling interest holders, net 3,337 5,095 8,411 Fee-Related Earnings $ 166,351 $ 139,942 $ 128,513 ____________ (1) Investment income or loss is generally realized when the Company redeems all or a portion of its investment or when the Company receives or is due cash, such as a from dividends or distributions.
The following table shows reconciliations of incentive fees to net incentive fees attributable to GCM Grosvenor for the years ended December 31, 2023, 2022 and 2021, respectively: Year Ended December 31, 2023 2022 2021 (in thousands) Incentive fees: Performance fees $ 15,313 $ 2,623 $ 51,947 Carried interest 49,590 72,544 121,906 Less incentive fees contractually owed to others: Cash carried interest compensation (28,505) (41,920) (67,773) Non-cash carried interest compensation (48) 52 (1,306) Carried interest attributable to redeemable noncontrolling interest holder — — (8,059) Carried interest attributable to other noncontrolling interest holders (5,095) (8,411) (13,245) Firm share of incentive fees (1) 31,255 24,888 83,470 Less: Cash-based incentive fee related compensation (15,628) (11,001) (28,002) Net Incentive Fees Attributable to GCM Grosvenor $ 15,627 $ 13,887 $ 55,468 ____________ (1) Firm share represents incentive fees net of contractual obligations but before discretionary cash based incentive compensation.
The following table shows reconciliations of incentive fees to net incentive fees attributable to GCM Grosvenor for the years ended December 31, 2024, 2023 and 2022, respectively: Year Ended December 31, 2024 2023 2022 (in thousands) Incentive fees: Performance fees $ 55,323 $ 15,313 $ 2,623 Carried interest 50,914 49,590 72,544 Less incentive fees contractually owed to others: Cash carried interest compensation (30,450) (28,505) (41,920) Non-cash carried interest compensation 460 (48) 52 Carried interest attributable to other noncontrolling interest holders (3,337) (5,095) (8,411) Firm share of incentive fees (1) 72,910 31,255 24,888 Less: Cash-based incentive fee related compensation (36,455) (15,628) (11,001) Net Incentive Fees Attributable to GCM Grosvenor $ 36,455 $ 15,627 $ 13,887 ____________ (1) Firm share represents incentive fees net of contractual obligations but before discretionary cash based incentive compensation.
Year Ended December 31, $000, except per share amounts 2023 2022 2021 (in thousands, except share and per share amounts) Adjusted Net Income Per Share Adjusted Net Income $ 103,204 $ 94,366 $ 118,806 Weighted-average shares of Class A common stock outstanding - basic 43,198,517 43,872,300 43,765,651 Exercise of private warrants - incremental shares under the treasury stock method — — 90,062 Exercise of public warrants - incremental shares under the treasury stock method — — 691,396 Exchange of partnership units 144,235,246 144,235,246 144,235,246 Assumed vesting of RSUs - incremental shares under the treasury stock method — 460,446 277,019 Weighted-average shares of Class A common stock outstanding - diluted 187,433,763 188,567,992 189,059,374 Effect of RSU’s, if antidilutive for GAAP 808,716 — — Adjusted shares - diluted 188,242,479 188,567,992 189,059,374 Adjusted Net Income Per Share - Diluted $ 0.55 $ 0.50 $ 0.63 Fee-Related Revenue and Fee-Related Earnings Fee-Related Revenue (“FRR”) is a non-GAAP measure used to highlight revenues from recurring management fees and administrative fees.
Year Ended December 31, $000, except per share amounts 2024 2023 2022 (in thousands, except share and per share amounts) Adjusted Net Income Per Share Adjusted Net Income $ 140,758 $ 103,204 $ 94,366 Weighted-average shares of Class A common stock outstanding - basic 44,741,336 43,198,517 43,872,300 Exercise of private warrants - incremental shares under the treasury stock method — — — Exercise of public warrants - incremental shares under the treasury stock method — — — Exchange of partnership units 144,235,246 144,235,246 144,235,246 Assumed vesting of RSUs - incremental shares under the treasury stock method 1,613,459 — 460,446 Weighted-average shares of Class A common stock outstanding - diluted 190,590,041 187,433,763 188,567,992 Effect of dilutive warrants, if antidilutive for GAAP 141,420 — — Effect of RSUs, if antidilutive for GAAP — 808,716 — Adjusted shares - diluted 190,731,461 188,242,479 188,567,992 Adjusted Net Income Per Share - Diluted $ 0.74 $ 0.55 $ 0.50 Fee-Related Revenue and Fee-Related Earnings Fee-Related Revenue (“FRR”) is a non-GAAP measure used to highlight revenues from recurring management fees and administrative fees.
We have defined the portion to be deferred as the amount of carried interest, typically net of tax, that we would be required to return if all remaining investments had no value as of the end of each reporting period. As of December 31, 2023, deferred revenue relating to constrained realized carried interest was approximately $5.6 million.
We have defined the portion to be deferred as the amount of carried interest, typically net of tax, that we would be required to return if all remaining investments had no value as of the end of each reporting period.
The complex and evolving regulatory and tax environment may have an adverse effect on our business and subject us to additional expenses or capital requirements, as well as restrictions on our business operations.
The complex and evolving regulatory and tax environment may have an adverse effect on our business and subject us to additional expenses or capital requirements, as well as restrictions on our business operations. Operating Segments We have determined that we operate in a single operating and reportable segment.
Although there can be no assurance that we will be able to secure the opportunity to invest on behalf of our clients in all or a substantial portion of the investments we select, or that the size of the investment opportunities available to us will be as large as we would desire, we seek to maintain excellent relationships with investment managers of investment funds, including those in which we have previously made investments for our clients and those in which we may in the future invest, as well as sponsors of investments that might provide co-investment opportunities in portfolio companies alongside the sponsoring fund manager.
Although there can be no assurance that we will be able to secure the opportunity to invest on behalf of our clients in all or a substantial portion of the investments we select, or that the size of the investment opportunities available to us will be as large as we would desire, we seek to maintain excellent relationships with investment managers that we have invested with previously or who we may invest with in the future.
See Note 15 of our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a summary of our interest rate derivatives to hedge interest rate risk related to the Company’s outstanding indebtedness.
See Note 14 of our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for a summary of our interest rate derivatives to hedge interest rate risk related to the Company’s outstanding indebtedness. During the year ended December 31, 2024, the Company entered into swap agreements to hedge interest rate risk related to our debt.
On February 8, 2024, we declared a quarterly dividend of $0.11 per share of Class A common stock to record holders as of the close of business on March 1, 2024. The payment date will be March 15, 2024.
On February 6, 2025, GCMG’s Board of Directors declared a quarterly dividend of $0.11 per share of Class A common stock to record holders as of the close of business on March 3, 2025. The payment date will be March 17, 2025.
Performance fees are typically a fixed percentage of investment gains, subject to loss carryforward provisions that require the recapture of any previous losses before any performance fees can be earned in the current period.
Performance Fees We may receive performance fees from certain GCM Funds, more commonly in funds associated with absolute return strategies. Performance fees are typically a fixed percentage of investment gains, subject to loss carryforward provisions that require the recapture of any previous losses before any performance fees can be earned in the current period.
Operating Segments We have determined that we operate in a single operating and reportable segment, consistent with how our chief operating decision maker allocates resources and assesses performance. 80 Organizational Structure The diagram below depicts our current organizational structure: Note: The diagram depicts a simplified version of our structure and does not include all legal entities in our structure.
This is consistent with how our chief operating decision maker, who is our Chief Executive Officer, allocates resources and assesses performance. 82 Organizational Structure The diagram below depicts our current organizational structure: Note: The diagram depicts a simplified version of our structure and does not include all legal entities in our structure.
(3) Represents corporate income taxes at a blended statutory effective tax rates of 24.7%, 24.2% and 24.5% applied to Adjusted Pre-Tax Income for the years ended December 31, 2023, 2022 and 2021, respectively.
(2) Includes $1.9 million and $1.2 million related to New York office relocation costs for the years ended December 31, 2024 and 2023, respectively. (3) Represents corporate income taxes at a blended statutory effective tax rates of 25.0%, 24.7% and 24.2% applied to Adjusted Pre-Tax Income for the years ended December 31, 2024, 2023 and 2022, respectively.
Year Ended December 31, 2023 2022 2021 (in thousands) Revenues Management fees $ 375,444 $ 367,242 $ 351,216 Incentive fees 64,903 75,167 173,853 Other operating income 4,652 4,121 6,523 Total operating revenues 444,999 446,530 531,592 Expenses Employee compensation and benefits 356,044 277,311 333,837 General, administrative and other 100,801 88,907 88,351 Total operating expenses 456,845 366,218 422,188 Operating income (loss) (11,846) 80,312 109,404 Investment income 11,640 10,108 52,495 Interest expense (23,745) (23,314) (20,084) Other income 1,008 1,436 3,394 Change in fair value of warrant liabilities 1,429 20,551 7,853 Net other income (expense) (9,668) 8,781 43,658 Income (loss) before income taxes (21,514) 89,093 153,062 Provision for income taxes 7,692 9,611 10,993 Net income (loss) (29,206) 79,482 142,069 Less: Net income attributable to redeemable noncontrolling interest — — 19,827 Less: Net income attributable to noncontrolling interests in subsidiaries 5,033 6,823 36,912 Less: Net income (loss) attributable to noncontrolling interests in GCMH (47,013) 52,839 63,848 Net income attributable to GCM Grosvenor Inc. $ 12,774 $ 19,820 $ 21,482 Revenues Year Ended December 31, 2023 2022 2021 (in thousands) Private markets strategies $ 214,338 $ 197,267 $ 175,447 Absolute return strategies 146,550 159,134 165,397 Fund expense reimbursement revenue 14,556 10,841 10,372 Total management fees 375,444 367,242 351,216 Incentive fees 64,903 75,167 173,853 Administrative fees 3,570 3,184 5,111 Other 1,082 937 1,412 Total other operating income 4,652 4,121 6,523 Total operating revenues $ 444,999 $ 446,530 $ 531,592 Management fees increased $8.2 million, or 2%, to $375.4 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Year Ended December 31, 2024 2023 2022 (in thousands) Revenues Management fees $ 401,648 $ 375,444 $ 367,242 Incentive fees 106,237 64,903 75,167 Other operating income 6,127 4,652 4,121 Total operating revenues 514,012 444,999 446,530 Expenses Employee compensation and benefits 336,236 356,044 277,311 General, administrative and other 104,296 100,801 88,907 Total operating expenses 440,532 456,845 366,218 Operating income (loss) 73,480 (11,846) 80,312 Investment income 15,589 11,640 10,108 Interest expense (24,160) (23,745) (23,314) Other income 1,334 1,008 1,436 Change in fair value of warrant liabilities (16,079) 1,429 20,551 Net other income (expense) (23,316) (9,668) 8,781 Income (loss) before income taxes 50,164 (21,514) 89,093 Provision for income taxes 13,560 7,692 9,611 Net income (loss) 36,604 (29,206) 79,482 Less: Net income attributable to noncontrolling interests in subsidiaries 2,545 5,033 6,823 Less: Net income (loss) attributable to noncontrolling interests in GCMH 15,364 (47,013) 52,839 Net income attributable to GCM Grosvenor Inc. $ 18,695 $ 12,774 $ 19,820 Revenues Year Ended December 31, 2024 2023 2022 (in thousands) Private markets strategies $ 238,546 $ 214,338 $ 197,267 Absolute return strategies 148,408 146,550 159,134 Fund expense reimbursement revenue 14,694 14,556 10,841 Total management fees 401,648 375,444 367,242 Incentive fees 106,237 64,903 75,167 Administrative fees 3,850 3,570 3,184 Other 2,277 1,082 937 Total other operating income 6,127 4,652 4,121 Total operating revenues $ 514,012 $ 444,999 $ 446,530 Management fees increased $26.2 million, or 7%, to $401.6 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The following table shows reconciliations of net income attributable to GCM Grosvenor Inc. and Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021, respectively: 91 Year Ended December 31, 2023 2022 2021 (in thousands) Adjusted Pre-Tax Income & Adjusted Net Income Net income attributable to GCM Grosvenor Inc. $ 12,774 $ 19,820 $ 21,482 Plus: Net income (loss) attributable to noncontrolling interests in GCMH (47,013) 52,839 63,848 Provision for income taxes 7,692 9,611 10,993 Change in fair value of derivatives — — (1,934) Change in fair value of warrants (1,429) (20,551) (7,853) Amortization expense 1,313 2,316 2,332 Severance 6,826 1,647 3,110 Transaction expenses (1) 6,445 2,051 7,827 Loss on extinguishment of debt — — 675 Changes in TRA liability and other (2) 3,048 (241) (1,372) Partnership interest-based compensation 103,934 31,811 27,671 Equity-based compensation 50,667 30,721 44,190 Other non-cash compensation 1,157 1,336 3,300 Less: Unrealized investment income, net of noncontrolling interests (8,309) (6,919) (15,604) Non-cash carried interest compensation (48) 52 (1,306) Adjusted Pre-Tax Income 137,057 124,493 157,359 Less: Adjusted income taxes (3) (33,853) (30,127) (38,553) Adjusted Net Income $ 103,204 $ 94,366 $ 118,806 Adjusted EBITDA Adjusted Net Income $ 103,204 $ 94,366 $ 118,806 Plus: Adjusted income taxes (3) 33,853 30,127 38,553 Depreciation expense 1,383 1,540 1,688 Interest expense 23,745 23,314 20,084 Adjusted EBITDA $ 162,185 $ 149,347 $ 179,131 ____________ (1) Represents 2023 and 2022 expenses related to contemplated corporate transactions and 2021 expenses related to a debt offering, other contemplated corporate transactions and other public company transition expenses.
The following table shows reconciliations of net income attributable to GCM Grosvenor Inc. and Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA for the years ended December 31, 2024, 2023 and 2022, respectively: Year Ended December 31, 2024 2023 2022 (in thousands) Adjusted Pre-Tax Income & Adjusted Net Income Net income attributable to GCM Grosvenor Inc. $ 18,695 $ 12,774 $ 19,820 Plus: Net income (loss) attributable to noncontrolling interests in GCMH 15,364 (47,013) 52,839 Provision for income taxes 13,560 7,692 9,611 Change in fair value of warrants 16,079 (1,429) (20,551) Amortization expense 1,313 1,313 2,316 Severance 1,502 6,826 1,647 Transaction expenses (1) 6,116 6,445 2,051 Loss on extinguishment of debt 157 — — Changes in TRA liability and other (2) 2,908 3,048 (241) Partnership interest-based compensation 72,068 103,934 31,811 Equity-based compensation 48,158 50,667 30,721 Other non-cash compensation 558 1,157 1,336 Less: Unrealized investment income, net of noncontrolling interests (9,261) (8,309) (6,919) Non-cash carried interest compensation 460 (48) 52 Adjusted Pre-Tax Income 187,677 137,057 124,493 Less: Adjusted income taxes (3) (46,919) (33,853) (30,127) Adjusted Net Income $ 140,758 $ 103,204 $ 94,366 Adjusted EBITDA Adjusted Net Income $ 140,758 $ 103,204 $ 94,366 Plus: Adjusted income taxes (3) 46,919 33,853 30,127 Depreciation expense 2,007 1,383 1,540 Interest expense 24,160 23,745 23,314 Adjusted EBITDA $ 213,844 $ 162,185 $ 149,347 ____________ (1) Represents 2024 expenses incurred, including $3.0 million related to a debt amendment and extension, and contemplated corporate transactions and 2023 and 2022 expenses related to contemplated corporate transactions.
Amounts were de minimis for periods prior to the Mosaic repurchase on July 2, 2021. Liquidity and Capital Resources We have historically financed our operations and working capital through net cash provided by operating activities and borrowings under our Term Loan Facility and Revolving Credit Facility (each as defined below).
Liquidity and Capital Resources We have historically financed our operations and working capital through net cash provided by operating activities and borrowings under our Term Loan Facility and Revolving Credit Facility (each as defined below).
The availability of investment opportunities is subject to certain factors outside of our control and the control of the investment managers with which we invest for our funds, including the market environment at a given point in time.
Our success largely depends on the identification and availability of suitable investment opportunities for our clients, including the success of the investment vehicles managed by third-party investment managers in which GCM Funds invest. The availability of investment opportunities is subject to certain factors outside of our control, including the market environment at a given point in time.
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. 5 Common Units may be exchanged on a one-for-one basis for shares of Class A common stock or, at our election, for cash, pursuant to and subject to the restrictions set forth in the A&R LLLPA.
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. 5 As of February 14, 2025, there were 44,911,734 shares of Class A common stock outstanding and 144,235,246 common units of GCMH (“Common Units”) outstanding held by the GCMH Equityholders, which may be exchanged for shares of Class A common stock on a one-to-one basis, or, at the Company’s election for cash, pursuant to and subject to the restrictions set forth in the Fifth Amended and Restated Limited Liability Limited Partnership Agreement of GCMH.
Expenses Employee Compensation and Benefits Year Ended December 31, 2023 2022 2021 (in thousands) Cash-based employee compensation and benefits $ 156,153 $ 160,522 $ 162,901 Equity-based compensation 50,667 30,721 44,190 Partnership interest-based compensation 103,934 31,811 27,671 Carried interest compensation 28,505 41,920 67,773 Cash-based incentive fee related compensation 15,628 11,001 28,002 Other non-cash compensation 1,157 1,336 3,300 Total employee compensation and benefits $ 356,044 $ 277,311 $ 333,837 Employee compensation and benefits increased $78.7 million, or 28%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Expenses Employee Compensation and Benefits Year Ended December 31, 2024 2023 2022 (in thousands) Cash-based employee compensation and benefits $ 148,547 $ 156,153 $ 160,522 Equity-based compensation 48,158 50,667 30,721 Partnership interest-based compensation 72,068 103,934 31,811 Carried interest compensation 30,450 28,505 41,920 Cash-based incentive fee related compensation 36,455 15,628 11,001 Other non-cash compensation 558 1,157 1,336 Total employee compensation and benefits $ 336,236 $ 356,044 $ 277,311 Employee compensation and benefits decreased $19.8 million, or 6%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Summary of Non-GAAP Financial Measures Year Ended December 31, 2023 2022 2021 (in thousands) Revenues Private markets strategies $ 214,338 $ 197,267 $ 175,447 Absolute return strategies 146,550 159,134 165,397 Management fees, net (1) 360,888 356,401 340,844 Administrative fees and other operating income 4,652 4,121 6,523 Fee-Related Revenue 365,540 360,522 347,367 Less: Cash-based employee compensation and benefits, net (2) (149,327) (158,875) (159,791) General, administrative and other, net (1,3) (76,271) (73,134) (67,175) Fee-Related Earnings 139,942 128,513 120,401 Incentive fees: Performance fees 15,313 2,623 51,947 Carried interest 49,590 72,544 121,906 Incentive fee related compensation and NCI: Cash-based incentive fee related compensation (15,628) (11,001) (28,002) Carried interest compensation, net (4) (28,553) (41,868) (69,079) Carried interest attributable to noncontrolling interests (5,095) (8,411) (21,304) Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (5) 3,103 4,699 1,496 Interest income 2,021 787 18 Other (income) expense 109 (79) 60 Depreciation 1,383 1,540 1,688 Adjusted EBITDA 162,185 149,347 179,131 Depreciation (1,383) (1,540) (1,688) Interest expense (23,745) (23,314) (20,084) Adjusted Pre-Tax Income 137,057 124,493 157,359 Adjusted income taxes (6) (33,853) (30,127) (38,553) Adjusted Net Income $ 103,204 $ 94,366 $ 118,806 ____________ (1) Excludes fund reimbursement revenue of $14.6 million, $10.8 million and $10.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
We may calculate or present these non-GAAP financial measures differently than other companies who report measures with the same or similar names, and as a result, the non-GAAP measures we report may not be comparable. 90 Summary of Non-GAAP Financial Measures Year Ended December 31, 2024 2023 2022 (in thousands) Revenues Private markets strategies $ 238,546 $ 214,338 $ 197,267 Absolute return strategies 148,408 146,550 159,134 Management fees, net (1) 386,954 360,888 356,401 Administrative fees and other operating income 6,127 4,652 4,121 Fee-Related Revenue 393,081 365,540 360,522 Less: Cash-based employee compensation and benefits, net (2) (147,045) (149,327) (158,875) General, administrative and other, net (1,3) (79,685) (76,271) (73,134) Fee-Related Earnings 166,351 139,942 128,513 Fee-Related Earnings Margin (4) 42 % 38 % 36 % Incentive fees: Performance fees 55,323 15,313 2,623 Carried interest 50,914 49,590 72,544 Incentive fee related compensation and NCI: Cash-based incentive fee related compensation (36,455) (15,628) (11,001) Carried interest compensation, net (5) (29,990) (28,553) (41,868) Carried interest attributable to noncontrolling interests (3,337) (5,095) (8,411) Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (6) 6,676 3,103 4,699 Interest income 2,695 2,021 787 Other (income) expense (340) 109 (79) Depreciation 2,007 1,383 1,540 Adjusted EBITDA 213,844 162,185 149,347 Depreciation (2,007) (1,383) (1,540) Interest expense (24,160) (23,745) (23,314) Adjusted Pre-Tax Income 187,677 137,057 124,493 Adjusted income taxes (7) (46,919) (33,853) (30,127) Adjusted Net Income $ 140,758 $ 103,204 $ 94,366 ____________ (1) Excludes fund reimbursement revenue of $14.7 million, $14.6 million and $10.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.
CNYFPAUM decreased $0.3 billion, or 4%, to $7.3 billion during the year ended December 31, 2023 due to CNYFPAUM that became FPAUM during the period, net of closing of new commitments.
CNYFPAUM increased $0.9 billion, or 12%, to $8.2 billion during the year ended December 31, 2024 due to the closing of new commitments during the period, net of reductions for CNYFPAUM that became FPAUM during the period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+3 added−1 removed8 unchanged
Biggest changeEnterprise Risk Management Committee The GCM Grosvenor Enterprise Risk Management Committee (“ERMC”) is tasked with overseeing firm-wide risks and potential conflicts arising from the operations of the firm. The ERMC meets at least quarterly, and as needed, and is comprised of some of the most senior professionals at the firm across the spectrum of departments.
Biggest changeThe ERMC meets at least quarterly, and as needed, and is comprised of some of the most senior professionals at the firm across the spectrum of departments. The ERMC aims to identify, assess, monitor and mitigate such key enterprise risks at the corporate, business unit and fund level.
Our general partner investments include unique underlying portfolio investments with no significant concentration in any industry or country outside of the United States. 101 • 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 102 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.
We do not possess significant assets in foreign countries in which we operate or engage in material transactions in currencies other than the U.S. dollar. Therefore, changes in exchange rates are not expected to materially impact our consolidated financial statements. Interest Rate Risk As of December 31, 2023, we had $389.0 million of borrowings outstanding under our Term Loan Facility.
We do not possess significant assets in foreign countries in which we operate or engage in material transactions in currencies other than the U.S. dollar. Therefore, changes in exchange rates are not expected to materially impact our consolidated financial statements. Interest Rate Risk As of December 31, 2024, we had $435.8 million of borrowings outstanding under our Term Loan Facility.
We had $5.6 million of deferred incentive fee revenue on our Consolidated Statements of Financial Condition as of December 31, 2023 . Minor decreases in underlying fair value would not affect the amount of deferred incentive fee revenue subject to clawback.
We had $6.0 million of deferred incentive fee revenue on our Consolidated Statements of Financial Condition as of December 31, 2024 . Minor decreases in underlying fair value would not affect the amount of deferred incentive fee revenue subject to clawback.
Based on the floating rate component of our Term Loan Facility and excluding any impact of interest rate hedges as of December 31, 2023, we estimate that a 100 basis point increase in interest rates would result in increased interest expense of $3.9 million over the next 12 months.
Based on the floating rate component of our Term Loan Facility and excluding any impact of interest rate hedges as of December 31, 2024, we estimate that a 100 basis point increase in interest rates would result in increased interest expense of $4.4 million over the next 12 months.
As a result of interest rate risk, in November 2022 the Company entered into an interest rate swap agreement with a total notional amount of $300 million to hedge interest rate risk related to a portion of its Term Loan Facility.
As a result of interest rate risk, in November 2022 the Company entered into an interest rate swap agreement with a total notional amount of $300 million and a maturity date of February 2028, to hedge interest rate risk related to a portion of its Term Loan Facility.
For the year ended December 31, 2023, the weighted average interest rate for our Term Loan Facility was 7.59%.
For the year ended December 31, 2024, the weighted average interest rate for our Term Loan Facility was 7.54%.
We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.
We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions.
The Term Loan Facility accrued interest at 2.50% over the LIBOR, subject to a 0.50% LIBOR floor through June 30, 2023 and defaulted to Term SOFR plus a Benchmark Replacement Adjustment of 0.11% on July 1, 2023 at the Benchmark Transition Event as discussed in Note 14 in the Notes Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
The Term Loan Facility accrues interest at 2.25% over Term SOFR, is subject to a 0.50% SOFR floor and has a maturity date of February 25, 2030, after we entered into Amendment No. 8 to the Credit Agreement as discussed in Note 13 in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
The ERMC aims to identify, assess, monitor and mitigate such key enterprise risks at the corporate, business unit and fund level. Senior management reports to the audit committee of the Board of Directors on the agenda of risk topics evaluated by the ERMC. 102
Senior management reports to the audit committee of the Board of Directors on the agenda of risk topics evaluated by the ERMC. 104
Removed
In October 2022, the Company terminated the 2028 Swap Agreement and 2028 Incremental Swap Agreement effective on November 1, 2022.
Added
In October 2022, the Company terminated certain derivative instruments which were entered into in 2021.
Added
In May 2024, we entered into a swap agreement and a forward-starting swap agreement that have a notional amount of $28.5 million and $317.0 million, respectively, with the purpose of hedging interest rate risk related to payments for the increase in aggregate principal amount and extended maturity of the Term Loan Facility.
Added
In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 103 Enterprise Risk Management Committee The GCM Grosvenor Enterprise Risk Management Committee (“ERMC”) is tasked with overseeing firm-wide risks and potential conflicts arising from the operations of the firm.

Other GCMG 10-K year-over-year comparisons