GCM Grosvenor Inc. Class A Common Stock 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- GCM Grosvenor reported strong second quarter 2026 results with $97 billion in assets under management and $78 billion in fee paying assets, each up approximately 13% year over year.
- Fundraising increased from $1.5 billion in Q1 to $2.3 billion in Q2, totaling approximately $3.9 billion for the first half, with expectations that second half fundraising will exceed first half levels.
- Credit was the largest contributor to Q2 fundraising, accounting for over $900 million, with $1.4 billion raised in credit for the first half.
- Second quarter fee related revenue grew by 11%, fee related earnings by 21%, and adjusted net income by 22% compared to Q2 2025.
- GCM Grosvenor holds approximately $150 million invested in SpaceX across Ares and private market portfolios, with an average cost of $6.37 per share and a market value of about $3.5 billion as of last week's close.
- Ares Multi-strategy composite delivered gross returns of approximately 14% including SpaceX and 10% excluding SpaceX in Q2, with year-to-date returns of 15% and 11%, respectively.
- Private equity, infrastructure, real estate, and private credit strategies all delivered positive quarter-over-quarter performance excluding SpaceX marks.
- The firm has a high ratio of unrealized carried interest relative to market cap, with $965 million in growth unrealized carried interest as of June 30, of which $493 million is attributable to the firm.
- Fee paying AUM grew 13% year over year to $78 billion, and contracted but not yet fee paying AUM grew 11% to $9.7 billion.
- Private markets management fees increased 10% over Q2 2025, with expectations for mid-single digit growth year over year in Q3.
- Absolute return strategies fees increased 11% year over year in Q2, with expected 10% sequential growth in Q3 management fees, equating to nearly 20% year over year growth.
- Total fee revenue for Q2 was $111 million, up 11% year over year.
- Compensation and benefits totaled approximately $38 million in Q2, with general and administrative expenses about $22 million.
- Fee related earnings were $50 million in Q2, a 21% increase year over year, with a fee related earnings margin of 45%.
- Annual performance fees earned in the first half were approximately $7 million, with an estimated $35 to $40 million of unrealized annual performance fees based on recent Ares investment performance.
- The majority of performance fees crystallize in Q4, with SpaceX an important driver of those fees.
- The firm repurchased 1.6 million shares for approximately $17 million during Q2 and has $55 million remaining in its buyback authorization.
- The balance sheet remains strong, supporting ongoing investments and dividend payments of $0.12 per share per quarter.
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Transcript
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Good day, and welcome to the GCM Grosvenor second quarter 2026 results webcast. Later, we will conduct a question and answer session. If you are interested in asking a question, please ensure you dial in using the numbers you have been provided for this call and press star one on your keypad to join the queue. If anyone should require operator assistance, please press star zero on your telephone. As a reminder, this call will be recorded. I will now like to hand the call over to Stacie Selinger, Head of Investor Relations. You may begin. Thank you.
Good morning. Before we discuss our 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 filings with the SEC related to these statements. We will also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP measures to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are available on our website.
Thank you again for joining us. Now I will turn the call over to Michael Sacks, our Chairman and CEO.
Thanks, Stacy, and thank you to all listening to the second quarter 2026 earnings call. I am pleased to report that GCM Grosvenor had another strong quarter, both generating returns for our clients while growing revenue and profits for the firm and our shareholders. We ended the second quarter with $97 billion of assets under management and $78 billion of fee-paying assets under management, an increase of approximately 13% for each from a year ago. Constructively, all investment strategies and all investor channels contributed to that growth. During the quarter, as expected, we saw an increase in fundraising from the first quarter's $1.5 billion to $2.3 billion in the second quarter, bringing first half fundraising to approximately $3.9 billion. Importantly, those results were again broad-based across the platform.
We continue to expect second half fundraising to exceed the levels experienced in the first half and are pleased to report that our pipeline remains full. Credit was the largest contributor to second quarter fundraising, accounting for more than $900 million of the $2.3 billion raised in Q2, making credit $1.4 billion of the first half's $3.9 billion of fundraising. Jon is going to go into some detail on our credit vertical in his remarks. It's worth mentioning that the individual investor and insurance channels were significant drivers of fundraising, representing 23% and 18% of our year-to-date fundraising against the 5% and 4% of AUM they represented, respectively, at the start of the year. As you know, both channels are areas of focus for us.
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