UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

__________________________________

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39716

__________________________________

GCM Grosvenor Inc.

(Exact Name of Registrant as Specified in Its Charter)

__________________________________

Delaware	85-2226287
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
900 North Michigan Avenue, Suite 1100<br><br>Chicago, IL	60611
(Address of principal executive offices)	(Zip Code)

312-506-6500

(Registrant's telephone number, including area code)

N/A

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report)

__________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 par value per share	GCMG	The Nasdaq Stock Market LLC
Warrants to purchase shares of Class A common stock	GCMGW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 8, 2023, there were 41,872,348 shares of the registrant’s Class A common stock, par value $0.0001 per share, outstanding and 144,235,246 shares of the registrant’s Class C common stock, par value $0.0001 per share, outstanding.

Table of Contents

		Page
Part I - Financial Information
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Statements of Financial Condition as of March 31, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Income (Loss) for the Three Months Ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Equity (Deficit) for the Three Months Ended March 31, 2023 and 2022	7
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	8
	Notes to Condensed Consolidated Financial Statements	9
Item2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item3.	Quantitative and Qualitative Disclosures about Market Risk	43
Item 4.	Controls and Procedures	43
Part II - Other Information
Item1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item6.	Exhibits	46
Signatures		47

BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q, unless as the context requires otherwise, as used herein, references to “GCM,” the “Company,” “we,” “us,” and “our,” and similar references refer collectively to GCM Grosvenor Inc. and its consolidated subsidiaries.

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q to:

•“AUM” are to assets under management;

•“CFAC” are to CF Finance Acquisition Corp., a Delaware corporation;

•“clients” are to persons who invest in our funds, even if such persons are not deemed clients of our registered investment adviser subsidiaries for purposes of the Investment Advisers Act 1940, as amended;

•“Class A common stock” are to our Class A common stock, par value $0.0001 per share;

•“Class B common stock” are to our Class B common stock, par value $0.0001 per share;

•“Class C common stock” are to our Class C common stock, par value $0.0001 per share;

•“FPAUM” are to fee-paying AUM;

•“GCMG” are to GCM Grosvenor Inc., which was incorporated in Delaware as a wholly owned subsidiary of Grosvenor Capital Management Holdings, LLLP, formed for the purpose of completing the Transaction. Pursuant to the Transaction, Grosvenor Capital Management Holdings, LLLP cancelled its shares in GCM Grosvenor Inc. no longer making GCM Grosvenor Inc. a wholly owned subsidiary of Grosvenor Capital Management Holdings, LLLP;

•“GCM Grosvenor” are to GCMH, its subsidiaries, and GCM, L.L.C.;

•“GCM V” are to GCM V, LLC, a Delaware limited liability company;

•“GCMH” are to Grosvenor Capital Management Holdings, LLLP, a Delaware limited liability limited partnership;

•“GCM Funds” and “our funds” are to GCM Grosvenor’s specialized funds and customized separate accounts;

•“GCMH Equityholders” are to Holdings, Management LLC, Holdings II and Progress Subsidiary;

•“Grosvenor common units” are to units of partnership interests in GCMH entitling the holder thereof to the distributions, allocations, and other rights accorded to holders of partnership interests in GCMH;

•“Holdings” are to Grosvenor Holdings, L.L.C., an Illinois limited liability company;

•“Holdings II” are to Grosvenor Holdings II, L.L.C., a Delaware limited liability company;

•“IntermediateCo” are to GCM Grosvenor Holdings, LLC (formerly known as CF Finance Intermediate Acquisition, LLC), a Delaware limited liability company;

•“Management LLC” are to GCM Grosvenor Management, LLC, a Delaware limited liability company;

•“NAV” are to net asset value;

•“Progress Subsidiary” are to GCM Progress Subsidiary LLC, a Delaware limited liability company;

•“Transaction” are to the transactions contemplated by the Transaction Agreement;

•“Transaction Agreement” are to the definitive transaction agreement, dated as of August 2, 2020, by and among CFAC, IntermediateCo, CF Finance Holdings, LLC, a Delaware limited liability company, GCMH, the GCMH Equityholders, GCMH GP, L.L.C., GCM V and us; and

•“TRA Parties” are to the GCMH LLLP Equityholders, and their successors and assigns with respect to the Tax Receivable Agreement (“TRA”).

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including, but not limited to, statements regarding our future results of operations or financial condition; business strategy and plans; market opportunity; changes to government regulations and our ability to comply with new or ongoing requirements and global economic conditions may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to statements regarding our future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth and our objectives for future operations.

The forward-looking statements in this Quarterly Report on Form 10-Q are only current expectations and predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the historical performance of GCM Grosvenor’s funds may not be indicative of GCM Grosvenor’s future results; risks related to redemptions and termination of engagements; the variable nature of GCM Grosvenor’s revenues; competition in GCM Grosvenor’s industry; effects of government regulation or compliance failures; market, geopolitical and economic conditions, including rising inflation and interest rates; the potential or actual outbreak of war or other hostilities, such as Russia’s invasion of Ukraine in February 2022; identification and availability of suitable investment opportunities; risks related to the performance of GCM Grosvenor’s investments; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and other filings with the Securities and Exchange Commission. The forward-looking statements in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events or otherwise.

ITEM 1. FINANCIAL STATEMENTS

GCM Grosvenor Inc.

Condensed Consolidated Statements of Financial Condition

(In thousands, except share and per share amounts)

	As of
	March 31, 2023		December 31, 2022
	(Unaudited)
Assets
Cash and cash equivalents	$	61,873	$	85,163
Management fees receivable	19,962		18,720
Incentive fees receivable	14,327		16,478
Due from related parties	13,509		13,119
Investments	231,799		223,970
Premises and equipment, net	4,182		4,620
Lease right-of-use assets	12,201		12,479
Intangible assets, net	3,612		3,940
Goodwill	28,959		28,959
Deferred tax assets, net	61,521		60,320
Other assets	19,984		21,165
Total assets	471,929		488,933
Liabilities and Equity (Deficit)
Accrued compensation and benefits	38,481		52,997
Employee related obligations	32,960		36,328
Debt	386,899		387,627
Payable to related parties pursuant to the tax receivable agreement	55,354		55,366
Lease liabilities	14,840		15,520
Warrant liabilities	10,081		7,861
Accrued expenses and other liabilities	41,388		27,240
Total liabilities	580,003		582,939
Commitments and contingencies (Note 13)
Preferred stock, $0.0001 par value, 100,000,000 shares authorized, none issued	—		—
Class A common stock, $0.0001 par value, 700,000,000 authorized; 41,390,306 and 41,806,215 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	4		4
Class B common stock, $0.0001 par value, 500,000,000 authorized, none issued	—		—
Class C common stock, $0.0001 par value, 300,000,000 authorized; 144,235,246 issued and outstanding as of March 31, 2023 and December 31, 2022	14		14
Additional paid-in capital	1,283		—
Accumulated other comprehensive income	2,747		4,096
Retained earnings	(29,931)		(23,934)
Total GCM Grosvenor Inc. deficit	(25,883)		(19,820)
Noncontrolling interests in subsidiaries	65,863		67,900
Noncontrolling interests in GCMH	(148,054)		(142,086)
Total deficit	(108,074)		(94,006)
Total liabilities and equity (deficit)	$	471,929	$	488,933

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended March 31,
	2023		2022
Revenues
Management fees	$	92,245	$	92,110
Incentive fees	5,815		11,992
Other operating income	1,056		1,026
Total operating revenues	99,116		105,128
Expenses
Employee compensation and benefits	86,224		65,905
General, administrative and other	25,779		21,258
Total operating expenses	112,003		87,163
Operating income (loss)	(12,887)		17,965
Investment income	6,324		10,860
Interest expense	(6,655)		(5,284)
Other income	714		1
Change in fair value of warrant liabilities	(2,221)		2,022
Net other income (expense)	(1,838)		7,599
Income (loss) before income taxes	(14,725)		25,564
Provision for income taxes	422		2,333
Net income (loss)	(15,147)		23,231
Less: Net income attributable to noncontrolling interests in subsidiaries	2,773		4,836
Less: Net income (loss) attributable to noncontrolling interests in GCMH	(16,690)		13,669
Net income (loss) attributable to GCM Grosvenor Inc.	$	(1,230)	$	4,726
Earnings (loss) per share of Class A common stock:
Basic	$	(0.03)	$	0.11
Diluted	$	(0.10)	$	0.08
Weighted average shares of Class A common stock outstanding:
Basic	42,380,335		44,593,746
Diluted	186,615,581		189,666,053

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2023		2022
Net income (loss)	$	(15,147)	$	23,231
Other comprehensive income (loss), net of tax:
Net change in cash flow hedges	(5,743)		18,334
Foreign currency translation adjustment	(58)		(765)
Total other comprehensive income (loss)	(5,801)		17,569
Comprehensive income (loss) before noncontrolling interests	(20,948)		40,800
Less: Comprehensive income attributable to noncontrolling interests in subsidiaries	2,773		4,836
Less: Comprehensive income (loss) attributable to noncontrolling interests in GCMH	(21,142)		27,140
Comprehensive income (loss) attributable to GCM Grosvenor Inc.	$	(2,579)	$	8,824

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Equity (Deficit)

(Unaudited)

(In thousands)

	Class A Common Stock		Class C Common Stock		Additional <br>Paid-in <br>Capital		Retained <br>Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Noncontrolling Interests in GCMH		Total Equity (Deficit)
Balance at December 31, 2022	$	4	$	14	$	—	$	(23,934)	$	4,096	$	67,900	$	(142,086)	$	(94,006)
Capital contributions from noncontrolling interests in subsidiaries	—		—		—		—		—		167		—		167
Capital distributions paid to noncontrolling interests	—		—		—		—		—		(4,977)		—		(4,977)
Repurchase of Class A common stock	—		—		(746)		—		—		—		(2,587)		(3,333)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		—		(848)		—		—		—		(2,946)		(3,794)
Deemed contributions	—		—		—		—		—		—		11,097		11,097
Net change in cash flow hedges	—		—		—		—		(1,335)		—		(4,408)		(5,743)
Translation adjustment	—		—		—		—		(14)		—		(44)		(58)
Equity-based compensation	—		—		2,864		—		—		—		9,945		12,809
Declared dividends	—		—		—		(5,102)		—		—		—		(5,102)
Deferred tax and other tax adjustments	—		—		13		—		—		—		—		13
Equity reallocation between controlling and non-controlling interests	—		—		—		335		—		—		(335)		—
Net income (loss)	—		—		—		(1,230)		—		2,773		(16,690)		(15,147)
Balance at March 31, 2023	$	4	$	14	$	1,283	$	(29,931)	$	2,747	$	65,863	$	(148,054)	$	(108,074)			Class A Common Stock		Class C Common Stock		Additional <br>Paid-in <br>Capital		Retained <br>Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Noncontrolling Interests in GCMH		Total Equity (Deficit)
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance at December 31, 2021	$	4	$	14	$	1,501	$	(26,222)	$	(1,007)	$	96,687	$	(126,778)	$	(55,801)
Capital contributions from noncontrolling interests in subsidiaries	—		—		—		—		—		187		—		187
Capital distributions paid to noncontrolling interests	—		—		—		—		—		(10,219)		—		(10,219)
Repurchase of Class A common stock	—		—		(569)		—		—		—		(1,872)		(2,441)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		—		(138)		—		—		—		(454)		(592)
Partners’ distributions	—		—		—		—		—		—		(36,401)		(36,401)
Deemed contributions	—		—		—		—		—		—		7,115		7,115
Net change in cash flow hedges	—		—		—		—		4,276		—		14,058		18,334
Translation adjustment	—		—		—		—		(178)		—		(587)		(765)
Equity-based compensation	—		—		2,074		—		—		—		6,824		8,898
Declared dividends	—		—		—		(4,761)		—		—		—		(4,761)
Deferred tax and other tax adjustments	—		—		(9)		—		(77)		—		—		(86)
Equity reallocation between controlling and non-controlling interests	—		—		—		164		—		—		(164)		—
Net income	—		—		—		4,726		—		4,836		13,669		23,231
Balance at March 31, 2022	$	4	$	14	$	2,859	$	(26,093)	$	3,014	$	91,491	$	(124,590)	$	(53,301)

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities
Net income (loss)	$	(15,147)	$	23,231
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expense	675		978
Equity-based compensation	12,809		8,898
Deferred tax income expense (benefit)	(1,219)		640
Other non-cash compensation	584		84
Partnership interest-based compensation	11,097		7,115
Amortization of debt issuance costs	272		275
Amortization of terminated swap	(991)		1,341
Change in fair value of warrant liabilities	2,221		(2,022)
Change in payable to related parties pursuant to tax receivable agreement	(12)		(7)
Amortization of deferred rent	—		24
Proceeds received from investments	3,030		8,044
Non-cash investment income	(6,324)		(10,860)
Non-cash lease expense	1,623		1,549
Other	316		2
Change in assets and liabilities:
Management fees receivable	(1,214)		3,454
Incentive fees receivable	2,151		75,999
Due from related parties	(390)		1,130
Other assets	1,155		38
Accrued compensation and benefits	(19,123)		(80,279)
Lease liabilities	(2,024)		(1,953)
Employee related obligations	113		(310)
Accrued expenses and other liabilities	5,637		3,072
Net cash provided by (used in) operating activities	(4,761)		40,443
Cash flows from investing activities
Purchases of premises and equipment	(203)		(285)
Contributions/subscriptions to investments	(8,505)		(6,702)
Distributions from investments	3,970		3,195
Net cash used in investing activities	(4,738)		(3,792)
Cash flows from financing activities
Capital contributions received from noncontrolling interests	167		187
Capital distributions paid to partners and member	—		(36,401)
Capital distributions paid to noncontrolling interests	(4,977)		(10,219)
Principal payments on senior loan	(1,000)		(1,000)
Payments to repurchase Class A common stock	(3,333)		(2,441)
Payments to repurchase warrants	—		(643)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		(592)
Dividends paid	(4,577)		(4,391)
Net cash used in financing activities	(13,720)		(55,500)
Effect of exchange rate changes on cash	(71)		(826)
Net decrease in cash and cash equivalents	$	(23,290)	$	(19,675)
Cash and cash equivalents
Beginning of period	85,163		96,185
End of period	$	61,873	$	76,510
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	6,980	$	3,612
Cash paid during the period for income taxes	$	545	$	770
Supplemental disclosure of cash flow information from operating activities
Non-cash right-of-use assets obtained in exchange for new operating leases	$	1,351	$	—
Supplemental disclosure of non-cash information from financing activities
Deemed contributions from GCMH Equityholders	$	11,097	$	7,115
Establishment of deferred tax assets, net related to tax receivable agreement and the Transaction	$	13	$	(9)
Dividends declared but not paid	$	546	$	392

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

1. Organization

GCM Grosvenor Inc. (“GCMG”) and its subsidiaries including Grosvenor Capital Management Holdings, LLLP (the “Partnership” or “GCMH” and collectively, the “Company”), provide comprehensive investment solutions to primarily institutional clients who seek allocations to alternative investments such as hedge fund strategies, private equity, real estate, infrastructure and strategic investments. The Company collaborates with its clients to construct investment portfolios across multiple investment strategies in the private and public markets, customized to meet their specific objectives. The Company also offers specialized commingled funds which span the alternatives investing universe that are developed to meet broad market demands for strategies and risk-return objectives.

The Company, through its subsidiaries acts as the investment adviser, general partner or managing member to customized funds and commingled funds (collectively, the “GCM Funds”).

GCMG was incorporated on July 27, 2020 under the laws of the State of Delaware for the purpose of consummating the Transaction and merging with CF Finance Acquisition Corp. (“CFAC”), which was incorporated on July 9, 2014 under the laws of the State of Delaware. GCMG owns all of the equity interests of GCM Grosvenor Holdings, LLC (“IntermediateCo”), formerly known as CF Finance Intermediate Acquisition, LLC until November 18, 2020, which is the general partner of GCMH subsequent to the Transaction. GCMG’s ownership (through IntermediateCo) of GCMH as of March 31, 2023 and December 31, 2022 was approximately 22.3% and 22.5%, respectively.

GCMH is a holding company operated pursuant to the Fifth Amended and Restated Limited Liability Limited Partnership Agreement (the “Partnership Agreement”) dated November 17, 2020, among the limited partners including Grosvenor Holdings, L.L.C. (“Holdings”), Grosvenor Holdings II, L.L.C. (“Holdings II”) and GCM Grosvenor Management, LLC (“Management LLC”) (collectively, together with GCM Progress Subsidiary LLC, the “GCMH Equityholders”).

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited Condensed Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. In the opinion of management, all necessary adjustments (which consists of only normal recurring items) have been made to fairly present the Condensed Consolidated Financial Statements for the interim periods presented. Results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”).

The Company is an “emerging growth company” (“EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), following the consummation of the merger of CFAC and the Company. The Company has elected to use this extended transition period for complying with new or revised accounting standards, pursuant to Section 102(b)(1) of the JOBS Act, that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition periods provided by the JOBS Act. As result of this election, its consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. The Company’s status as an EGC will terminate on December 31, 2023.

Fair Value Measurements

The Company categorizes its fair value measurements according to a three-level hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are defined as follows:

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

•Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

•Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active; and

•Level 3 – Inputs that are unobservable.

Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances.

The carrying amounts of cash and cash equivalents and fees receivable approximate fair value due to the immediate or short-term maturity of these financial instruments.

Investments

Investments primarily consist of investments in GCM Funds and other funds the Company does not control, but is deemed to exert significant influence, and are generally accounted for using the equity method of accounting. Under the equity method of accounting, the Company records its share of the underlying income or loss of such entities, which reflects the net asset value of such investments. Management believes the net asset value of the funds is representative of fair value. The resulting gains and losses are included as investment income in the Condensed Consolidated Statements of Income (Loss).

The Company’s equity method investments in the GCM Funds investing in private equity, real estate and infrastructure (“GCM PEREI Funds”) are valued based on the most recent available information, which typically has a delay of up to three months due to the timing of financial information received from the investments held by the GCM PEREI Funds. The Company records its share of capital contributions to and distributions from the GCM PEREI Funds within investments in the Condensed Consolidated Statements of Financial Condition during the three-month lag period. To the extent that management is aware of material events that affect the GCM PEREI Funds during the intervening period, the impact of the events would be disclosed in the notes to the Condensed Consolidated Financial Statements.

Certain subsidiaries which hold the general partner capital interest in the GCM Funds are not wholly owned, and as such, the portion of the Company’s investments owned by limited partners in those subsidiaries are reflected within noncontrolling interests in the Condensed Consolidated Statements of Financial Condition.

For certain other debt investments, the Company has elected the fair value option. Such election is irrevocable and is made at the investment level at initial recognition. The debt investments are not publicly traded and are a Level 3 fair value measurement. For investments carried at fair value, the Company records the increase or decrease in fair value as investment income in the Condensed Consolidated Statements of Income (Loss). See Note 5 for additional information regarding the Company’s other investments.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. This guidance is for public business entities that are an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, with fiscal years beginning after December 15, 2019. On March 9, 2020, the FASB extended the adoption date for all other entities to annual periods beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard on January 1, 2023 on a prospective basis. Adoption did not have a material impact on the Consolidated Financial Statements.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

3. Revenue

For the three months ended March 31, 2023 and 2022, management fees and incentive fees consisted of the following:

	Three Months Ended March 31,
Management fees	2023		2022
Management fees, net	$	88,938	$	89,552
Fund expense reimbursement revenue	3,307		2,558
Total management fees	$	92,245	$	92,110			Three Months Ended March 31,
---	---	---	---	---
Incentive fees	2023		2022
Performance fees	$	244	$	1,001
Carried interest	5,571		10,991
Total incentive fees	$	5,815	$	11,992

The Company recognized revenues of $0.4 million during the three months ended March 31, 2022 that were previously received and deferred at the beginning of the period. The Company did not recognize revenue during the three months ended March 31, 2023 that was previously deferred.

4. Investments

Investments consist of the following:

	As of
	March 31, 2023		December 31, 2022
Equity method investments	$	221,334	$	213,776
Other investments	10,465		10,194
Total investments	$	231,799	$	223,970

As of March 31, 2023 and December 31, 2022, the Company held investments of $231.8 million and $224.0 million, respectively, of which $63.1 million and $64.9 million were owned by noncontrolling interest holders, respectively. Future net income (loss) and cash flow from investments held by noncontrolling interest holders will not be attributable to the Company.

See Note 5 for fair value disclosures of certain investments held within other investments.

5. Fair Value Measurements

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis and level of inputs used for such measurements as of March 31, 2023 and December 31, 2022:

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

	Fair Value as of March 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	11,505	$	—	$	—	$	11,505
Other investments	—		—		10,279		10,279
Total assets	$	11,505	$	—	$	10,279	$	21,784
Liabilities
Public warrants	$	9,472	$	—	$	—	$	9,472
Private warrants	—		—		609		609
Interest rate derivatives	—		11,161		—		11,161
Total liabilities	$	9,472	$	11,161	$	609	$	21,242			Fair Value as of December 31, 2022
---	---	---	---	---	---	---	---	---
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	36,240	$	—	$	—	$	36,240
Other investments	—		—		10,007		10,007
Total assets	$	36,240	$	—	$	10,007	$	46,247
Liabilities
Public warrants	$	7,386	$	—	$	—	$	7,386
Private warrants	—		—		475		475
Interest rate derivatives	—		6,473		—		6,473
Total liabilities	$	7,386	$	6,473	$	475	$	14,334

Money Market Funds

Money market funds are valued using quoted market prices and are included in cash and cash equivalents in the Condensed Consolidated Statements of Financial Condition.

Interest Rate Derivatives

Management determines the fair value of its interest rate derivative agreements based on the present value of expected future cash flows based on observable future LIBOR rates applicable to each swap contract using linear interpolation, inclusive of the risk of non-performance, using a discount rate appropriate for the duration. See Note 12 for additional information regarding interest rate derivatives.

Other Investments

Investments in the subordinated notes of a structured alternatives investment solution are not publicly traded and are classified as Level 3. Management determines the fair value of these other investments using a discounted cash flow analysis (“Cash Flow Analysis”). The position was classified as Level 3 as of March 31, 2023 and December 31, 2022 because of the use of significant unobservable inputs in the Cash Flow Analysis as follows:

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

	March 31, 2023			December 31, 2022			Impact to Valuation from an Increase in Input(2)
Significant Unobservable Inputs(1)	Range	Weighted Average		Range	Weighted Average
Discount rate(3)	26.0% – 27.0%	26.5	%	25.5% - 26.5%	26	%	Decrease
Expected term (years)	10 – 15	N/A		10 – 15	N/A		Decrease
Expected return – liquid assets(4)	2.0% – 5.0%	4.6	%	2.0% - 6.0%	5.0	%	Increase
Expected total value to paid in capital – private assets(5)	1.32x – 2.40x	1.85x		1.32x – 2.40x	1.85x		Increase

____________

(1)In determining these inputs, management considers the following factors including, but not limited to: liquidity, estimated yield, capital deployment, diversified multi-strategy appreciation, expected net multiple of investment capital across Private Assets investments, annual operating expenses, as well as investment guidelines such as concentration limits, position size, and investment periods.

(2)Unless otherwise noted, this column represents the directional change in fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect.

(3)The discount rate was based on the relevant benchmark rate, spread, and yield migrations on related securitized assets.

(4)Inputs were weighted based on actual and estimated expected return included in the range.

(5)Inputs were weighted based on the actual and estimated commitments to the respective private asset investments included in the range.

The resulting fair values of $10.3 million and $10.0 million were recorded within investments in the Condensed Consolidated Statements of Financial Condition as of March 31, 2023 and December 31, 2022, respectively.

The following table presents changes in Level 3 assets measured at fair value for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Balance at beginning of period	$	10,007	$	11,010
Change in fair value	272		(378)
Balance at end of period	$	10,279	$	10,632

Public Warrants

The public warrants are valued using quoted market prices on the Nasdaq Stock Market LLC under the ticker GCMGW.

Private Warrants

The private warrants were classified as Level 3 as of March 31, 2023 and December 31, 2022 because of the use of significant unobservable inputs in the valuation, however the overall private warrant valuation and change in fair value are not material to the Condensed Consolidated Financial Statements.

The valuations for the private warrants were determined to be $0.68 and $0.53 per unit as of March 31, 2023 and December 31, 2022, respectively. The resulting fair values of $0.6 million and $0.5 million were recorded within warrant liabilities in the Condensed Consolidated Statements of Financial Condition as of March 31, 2023 and December 31, 2022, respectively. See Note 7 for additional information regarding the warrant activity.

The following table presents changes in Level 3 liabilities measured at fair value for the three months ended March 31, 2023 and 2022:

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

	Three Months Ended March 31,
	2023		2022
Balance at beginning of period	$	(475)	$	(1,584)
Change in fair value	(134)		72
Balance at end of period	$	(609)	$	(1,512)

6. Equity

Shares of Common Stock Outstanding

The following table shows a rollforward of the common stock outstanding for the three months ended March 31, 2023:

	Three Months Ended March 31, 2023
	Class A common stock	Class B common stock	Class C common stock
Beginning of period	41,806,215	—	144,235,246
Repurchase of Class A Shares	(415,909)	—	—
End of period	41,390,306	—	144,235,246

As of March 31, 2023, 2,910,008 RSUs were vested, but not yet delivered, and are therefore not yet included in outstanding Class A common stock. The delivery of vested RSUs will be reduced by the number of shares withheld to satisfy statutory withholding tax obligations.

Dividends

Dividends are reflected in the Condensed Consolidated Statements of Equity (Deficit) when declared by the Board of Directors. The table below summarizes dividends declared to date during 2023:

Declaration Date	Record Date	Payment Date	Dividend per Common Share
February 9, 2023	March 1, 2023	March 15, 2023	$0.11
May 9, 2023	June 1, 2023	June 15, 2023	$0.11

Dividend equivalent payments of $1.9 million were accrued for holders of RSUs as of March 31, 2023. Distributions to partners represent distributions made to GCMH Equityholders.

Stock Repurchase Plan

On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan of up to an aggregate of $25.0 million, excluding fees and expenses, which may be used to repurchase shares of the Company’s outstanding Class A common stock and warrants to purchase shares of Class A common stock. Class A common stock and warrants may be repurchased from time to time in open market transactions, in privately negotiated transactions, including with employees or otherwise, pursuant to the requirements of Rule 10b5-1 and Rule 10b-18 of the Exchange Act, 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), with the terms and conditions of these repurchases depending on legal requirements, price, market and economic conditions and other factors. The Company is not obligated under the terms of the plan to repurchase any of its Class A common stock or warrants, the program has no expiration date and the Company may suspend or terminate the program at any time without prior notice. Any shares of Class A common stock and any warrants repurchased as part of this program will be canceled. On February 10, May 5, and November 7, 2022, GCMG’s Board of Directors made increases to its stock repurchase authorization for shares and warrants. The increases of $20.0 million on February 10, 2022 and May 5, 2022, and of $25.0 million on November 7, 2022, increased the total authorization to $45.0 million, $65.0 million, and $90.0 million as of February 10, May 5, and November 7, 2022, respectively.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

During the three months ended March 31, 2023, the Company is deemed to have repurchased 2,485,339 shares for (1) RSUs that were settled in cash or (2) amounts withheld in connection with the payment of tax liabilities on behalf of employees upon the settlement of vested RSUs for $19.4 million, or an average of $7.81 per share. The $19.4 million for deemed repurchases during the three months ended March 31, 2023 was recorded as a liability within accrued expenses and other liabilities and accrued compensation and benefits in the Condensed Consolidated Statements of Financial Condition as of March 31, 2023 as the amounts were settled in April 2023. See Note 10 for additional information regarding RSUs. In the three months ended March 31, 2023, the Company also repurchased 415,909 shares of Class A common stock for $3.3 million, or an average of $8.01 per share. As of March 31, 2023, the Company had $22.8 million remaining under the stock repurchase plan.

7. Warrants

The public and private warrants meet the definition of a derivative under ASC 815 and the Company records these warrants as liabilities in the Condensed Consolidated Statements of Financial Condition at fair value, with subsequent changes in their respective fair values recorded in the change in fair value of warrant liabilities within the Condensed Consolidated Statements of Income (Loss) at each reporting date.

Each public warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. The warrants expire 5 years after the consummation of the Transaction, or earlier upon redemption or liquidation. The public warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise their warrants and receive shares of Class A common stock. After the issuance of shares of Class A common stock, upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be redeemable by the Company so long as they are held by CF Sponsor, Holdings or their permitted transferees. CF Sponsor, Holdings or their permitted transferees, have the option to exercise the private placement warrants on a cashless basis.

The following table shows public and private warrants outstanding as of March 31, 2023 and December 31, 2022:

	Public Warrants	Private Warrants	Total
Outstanding	16,784,970	900,000	17,684,970

There were no warrant exercises or repurchases during the three months ended March 31, 2023.

8. Variable Interest Entities

The Company consolidates certain VIEs in which it is determined that the Company is the primary beneficiary.

The Company holds variable interests in certain entities that are VIEs which are not consolidated, as it is determined that the Company is not the primary beneficiary. The Company’s involvement with such entities is generally in the form of direct equity interests in, and fee arrangements with, the entities in which it also serves as the general partner or managing member. The Company evaluated its variable interests in the VIEs and determined it is not considered the primary beneficiary of the entities primarily because it does not have interests in the entities that could potentially be significant. No reconsideration events that caused a change in the Company’s consolidation conclusions occurred during either the three months ended March 31, 2023 or the year ended December 31, 2022. As of March 31, 2023 and December 31, 2022, the total unfunded commitments from the special limited partner and general partners to the unconsolidated VIEs were $40.7 million and $41.1 million, respectively. These commitments are the primary source of financing for the unconsolidated VIEs.

The following table sets forth certain information regarding the VIEs in which the Company holds a variable interest but does not consolidate. The assets recognized on the Company’s Condensed Consolidated Statements of Financial Condition relate to the Company’s interests in and management fees, incentive fees and third party costs receivables from these non-consolidated VIEs. The Company’s maximum exposure to loss relating to non-consolidated VIEs as of March 31, 2023 and December 31, 2022 were as follows:

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

	As of
	March 31, 2023		December 31, 2022
Investments	$	100,539	$	98,712
Receivables	12,773		11,695
Maximum exposure to loss	$	113,312	$	110,407

The above table includes investments in VIEs which are owned by noncontrolling interest holders of approximately $35.1 million and $36.7 million as of March 31, 2023 and December 31, 2022, respectively.

9. Employee Compensation and Benefits

For the three months ended March 31, 2023 and 2022, employee compensation and benefits consisted of the following:

	Three Months Ended March 31,
	2023		2022
Cash-based employee compensation and benefits	$	44,453	$	41,376
Equity-based compensation	25,793		9,881
Partnership interest-based compensation	11,097		7,115
Carried interest compensation	3,560		5,855
Cash-based incentive fee related compensation	737		1,594
Other non-cash compensation	584		84
Total employee compensation and benefits	$	86,224	$	65,905

Partnership Interest in Holdings, Holdings II and Management LLC

Payments and settlements for partnership interest awards to the employees are made by GCMH Equityholders. As a result, the Company records a non-cash profits interest compensation charge and an offsetting deemed contribution to equity (deficit) to reflect the payments or settlements made or owed by the GCMH Equityholders. Since payments or settlements are made by Holdings, Holdings II and Management LLC, the expense that is pushed down to GCMH and the offsetting deemed contribution are each attributed solely to noncontrolling interests in GCMH. Any liability related to the awards is recognized at Holdings, Holdings II or Management LLC as Holdings, Holdings II or Management LLC is the party responsible for satisfying the obligation, and is not shown in the Company’s Condensed Consolidated Financial Statements. The Company has recorded deemed contributions to equity (deficit) from Holdings, Holdings II and Management LLC of approximately $11.1 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively, for partnership interest-based compensation expense which was or will ultimately be paid or settled by Holdings, Holdings II or Management LLC.

The Company has modified awards to certain individuals upon their voluntary retirement or intention to retire as employees. These awards generally include a stated target amount that, upon payment, terminates the recipient’s rights to future distributions and allows for a lump sum buy-out of the awards, at the discretion of the managing member of Holdings, Holdings II, and Management LLC. The awards are accounted for as partnership interest-based compensation at the fair value of these expected future payments, in the period the employees accepted the offer. No partnership interest-based compensation expense related to award modifications was recognized for the three months ended March 31, 2023 and $1.6 million was recognized for the three months ended March 31, 2022.

The liability associated with awards that contain a stated target has been retained by Holdings as of March 31, 2023 and December 31, 2022 and is re-measured at each reporting date, with any corresponding changes in liability being reflected as employee compensation and benefits expense of the Company. No recipients had unvested stated target payments as of March 31, 2023. Certain recipients had unvested stated target payments of $4.7 million as of March 31, 2022, which was not reflected as employee compensation and benefits expense by the Company as of March 31, 2022. The Company recognized

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

partnership interest-based compensation expense of $5.7 million and $5.5 million for the three months ended March 31, 2023 and 2022, respectively, related to profits interest awards that are in substance profit-sharing arrangements.

In the year ended December 31, 2022, GCMH Equityholders entered into an agreement that will transfer equity ownership between certain existing employee members of the GCMH Equityholders (“GCMH Equityholders Awards”). The GCMH Equityholders Awards will entitle recipients to receive Class A common stock upon vesting. The non-cash awards serve to transfer equity ownership from existing GCMH Equityholders to other existing member employees upon vesting. The GCMH Equityholders Awards do not dilute Class A common stockholders and do not impact cash flows of the Company. The GCMH Equityholders Awards are accounted for under ASC 718, Compensation—Stock Compensation. The awards generally will vest in May 2025 and do not entitle the recipients to dividends or distributions made on Class A common stock during the vesting period. As such, the fair value of the GCMH Equityholders Awards is based on the closing price of Class A common stock on the accounting grant date less the present value of dividends expected to be paid during the vesting period. GCMH Equityholders can settle the awards upon vesting by exchanging outstanding GCMH common units or by otherwise acquiring and delivering Class A common stock, and therefore the vesting of such awards will not dilute Class A common stockholders. The GCMH Equityholders Awards therefore have no economic impact on Class A common stockholders. As such, the expense that is pushed down to GCMH and the offsetting deemed contribution are each attributed solely to noncontrolling interests in GCMH, consistent with the accounting for payments to employees described above. The GCMH Equityholders Awards of 7,169,415 units had an aggregate grant date fair value of $53.4 million, or an average grant date fair value of $7.45 per unit. The Company recognized partnership interest-based compensation expense related to the GCMH Equityholders Awards of $5.4 million for the three months ended March 31, 2023. As of March 31, 2023, total unrecognized compensation expense related to unvested GCMH Equityholders Awards was $45.6 million and is expected to be recognized over the remaining weighted average period of 2.1 years.

Other

Other consists of employee compensation and benefits expense related to deferred compensation programs and other awards that represent investments made in GCM Funds on behalf of the employees.

10. Equity-Based Compensation

In March 2023, the Company granted 1.8 million equity-classified RSUs and 0.4 million liability-classified RSUs with aggregate grant date fair values of $14.7 million and $3.2 million, respectively, to certain employees. The liability-classified RSUs are either classified as liabilities because they are required to be settled in cash or because the Company has the right to and intends to (as of March 31, 2023) settle the RSUs partially or wholly in cash.

The majority of liability-classified awards outstanding as of December 31, 2022 were granted on December 15, 2022 and vested on March 31, 2023. In March 2023, the Company reclassified 1.0 million RSUs granted on December 15, 2022 from liability-classified to equity-classified based on management’s intent to settle the awards in shares of Class A common stock. Other awards generally vest either (a) one-third at the grant date with the remainder over two years in equal annual installments or (b) over a one to three year period. Upon delivery, the Company may withhold the number of shares to satisfy the statutory withholding tax obligation and deliver the net number of resulting shares vested.

See Note 9 for additional information regarding GCMH Equityholders Awards.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

A summary of non-vested equity-classified RSU activity for the three months ended March 31, 2023 is as follows:

	Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU
Balance as of December 31, 2022	2,240,797	$	11.71
Granted	1,782,783	8.26
Reclassified from liability-classified RSUs	1,010,339	8.38
Vested	(2,755,405)	10.83
Forfeited	(52,653)	9.98
Balance as of March 31, 2023	2,225,861	$	8.56

A summary of non-vested liability-classified RSU activity for the three months ended March 31, 2023 is as follows:

	Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU
Balance as of December 31, 2022	3,155,161	$	8.41
Granted	392,261	8.25
Reclassified to equity-classified RSUs	(1,010,339)	8.38
Vested	(2,153,025)	8.40
Forfeited	(65,625)	8.38
Balance as of March 31, 2023	318,433	$	8.40

The total grant-date fair value of RSUs that vested during the three months ended March 31, 2023 was $47.9 million. For the three months ended March 31, 2023 and 2022, $25.8 million and $9.9 million, respectively, of compensation expense related to RSUs was recorded within employee compensation and benefits in the Condensed Consolidated Statements of Income (Loss). As of March 31, 2023, total unrecognized compensation expense related to unvested RSUs was $20.1 million and is expected to be recognized over the remaining weighted average period of 2.6 years.

The tax benefit related to RSUs that vested during the three months ended March 31, 2023 will be recognized in the second and third quarters of 2023 when the cash or Class A common stock is delivered.

11. Debt

The table below summarizes the outstanding debt balance as of March 31, 2023 and December 31, 2022:

	As of
	March 31, 2023		December 31, 2022
Senior loan	$	392,000	$	393,000
Less: debt issuance costs	(5,101)		(5,373)
Total debt	$	386,899	$	387,627

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

Maturities of debt for the next five years and thereafter are as follows:

Year Ended December 31,
Remainder of 2023	$	3,000
2024	4,000
2025	4,000
2026	4,000
2027	4,000
Thereafter	373,000
Total	$	392,000

Senior Loan

On January 2, 2014, the Company entered into a senior secured term loan facility (“Senior Loan”), which was subsequently amended through several debt modifications.

On February 24, 2021, the Company completed an amendment and extension of its Senior Loan to further extend the maturity (“Amended Credit Agreement”). Approximately $290.0 million of the aggregate principal amount of the Senior Loan was extended from a maturity date of March 29, 2025 to a maturity date of February 24, 2028. On June 23, 2021, the Company further amended its Senior Loan to increase the aggregate principal amount from $290.0 million to $400.0 million (as extended and increased, the “2028 Term Loans”). The Company capitalized $0.9 million and $2.2 million of debt issuances costs related to payments to lenders in connection with the amendments and extension of its Senior Loan in February and June 2021, respectively, which were recorded within debt in the Consolidated Statements of Financial Condition.

Since June 30, 2021, quarterly principal payments of $1.0 million are required to be made toward the 2028 Term Loans beginning June 30, 2021 (less any reduction for prior or future voluntary or mandatory prepayments of principal). The 2028 Term Loans have an interest rate of 2.50% over the LIBOR, subject to a 0.50% LIBOR floor. In the event of a Benchmark Transition Event, the interest rate will default to the Term Secured Overnight Financing Rate (“Term SOFR”) plus a Benchmark Replacement Adjustment as recommended by the Relevant Governmental Body (all terms as defined in the Amended Credit Agreement).

In addition to the scheduled principal repayments, the Company is required to offer to make prepayments of Consolidated Excess Cash Flow (“Cash Flow Payments”) no later than five days following the date the quarterly financial statements are due if the leverage ratio exceeds 2.50x. The Cash Flow Payments were calculated as defined in the Senior Loan agreement based on a percentage of calculated excess cash. During the three months ended March 31, 2023, the Company did not make any Cash Flow Payments.

As of March 31, 2023 and December 31, 2022, $392.0 million and $393.0 million of 2028 Term Loans were outstanding, respectively, with weighted average interest rates of 7.03% and 3.00% for the three months ended March 31, 2023 and 2022, respectively.

Under the credit and guaranty agreement governing the terms of the Senior Loan, the Company must maintain certain leverage and interest coverage ratios. The credit and guaranty agreement also contains other covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur debt and restrict the Company and its subsidiaries ability to merge or consolidate, or sell or convey all or substantially all of the Company’s assets. As of March 31, 2023, the Company was in compliance with all covenants.

GCMH Equityholders and IntermediateCo have executed a pledge agreement (“Pledge Agreement”) and security agreement (“Security Agreement”) with the lenders of the Senior Loan. Under the Pledge Agreement, GCMH Equityholders and IntermediateCo have agreed to secure the obligations under the Senior Loan by pledging its interests in GCMH as collateral against the repayment of the senior secured notes, and GCMH has agreed to secure the obligations under the Senior Loan by granting a security interest in and continuing lien on the collateral described in the Security Agreement. The Pledge Agreement and Security Agreement will remain in effect until such time as all obligations relating to the Senior Loan have been fulfilled.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

Credit Facility

Concurrent with the issuance of the Senior Loan, the Company entered into a $50.0 million revolving credit facility (“Credit Facility”). The Credit Facility matures on February 24, 2026 and carries an unused commitment fee that is paid quarterly. There were no outstanding borrowings related to the Credit Facility as of each of March 31, 2023 and December 31, 2022.

Other

Certain subsidiaries of the Company agree to jointly and severally guarantee, as primary obligors and not merely as surety guarantees the obligations of their parent entity, GCMH.

Amortization of deferred debt issuance costs was $0.3 million for each of the three months ended March 31, 2023 and 2022, respectively. These amounts were recorded within interest expense in the Condensed Consolidated Statements of Income (Loss).

The carrying value of the Senior Loan, excluding the unamortized debt issuance costs presented as a reduction to the principal balance, approximated the fair value as of March 31, 2023 and December 31, 2022. As the Senior Loan was not accounted for at fair value, it was not included in the Company’s fair value hierarchy in Note 5, however had it been included, it would have been classified in Level 2.

12. Interest Rate Derivatives

The Company has entered into various derivative agreements with financial institutions to hedge interest rate risk related to its outstanding debt. The Company had the following interest rate derivatives recorded as a liability within accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition as of March 31, 2023 and December 31, 2022:

Derivative	Notional Amount		Fair Value as of March 31, 2023		Fair Value as of December 31, 2022		Fixed Rate Paid		Floating Rate Received	Effective Date(2)	Maturity Date
Interest rate swap	$	300,000	$	(11,161)	$	(6,473)	4.37	%	1 month LIBOR(1)	November 2022	February 2028

____________

(1)Floating rate received subject to a 0.50% Floor. Refer to Note 11 regarding the interest rate on the outstanding debt in the event of a Benchmark Transition Event. If the outstanding debt defaults to Term SOFR plus a Benchmark Replacement Adjustment, the floating rate received under the interest rate swaps will also default to such rate.

(2)Represents the date at which the derivative is in effect and the Company is contractually required to begin payment of interest under the terms of the agreement.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

A rollforward of the amounts in accumulated other comprehensive income (loss) (“AOCI”) related to interest rate derivatives designated as cash flow hedges is as follows:

	Three Months Ended March 31,
	2023		2022
Derivative gain (loss) at beginning of period	$	29,130	$	(3,622)
Amount recognized in other comprehensive income (loss)1	(4,639)		16,360
Amount reclassified from accumulated other comprehensive income (loss) to interest expense	(1,104)		1,974
Derivative gain at end of period	23,387		14,712
Less: gain (loss) attributable to noncontrolling interests in GCMH	19,796		11,099
Derivative gain at end of period, net	$	3,591	$	3,613

____________

(1) Net of an immaterial tax impact for each of the three months ended March 31, 2023 and 2022.

In February 2021, the Company terminated derivative instruments which were entered into in 2017 and 2018. In October 2022, the Company terminated derivative instruments which were entered into in 2021 and received $40.3 million of cash for the fair market value of the interest rate swaps at termination. The amounts previously recorded as hedges in AOCI will remain in AOCI and will be recorded in interest expense within the Condensed Consolidated Statements of Comprehensive Income (Loss) over the original lives of the derivative instruments.

The Company reclassified $1.0 million and $1.3 million for the three months ended March 31, 2023 and 2022, respectively, from AOCI to interest expense relating to the derivative instruments terminated that initially qualified for hedge accounting. The net impact of these reclassifications decreased interest expense for the three months ended March 31, 2023 and increased interest expense for the three months ended March 31, 2022.

Effective on November 1, 2022, the Company entered into a swap agreement to hedge interest rate risk related to payments made for the 2028 Term Loans that has a notional amount of $300 million and a fixed rate of 4.37%. The new swap agreement and the 2028 Term Loans have a 0.50% LIBOR floor. The swap was determined to be an effective cash flow hedge at inception based on a comparison of critical terms.

The fair values of the interest rate swaps are based on observable market inputs and represent the net amount required to terminate the positions, taking into consideration market rates and non-performance risk. Refer to Note 5 for further details.

During the next twelve months, the Company expects to reclassify approximately $8.8 million from AOCI to interest expense (which will decrease interest expense), including the impact of the swap terminations.

13. Commitments and Contingencies

Leases

The Company has entered into operating lease agreements for office space. The Company leases office space in various countries around the world and maintains its headquarters in Chicago, Illinois, where it leases primary office space under a lease agreement expiring September 2026. The leases contain rent escalation clauses based on increases in base rent, real estate taxes and operating expenses.

The components of operating lease expense recorded within general, administrative and other in the Condensed Consolidated Statements of Income (Loss) were as follows:

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

	Three Months Ended March 31,
	2023		2022
Operating lease cost(1)	$	1,869	$	1,846
Variable lease cost(2)	1,109		1,108
Less: sublease income	49		48
Total lease cost	$	2,929	$	2,906

____________

(1)Includes less than $0.1 million of short term lease expense for each of the three months ended March 31, 2023 and 2022.

(2)Includes common area maintenance charges and other variable costs not included in the measurement of ROU assets and lease liabilities.

The following table summarizes cash flows and other supplemental information related to our operating leases:

	Three Months Ended March 31,
	2023			2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	2,195		$	2,145
Non-cash ROU assets obtained in exchange for new operating leases	1,351			N/A
Weighted average remaining lease term in years	2.7 years			3.3 years
Weighted average discount rate	4.9		%	3.6		%

As of March 31, 2023, the maturities of operating lease liabilities were as follows:

Remainder of 2023	$	6,585
2024	3,636
2025	3,544
2026	1,974
2027	—
Thereafter	—
Total lease payments	15,739
Less: imputed interest	(899)
Total operating lease liabilities	$	14,840

Commitments

The Company was required to pay a fixed management fee of $0.5 million per year for a five year period that commenced in 2019 pursuant to its 12.5% interest in an aircraft. On March 11, 2021, GCMH entered into an agreement to assign 50% of its 12.5% share interest in an aircraft to Holdings, for cash consideration of approximately $1.3 million. The Company is now required to pay a fixed management fee of $0.3 million per year.

The Company had $85.2 million and $88.9 million of unfunded investment commitments as of March 31, 2023 and December 31, 2022, respectively, representing general partner capital funding commitments to several of the GCM Funds.

Litigation

In the normal course of business, the Company may enter into contracts that contain a number of representations and warranties, which may provide for general or specific indemnifications. The Company’s exposure under these contracts is not currently known, as any such exposure would be based on future claims, which could be made against the Company. The Company’s management is not currently aware of any such pending claims and based on its experience, the Company believes the risk of loss related to these arrangements to be remote.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

From time to time, the Company is a defendant in various lawsuits related to its business. The Company’s management does not believe that the outcome of any current litigation will have a material effect on the Company’s Condensed Consolidated Financial Statements.

Off-Balance Sheet Risks

The Company may be exposed to a risk of loss by virtue of certain subsidiaries serving as the general partner of GCM Funds organized as limited partnerships. As general partner of a GCM Fund organized as a limited partnership, the Company’s subsidiaries that serve as the general partner have exposure to risk of loss that is not limited to the amount of its investment in such GCM Fund. The Company cannot predict the amount of loss, if any, which may occur as a result of this exposure; however, historically, the Company has not incurred any significant losses and management believes the likelihood is remote that a material loss will occur.

14. Related Parties

In regard to the following related party disclosures, the Company’s management cannot be sure that such transactions or arrangements would be the same to the Company if the parties involved were unrelated and such differences could be material.

The Company provides certain employees partnership interest awards which are paid by Holdings, Holdings II and Management LLC. Refer to Note 9 for further details.

The Company has a sublease agreement with Holdings. Because the terms of the sublease are identical to the terms of the original lease, there is no impact to net income (loss) in the Condensed Consolidated Statements of Income (Loss) or Condensed Consolidated Statements of Cash Flows.

The Company incurs certain costs, primarily related to accounting, client reporting, investment-decision making and treasury-related expenditures, for which it receives reimbursement from the GCM Funds in connection with its performance obligations to provide investment management services. The Company also incurs certain costs, primarily related to employee benefits and travel, for which it receives reimbursement from Holdings. Due from related parties in the Condensed Consolidated Statements of Financial Condition includes net receivables from GCM Funds of $12.9 million and $13.0 million and from Holdings of $0.6 million and $0.1 million as of March 31, 2023 and December 31, 2022, respectively, paid on behalf of affiliated entities that are reimbursable to the Company.

Our executive officers, senior professionals, and certain current and former employees and their families invest on a discretionary basis in GCM Funds, and such investments are generally not subject to management fees and performance fees. As of March 31, 2023 and December 31, 2022, such investments and future commitments were $375.3 million and $366.2 million in aggregate, respectively.

Certain employees of the Company have an economic interest in an entity that is the owner and landlord of the building in which the principal headquarters of the Company are located.

The Company utilizes the services of an insurance broker to procure insurance coverage, including its general commercial package policy, workers’ compensation and professional and management liability coverage for its directors and officers. Certain members of Holdings have an economic interest in, and relatives are employed by, the Company’s insurance broker.

From time to time, certain of the Company’s executive officers utilize a private business aircraft, including an aircraft wholly owned or controlled by members of Holdings. Additionally, the Company arranges for the use of the private business aircraft through a number of charter services, including entities predominantly or wholly owned or controlled by members of Holdings. The Company paid, net of reimbursements, $1.4 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively, to utilize aircraft and charter services wholly owned or controlled by members of Holdings, which is recorded within general, administrative and other in the Condensed Consolidated Statements of Income (Loss).

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

15. Income Taxes

The Company’s effective tax rate used for interim periods is based on the tax effect of items recorded discretely in the interim period in which those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax and allocation of tax benefit to noncontrolling interest; therefore, the effective tax rate can vary from period to period. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is expected a portion of the deferred tax asset may not be realized.

The Company’s effective tax rate was (3)% and 9% for the three months ended March 31, 2023 and 2022, respectively. These rates were different than the statutory rate primarily due to the portion of income allocated to the noncontrolling interest holders, a valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.

As of March 31, 2023, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months.

On August 16, 2022, the IRA was signed into law. In general, the provisions of the IRA will be effective beginning with the fiscal year 2023, with certain exceptions. The IRA includes a new 15% corporate minimum tax as well as a 1% excise tax on corporate stock repurchases completed after December 31, 2022. As required under the authoritative guidance of ASC 740, Income Taxes, the Company reviewed the impact on income taxes due to the change in legislation and concluded there was no impact to the financial statements as of March 31, 2023. The Company is in the process of evaluating the potential future impacts of the IRA, and while we do not expect a material impact from this legislation on our Condensed Consolidated Financial Statements, we will continue to review and monitor any additional guidance provided by the Internal Revenue Service.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

16. Earnings (Loss) Per Share

The following is a reconciliation of basic and diluted earnings (loss) per share for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to GCM Grosvenor Inc., basic	$	(1,230)	$	4,726
Exchange of Partnership units	(16,683)		10,251
Net income (loss) attributable common stockholders, diluted	(17,913)		14,977
Denominator for earnings (loss) per share calculation:
Weighted-average shares, basic	42,380,335		44,593,746
Exchange of Partnership units	144,235,246		144,235,246
Assumed vesting of RSUs - incremental shares under the treasury stock method	—		837,061
Weighted-average shares, diluted	186,615,581		189,666,053
Basic EPS
Net income (loss) attributable common stockholders, basic	$	(1,230)	$	4,726
Weighted-average shares, basic	42,380,335		44,593,746
Net income (loss) per share attributable common stockholders, basic	$	(0.03)	$	0.11
Diluted EPS
Net income (loss) attributable common stockholders, diluted	$	(17,913)	$	14,977
Weighted-average shares, diluted	186,615,581		189,666,053
Net income (loss) per share attributable common stockholders, diluted	$	(0.10)	$	0.08

When applying the if-converted method to calculate the potential dilutive impact of the exchangeable common units of the Partnership, the earnings (loss) per share numerator adjustment reflects the net income (loss) attributable to noncontrolling interests in GCMH, as reported, adjusted for the hypothetical incremental provision (benefit) for income taxes that would have been recorded by the Company if the units had been converted.

Shares of the Company’s Class C common stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, a separate presentation of basic and diluted earnings (loss) per share of Class C common stock under the two-class method has not been presented.

The following outstanding potentially dilutive securities were excluded from the calculations of diluted earnings (loss) per share attributable to common stockholders because their impact would have been antidilutive for the periods presented:

	Three Months Ended March 31,
	2023	2022
Public warrants	16,784,970	19,145,063
Private warrants	900,000	900,000
Unvested restricted stock units	1,539,673	—

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts and where otherwise noted)

17. Subsequent Events

On May 9, 2023, 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 June 1, 2023. The payment date will be June 15, 2023.

Partnership Interest-Based Compensation Award

On May 9, 2023, Holdings entered into amended and restated participation certificates with existing employee members (“Holdings Awards”). The Holdings Awards entitle recipients to a stated percentage, or minimum allocable share, of distributions from Holdings, as well as a profits interest with respect to net sale proceeds from dispositions of Holdings properties after certain threshold distributions to other members. Pursuant to ASC 505, the Holdings Awards will be recognized as compensation expense with a corresponding deemed contribution and are accounted for under ASC 718, Compensation—Stock Compensation as the awards have characteristics that are more akin to the risks and rewards of equity ownership in Holdings. These awards do not dilute Class A common stockholders and these awards do not have a cash impact on the Company.

Certain of these existing employee members were previously awarded target amounts that entitled them to a stated percentage, or minimum allocable share, of distributions from Holdings until they received a sum certain. Those target amounts represented by those sums, which were previously recorded as partnership interest-based compensation, were reduced to zero in the amended and restated participation certificates. As a result, target amounts that were previously recorded as partnership interest-based compensation will be reversed, while partnership interest-based compensation associated with the amended and restated participation certificates will be recorded. The Company is still evaluating the grant date fair value of the new Holdings Awards. A portion of the Holdings Awards are vested upon grant and will result in immediate expense recognition. A portion will vest and be expensed over a requisite service period through December 31, 2024.

Because the Holdings Awards do not dilute Class A common stockholders and do not impact net cash flows of the Company, they have no economic impact on Class A common stockholders. As such, the expense that will be pushed down to GCMH and the offsetting deemed contribution will each be attributed solely to noncontrolling interests in GCMH, consistent with the accounting for profits interest-based compensation described in Note 9.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the Annual Report on Form 10-K for the fiscal year ended December 31, 2022. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Risk Factors” section of Part I, Item IA in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and under the “Forward-Looking Statements” section elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

We are a leading alternative asset management solutions provider that invests across all major alternative investment strategies. We invest on a primary, secondary, co-investment and direct basis. We operate customized separate accounts and commingled funds. We collaborate with our clients to invest on their behalf across the private and public markets, either through portfolios customized to meet a client’s specific objectives or through specialized commingled funds that are developed to meet broad market demands for strategies and risk-return objectives.

We operate at scale across the full range of private markets and absolute return strategies. Private markets and absolute return strategies are primarily defined by the liquidity of the underlying securities purchased, the length of the client commitment, and the form and timing of incentive fees. For private markets strategies, clients generally commit to invest over a three-year time period and have an expected duration of seven years or more. In private markets strategies, carried interest is typically based on realized gains on liquidation of the investment. For absolute return strategies, the securities tend to be more liquid, clients have the ability to redeem assets more regularly, and performance fees can be earned on an annual basis. We offer the following investment strategies:

•Private Equity

•Infrastructure

•Real Estate

•Absolute Return Strategies

•Alternative Credit

•ESG and Impact Strategies

Our clients include large, sophisticated, global institutional investors who rely on our investment expertise and differentiated investment access to navigate the alternatives market, but also include a growing non-institutional client base. As one of the pioneers of the customized separate account solutions, we are equipped to provide investment services to clients with a wide variety of needs, internal resources and investment objectives, and our client relationships are deep and frequently span decades.

Trends Affecting Our Business

As a global alternative asset manager, our results of operations are impacted by a variety of factors, including conditions in the global financial markets and economic and political environments, particularly in the United States, Europe, Asia-Pacific, Latin America and the Middle East. While economic factors, such as interest rates, can make alternative investments more or less attractive relative to other asset classes, investors have increasingly gravitated towards the returns generated by alternative investments in order to meet their return objectives. In addition, increased equity market volatility can also contribute to increased investor demand for alternative strategies. 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.

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.

Our ability to retain existing assets under management and attract new investors in our funds is partially dependent on the extent to which investors continue to favorably see the alternative asset management industry relative to traditional publicly listed equity and debt securities. A decline in the pace or the size of our fundraising efforts or investments as a result of

increased competition in the private markets investing environment or a shift toward public markets may impact our revenues, which are generated from management fees and incentive fees.

Our ability to expand our business through new lines of business and geographic markets.

Our ability to grow our revenue base is partially dependent upon our ability to offer additional products and services by entering into new lines of business and by entering into, or expanding our presence in, new geographic markets. Entry into certain lines of business or geographic markets or the introduction of new types of products or services may subject us to the evolving macroeconomic and regulatory environment of the various countries where we operate or in which we invest.

Our ability to realize investments.

Challenging market and economic conditions may adversely affect our ability to exit and realize value from our investments and we may not be able to find suitable investments in which to effectively deploy capital. During periods of adverse economic conditions, such as current geopolitical turmoil abroad and increasing inflation and interest rates, our funds may have difficulty accessing financial markets, which could make it more difficult to obtain funding for additional investments and impact our ability to successfully exit positions in a timely manner. A general market downturn, a recession or a specific market dislocation may result in lower investment returns for our funds, which would adversely affect our revenues.

Our ability to identify suitable investment opportunities for our clients.

Our success largely depends on the identification and availability of suitable investment opportunities for our clients, and, in particular, 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 and the control of the investment managers with which we invest for our funds, including the market environment at a given point in time. 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. Our ability to identify attractive investments and execute on those investments is dependent on a number of factors, including the general macroeconomic environment, valuation, transaction size, and expected duration of such investment opportunity.

Our ability to generate strong returns.

The ability to attract and retain clients is partially dependent on returns we are able to deliver versus our peers. The capital we are able to attract drives the growth of our assets under management and the management and incentive fees we earn. Similarly, in order to maintain our desired fee structure in a competitive environment, we must be able to continue to provide clients with investment returns and service that incentivize our investors to pay our desired fee rates.

Our ability to comply with increasing and evolving regulatory requirements.

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, consistent with how our chief operating decision maker allocates resources and assesses performance.

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. 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. Certain separate account clients may have us manage assets both with full discretion over investments decisions as well as without discretion over investment decisions and may also receive access to various other advisory services the firm may provide.

Certain of our management fees, typically associated with our private markets strategies, are based on client commitments to those funds during an initial commitment or investment period. During this period fees may be charged on total commitments, on invested capital (capital committed to underlying investments) or on a ratable ramp-in of total commitments, which is meant to mirror typical invested capital pacing. Following the expiration or termination of such period, certain fees continue to be based on client commitments while others are based on invested assets or based on invested capital and unfunded deal commitments less returned capital or based on a fixed ramp down schedule.

Certain of our management fees, typically associated with absolute return strategies, are based on the NAV of those funds. Such GCM Funds either have a set fee for the entire fund or a fee scale through which clients with larger commitments pay a lower fee.

Management fees are determined quarterly and are more commonly billed in advance based on the management fee rate applied to the management fee base at the end of the preceding quarterly period as defined in the respective contractual agreements.

We provided investment management / advisory services on assets of $75.3 billion and $73.7 billion as of March 31, 2023 and December 31, 2022, respectively.

Fund expense reimbursement revenue

We incur certain costs, primarily related to accounting, client reporting, investment-decision making and treasury-related expenditures, for which we receive reimbursement from the GCM Funds in connection with its performance obligations to provide investment management services. We concluded that we control the services provided and resources used before they are transferred to the customer, and therefore we act as a principal. Accordingly, the reimbursement for these costs incurred by us are presented on a gross basis within management fees. Expense reimbursements are recognized at a point in time, in the periods during which the related expenses are incurred and the reimbursements are contractually earned.

Incentive Fees

Incentive fees are based on the results of our funds, in the form of performance fees and carried interest income, which together comprise incentive fees.

Carried Interest

Carried interest is a performance-based capital allocation from a fund’s limited partners earned by us in certain GCM Funds, more commonly in private markets strategies. Carried interest is typically a percentage of the profits calculated in accordance with the terms of fund agreements, certain fees and a preferred return to the fund’s limited partners. 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. 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 March 31, 2023, deferred revenue relating to constrained realized carried interest was approximately $6.6 million.

Assets under management that are subject to carried interest, excluding investments of the firm and our professionals from which we generally do not earn incentive fees, were approximately $41.0 billion as of March 31, 2023.

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. 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.

Investment returns are highly susceptible to market factors, judgments, and actions of third parties that are outside of our control. Accordingly, performance fees are variable consideration and are therefore constrained and not recognized until it is probable that a significant reversal will not occur. 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 date of the redemption.

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 $12.5 billion as of March 31, 2023.

Other Operating Income

Other operating income primarily consists of administrative fees from certain private investment vehicles where we perform a full suite of administrative functions but do not manage or advise and have no discretion over the capital.

Expenses

Employee Compensation and Benefits

Employee compensation and benefits primarily consists of (1) cash-based employee compensation and benefits, (2) equity-based compensation, (3) partnership interest-based compensation, (4) carried interest compensation, (5) cash-based incentive fee related compensation and (6) other non-cash compensation. Bonus and incentive fee related compensation is generally determined by our management and is discretionary taking into consideration, among other things, our financial results and the employee’s performance. In addition, various individuals, including certain senior professionals have been awarded partnership interests and restricted stock units (“RSUs”). These partnership interests grant the recipient the right to certain cash distributions from GCMH Equityholders’ profits to the extent such distributions are authorized, resulting in non-cash profits interest compensation expense. Certain employees and former employees are also entitled to a portion of the carried interest and performance fees realized from certain GCM Funds, which is payable upon a realization of the carried interest or performance fees. The Company recognizes non-cash compensation expense attributable to the RSUs on a straight-line basis over the requisite service period, which is generally the vesting period.

General, Administrative and Other

General, administrative and other consists primarily of professional fees, travel and related expenses, 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.

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 also includes (1) the impact of qualifying effective cash flow hedges and (2) the amortization of realized gains or losses on interest rate swaps that initially qualified for hedge accounting and were subsequently terminated. The unrealized gains or losses are reclassified from accumulated other comprehensive income into interest expense over the original life of the swap.

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.

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. The warrant liabilities are classified as marked-to-market liabilities pursuant to ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and the corresponding increase or decrease in value impacts our net income (loss).

Provision (Benefit) 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. GCMH is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by GCMH flows through to its partners, and is generally not subject to U.S. federal or state income tax at the partnership level. Our non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to local or non-U.S. income taxes. The tax liability with respect to income attributable to noncontrolling interests in GCMH is borne by the holders of such noncontrolling interests.

Net Income (Loss) Attributable to Noncontrolling Interests

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. 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.

Results of Operations

The following is a discussion of our consolidated results of operations for the three months ended March 31, 2023 and 2022. This information is derived from our accompanying Condensed Consolidated Financial Statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Revenues
Management fees	$	92,245	$	92,110
Incentive fees	5,815		11,992
Other operating income	1,056		1,026
Total operating revenues	99,116		105,128
Expenses
Employee compensation and benefits	86,224		65,905
General, administrative and other	25,779		21,258
Total operating expenses	112,003		87,163
Operating income (loss)	(12,887)		17,965
Investment income	6,324		10,860
Interest expense	(6,655)		(5,284)
Other income	714		1
Change in fair value of warrant liabilities	(2,221)		2,022
Net other income (expense)	(1,838)		7,599
Income (loss) before income taxes	(14,725)		25,564
Provision for income taxes	422		2,333
Net income (loss)	(15,147)		23,231
Less: Net income attributable to noncontrolling interests in subsidiaries	2,773		4,836
Less: Net income (loss) attributable to noncontrolling interests in GCMH	(16,690)		13,669
Net income (loss) attributable to GCM Grosvenor Inc.	$	(1,230)	$	4,726

Revenues

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Private markets strategies	$	51,802	$	46,841
Absolute return strategies	37,136		42,711
Fund expense reimbursement revenue	3,307		2,558
Total management fees	92,245		92,110
Incentive fees	5,815		11,992
Administrative fees	871		754
Other	185		272
Total other operating income	1,056		1,026
Total operating revenues	$	99,116	$	105,128

Management fees of $92.2 million for the three months ended March 31, 2023 were generally consistent with those in the three months ended March 31, 2022. Private markets strategies fees increased $5.0 million, primarily due to a $2.4 million increase in private markets strategies specialized funds fees and a $2.6 million increase in private markets strategies customized separate accounts fees, both as a result of capital raising and deployment. Fund expense reimbursement revenue increased $0.7

million to $3.3 million. These increases were largely offset by a $5.6 million decrease in absolute return strategies fees driven by lower FPAUM as a result of lower market performance and net withdrawals.

Incentive fees consisted of carried interest of $5.6 million and $11.0 million and performance fees of $0.2 million and $1.0 million for the three months ended March 31, 2023 and 2022, respectively. The decrease in carried interest is primarily due to lower distributions and investment exit activity during the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

Expenses

Employee Compensation and Benefits

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Cash-based employee compensation and benefits	$	44,453	$	41,376
Equity-based compensation	25,793		9,881
Partnership interest-based compensation	11,097		7,115
Carried interest compensation	3,560		5,855
Cash-based incentive fee related compensation	737		1,594
Other non-cash compensation	584		84
Total employee compensation and benefits	$	86,224	$	65,905

Employee compensation and benefits increased $20.3 million, or 31%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The overall increase was primarily driven by equity-based compensation, which increased $15.9 million in the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to the amortization of expense for awards granted in the fourth quarter of 2022 that vested on March 31, 2023. Cash-based employee compensation and benefits increased $3.1 million, or 7%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to an increase in base salaries and related payroll taxes, partially offset by a decrease in bonus accruals. Partnership interest-based compensation increased $4.0 million, or 56%, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to amendments to partnership interest-based awards in the third and fourth quarters of 2022. Carried interest compensation decreased $2.3 million and cash-based incentive fee related compensation decreased $0.9 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to lower realized carried interest during the three months ended March 31, 2023.

General, Administrative and Other

General, administrative and other increased $4.5 million, or 21%, to $25.8 million, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The increase was primarily driven by increases in professional fees and travel costs.

Net Other Income (Expense)

Investment income was $6.3 million for the three months ended March 31, 2023 compared to investment income of $10.9 million for the three months ended March 31, 2022, primarily due to the change in value of private and public market investments.

Interest expense increased $1.4 million, or 26%, to $6.7 million, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to a higher effective interest rate on the Term Loan Facility principal amount outstanding during the three months ended March 31, 2023.

Other income was $0.7 million for the three months ended March 31, 2023 compared to negligible other income for the three months ended March 31, 2022. Other income in the three months ended March 31, 2023 consisted primarily of interest income.

Change in fair value of warrant liabilities of $2.2 million for the three months ended March 31, 2023 was due to an increase in the fair value of the warrants from December 31, 2022 to March 31, 2023.

Provision for Income Taxes

Provision for income taxes primarily reflect U.S. federal and state income taxes on our share of taxable income generated by the Company, as well as local and foreign income taxes of certain of the Company’s subsidiaries.

The Company’s effective tax rate was (3)% and 9% for the three months ended March 31, 2023 and 2022, respectively. Our overall effective tax rate is less than the statutory rate primarily because a majority of income or loss is allocated to noncontrolling interests, and the tax liability or benefit on such income or loss is borne by the holders of such noncontrolling interests.

Net Income (Loss) Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests in subsidiaries was $2.8 million and $4.8 million for the three months ended March 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 in GCMH was $(16.7) million and $13.7 million for the three months ended March 31, 2023 and 2022, respectively. The decrease was primarily attributable to the underlying performance of GCMH, offset by an increase in partnership-interest based compensation, which is fully allocated to noncontrolling interests in GCMH.

Fee-Paying AUM

FPAUM is a metric we use to measure the assets from which we earn management fees. Our FPAUM comprises the assets in our customized separate accounts and specialized funds from which we derive management fees. We classify customized separate account revenue as management fees if the client is charged an asset-based fee, which includes the vast majority of our discretionary AUM accounts. Our FPAUM for private market strategies typically represents committed, invested or scheduled capital during the investment period and invested capital following the expiration or termination of the investment period. Substantially all of our private markets strategies funds earn fees based on commitments or net invested capital, which are not affected by market appreciation or depreciation. Our FPAUM for our absolute return strategy is based on NAV, which includes impacts of any market appreciation or depreciation.

Our calculations of FPAUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers. Our 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.

	Three Months Ended March 31, 2023
(in millions, unaudited)	Private Markets Strategies		Absolute Return Strategies		Total FPAUM
Fee-paying AUM
Balance, beginning of period	$	36,876	$	21,980	$	58,856
Contributions	1,699		116		1,815
Withdrawals	(13)		(556)		(569)
Distributions	(346)		—		(346)
Change in market value	32		307		339
Foreign exchange and other	(218)		(62)		(280)
Balance, end of period	$	38,030	$	21,785	$	59,815

Contracted, not yet fee-paying AUM represents limited partner commitments which are expected to be invested and begin charging fees over the ensuing five years.

	As of
(in millions)	March 31, 2023 (unaudited)		December 31, 2022
Contracted, not yet Fee-Paying AUM	$	6,436	$	7,603
AUM	$	75,252	$	73,667

FPAUM increased $1.0 billion, or 2%, to $59.8 billion during the three months ended March 31, 2023 primarily due to $1.8 billion of contributions and a $0.3 billion increase in market value, partially offset by $0.6 billion and $0.3 billion of withdrawals and distributions, respectively.

•Private markets strategies FPAUM increased $1.2 billion, or 3%, to $38.0 billion during the three months ended March 31, 2023, primarily due to $1.7 billion of contributions, partially offset by $0.3 billion of distributions.

•Absolute return strategies FPAUM decreased $0.2 billion, or 1%, to $21.8 billion during the three months ended March 31, 2023, primarily due to $0.6 billion of withdrawals, partially offset by a $0.3 billion increase in market value.

Contracted, not yet fee-paying AUM decreased $1.2 billion, or 15%, to $6.4 billion during the three months ended March 31, 2023 primarily due to contracted, not yet fee-paying AUM that became fee-paying AUM during the period.

AUM increased $1.6 billion, or 2%, to $75.3 billion during the three months ended March 31, 2023, primarily driven by changes in FPAUM and contracted, not yet Fee-Paying AUM, as well as mark to market changes that did not impact FPAUM.

Non-GAAP Financial Measures

In addition to our results of operations above, we report certain financial measures that are not required by, or presented in accordance with, GAAP. Management uses these non-GAAP measures to assess the performance of our business across reporting periods and believes this information is useful to investors for the same reasons. 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). 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.

Summary of Non-GAAP Financial Measures

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Revenues
Private markets strategies	$	51,802	$	46,841
Absolute return strategies	37,136		42,711
Management fees, net (1)	88,938		89,552
Administrative fees and other operating income	1,056		1,026
Fee-Related Revenue	89,994		90,578
Less:
Cash-based employee compensation and benefits, net (2)	(39,890)		(40,863)
General, administrative and other, net (1,3)	(19,727)		(18,004)
Fee-Related Earnings	30,377		31,711
Incentive fees:
Performance fees	244		1,001
Carried interest	5,571		10,991
Incentive fee related compensation and NCI:
Cash-based incentive fee related compensation	(737)		(1,594)
Carried interest compensation, net (4)	(3,217)		(6,191)
Carried interest attributable to noncontrolling interests	(961)		(1,815)
Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (5)	555		2,664
Interest income	695		3
Other (income) expense	17		(2)
Depreciation	347		399
Adjusted EBITDA	32,891		37,167
Depreciation	(347)		(399)
Interest expense	(6,655)		(5,284)
Adjusted Pre-Tax Income	25,889		31,484
Adjusted income taxes (6)	(6,266)		(7,714)
Adjusted Net Income	$	19,623	$	23,770

____________

(1)    Excludes fund reimbursement revenue of $3.3 million and $2.6 million for the three months ended March 31, 2023 and 2022, respectively.

(2)    Excludes severance expense of $4.6 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively.

(3)    Excludes amortization of intangibles of $0.3 million and $0.6 million for the three months ended March 31, 2023 and 2022, respectively. Also excludes contemplated corporate transaction related costs of $2.4 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively, and non-core expenses of $0.1 million for each of the three months ended March 31, 2023 and 2022.

(4)    Excludes the impact of non-cash carried interest expense of $(0.3) million and $0.3 million for the three months ended March 31, 2023 and 2022, respectively.

(5)    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.

(6)    Represents corporate income taxes at a blended statutory rate of 24.2% and 24.5% applied to Adjusted Pre-Tax Income for the three months ended March 31, 2023 and 2022, respectively. The 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 3.2% 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. Net incentive fees represent incentive fees excluding (a) incentive fees contractually owed to others and (b) cash-based incentive fee related compensation. Net incentive fees are used by management in making compensation and capital allocation decisions and

we believe that they provide investors useful information regarding the amount that such fees contribute to the Company’s earnings.

The following table shows reconciliations of incentive fees to net incentive fees attributable to GCM Grosvenor for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Incentive fees:
Performance fees	$	244	$	1,001
Carried interest	5,571		10,991
Less incentive fees contractually owed to others:
Cash carried interest compensation	(3,560)		(5,855)
Non-cash carried interest compensation	343		(336)
Carried interest attributable to other noncontrolling interest holders	(961)		(1,815)
Firm share of incentive fees (1)	1,637		3,986
Less: Cash-based incentive fee related compensation	(737)		(1,594)
Net Incentive Fees Attributable to GCM Grosvenor	$	900	$	2,392

____________

(1) Firm share represents incentive fees net of contractual obligations but before discretionary cash-based incentive compensation.

Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA

Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA are non-GAAP measures used to evaluate our profitability.

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 and employee severance.

Adjusted Net Income represents Adjusted Pre-Tax Income fully taxed at each period’s blended statutory tax rate.

Adjusted EBITDA represents Adjusted Net Income excluding (a) adjusted income taxes, (b) depreciation and amortization expense and (c) interest expense on our outstanding debt.

The Company is a holding company with no material assets other than its indirect ownership of equity interests in GCMH and certain deferred tax assets. The GCMH Equityholders may from time to time cause GCMH to redeem any or all of their GCMH common units in exchange, at the Company’s election, for either cash (based on the market price for a share of the Class A common stock) or shares of Class A common stock. As such, net income (loss) attributable to noncontrolling interests in GCMH is added back in order to reflect the full economics of the underlying business as if GCMH Equityholders converted their interests to shares of Class A common stock. Other noncontrolling interests do not have the ability to convert those interests into equity interests of the Company, and as such, income (loss) attributable to these noncontrolling interests are not adjusted for in our non-GAAP financial measures.

We believe Adjusted Pre-Tax Income, Adjusted Net Income and Adjusted EBITDA are useful to investors because they provide additional insight into the operating profitability of our core business across reporting periods. These measures (1) present a view of the economics of the underlying business as if GCMH Equityholders converted their interests to shares of Class A common stock and (2) adjust for certain non-cash and other activity in order to provide more comparable results of the core business across reporting periods. These measures are used by management in budgeting, forecasting and evaluating operating results.

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 three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Adjusted Pre-Tax Income & Adjusted Net Income
Net income (loss) attributable to GCM Grosvenor Inc.	$	(1,230)	$	4,726
Plus:
Net income (loss) attributable to noncontrolling interests in GCMH	(16,690)		13,669
Provision for income taxes	422		2,333
Change in fair value of warrant liabilities	2,221		(2,022)
Amortization expense	328		579
Severance	4,563		513
Transaction expenses (1)	2,359		79
Changes in TRA liability and other	—		127
Partnership interest-based compensation	11,097		7,115
Equity-based compensation	25,793		9,881
Other non-cash compensation	584		84
Less:
Unrealized investment income, net of noncontrolling interests	(3,901)		(5,264)
Non-cash carried interest compensation	343		(336)
Adjusted Pre-Tax Income	25,889		31,484
Less:
Adjusted income taxes (2)	(6,266)		(7,714)
Adjusted Net Income	$	19,623	$	23,770
Adjusted EBITDA
Adjusted Net Income	$	19,623	$	23,770
Plus:
Adjusted income taxes (2)	6,266		7,714
Depreciation expense	347		399
Interest expense	6,655		5,284
Adjusted EBITDA	$	32,891	$	37,167

____________

(1)    Represents 2023 and 2022 expenses related to contemplated corporate transactions.

(2)    Represents corporate income taxes at a blended statutory rate of 24.2% and 24.5% applied to Adjusted Pre-Tax Income for the three months ended March 31, 2023 and 2022, respectively. The 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 3.2% and 3.5%, respectively.

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. Adjusted shares outstanding assumes the hypothetical full exchange of limited partnership interests in GCMH into Class A common stock of GCM Grosvenor Inc., the dilution from outstanding warrants for Class A common stock of GCM Grosvenor Inc. and the dilution from outstanding equity-based compensation. We believe adjusted net income per share is useful to investors because it enables them to better evaluate per-share performance across reporting periods.

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 three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
$000, except per share amounts	2023		2022
	(in thousands, except share and per share amounts; unaudited)
Adjusted Net Income Per Share
Adjusted Net Income	$	19,623	$	23,770
Weighted-average shares of Class A common stock outstanding - basic	42,380,335		44,593,746
Exchange of partnership units	144,235,246		144,235,246
Assumed vesting of RSUs - incremental shares under the treasury stock method	—		837,061
Weighted-average shares of Class A common stock outstanding - diluted	186,615,581		189,666,053
Effective RSUs, if antidilutive for GAAP	1,539,673		—
Adjusted shares - diluted	188,155,254		189,666,053
Adjusted Net Income Per Share - Diluted	$	0.10	$	0.13

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. FRR represents total operating revenues less (1) incentive fees and (2) fund reimbursement revenue. We believe FRR is useful to investors because it provides additional insight into our relatively stable management fee base separate from incentive fee revenues, which tend to have greater variability.

Fee-Related Earnings (“FRE”) is a non-GAAP metric used to highlight earnings from recurring management fees and administrative fees. FRE represents adjusted EBITDA further adjusted to exclude (a) incentive fees and related compensation and (b) other non-operating income, and to include depreciation expense. We believe FRE is useful to investors because it provides additional insights into the management fee driven operating profitability of our business.

The following table shows reconciliations of Adjusted EBITDA to Fee-Related Earnings for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Adjusted EBITDA	$	32,891	$	37,167
Less:
Incentive fees	(5,815)		(11,992)
Depreciation expense	(347)		(399)
Other non-operating income	(712)		(1)
Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries	(555)		(2,664)
Plus:
Incentive fee-related compensation	3,954		7,785
Carried interest attributable to other noncontrolling interest holders, net	961		1,815
Fee-Related Earnings	$	30,377	$	31,711

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). As of March 31, 2023, we had $61.9 million of cash and cash equivalents and available borrowing capacity of $48.2 million under our Revolving Credit Facility. On July 29, 2022, the SEC declared effective our Registration Statement on Form S-3, pursuant to which the Company may issue a combination of securities described in the prospectus in one or more offerings from time to time. Our primary cash

needs are to fund working capital requirements, invest in growing our business, make investments in GCM Funds, make scheduled principal payments and interest payments on our outstanding indebtedness, pay dividends to holders of our Class A common stock, and pay tax distributions to members. Additionally, as a result of the Transaction, we need cash to make payments under the Tax Receivable Agreement. We expect that our cash flow from operations, current cash and cash equivalents and available borrowing capacity under our Revolving Credit Facility will be sufficient to fund our operations and planned capital expenditures and to service our debt obligations for the next twelve months and the foreseeable future.

We are required to maintain minimum net capital balances for regulatory purposes for our Japan, Hong Kong and United Kingdom subsidiaries as well as our U.S. broker-dealer subsidiary. These net capital requirements are met by retaining cash. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of March 31, 2023 we are in compliance with these regulatory requirements.

Cash Flows

	Three Months Ended March 31,
	2023		2022
	(in thousands, unaudited)
Net cash provided by (used in) operating activities	$	(4,761)	$	40,443
Net cash used in investing activities	(4,738)		(3,792)
Net cash used in financing activities	(13,720)		(55,500)
Effect of exchange rate changes on cash	(71)		(826)
Net decrease in cash and cash equivalents	$	(23,290)	$	(19,675)

Net Cash Provided by (Used In) Operating Activities

Net cash provided by (used in) operating activities was primarily driven by our net income in the respective periods after adjusting for significant non-cash activities, including equity-based compensation, non-cash partnership interest-based compensation, the change in fair value of warrant liabilities and the change in equity value of our investments, in addition to proceeds received from return on investments, the payment of bonus compensation and receipt of incentive fees.

Net cash provided by (used in) operating activities was $(4.8) million and $40.4 million for the three months ended March 31, 2023 and 2022, respectively. These operating cash flows were primarily driven by:

•net income (loss) of $(15.1) million and $23.2 million for the three months ended March 31, 2023 and 2022, respectively, adjusted for $21.1 million and $8.0 million of non-cash activities, respectively, as well as changes in working capital; and

•proceeds received from investments of $3.0 million and $8.0 million for the three months ended March 31, 2023 and 2022, respectively.

Net Cash Used in Investing Activities

Net cash used in investing activities was $(4.7) million and $(3.8) million for the three months ended March 31, 2023 and 2022, respectively. These investing cash flows were primarily driven by:

•contributions/subscriptions to investments of $(8.5) million and $(6.7) million during the three months ended March 31, 2023 and 2022, respectively; partially offset by

•proceeds received from investments of $4.0 million and $3.2 million during the three months ended March 31, 2023 and 2022, respectively.

Net Cash Used in Financing Activities

Net cash used in financing activities was $(13.7) million and $(55.5) million for the three months ended March 31, 2023 and 2022, respectively. These financing cash flows were primarily driven by:

•capital distributions paid to partners and member of $(36.4) million during the three months ended March 31, 2022;

•capital distributions paid to noncontrolling interest holders of $(5.0) million and $(10.2) million during the three months ended March 31, 2023 and 2022, respectively;

•principal payments on the Term Loan Facility of $(1.0) million during each of the three months ended March 31, 2023 and 2022;

•payments to repurchase Class A common stock of $(3.3) million and $(2.4) million during the three months ended March 31, 2023 and 2022, respectively;

•the repurchase of warrants of $(0.6) million during the three months ended March 31, 2022;

•the settlement of equity-based compensation to satisfy withholding tax requirements of $(0.6) million during the three months ended March 31, 2022; and

•dividends paid of $(4.6) million and $(4.4) million during the three months ended March 31, 2023 and 2022, respectively.

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”). Under the Revolving Credit Facility, $15.0 million is available for letters of credit and $10.0 million is available for swingline loans.

On February 24, 2021, we entered into an amended Credit Agreement, which among other things reduced the interest rate margin and extended the maturity dates of our Term Loan Facility. Concurrently with the amendment, we also made a voluntary prepayment on the Term Loan Facility in an aggregate principal amount of $50.3 million. The maturity date of all of the outstanding borrowings under the Term Loan Facility is February 24, 2028, and the maturity date for the full amount of the Revolving Credit Facility is February 24, 2026.

On June 23, 2021, the Company further amended its Term Loan Facility to increase the aggregate principal amount from $290.0 million to $400.0 million. As of March 31, 2023, GCMH had borrowings of $392.0 million outstanding under the Term Loan Facility and no outstanding balance under the Revolving Credit Facility. As of March 31, 2023, we had available borrowing capacity of $48.2 million under our Revolving Credit Facility.

See Note 11 of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q 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. As a holding company, we are dependent upon the ability of GCMH to make distributions to its members, including us. However, the ability of GCMH to make such distributions is subject to its operating results, cash requirements and financial condition, restrictive covenants in our debt instruments and applicable Delaware law. These restrictions include restrictions on the payment of distributions whenever the payment of such distributions would cause GCMH to no longer be in compliance with any of its financial covenants under the Term Loan Facility. 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 March 31, 2023, the Total Leverage Ratio was below 2.75x and the Company was in compliance with all financial covenants.

See Note 12 of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for a summary of our interest rate derivatives to hedge interest rate risk related to the Company’s outstanding indebtedness. Effective November 1, 2022, the Company terminated the existing interest rate derivatives and received $40.3 million of cash for the fair market value of the swaps at termination. Also effective on November 1, 2022, the Company entered into a new swap agreement to hedge interest rate risk related the outstanding indebtedness that has a notional amount of $300 million and a fixed rate of 4.37%.

Dividend Policy

We are a holding company with no material assets other than our indirect ownership of equity interests in GCMH and certain deferred tax assets. As such, we do not have any independent means of generating revenue. However, management of GCM Grosvenor expects to cause GCMH to make distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under the Tax Receivable Agreement, and to pay our corporate and other overhead expenses. On May 9, 2023, 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 June 1, 2023. The payment date will be June 15, 2023. 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 GCMG’s Board of Directors at such time.

Stock Repurchase Plan

On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan of up to an aggregate of $25.0 million, excluding fees and expenses, which may be used to repurchase the Company’s outstanding Class A common stock and warrants to purchase Class A common stock. Our Class A common stock and warrants may be repurchased from time to time in open market transactions, in privately negotiated transactions, including with employees or otherwise, pursuant to the requirements of Rule 10b5-1 and Rule 10b-18 of the Exchange Act, 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), with the terms and conditions of these repurchases depending on legal requirements, price, market and economic conditions and other factors. We are not obligated under the terms of the program to repurchase any of our Class A common stock or warrants, the program has no expiration date and we may suspend or terminate the program at any time without prior notice. Any shares of Class A common stock and any warrants repurchased as part of this program will be canceled. On February 10, May 5, and November 7, 2022, GCMG’s Board of Directors made increases to its stock repurchase authorization for shares and warrants. The increases of $20.0 million on February 10, 2022 and May 5, 2022 and of $25.0 million on November 7, 2022 increased the total authorization to $45.0 million, $65.0 million, and $90.0 million as of February 10, May 5, and November 7, 2022, respectively.

For the three months ended March 31, 2023, we accrued $19.4 million for RSUs that were settled in cash or to reduce Class A shares to be issued to employees to satisfy tax obligations in connection with the settlement of RSUs and we spent $3.3 million to repurchase shares of Class A common Stock. As of March 31, 2023, $19.4 million for deemed repurchases during the three months ended March 31, 2023 was recorded as a liability within accrued expenses and other liabilities and accrued compensation and benefits in the Condensed Consolidated Statements of Financial Condition as the amounts were settled in April 2023. As of March 31, 2023, $22.8 million remained available under our stock repurchase plan.

We review our capital return plan on an on-going basis, considering our financial performance and liquidity position, investments required to execute our strategic plans and initiatives, acquisition opportunities, the economic outlook, regulatory changes and other relevant factors. As these factors may change over time, the actual amounts expended on repurchase activity, dividends, and acquisitions, if any, during any particular period cannot be predicted and may fluctuate from time to time.

Tax Receivable Agreement

Exchanges of Grosvenor common units by limited partners of GCMH will result in increases in the tax basis in our share of the assets of GCMH and its subsidiaries that otherwise would not have been available. These increases in tax basis are expected to increase our depreciation and amortization deductions and create other tax benefits, and therefore may reduce the amount of tax that we would otherwise be required to pay in the future. The Tax Receivable Agreement requires us to pay 85% of the amount of these and certain other tax benefits, if any, that we realize (or are deemed to realize in certain circumstances) to the TRA Parties. As of March 31, 2023, the amount payable to related parties pursuant to the Tax Receivable Agreement was $55.4 million.

Contractual Obligations, Commitments and Contingencies

There have been no material changes outside of the ordinary course of business in our contractual obligations, commitments and contingencies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Critical Accounting Policies

The preparation of our Condensed Consolidated Financial Statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For a more complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our Condensed Consolidated Financial Statements, please refer to Note 2 in the notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Recent Accounting Pronouncements

Information regarding recent accounting developments and their impact on our results can be found in Note 2 in the notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including price risk, interest-rate risk, access to and cost of financing risk, liquidity risk, counterparty risk and foreign exchange-rate risk. Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit or financial market dislocations.

Our predominant exposure to market risk is related to our role as general partner or investment manager for our funds and the sensitivity to movements in the fair value of their investments, which may adversely affect our investment income, management fees, and incentive fees, as applicable.

There have been no material changes in our market risks during the three months ended March 31, 2023. For additional information, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Limitations on effectiveness of controls and procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of disclosure controls and procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2023.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a defendant in various lawsuits related to our business. We do not believe that the outcome of any current litigation will have a material effect on our condensed consolidated statements of financial condition or statements of income.

In the normal course of business, we may enter into contracts that contain a number of representations and warranties, which may provide for general or specific indemnifications. The Company’s exposure under these contracts is not currently known, as any such exposure would be based on future claims, which could be made against us. We are not currently aware of any such pending claims and based on our experience, we believe the risk of loss related to these arrangements to be remote.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors since our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table represents our purchases of common stock and warrants during the three months ended March 31, 2023 for the periods indicated:

	Total Number of Warrants/Shares Purchased		Average Price Paid Per Warrant		Average Price Paid Per Share		Total Number of Warrants Purchased as Part of Publicly Announced Plans or Programs (1)	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (3)
	Warrants (1)	Common Stock (2)
January 1-31, 2023	—	138,022	$	—	$	8.08	3,494,564	3,495,089	$	44,388,486
February 1-28, 2023	—	56,451	$	—	$	9.20	3,494,564	3,551,540	$	43,869,365
March 1-31, 2023	—	221,436	$	—	$	7.67	3,494,564	3,772,976	$	22,760,133
Total	—	415,909					3,494,564	3,772,976

____________

(1)Represents warrants to purchase shares of Class A common stock, purchased pursuant to a stock repurchase plan, as described in note (3) below.

(2)Excludes 2,485,339 shares of Class A common stock equivalents purchased for $19.4 million that we are deemed to have repurchased in March 2023 in conjunction with the cash settlement of RSUs and the payment of tax liabilities in respect of stock delivered to our employees in settlement of vested RSUs.

(3)On August 6, 2021, GCMG’s Board of Directors authorized a stock repurchase plan (the “Repurchase Plan”) of up to an aggregate of $25.0 million, excluding fees and expenses, which may be used to repurchase shares of our outstanding Class A common stock and warrants to purchase shares of our 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 equity plan thereto). On February 10, May 5, and November 7, 2022, GCMG’s Board of Directors made increases to its stock repurchase authorization for shares and warrants. The increases of $20.0 million on February 10, 2022 and May 5, 2022, and of $25.0 million on November 7, 2022, increased the total authorization to $45.0 million, $65.0 million, and $90.0 million as of February 10, May 5, and November 7, 2022, respectively. The dollar value of shares that may yet be repurchased is reduced for the deemed repurchases of common stock equivalents discussed in note (2) above.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Fred Pollock Amended Employment Agreement

On May 9, 2023, pursuant to the authority delegated to Mr. Sacks by GCMG’s Board of Directors, Mr. Sacks approved the Second Amended and Restated Employment and Protective Covenants Agreement (the “Amended Employment Agreement”), effective May 9, 2023 (the “Effective Date”), by and between Grosvenor Capital Management, L.P. (“GCMLP”) and Frederick E. Pollock. The Amended Employment Agreement amends and restates Mr. Pollock’s employment agreement with GCMLP, dated October 1, 2017, as amended October 1, 2020 and March 11, 2021 (the “Employment Agreement”). The Amended Employment Agreement is substantially similar to the Employment Agreement, with certain changes as noted herein.

Under the Amended Employment Agreement, Mr. Pollock shall be entitled to total cash, comprised of his base salary, any annual cash bonus, and distributions from Holdings, for bonus periods in respect of calendar years 2023, 2024, and 2025 in aggregate amounts equal to $4,500,000, $5,000,000, and $6,000,000, respectively, subject to Mr. Pollock’s continued employment through the last day of the bonus period. It is expected that a significant portion of the total cash to which Mr. Pollock will be entitled will be derived from distributions from Holdings pursuant to his minimum stated percentage of distributions from that entity.

Mr. Pollock shall continue to receive carried interest associated with programs managed by the Company’s Strategic Investments Group and will also receive 5% of the carried interest associated with the Company’s private markets investment strategies, and not less than 5% of any carried interest or incentive economics associated with newly created specialized funds that pursue absolute return strategies, provided such interests are otherwise awarded to other members of senior management of the Company.

Mr. Pollock shall be granted 150,000 restricted stock units of the Company in each bonus period in respect of calendar years 2023, 2024, and 2025, which represent the right to receive shares of the Company’s Class A common stock, or cash at the option of GCMG. Each grant of restricted stock units will vest in three equal installments, on the first, second and third anniversary of the date of grant, subject to continued service through each vesting date. Each grant will be subject to satisfaction of the vesting and other conditions to be set forth in a restricted stock unit grant agreement and the applicable plan documents and approval of GCMG’s Board of Directors.

Mr. Pollock shall be paid directly or reimbursed by GCMLP for non-commercial air travel for personal purposes, up to an annual aggregate maximum of $250,000, which shall be adjusted each year based upon the change in the Consumer Price Index-All Urban Consumers.

Under the Amended Employment Agreement Amendment, the notice period required to terminate the Amended Employment Agreement without cause is 90 days. The Amended Employment Agreement includes confidentiality, perpetual non-disparagement in favor of GCMLP and assignment of intellectual property provisions, as well as a two-year post-termination non-competition and a two-year post-termination non-interference and non-solicitation of employees, clients and marketing agent provisions.

The forgoing summary of amendments does not purport to be complete and is qualified in its entirety by reference to the Amended Employment Agreement, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

Partnership Interest-Based Compensation Awards

On May 9, 2023, Holdings entered into amended and restated participation certificates with existing employee members, including Messrs. Levin and Pollock (“Holdings Awards”). The Holdings Awards entitle the recipients to a stated percentage, or minimum allocable share, of distributions from Holdings, as well as a profits interest with respect to net sale proceeds from dispositions of Holdings properties after certain threshold distributions to other members. These awards do not dilute Class A common stockholders and these awards do not have a cash impact on the Company.

Certain of these existing employee members were previously awarded target amounts that entitled them to a stated percentage, or minimum allocable share, of distributions from Holdings until they received a sum certain. Those target amounts represented by those sums, which were previously recorded as partnership interest-based compensation, were reduced to zero in the amended and restated participation certificates. As a result, target amounts that were previously recorded as partnership interest-based compensation will be reversed, while partnership interest-based compensation associated with the amended and restated participation certificates will be recorded. The Company is still evaluating the grant date fair value of the new Holdings Awards.

Because the Holdings Awards do not dilute Class A common stockholders and do not impact net cash flows of the Company, they have no economic impact on Class A common stockholders. See Note 17 of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for more information.

ITEM 6. EXHIBITS

The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q.

		Incorporated by Reference				Filed/
Exhibit<br>Number	Exhibit Description	Form	File No.	Exhibit	Filing<br>Date	Furnished<br>Herewith
2.1†	Transaction Agreement, dated as of August 2, 2020, by and among CF Finance Acquisition Corp., CF Finance Intermediate Acquisition, LLC, CF Finance Holdings, LLC, Grosvenor Holdings, L.L.C., GCM Grosvenor Holdings, LLC, Grosvenor Capital Management Holdings, LLLP, GCM Grosvenor Management, LLC, Grosvenor Holdings II, L.L.C., GCMH GP, L.L.C., GCM V, LLC, and GCM Grosvenor Inc.	8-K/A	001-38759	2.1	08/04/20
3.1	Amended and Restated Certificate of Incorporation of GCM Grosvenor Inc.	8-K	001-39716	3.1	11/20/20
3.2	Amended and Restated Bylaws of GCM Grosvenor Inc.	8-K	001-39716	3.2	11/20/20
4.1	Warrant Agreement, dated December 12, 2018, between Continental Stock Transfer & Trust Company and CF Finance Acquisition Corp.	8-K	001-38759	4.1	12/17/18
10.1	Second Amended and Restated Employment and Protective Covenants Agreement, by and Between Grosvenor Capital Management, L.P. and Frederick E. Pollock					*
31.1	Chief Executive Officer Certifications pursuant to Section 302 of the Sarbanes Oxley Act of 2002					*
31.2	Chief Financial Officer Certifications pursuant to Section 302 of the Sarbanes Oxley Act of 2002					*
32.1	Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002					**
32.2	Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002					**
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					*
101.SCH	Inline XBRL Taxonomy Extension Schema Document					*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document					*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					*

____________

* Filed herewith.

** Furnished herewith.

† Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant     agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GCM GROSVENOR INC.
Date: May 10, 2023	By:	/s/ Michael J. Sacks
		Michael J. Sacks
		Chief Executive Officer
		(Principal Executive Officer)
	GCM GROSVENOR INC.
---	---	---
Date: May 10, 2023	By:	/s/ Pamela L. Bentley
		Pamela L. Bentley
		Chief Financial Officer
		(Principal Financial Officer)

47

Document

Exhibit 10.1

SECOND AMENDED AND RESTATED EMPLOYMENT AND PROTECTIVE COVENANTS AGREEMENT

This SECOND AMENDED AND RESTATED EMPLOYMENT AND PROTECTIVE COVENANTS AGREEMENT (this “Agreement”), dated as May 9, 2023 (the “Effective Date”) is between Grosvenor Capital Management, L.P., an Illinois limited partnership (“Employer”), and Frederick E. Pollock (“Employee”);

WHEREAS, Employer and Employee are parties to that certain Amended and Restated Employment and Restrictive Covenant Agreement, effective as of October 1, 2017, which was amended, effective as of October 1, 2020, and later amended, effective March 11, 2021 (as so amended, the “Existing Employment Agreement”), pursuant to which Employee currently is employed by Employer; and

WHEREAS, Employee and Employer now desire to amend and restate the Existing Employment Agreement on and after the Effective Date so that this Agreement shall thereafter govern the terms and conditions of Employee’s continued employment by Employer; and

NOW, THEREFORE, it is hereby agreed as follows:

§1    EMPLOYMENT. Effective as of the Effective Date, Employer hereby continues to employ Employee, and Employee hereby accepts continuation of such employment, upon the terms and subject to the conditions hereinafter set forth in this Agreement. The parties agree that this Agreement supersedes and replaces the Existing Employment Agreement in all respects.

§2.    FREEDOM TO CONTRACT; REPRESENTATIONS. Employee represents and warrants to Employer that as of the Effective Date, (i) Employee is free to enter into this Agreement, (ii) Employee is not party to or bound by any noncompetition or nonsolicitation agreement with any Person (as defined in §12 below) other than the noncompetition and nonsolicitation agreements set forth in this Agreement, (iii) Employee’s execution, delivery, and performance of this Agreement are not in violation or breach of, and do not conflict with or constitute a default under, any agreement or commitment to which Employee is a party, and (iv) Employee is not a party to or bound by any confidentiality or nondisclosure agreement or obligation except as previously disclosed to Employer in writing, and Employee agrees with Employer not to use or disclose any information in violation of any such agreement or obligation, if any.

§3.    POSITION; DUTIES; COMMITMENT. Employee shall be employed as a Managing Director and sole Chief Investment Officer of Employer. In that capacity, Employee shall have the responsibilities and duties assigned by Employer and shall act only within the scope of the authority granted. Employee agrees to devote Employee’s full time and best efforts to the performance of his duties to Employer while employed by Employer. Employee will comply with all lawful policies and procedures established by Employer from time to time. Employee shall not engage in any activities that conflict with, or create an appearance of conflict with regard to, the interests of Employer or any of the members of the GCM Group (as defined in §8 below).

§4.    TERM OF EMPLOYMENT; POST-EMPLOYMENT COOPERATION. The employment of Employee under this Agreement shall commence on the Effective Date and shall continue thereafter until terminated pursuant to §6 hereof. For the period commencing upon the date that Employee first ceases to be employed by Employer or an Affiliate (as defined in §8 below) of Employer (the “Employment Termination Date”) for any reason (other than a termination resulting from an event described in §6(a) or §6(b)) and ending on the end of the 24th full calendar month following said Employment Termination Date (such period, the “Post-Employment Period”), Employee shall be available to cooperate with Employer from time to time, at reasonable times and on reasonable notice, concerning such matters with respect to the business of Employer or Employee’s previous activities and responsibilities with Employer, and for such amount of time, as Employer may reasonably request, and to provide such other cooperation as described in subsection 9(n).

§5.    COMPENSATION, BENEFITS AND EXPENSE REIMBURSEMENT.

(a)Total Cash Compensation. For each period ending on the last day of Employer’s standard bonus period, currently ending on the last day of each February in respect of the prior calendar year, (a “Bonus Period”) through the last day of Employer’s standard bonus period ending in respect of calendar year 2025, during which Employee is employed by Employer under this Agreement, Employee shall be entitled to receive total cash compensation, comprised of Base Salary, Annual Cash Bonus (as defined below) and Distributions (as defined below) (“Total Cash Compensation”) equal to the following:

Bonus Period <br>in Respect of Calendar Year	Total Cash Compensation
2023	$4,500,000
2024	$5,000,000
2025	$6,000,000

The apportionment of Total Cash Compensation among Base Salary, Annual Cash Bonus, and Distributions shall be determined by Employer (in consultation with Holdings (as defined below)). In the event of a Bonus Period that extends either for more than or fewer than 12 months, the Total Cash Compensation for the relevant Bonus Period shall be adjusted accordingly on a pro rata basis.

(b)Base Salary; Benefits; Expense Reimbursements. After the Effective Date and while Employee is employed hereunder, in consideration for the services of Employee hereunder, Employer shall compensate Employee and provide benefits to Employee as determined by Employer; provided, however, that (A) the rate of base salary hereunder shall be not less than Five Hundred Thousand U.S. Dollars ($500,000) per year (the “Base Salary”), (B) Employer shall provide to Employee at least basic medical insurance or other medical coverage, and (C) Employee may participate in any other group insurance plan maintained by Employer from time to time in accordance with the terms of such plan. Employee shall be eligible, on at least as favorable a basis as any other member of senior management of Employer, to participate in and receive benefits under all of Employer’s employee benefit plans, programs or arrangements, in accordance with the terms of such plans, programs or arrangements, as in effect from time to time, including, for the avoidance of doubt, any carried interest, deferred compensation programs and long-term incentive award plan, including any plan providing for equity-based awards, established at any time by Employer or its Affiliate. Employee’s base salary as in effect from time to time shall be paid in substantially equal installments in accordance with Employer’s normal payroll practices, but no less frequently than monthly. In addition, subject to the following sentence, Employer shall reimburse Employee for all reasonable expenses of the types authorized by Employer and incurred by Employee in the performance of Employee’s duties hereunder. Employee shall comply with such budget limitations and other policies and procedures of Employer relating to reimbursable expenses, including without limitation those relating to approval and reporting, as are applicable to Employee, which policies and procedures are subject to change in the sole discretion of Employer from time to time, and need not be the same as those applicable to other employees.

(c)Annual Cash Bonus. For each Bonus Period, commencing on the period ending on the last day of the Bonus Period in respect of 2023, during which Employee is employed by Employer under this Agreement, Employee shall be eligible for a cash bonus in an amount to be determined in the sole discretion of Employer (the “Annual Cash Bonus”); provided, however, that the Annual Cash Bonus for each Bonus Period in respect of calendar years 2023, 2024, and 2025 is expected to be at least $1,000,000 for each such Bonus Period. The Annual Cash Bonus for a Bonus Period, if any, shall be determined and paid to Employee not later than the 45th day after the end of the Bonus Period. Notwithstanding anything to the contrary in this §5(c), the Annual Cash Bonus for a Bonus Period shall not be payable to Employee if (A) Employee does not remain employed under this Agreement on the last day of the Bonus Period or (B) a notice of termination of employment has been given by Employee or Employer on or before the last day of such Bonus Period.

-2-

(d)Distributions. Employee is a member of Grosvenor Holdings, L.L.C. (“Holdings”), and, as a member of Holdings, Employee may receive distributions of cash from Holdings from time-to-time (“Distributions”). For purposes of calculating Total Compensation for a Bonus Period, only the aggregate amount of Distributions received by Employee in cash during the calendar year ending on the December 31 on or immediately prior to the end of the relevant Bonus Period shall be included in the Total Compensation for such Bonus Period.

(e)Carried Interest. Employee shall be entitled to the following allocations of carried interest or other performance-based compensation in respect of each Bonus Period during which Employee is employed by Employer under this Agreement:

(i)10% of the total carried interest or other performance-based compensation associated with Employer’s Strategic Investment Group; and

(ii)5% of the total carried interest or other performance-based compensation associated with Employer’s private markets (a/k/a PEREI) investment strategies (including, for the avoidance of doubt, both general and “localized” tranches, and credit strategies consistent with past practices); and

(iii)not less than 5% of any carried interest or other performance-based compensation associated with multi-investor, specialized investment products that pursue absolute return investment strategies, but only in the event such carried interest or other performance-based compensation is otherwise awarded to senior management of Employer.

Carried interest awards shall be subject to all the terms and conditions set forth in the governing documents of the relevant carry plan vehicle(s) and related award agreements that will set forth, among other things, the vesting terms applicable to such carried interest allocation awards. If either of Employer’s Chief Executive Officer or its President enters into an agreement with any Grosvenor Party that would have the effect following a change of control of the Employer of accelerating the vesting of any carried interest award granted by a Grosvenor Party to such person, then Employee will be entitled to enter into a similar agreement with the relevant Grosvenor Party(ies). Notwithstanding anything to the contrary in this §5(e), carried interest for a Bonus Period shall not be allocable to Employee if (A) Employee does not remain employed under this Agreement on the last day of the Bonus Period or (B) a notice of termination of employment has been given by Employee or Employer on or before the last day of such Bonus Period.

(f)RSU Award. For the Bonus Periods in respect of calendar years 2023, 2024, and 2025, Employee shall be granted in respect of each such Bonus Period 150,000 restricted stock units (“RSUs”) issued under the GCM Grosvenor Inc. (“GCMG”) long-term incentive plan that settle in shares of Class A common stock of GCMG, or in cash at the option of GCMG. It is expected that RSUs for each Bonus Period shall be granted not later than the 45th day after the end of the relevant Bonus Period. One-third of each RSU grant shall vest on each of the first, second, and third anniversaries of each grant date, and shall be delivered as soon as reasonably practicable after each such vesting date. The RSUs will be subject to separate definitive documents, which shall include standard terms and conditions of the applicable plan documents and award agreement, and will be subject to approval by GCMG’s Board of Directors.

(g)Non-Commercial Air Travel. Employer agrees, for non-commercial air travel for personal purposes, to either pay directly or reimburse Employee for all costs of non-commercial air travel incurred by Employee or parties identified by Employee, whether provided by parties related to Employee or by persons unrelated to Employee, up to an aggregate maximum of $250,000 in any one calendar year, multiplied by the Escalation Percentage for such calendar year. The Escalation Percentage for calendar year 2023 shall be one hundred percent (100%) and the Escalation Percentage for each subsequent calendar year shall be the Escalation Percentage in effect for calendar year 2023 (that is, 100%) multiplied by a fraction, the numerator of which is the Consumer Price Index – All Urban Consumers published by the United States Department of Labor/Bureau of Labor Statistics in effect on the first day of such subsequent calendar year, and the denominator of which is such Consumer Price Index as in effect on the first day of calendar year 2023. Employer agrees, for non-commercial air travel

-3-

for business purposes of Employer, to pay for all costs of non-commercial air travel incurred by Employee, whether provided by parties related to Employee or by persons unrelated to Employee.

(h)Separation Payments. Subject to the further provisions of this §5(h), commencing on Employee’s Separation from Service (within the meaning of Treas. Reg. §1.409A-1(h)(1)) for any reason other than an event described in §6(a) or §6(b)), and continuing during the Post-Employment Period, Employer shall pay to Employee separation payments at the annual rate of Two Hundred and Fifty Thousand U.S. Dollars ($250,000) (“Separation Payments”), payable in equal semi-monthly installments. Employee shall not be an employee during the Post-Employment Period, shall not be entitled to the benefits described in §5(b) or any other employee benefits during such period except as required by applicable law, and shall not be reimbursed for any expenses unless and to the extent Employer otherwise agrees in a particular case in writing before such expenditure is incurred. For the avoidance of doubt, the parties acknowledge that payment of monthly installments of Separation Payments shall commence with the month following the month in which Employee has a Separation from Service within the meaning of Treas. Reg. §1.409A-1(h)(1). Employee’s entitlement to and right to receive any Separation Payments is conditioned upon Employee’s execution and delivery to the Employer of (and non-revocation of) a separation agreement that includes a general release, in the form that is then in use by Employer for such purposes. Notwithstanding anything to the contrary in this Agreement, in the event that Employee commits a material violation of any of the covenants contained in §8 or §9 of this Agreement, or fails to timely sign the separation agreement referred to above, Employer may cease paying any unpaid installments of Separation Payments; provided, however, that such nonpayment of Separation Payments shall not relieve Employee of Employee’s obligations under §8 or §9 of this Agreement.

§6.    TERMINATION. Employee’s employment hereunder shall terminate:

(a)Death or Disability. Upon the death of Employee during Employee’s employment hereunder or, at the option of Employer, in the event Employee is Disabled (as defined below), upon written notice from Employer specifying the date on which Employee became Disabled. Employee shall be deemed “Disabled” if a medical doctor selected by Employer certifies that Employee has for one hundred eighty (180) days, consecutive or non-consecutive, in any twelve (12) month period, been disabled in a manner which seriously interferes with Employee’s ability to perform Employee’s duties under this Agreement. Any failure or refusal by Employee to submit to a medical examination for the purpose of certifying whether Employee is Disabled under this §6(a) shall, at the option of Employer, be deemed to constitute conclusive evidence that Employee is Disabled.

(b)For Cause. For Cause immediately upon written notice by Employer to Employee. For purposes of this Agreement, a termination shall be for “Cause” if any one or more of the following has occurred:

(i)    Employee has committed (whether or not at the workplace) (A) an act of fraud, embezzlement, or misappropriation of funds or property, (B) a breach of fiduciary duty, or (C) an illegal, unethical, or dishonest act or omission, including, but not limited to, the offer, payment, solicitation or acceptance of any unlawful bribe or kickback; or

(ii)    Employee has been indicted for or convicted by a court of competent jurisdiction of, or has pleaded guilty or nolo contendere to, (A) any felony, (B) any crime involving moral turpitude, or (C) any other crime that reasonably could impair Employee's ability to perform Employee’s duties hereunder in a satisfactory manner; or

(iii)    Employee has committed a willful breach of any of the covenants, terms or provisions of this Agreement, including without limitation §8 or §9, or engaged in any other willful act or omission (whether or not at the workplace) that (A) injures or has the potential to injure any Grosvenor Party, or (B) impairs or has the potential to impair Employee’s ability to perform Employee’s duties hereunder in a satisfactory manner, which, if curable, remains uncured following ten (10) days written notice to Employee describing such breach; or

-4-

(iv)    Employee has willfully failed or refused to follow the lawful and good faith directions of Employer, which, if curable, remains uncured following ten (10) days' written notice to Employee describing such failure or refusal; or

(v)    Employee has been grossly negligent or has engaged in willful misconduct in the performance of Employee’s duties hereunder; or

(vi)    Employee has reported to work under the influence of alcohol, used or possessed illegal drugs (whether or not at the workplace), or engaged in other conduct (whether or not in conjunction with Employee’s duties hereunder) that is detrimental to any Grosvenor Party or causes any of them public disgrace, disrepute or material harm; or

(vii)    Employee has violated any of the terms of Employer’s established policies or any applicable law, statute, regulation, or rule of any government authority having jurisdiction over Employee’s business or affairs, which, if curable, remains uncured following ten (10) days’ written notice to Employee describing such violation; or

(viii)     Employee has failed to fulfill Employee’s obligations pursuant to §6(c) of this Agreement; or

(ix)     Employee has resigned other than pursuant to the written notice required pursuant to §6(c) of this Agreement.

For purposes of this definition, no act or failure to act on the part of Employee shall be considered “willful” unless done, or omitted to be done, by Employee in bad faith or without a reasonable belief that Employee’s action or omission is in the best interests of Employer or its Affiliates.

(c)Without Cause. Upon ninety (90) days’ written notice by either Employer or Employee to the other party hereto, other than pursuant to §6(a) or §6(b), or upon six (6) months’ written notice by Employee to Employer (a “Six-Month Notice Resignation”), other than pursuant to §6(a) or §6(b).

During the applicable notice period described above in this §6(c) (the “Notice Period”), Employer may, in its sole discretion:

(i)require Employee to perform only such duties as it may allocate to Employee;

(ii)require Employee not to perform any of Employee’s duties;

(iii)require Employee not to have any contact with Past Clients, Present Clients, Potential Clients, Marketing Agents, Investment Product Managers or Managers of Investment Product Managers (as those terms are defined in §9 below);

(iv)require Employee not to have any contact with such employees of Employer and/or any of the members of the GCM Group (as defined in §8 below) as Employer shall determine; and

(v)exclude Employee from Employer’s premises.

During the Notice Period, Employee must fulfill all of Employee’s duties and responsibilities set forth above as directed by Employer. Employee’s failure to comply with this requirement may result in termination for Cause as set forth in §6(b) above.

§7.    RIGHTS, REMEDIES AND OBLIGATIONS ON TERMINATION.

(a)Death or Disability. If Employee’s employment is terminated under §6(a) hereof because of death or because Employee becomes Disabled, Employee (or Employee’s estate, as applicable) shall be paid (i) base salary, at the rate of salary that was payable to Employee under §5(a) at the time said employment was terminated (prorated through the Employment Termination Date); (ii) benefits (as

-5-

specified in §5(b)) through the Employment Termination Date (unless a different date is specified by the terms of the applicable benefit plans); and (iii) reimbursement of expenses (as specified in §5(b) through the Employment Termination Date. All such payments shall be made in accordance with Employer’s normal payroll practices.

(b)For Cause. If Employee’s employment is terminated under §6(b) hereof for Cause, Employee shall be paid (i) base salary (at the rate of salary that was payable to Employee under §5(a) at the time said employment was terminated) prorated through the Employment Termination Date; (ii) benefits (as specified in §5(b)) through the Employment Termination Date (unless a different date is specified by the terms of the applicable benefit plans); and (iii) reimbursement of expenses (as specified in §5(b)) through the Employment Termination Date.

(c)Without Cause. If Employee’s employment is terminated by Employer under §6(c) hereof, Employee shall be paid (i) reimbursement of expenses (as specified in §5(b)) through the Employment Termination Date; (ii) base salary at the rate of salary that was payable to Employee under §5(a) at the time said employment was terminated (prorated through the Employment Termination Date); and (iii) benefits (as specified in §5(b)) through the Employment Termination Date (unless a different date is specified by the terms of the applicable benefit plans). All such payments shall be made in accordance with Employer’s normal payroll practices. In addition to the foregoing, Employee shall receive the Separation Payments, subject to the provisions of §5(h) above.

(d)Resignation. If Employee’s employment is terminated by Employee under §6(c) hereof, Employee shall be paid (i) reimbursement of expenses (as specified in §5(b)) through the Employment Termination Date; (ii) base salary at the rate of salary that was payable to Employee under §5(a) at the time said employment was terminated (prorated through the Employment Termination Date); and (iii) benefits (as specified in §5(b)) through the Employment Termination Date (unless a different date is specified by the terms of the applicable benefit plans). In addition, Employee shall be paid the Separation Payments, subject to the provisions of §5(h). In the event of a Six-Month Notice Resignation under §6(c) hereof, then all carried interest awarded to Employee on or prior to March 31, 2022 that is not fully vested as of the Employment Termination Date shall be deemed 80% vested as of such date.

(e)Miscellaneous. Except as otherwise expressly set forth in this §7, Employee shall not be entitled to any severance or other compensation from Employer after the Employment Termination Date whether in respect of the period before or after such termination or during or after the Post-Employment Period. In addition, in the event that Employee commits a material violation of any of the covenants contained in §8 or §9 of this Agreement after the Employment Termination Date, or fails to timely sign the separation agreement described in §5(h) above, Employer shall have no further obligation to make any payments to Employee under this §7; provided, however, that such nonpayment shall not relieve Employee of Employee’s obligations under §8 or §9 of this Agreement. Payments made pursuant to this §7 shall, to the fullest extent permitted by applicable law, be subject to offset for any debts or money owed to Employer by Employee.

§8.    CONFIDENTIAL INFORMATION.

(a)Confidential Information. “Confidential Information” as used herein shall mean all confidential and proprietary information of Grosvenor Capital Management, L.P., GCM Customized Fund Investment Group, L.P., Grosvenor Holdings, L.L.C., Grosvenor Holdings II, LLC, Grosvenor Capital Management Holdings, LLLP, their respective general partners, managing members, or managers, and/or their respective affiliates (each a “Grosvenor Party” and collectively, the “GCM Group”), including, without limitation, confidential or proprietary information regarding clients, client lists, fee and pricing policies, marketing materials, portfolio selection, trading practices and policies, investment techniques, investment processes, investment advisory, technical, and research data, methods of operation, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, trade secrets, descriptive materials relating to any of the foregoing, and information provided to any Grosvenor Party by others which the Grosvenor Party is obligated to keep confidential, whether such information is in the memory of Employee or is embodied in written, electronic, or other tangible form.

-6-

(b)Non-Disclosure. Employee recognizes and acknowledges that the Confidential Information constitutes valuable, special, and unique assets of the GCM Group because, among other reasons, such Confidential Information (i) has been developed at substantial expense and effort over a period of many years, (ii) constitutes a material competitive advantage for the Grosvenor Parties which is not known to the general public or competitors, (iii) could not be duplicated by others without extraordinary expense, effort and time, (iv) constitutes “trade secrets” as such term is used in the Illinois Trade Secrets Act (and counterpart statutes of other states where the Grosvenor Parties conduct business) or (v) is information of a private nature. Employee shall not, either before or at any time after the Employment Termination Date for any reason or under any circumstance, use for Employee’s benefit or disclose to or use for the benefit of any other Person, any Confidential Information for any reason or purpose whatsoever, directly or indirectly, except as may be required or otherwise appropriate pursuant to Employee’s employment by Employer, unless and until such Confidential Information becomes public or generally available to Persons other than the Grosvenor Parties other than as a consequence of the breach by Employee of Employee’s confidentiality obligations hereunder (after which such public or otherwise generally available information shall no longer be deemed to be Confidential Information). Notwithstanding the foregoing, if Employee is, in the opinion of counsel acceptable to Employer, compelled by law to disclose Confidential Information or else stand liable for contempt or suffer other censure or penalty, Employee may disclose such information, provided, however, that Employee shall promptly notify Employer of such requirement so that Employer may seek a protective order. Nothing in this §8 or otherwise in this Agreement prohibits Employee from reporting possible violations of applicable federal law or regulation to any governmental agency or entity, or making other disclosures that are protected under the whistleblower provisions of applicable federal law or regulation. Employee does not need Employer’s prior authorization to make any such reports or disclosures, and Employee is not required to notify Employer that Employee has made such reports or disclosures. Employee also expressly acknowledges that Performance Records constitute Confidential Information. For the avoidance of doubt, Employee agrees that “Performance Records” means the financial performance, track record, investment decisions and analysis or any related information (whether alone or in aggregate or composite form) of (i) any current former or future Investment Product or account managed or advised directly or indirectly by a GCM Group entity (a “GCM Grosvenor Fund”), irrespective of inception date, investment date or date on which a GCM Group entity began managing or advising any such GCM Grosvenor Fund, and (ii) any current, former or future investment made by a GCM Group entity, irrespective of the investment date of such investment. The parties expressly acknowledge that Performance Records are the exclusive property of Employer (even if they are otherwise publicly available), and Employee is not authorized to use or disclose them for any reason other than the Employer’s legitimate business purposes.

(c)Return of Information and Property. Upon the Employment Termination Date, Employee shall cause to be delivered to Employer all documents and data pertaining to the Confidential Information (whether maintained in electronic or tangible media) and shall not retain any such documents or data, any reproductions (in whole or in part) thereof, or any extracts of any such documents or data containing Confidential Information. Employer retains the right to examine any home or laptop computers or similar devices used by Employee, and to copy and/or erase all Confidential Information contained on such computers and devices. In addition, Employee shall return, in good working order, all Employer property to which Employee has possession of or access to on or prior to the Employment Termination Date.

(d)Affiliate. As used in this Agreement, “Affiliate” means with respect to a specified Person (i) any Person that directly or indirectly through one or more intermediaries controls, alone or through an affiliated group, is controlled by, or is under common control with such Person; (ii) any Person that is an officer, director, partner, or trustee of, or serves in a similar capacity with respect to, such Person or of which such Person is an officer, director, partner, or trustee, or with respect to which such Person serves in a similar capacity; (iii) any Person that, directly or indirectly, is the beneficial owner of 10% or more of any class of equity securities of, or otherwise has a substantial beneficial interest in, the specified Person or of which the specified Person is directly or indirectly the owner of 10% or more of any class of equity securities or in which the specified Person has a substantial beneficial interest; (iv) any spouse, descendant, parent, grandparent, or descendant of a parent or grandparent of the specified Person or of any Person identified in clauses (i) through (iii); and (v) any partnership, trust, or other entity or arrangement for the principal benefit of the specified Person and/or of any one or more Persons identified in clauses (i) through (iv).

-7-

§9.    NON-COMPETITION AND OTHER PROTECTIVE COVENANTS. Employee acknowledges that (i) Employer, by and through its subsidiaries and affiliated companies, conducts business throughout the world, (ii) Employer and the GCM Group have a vital and continuing interest in protecting that business, including without limitation, their existing and prospective relationships with clients and with investment funds in which any Grosvenor Party or investment funds managed by any of them invest, its marketing agents, and its officers, employees, and consultants (“Employer’s Interests”), (iii) the covenants contained in this §9 are reasonably necessary to protect Employer’s Interests, including, but not limited to, those identified above, and (iv) the restrictions and other provisions hereafter set forth in this §9 are reasonable and necessary in all respects including, without limitation, duration, geographic reach, and scope of activities covered, to provide such protection of Employer’s Interests. Employee further acknowledges and represents that the Base Salary, Annual Cash Bonus, carried interest, RSUs, and Separation Payments provided by Employer under §5 adequately compensate Employee for any potential employment opportunities Employee may forego as a result of Employee’s compliance with the protective covenants contained in this §9, that such compensation will enable Employee to provide for the needs and wants of Employee’s family without violating such restrictions, and that the truth of the foregoing representations is a material condition to Employee’s employment by Employer. Accordingly, in special consideration of the promises and covenants given to Employee under this Agreement, including, without limitation, Employee’s entitlement to participate in any carried interest, deferred compensation, or long-term incentive programs established at any time by Employer or its Affiliates, pursuant to §5, and Employee’s entitlement to the Separation Payments and expense reimbursements, Employee agrees to be bound by and to faithfully observe the restrictions and covenants set forth hereafter in this §9 and further agrees that Employee will not do or attempt to do indirectly, through any other Person, or by any other manner, means, or artifice, anything which this §9 prohibits Employee from doing directly.

(a)Investment Management or Advisory Services. Employee shall not, directly or indirectly (except in a Permitted Capacity), until the expiration of the Restricted Period, either (x) provide or offer (or attempt to provide or offer), whether as an officer, director, employee, partner, consultant, shareholder, independent contractor or otherwise, investment advisory or investment management services to any Person anywhere in the world (including but not limited to providing any services to any investment entity or vehicle of a type commonly known as a “hedge fund,” a private equity fund, a fund of hedge funds, a fund of private equity funds, or an infrastructure fund), or (y) become an officer, director, partner, owner, or employee of, or contractor with or consultant to, or invest in, any Person which provides services described in clause (x) or which acts as distribution agent for (or otherwise sells or markets the services of) any Person that provides the services described in clause (x), to the extent that an act described in this clause (y) relates to the business or activity of providing any of the services described in clause (x).

(b)Multi-Manager Alternative Strategies. Employee shall not, directly or indirectly (except in a Permitted Capacity), until the expiration of the Restricted Period, either:

(x)    provide or offer (or attempt to provide or offer), whether as an officer, director, employee, partner, consultant, shareholder, independent contractor or otherwise, investment advisory or investment management services which are directly competitive with the types of services that are or were, within the preceding two (2) years, offered by any Grosvenor Party (or by any investment fund directly or indirectly managed by a Grosvenor Party); or

(y)    become an officer, director, partner, owner, or employee of, or contractor with or consultant to, or invest in, any Person which provides services described in subparagraph (x), or which acts as distribution agent for (or otherwise sells or markets the services of) any Person that provides the services described in subparagraph (x), or which acts as a distribution agent for (or otherwise sells or markets the services of) any Person which provides services described in subparagraph (x), to the extent that an act described in this subparagraph (y) relates to the business or activity of providing any of the services described in subparagraph (x).

(c)Investment of Employee’s Own Funds. Without the consent of Employer, Employee shall not, directly or indirectly, until after the Employment Termination Date, invest (or assist in the investment of) Employee’s own funds or any other funds controlled, advised or administered in any way by Employee in (i) any investment entity or vehicle of a type commonly known as a “hedge fund,” a

-8-

private equity fund, a fund of hedge funds, or a fund of private equity funds, or (ii) any other type of investment product which is, at the time of such investment, similar to an investment product managed or sponsored directly or indirectly by a Grosvenor Party (each such fund or product, a “Investment Product”), other than one managed directly or indirectly by a Grosvenor Party.

(d)Interference. Employee shall not, directly or indirectly (except in a Permitted Capacity), until two (2) years after the Employment Termination Date, interfere with the relations of any Grosvenor Party, or of any investment fund directly or indirectly managed by a Grosvenor Party, with any Person who, at any time during the period from the date Employee’s employment by Employer commenced until the Employment Termination Date, was or had been (u) a Past Client, Present Client or Potential Client, (v) a fund or other Investment Product in which were invested any funds managed directly or indirectly by any Grosvenor Party, (w) a manager included in the GCM Group’s database of investment managers, (x) the manager, advisor, general partner or similar entity or Person of any Person described in clause (w) (an “Investment Product Manager”), (y) an officer, partner, director, manager or other Affiliate of any such Investment Product Manager (a “Manager of an Investment Product Manager”), or (z) any distribution agent or other Person who acts on behalf of a Grosvenor Party in selling or marketing the services of such Grosvenor Party (“Marketing Agent”).

(e)No Solicitation of Clients or Marketing Agents. Employee shall not, directly or indirectly (except in a Permitted Capacity), until two (2) years after the Employment Termination Date, solicit, enter into, or propose to enter into any employment, consulting, investment management, investment advisory, or any other business relationship or agreement with any Past Client, Present Client, Potential Client, or Marketing Agent.

(f)No Employee Solicitation. Employee shall not, directly or indirectly (except in a Permitted Capacity), until two (2) years after the Employment Termination Date, induce or attempt to induce any officer or employee of or consultant to any Grosvenor Party (other than Employee’s personal secretary) or of any investment fund managed directly or indirectly by it, to terminate Employee’s employment or consultancy with such entity.

(g)Hiring by Employee. Employee shall not, directly or indirectly (except in a Permitted Capacity), until two (2) years after the Employment Termination Date, directly or indirectly hire or retain, or attempt to hire or retain, any Person described in §9(f).

(h)Time Limitation. During the period after the Employment Termination Date, subsections 9(d) and 9(e) shall apply only to (i) Past Clients, Present Clients and Potential Clients who were such as of the Employment Termination Date, (ii) Investment Products in which funds were invested directly or indirectly by any Grosvenor Party or a manager of which was contained in the GCM Group’s database of investment managers at any time within two (2) years prior to the Employment Termination Date, and to Investment Product Managers and Managers of Investment Product Managers of such Investment Products, and (iii) Marketing Agents who acted in such capacity at any time within two (2) years prior to the Employment Termination Date.

(i)Invest In. For purposes of subsections 9(a) and (b), the term “invest in” shall be deemed to exclude any investment or related series of investments constituting less than five per cent (5%) of the outstanding capital stock of a company whose stock is publicly traded.

(j)Clients. For purposes of subsections (d) and (e) of this §9, “Past Client” shall mean at any particular time, any Person who at any time within two (2) years prior to such time has been but at such time is not, directly or indirectly, an advisee, investment advisory customer or client of (or a partner of or investor in any investment vehicle (other than a registered investment company) managed directly or indirectly by) a Grosvenor Party, or any consultant to such Person; “Present Client” shall mean at any particular time, any Person who is at such time, directly or indirectly, an advisee, investment advisory customer or client of (or a partner of or investor in any investment vehicle (other than a registered investment company) managed directly or indirectly by) a Grosvenor Party, or any consultant to such Person; and “Potential Client” shall mean at any particular time, (x) any Person to whom a Grosvenor Party, any investment fund directly or indirectly managed by it, or any distribution agent or other Person acting on behalf of either, has within two (2) years prior to such time, offered or solicited (by means of personal meeting, telephone call, or a letter or written proposal specifically

-9-

directed to the particular Person) to serve as investment adviser or manager, or who has been offered or solicited to invest in any investment fund or other Investment Product directly or indirectly managed by a Grosvenor Party (other than a registered investment company), but who is not at such time, directly or indirectly, an advisee, investment advisory customer or client of (or a partner of or investor in any investment vehicle (other than a registered investment company) managed directly or indirectly by) a Grosvenor Party, or (y) any consultant to such Person.

(k)Permitted Capacity. As used in this Agreement, “Permitted Capacity” means Employee acting in Employee’s capacity as an employee of or consultant to Employer or any Grosvenor Party.

(l)Restricted Period. As used in this Agreement, “Restricted Period” means the period beginning on the Effective Date and ending on the second anniversary of the Employment Termination Date (i.e., the second anniversary of the date on which the Notice Period, if applicable, has expired).

(m)No Disparagement. Employee shall not at any time disparage any Grosvenor Party, any Affiliate thereof, or any officer or employee of any of the foregoing. Employee shall not, without the prior written consent of Employer, make any written or oral statement concerning the termination of Employee’s employment or any circumstances, terms or conditions relating thereto, which statement is reasonably likely to become generally known to the public. Nothing in this §9(m) shall prevent Employee from testifying truthfully in any judicial proceeding, law enforcement matter, or government investigation or lawfully filing or prosecuting any claim against any of the foregoing Persons in accordance with §10 below.

(n)Cooperation. Both during and after Employee’s employment, Employee shall cooperate with Employer and the GCM Group, as reasonably requested by Employer in connection with Employer’s or the GCM Group’s business, including but not limited to, any litigation, arbitration, or other dispute in which Employer or the GCM Group has or may have an interest. Employee shall also cooperate with Employer or the GCM Group in connection with any investigation, review or hearing of any federal, state or local governmental authority that relates to events or occurrences that happened while Employee was employed by Employer. Employee’s reasonable cooperation shall include, but not be limited to, being available to meet with Employer’s counsel, acting as a witness on behalf of Employer, and treating all communications with Employer’s counsel as confidential. Employee acknowledges that in any legal action, investigation, hearing or review covered by this §9(n), Employer expects Employee to provide only accurate and truthful information or testimony. Employer will reimburse Employee for all reasonable, necessary, and pre-approved out-of-pocket expenses incurred in fulfilling Employee’s obligations under this §9(n).

(o)Future Business Activities. If, at any time or times in the future, any Grosvenor Party engages in business or activities in addition to or in lieu of its present activity, the provisions of this §9 shall apply to all such business and activities.

(p)Restrictions Reasonable. Employee acknowledges and agrees that the restrictions and other provisions set forth above in this §9 are reasonable, in all respects, including without limitation duration, geographic reach, and scope of activities covered, and will not prevent Employee from earning a living in Employee’s profession. Further, Employee acknowledges that in agreeing to said restrictions, Employee has received and has relied upon the independent advice and counsel of attorneys selected by Employee. Accordingly, Employee agrees to be bound by and to faithfully observe the restrictions and covenants set forth above in this §9, and further agrees that Employee will not do or attempt to do indirectly, through any other Person, or by any other manner, means, or artifice, anything which this §9 prohibits Employee from doing directly.

(q)Revision. The parties hereto expressly agree that in the event that any of the provisions, covenants, warranties or agreements in this §9 are held to be in any respect an unreasonable restriction upon Employee or are otherwise invalid, for whatsoever cause, then the court so holding is hereby authorized to (i) reduce the territory to which said covenant, warranty or agreement pertains, the period of time in which said covenant, warranty or agreement operates or the scope of activity to which said covenant, warranty or agreement pertains or (ii) effect any other change to the extent necessary to render any of the restrictions contained in this Agreement enforceable.

-10-

§10.    ARBITRATION OF DISPUTES.

(a)Arbitration. Notwithstanding anything to the contrary contained in this Agreement, but subject to the last sentence of this §10(a), all claims, disputes and controversies between the parties hereto arising out of or in connection with this Agreement, relating to the validity, construction, performance, breach, enforcement or termination thereof, or otherwise, shall be resolved by binding arbitration at Chicago, Illinois, in accordance with this §10 and, to the extent not inconsistent herewith, the commercial arbitration rules of the American Arbitration Association. Employer may elect, on a claim-by-claim basis, that this §10 not apply to a claim which would otherwise be governed by this §10 and to require instead that such claim be adjudicated in a court of law.

(b)Procedures. Any arbitration called for by this §10 shall be conducted in accordance with the following procedures:

(i)Employee or Employer (the “Requesting Party”) may demand arbitration pursuant to §10(a) hereof at any time by giving written notice of such demand (the “Demand Notice”) to the other (the “Responding Party”), which Demand Notice shall describe in reasonable detail the nature of the claim, dispute or controversy.

(ii)Within thirty (30) days after the giving of a Demand Notice, each of the Requesting Party and the Responding Party shall select and designate in writing to the other party one reputable, disinterested individual (a “Qualified Individual”) willing to act as an arbitrator of the claim, dispute or controversy in question. Each of the Requesting Party and the Responding Party shall use their best efforts to select an exjudge having no affiliation with any of the parties as their respective Qualified Individual. If either party fails to make such a designation, then, on the application of the other party, the American Arbitration Association shall promptly select and appoint a Qualified Individual to act as the second arbitrator. Within forty-five (45) days after the foregoing selections have been made, the arbitrators so selected shall jointly select an ex-judge having no affiliation with any of the parties as the third Qualified Individual willing to act as an arbitrator of the claim, dispute or controversy in question. In the event that the two arbitrators initially selected are unable to agree on a third arbitrator within the forty-five (45) day period referred to above, then, on the application of either party, the American Arbitration Association shall promptly select and appoint an ex-judge having no affiliation with any of the parties, as the Qualified Individual to act as the third arbitrator. The three arbitrators selected pursuant to this §10(b)(ii) shall constitute the arbitration panel for the arbitration in question.

(iii)All filings, submissions and presentations in the arbitration proceeding shall be confidential. Any decision concurred in by any two (2) of the arbitrators shall constitute the decision of the arbitration panel, and unanimity shall not be required. Any decision by the arbitrators shall be confidential and shall be shielded from public access.

(iv)The arbitration panel may award the same remedies (which may include attorney’s fees) to the prevailing party that would have been available in court for the type of claim that was brought; provided, however, that the arbitration panel shall not award a prevailing party its attorney’s fees, costs, and expenses in excess of the amount awarded to such party (excluding attorney’s fee, costs, and expenses).

(c)Binding Character & Jurisdiction. Any decision rendered by the arbitration panel pursuant to this §10 shall be final and binding on, and nonappealable by, the parties hereto, and judgment thereon may be entered by any state or federal court of competent jurisdiction. Any action to enforce an award shall be filed under seal. The parties agree to submit to the jurisdiction of the federal and state courts in Cook County, Illinois in any action seeking a provisional remedy, or any action for judgment on the award entered by the arbitration panel.

(d)Exclusivity. Except for actions seeking a provisional remedy which a party elects to adjudicate in a court of law pursuant to §10(a), and except as set forth in §10(e) below, arbitration shall be the exclusive method available for resolution of claims, disputes and controversies described in §10(a) hereof, and Employer and Employee stipulate that the provisions hereof shall be a complete

-11-

defense to any suit, action, or proceeding in any court or before any administrative or arbitration tribunal with respect to any such claim, controversy or dispute. The arbitration panel shall have the exclusive authority to resolve any dispute relating to the interpretation, scope, applicability, enforceability or formation of the agreement to arbitrate set forth in this §10. The provisions of this §10 shall survive the dissolution of Employer.

(e)Governmental Agencies. Nothing in this §10 or otherwise in this Agreement shall be deemed to prohibit Employee from contacting, speaking, participating or cooperating with any governmental agency or self-regulatory organization in any investigation, administrative proceeding or action.

(f)Severability. If the arbitration panel finds any part of this §10 illegal, invalid or unenforceable, such a finding shall not affect the legality, validity, or enforceability of the remaining parts of §10, and the illegal, invalid or unenforceable part will be stricken from this Agreement. Except as set forth in the preceding sentence, nothing contained herein shall be deemed to give the arbitration panel any authority, power or right to alter, change, amend, modify, add to, or subtract from any of the provisions of this Agreement.

§11.    PROPERTY ASSIGNMENT.

(a)Assignment. To the fullest extent permitted by law, Employee shall assign, and does hereby assign, to Employer all of Employee’s right, title and interest in and to all “Intellectual Property” (which, as used herein, shall include all original works of authorship, developments, concepts, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws) improved, developed, discovered or written by Employee, alone or in collaboration with others, while Employee is employed by Employer.

(b)Further Cooperation. Employee shall, upon request of Employer, execute, acknowledge, deliver and file any and all documents necessary or useful to vest in Employer all of Employee’s right, title and interest in and to all such matters.

§12.    GENERAL.

(a)Notices. All notices and other communications hereunder shall be in writing or by written telecommunication, and shall be deemed to have been duly given if delivered personally or if mailed by certified mail, return receipt requested, postage prepaid or sent by overnight courier, or sent by written telecommunication or telecopy, to the relevant address set forth below, or to such other address as the recipient of such notice or communication shall have specified to the other party hereto in accordance with this §12(a):

If to Employer, to:

Grosvenor Capital Management, L.P.      900 North Michigan Avenue         Suite 1100                 Chicago, Illinois 60611             Attention: Michael J. Sacks

If to Employee, to the attention of Employee at the address set forth in Employer’s records (or at such other address as may be provided in writing by Employee to Employer).

Any such notice shall be effective only when received at such address.

(b)Equitable and Other Remedies. Employee acknowledges that violation of any of the provisions of §§8 and/or 9 of this Agreement would result in irreparable injury to Employer, for which Employer would have no adequate remedy at law. Accordingly, it is agreed that Employer shall be entitled, in addition to any and all other remedies provided by law and this Agreement (including, without limitation, termination of the Separation Payments under §5(b), to equitable relief with respect to any such violation, including without limitation specific performance and preliminary and permanent

-12-

injunctive relief, with respect to any such violation, without the need to post any bond or other security, and Employee shall not assert that Employer will not suffer irreparable injury or that it has an adequate remedy at law or is otherwise not entitled to equitable relief in such circumstances. In addition to any other equitable or legal remedies to which Employer shall be entitled, Employee shall reimburse Employer for all reasonable costs and expenses (including without limitation, reasonable attorneys’ fees and expenses) incurred by Employer in connection with the enforcement of §§8 or 9 of this Agreement.

(c)Severability and Modification. Each restriction which is separately stated in any section, subsection, paragraph, or clause of §§8 or 9 of this Agreement is independent of each other such restriction, and if any such restriction is held for any reason not to be capable of modification so as to cause it to be valid and enforceable, then the invalidity or unenforceability of such restriction shall not invalidate, affect, or impair in any way the validity and enforceability of any other such restriction.

(d)Person. For purposes of this Agreement, “Person” means and includes a natural person and any other person, entity, trust or fiduciary arrangement, partnership, corporation, limited liability company, group, or association, whether or not recognized by law as having a separate legal personality.

(e)Waivers. No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege.

(f)Counterparts. This Agreement may be executed in multiple counterparts, any of which may bear the signature of only one of the two parties, and each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)Assigns. This Agreement shall be binding upon and inure to the benefit of the heirs and successors of each of the parties hereto, except that the employment obligations of and restrictions upon Employee shall not bind Employee’s heirs or successors. Neither this Agreement nor the obligations of any party hereunder shall be assignable or transferable by such party without the prior written consent of the other party hereto, except Employer may assign its rights and obligations hereunder in connection with the sale of its entire business.

(h)Entire Agreement; Supercession. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, and, by amending and restating the Existing Employment Agreement, it supercedes, from and after the Effective Date, all other prior agreements and understandings relating to the subject matter hereof. This Agreement shall not be amended except by a written instrument hereafter signed by each of the parties hereto, and no waiver or release of a party’s rights hereunder shall be effective unless made in writing by the party whose rights are thereby waived or released. This Agreement may not be amended by e-mail.

(i)Governing Law. This Agreement and the performance hereof shall be construed and governed in accordance with the laws of the State of Illinois.

(j)IRC Section 409A.

(i)To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A. Notwithstanding any provision of this Agreement to the contrary, if Employer determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, Employer shall work in good faith with Employee to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that Employer determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, including without limitation, actions intended to (i) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A; provided, that this subsection 12(j)(i) shall not create an obligation on the part of Employer to adopt any such amendment, policy or procedure or take any such other action, nor shall Employer have any liability for failing to do so.

-13-

(ii)Any right to a series of installment payments pursuant to this Agreement is to be treated as a right to a series of separate payments. To the extent permitted under Section 409A, any separate payment or benefit under this Agreement or otherwise shall not be deemed “nonqualified deferred compensation” subject to Section 409A to the extent provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception or provision of Section 409A. Any payments subject to Section 409A that are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as termination of employment) occurs shall commence payment only in the calendar year in which the consideration period or, if applicable, release revocation period ends, as necessary to comply with Section 409A. All payments of nonqualified deferred compensation subject to Section 409A to be made upon a termination of employment under this Agreement may only be made upon Employee’s “separation from service” from Employer (within the meaning of Section 409A, a “Separation from Service”).

(iii)If, at the time of a Separation from Service of Employee, Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) (a “Specified Employee”), then any payments and benefits constituting Section 409A deferred compensation to be paid or provided upon the Separation from Service of Employee shall be paid or provided commencing on the later of (i) the date that is six months after the date of such Separation from Service or, if earlier, the date of death of Employee (in either case, the “Delayed Payment Date”), or (ii) the date or dates on which such Section 409A deferred compensation would otherwise be paid or provided. All such amounts that would, but for this subsection 12(j), become payable prior to the Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.

(iv)To the extent that any payments or reimbursements provided to Employee under this Agreement are deemed to constitute compensation to Employee to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or reimbursed reasonably promptly, but not later than December 31 of the year following the year in which the expense was incurred. The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and Employee’s right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.

(v)To the extent that any payment or benefit to be received by Employee hereunder is to be offset hereunder, such offset may occur only if it would not result in an impermissible acceleration or deferral under Section 409A.

[The remainder of this page is left intentionally blank]

[Signature page follows]

-14-

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this Agreement to be duly executed as of the Effective Date.

EMPLOYER

GROSVENOR CAPITAL MANAGEMENT, L.P.

Date:        5/9/2023                By: /s/ Michael J. Sacks

Name: Michael J. Sacks

Title: Chief Executive Officer

EMPLOYEE

Date:        5/9/2023                /s/ Frederick E. Pollock

Frederick E. Pollock

-15-

Document

Exhibit 31.1

CERTIFICATION

I, Michael J. Sacks, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of GCM Grosvenor Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2023	By:	/s/ Michael J. Sacks
		Michael J. Sacks
		Chief Executive Officer<br><br>(principal executive officer)

Document

Exhibit 31.2

CERTIFICATION

I, Pamela L. Bentley, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of GCM Grosvenor Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2023	By:	/s/ Pamela L. Bentley
		Pamela L. Bentley
		Chief Financial Officer<br><br>(principal financial officer)

Document

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of GCM Grosvenor Inc. (the “Company”) for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2023	By:	/s/ Michael J. Sacks
		Michael J. Sacks
		Chief Executive Officer<br><br>(principal executive officer)

Document

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of GCM Grosvenor Inc. (the “Company”) for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)    The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 10, 2023	By:	/s/ Pamela L. Bentley
		Pamela L. Bentley
		Chief Financial Officer<br><br>(principal financial officer)