GCM Grosvenor Inc. (NASDAQ:GCMG) Q3 2024 Earnings Conference Call November 8, 2024 10:00 AM ET

Company Participants

Stacie Selinger - Head of IR
Michael Sacks - Chairman and CEO
Jon Levin - President
Pam Bentley - CFO

Conference Call Participants

Crispin Love - Piper Sandler
Bill Katz - TD Cowen
Ken Worthington - JP Morgan
Stephanie Ma - Morgan Stanley

Operator

Good day, and welcome to the GCM Grosvenor Third Quarter 2024 Results Webcast [Operator Instructions]. As a reminder, this call will be recorded. I would now like to hand the call over to Stacie Selinger, Head of Investor Relations. You may begin.

Stacie Selinger

Thank you. Good morning. And welcome to GCM Grosvenor's third quarter 2024 earnings call. Today I am joined by GCM Grosvenor's Chairman and Chief Executive Officer, Michael Sacks; President, Jon Levin; and Chief Financial Officer, Pam Bentley. Before we discuss this quarter's results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business, our financial performance and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties and other important factors that may cause our actual results to differ materially from those indicated by the forward-looking statements on this call. Please refer to the factors in the Risk Factors section of our 10-K, our other filings with the Securities and Exchange Commission and our earnings release, all of which are available on the Public Shareholders Section of our Web site. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP metrics to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are available on our Web site. Our goal is to continually improve how we communicate with and engage with our shareholders and in that spirit we look forward to your feedback. Thank you again for joining us. And with that, I'll turn the call over to Michael.

Michael Sacks

Thanks, Stacie. And good morning, everyone. We are pleased to report another strong quarter on our way to a strong full year of growth in 2024. On a year-to-date basis, our fee related earnings increased 18% and adjusted net income increased 24% over the same period in 2023. Our fee related earnings margin was 41% for the quarter compared to 31% at the end of 2020 and we continue to believe that we have margin expansion opportunity. We believe that we succeed when our clients succeed. In this quarter, we again delivered value to our clients. Performance across our business was solid in all investment verticals. Absolute return strategies performance has been particularly strong with our multi strategy composite generating a 12.5% gross rate of return over the last 12 months. We similarly enjoyed portfolio appreciation year-over-year across private equity and infrastructure strategies, real estate valuations have largely stabilized and the environment there is good with regard to investment opportunities. Capital formation activity continues to improve across the business and we are seeing signs of improvement in realization activity. We raised $1.4 billion of new capital in the quarter, bringing our year-to-date fundraising total to $4.8 billion, a 34% increase year-over-year. We've seen tremendous growth in late stage pipeline opportunities, which are up over 70% today from a year ago with every investment strategy showing real pipeline growth.