GCM Grosvenor Q1 Earnings Call Highlights

Key Points

• GCM Grosvenor reported Q1 $91 billion AUM and $74 billion fee-paying AUM, up 12% and 11% year‑over‑year, plus $9.8 billion of contracted not‑yet fee‑paying AUM (up 20% YoY) that management says underpins future organic fee growth.
• Fee‑related revenue was $107 million and fee‑related earnings were $47 million (flat YoY), but excluding significant Q1 2025 catch‑up fees management said fee‑related revenue and earnings grew roughly 8% and 20% YoY respectively, with ARS fees up 10% YoY and private markets fees up ~7% excluding catch‑up items.
• The firm raised $1.5 billion in Q1 and $9.3 billion over the last 12 months—including strong ARS and infrastructure flows and accelerating wealth‑channel inflows (~$500 million in Q1)—while unrealized carried interest topped $1 billion; capital return actions included a $0.12 quarterly dividend, $18.6 million of buybacks and $65 million of term‑loan repayment.

GCM Grosvenor NASDAQ: GCMG executives highlighted steady first-quarter results, improving fundraising momentum, and continued progress in the firm’s wealth channel initiatives during the company’s first quarter 2026 earnings call.

Quarterly performance and growth in assets

Chairman and CEO Michael Sacks said the firm delivered “solid investment performance across our strategies,” while also growing its fundraising pipeline and advancing strategic initiatives—particularly in the individual investor channel. He described the operating backdrop as volatile, citing a period “marred by war and energy price shocks,” but said the firm’s business has shown “consistency, resilience, and growth.”

Chief Financial Officer Pam Bentley reported that first-quarter assets under management were $91 billion and fee-paying AUM was $74 billion, up 12% and 11% year-over-year, respectively. Bentley also pointed to “contracted not yet Fee-Paying AUM” of $9.8 billion, up 20% year-over-year, which she said provides “a strong foundation for continued organic growth” as that capital is deployed and converts to fee-paying AUM over time.

Revenue, earnings, and expense outlook

Sacks said first-quarter 2026 fee-related revenue and fee-related earnings were “essentially flat” year-over-year. However, he and Bentley both emphasized that the first quarter of 2025 included significant catch-up management fees; excluding that impact, Sacks said fee-related revenue and fee-related earnings grew 8% and 20% year-over-year.

Bentley reported total fee-related revenue of $107 million in the quarter and said the company expects fee-related revenue to increase in the second quarter “by a high single-digit percentage growth rate year-over-year.” She also provided segment detail:

• Private Markets management fees: $63 million, down from $67 million a year earlier due to $7.6 million of catch-up fees in Q1 2025. Excluding catch-up fees, Bentley said private markets management fees grew 7% year-over-year. For Q2, she expects private markets management fees to rise about 2% sequentially.
• Absolute Return Strategies (ARS) management fees: $42 million, up 10% year-over-year. Bentley said she expects ARS management fees to be up about 1% sequentially in Q2, translating to roughly 10% year-over-year growth.

On profitability, Bentley said fee-related earnings were $47 million, flat year-over-year, with an FRE margin of 44%. She added that excluding prior-year catch-up fees, fee-related earnings grew about 20% year-over-year, supported by organic growth and operating leverage.

Turning to expenses, Bentley said FRE compensation and benefits were $37 million, down year-over-year “due to the benefits of operating leverage,” and she expects it to increase by about $1 million in Q2. Non-GAAP general, administrative, and other expenses were $23 million—“slightly higher than expected”—reflecting “faster AI-related technology investments.” She expects G&A and other expenses in Q2 to be consistent with Q1.

Fundraising trends and strategic priorities

Sacks said the firm raised $1.5 billion during the quarter and $9.3 billion over the last year, describing fundraising as “broadly diversified across the platform.” He said infrastructure led with $2.6 billion raised over the last 12 months, followed by $2 billion for absolute return strategies.

While Sacks said the firm is not changing its “base position on flat ARS flows,” he noted net inflows in ARS during the first quarter and said the firm has “a larger pipeline than we have seen in many years.” He also said the capital formation pipeline remains strong outside ARS, with clients “either growing or maintaining their alternatives allocations, with many moving into new strategies.”

Looking ahead, Sacks said the firm expects second-quarter fundraising to exceed the first quarter, and expects the back half of the year to be larger than the front half. In response to an analyst question, Sacks said the first-quarter fundraising result was “in line with our expectations,” adding that the firm sees growth “really everywhere,” including separate account re-ups and new separate accounts, specialized funds, and continued growth in the individual investor channel. He also said specialized fund fundraising will likely be weighted toward the back half of the year, particularly the fourth quarter, as certain funds “turn on” later in the year.

Sacks also noted the firm has made new business development hires to expand its presence in the Middle East and Europe—“with a particular focus on the Nordic region”—as well as Southeast Asia, and added a senior leader to the direct infrastructure investment team.

ARS: performance, client demand, and fees

President Jon Levin focused his prepared remarks on the firm’s absolute return strategies franchise. Levin said the firm managed $26 billion of ARS fee-paying assets as of quarter end, 16% higher than a year ago. He said ARS fee-paying AUM has grown at a 9% CAGR since the end of 2023, adding that the ARS business is “durable,” and “now it’s also a source of growth.”

Levin highlighted client retention, noting that “100% of our top 25 ARS clients from 2020 are still clients with us today.” He attributed durability to “experience, relationships, scale, and high-touch client partnerships,” emphasizing that the business supports customized, solutions-oriented engagement across portfolio construction, operations, and risk management.

On performance, Levin said the multi-strategy composite has generated an 8% gross return since inception, with one- and three-year gross returns of 16% and 12%, respectively. He also said ARS portfolios have typically had a beta of less than 0.3 and have served as diversifiers. For the first quarter, Levin said ARS portfolios “preserved capital and delivered positive returns” amid “generally down equity markets,” and he added that early indications for April performance were “generally north of 4% across most portfolios.”

Levin said the firm currently has about $35 million of run-rate performance fees and noted that in multiple recent years the firm generated more than $50 million annually in performance fees, while cautioning that the timing is variable and difficult to predict. Bentley added that ARS performance fees are primarily realized in the fourth quarter.

Wealth channel, carry, and capital management

Sacks said the firm raised approximately $500 million from the individual investor channel in the quarter—“a higher number than we have historically seen in many full years”—and said the firm sees “accelerating growth” in that channel. Levin clarified during Q&A that the $500 million did not include the anchor investment for the private equity co-invest portfolio intended to become a registered fund, because that seed capital came from an institutional investor.

Levin also said the firm’s wealth channel fundraising extends beyond registered products, describing flexibility across multiple “wrappers,” including separate accounts, 3(c)(7) private closed-end funds, and registered funds. Sacks said the firm’s products are not exposed to certain issues affecting parts of the wealth alternatives market, including “redemption pressures, marks, and fee-related performance fees” associated with private credit and secondaries in that channel.

On Grove Lane, Sacks said the distribution joint venture is “doing well,” and the firm is “adding to the Grove Lane team” and will “continue to invest” in the business. He also said the firm believes it is insulated from much of the current debate in the wealth channel around certain alternative products.

On carried interest, Sacks said unrealized carried interest exceeded $1 billion for the first time, with the firm’s share above $500 million at quarter end—up 16% and 23% year-over-year, respectively. Asked about potential ways to accelerate carry realization, Sacks said the firm was familiar with such approaches but “not today working on a transaction like that.” He and Levin discussed the complexity of valuing and financing “carry at work” and said the firm would not pursue a deal that “short-changes value” simply to accelerate timing, describing the asset as “compounding.”

Bentley said the company maintained a quarterly dividend of $0.12 per share. She added that during the quarter the firm repaid $65 million of its term loan and repurchased $18.6 million, or 1.6 million shares, under its authorization. Bentley said $64 million remained in the repurchase program as of May 1 and that the firm intends to use it “to largely manage dilution.”

Elsewhere, Sacks said the firm is increasingly using AI internally “to drive efficiency, enhance operating leverage, and support the firm’s growth,” while stressing that GCM Grosvenor remains “a people-centric organization.”

About GCM Grosvenor NASDAQ: GCMG

GCM Grosvenor is a global alternative asset management firm that specializes in customized investment solutions across a range of private markets and hedge fund strategies. The firm partners with institutional clients—including pension funds, endowments, insurers and sovereign wealth funds—to design and implement portfolios that span private equity, infrastructure, real estate, credit and multi‐strategy hedge fund products. Through its multi‐manager platforms and direct co‐investment vehicles, GCM Grosvenor provides diversified access to opportunities that can enhance returns and manage risk in client portfolios.

Founded in 1971 as Grosvenor Capital Management, the firm has built a track record of sourcing, structuring and monitoring alternative investments on behalf of its clients.

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