Earnings Call Transcript - GCMG Q2 2025

Operator, Operator

Good day, and welcome to the GCM Grosvenor Second Quarter 2025 Results Webcast. As a reminder, this call will be recorded. I would now like to hand the call over to Stacie Selinger, Head of Investor Relations. You may begin.

Stacie Driebusch Selinger, Head of Investor Relations

Thank you. Good morning, and welcome to GCM Grosvenor's Second Quarter 2025 Earnings Call. Today, I am joined by GCM Grosvenor's Chairman and Chief Executive Officer, Michael Sacks; President, Jon Levin; and Chief Financial Officer, Pam Bentley. Before we discuss this quarter's results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business, our financial performance and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties and other important factors that may cause our actual results to differ materially from those indicated by the forward-looking statements on this call. Please refer to the factors in the Risk Factors section of our 10-K, our other filings with the Securities and Exchange Commission and our earnings release, all of which are available on the Public Shareholders section of our website. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP metrics to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are available on our website. Thank you again for joining us. And with that, I'll turn the call over to Michael to discuss our results.

Michael Jay Sacks, Chairman and CEO

Thank you, Stacie. We are pleased to report another strong quarter for GCM Grosvenor, led by strong investment performance, strong fundraising, financial results in line with expectations and positive business developments that will benefit us in the long run. For the quarter, our fee-related earnings, adjusted EBITDA and adjusted net income were up 6%, 9% and 9%, respectively, as compared to the second quarter of 2024. Year-to-date fee-related earnings, adjusted EBITDA and adjusted net income were up 14%, 17% and 19% as compared to the first half of 2024. Our fee-related earnings margin for the quarter was 42%, which is 200 basis points higher than the second quarter of last year. We ended the quarter with $86 billion of total assets under management, a 5% increase compared to the end of the first quarter of 2025. Our AUM growth was led by excellent ARS performance, moderate ARS inflows and another strong fundraising quarter for private market strategies. In total, we raised $2.4 billion in the quarter, bringing our first half of the year fundraising to $5.3 billion, a 52% increase from the first half of 2024 and our highest first half fundraising total on record. There continues to be a tremendous amount of activity with a very visible full fundraising pipeline. Given the strong fundraising thus far and our significant pipeline, our goal of 2025 fundraising exceeding 2024 fundraising is highly likely. The only question is by how much we exceed last year's total. We expect second half fundraising to be weighted towards the fourth quarter. Demand activity levels and pipeline are strong for alternatives generally, and our investment performance has been solid. There are 3 areas of recent particular strength around the firm worth noting. The first is infrastructure, which accounted for $1.9 billion of fundraising in the first half of the year and remains a great contributor to growth within the firm. While not a new story, the growth is persistent and likely accelerating. Jon will talk about our infrastructure platform, its innovation and its prospects during his remarks. Private credit was the highest contributor to our fundraising for the quarter. We believe that market remains strong and importantly, for us, is evolving in ways that benefit our business. We expect investors to increasingly seek greater diversification within their private credit allocations. And as we have discussed in the past, our sourcing breadth and our flexibility to invest via funds and directly, including co-investments and secondaries, whether in credit-focused separate accounts or specialized funds, leaves us well positioned to continue to grow our credit vertical. The third point we wanted to touch on relates to our absolute return strategies vertical, which had an excellent quarter led by strong investment results and strong first half fundraising. Performance for the quarter was good with our multi-strategy composite returning approximately 6% on a gross basis, increasing fee-paying AUM heading into the second half of the year. In addition, that strong performance has resulted in an additional $18 million of accrued unrealized annual performance fees as of June 30. Our ARS strategy saw $1 billion of gross fund flows for the first half of the year with net inflows of approximately $400 million for the second quarter. While we continue to model ARS as a flat net flows business in our internal forecast, the sentiment has clearly improved. The combination of performance and flows has seen fee-paying AUM in ARS up 7% year-to-date and 10% over the last 12 months. In addition to these areas of demonstrable strength, we wanted to touch on a few topics of note. We continue to make steady progress building out our individual investor channel efforts with Grove Lane, our distribution joint venture, adding 4 people to the team in the past quarter and our infrastructure interval fund making steady progress with regard to important operational milestones and starting to generate sales. We continue to emphasize the long-term nature of this opportunity and caution against overoptimistic short-term assumptions. That said, we are very optimistic with regard to this channel's potential for us in the intermediate to long term. Next, we're in the market with a structured alternative investment solution in the form of a CFO, where the assets will be invested in our credit strategy. We expect to close that transaction in the second half of the year, which will contribute to fundraising. This is our second CFO, and we intend to continue to sponsor collateralized fund obligations from time to time going forward. This wouldn't be a second quarter 2025 earnings call without mentioning AI, which is a key strategic focus inside of Grosvenor. It is a daily conversation somewhere within the firm. Adoption and use are increasing rapidly, and it will no doubt make us a better, more efficient and more profitable company over time. Finally, with regard to the macro environment, our fundraising results to date prove out the strong continuing demand for alternative investments. Today, there is more clarity regarding tax policy and the environment feels better compared to the period immediately following the introduction of increased tariffs at the beginning of the second quarter. Transaction activity seems to be starting to accelerate from recent lows and the IPO market has some life with regard to certain sectors. Realizations have ticked up since 2024. That said, we continue to see plenty of volatility around interest rates, tariffs and policy generally, and we have not abandoned caution. Our teams remain focused on investing client capital on a disciplined programmatic basis and are well positioned to take advantage of opportunities with $12 billion of dry powder. We remain positioned to benefit significantly from unlocked value in our unrealized carried interest at NAV, which surpassed $900 million this quarter. Half of this carry balance or approximately $450 million is owned by the firm, which translates into approximately $2.30 per share. That $450 million in firm share of carry at NAV was up approximately 9% or $35 million from last quarter and is over 3x higher than where it was at the end of 2020 despite the firm collecting nearly $100 million of revenue during that period of time. Finally, we are pleased to announce that GCM Grosvenor will host its first Investor Day on October 15 in New York. We look forward to showcasing our team, highlighting our value proposition and walking you through our growth profile at that time. We hope you can join us. And with that, I'll turn the call over to Jon.

Jonathan Reisin Levin, President

Thank you, and good morning. As Michael noted, the focus of my remarks this quarter is our infrastructure platform. That business has been a key growth driver for us. And more broadly, the infrastructure platform is emblematic of the firm's value proposition to clients, our competitive advantages and our growth opportunities across the platform and the different verticals. Let's first briefly touch on the attractiveness of infrastructure as an asset class. Investors are drawn to infrastructure's predictable cash flows, long duration and inflation hedging properties. Core plus and value-add infrastructure assets, which is our focus, tend to be less correlated to traditional equity and fixed income markets, offering resiliency amidst market volatility. The global need for infrastructure capital is massive and global demand for infrastructure's properties as a risk asset has major tailwinds. Fueled by aging systems, urbanization, energy transition and digital innovation, some estimates put the need for infrastructure capital in excess of $100 trillion over the coming 15 years. While infrastructure assets are as old as the world, infrastructure as an investable asset class is still relatively new. Many investors are still underallocated to infrastructure relative to asset allocation plans. Recent studies suggest that over 90% of investors plan to either maintain or grow their infrastructure allocations over the future periods. As the asset class matures, we're seeing the same type of evolution we saw in the private equity markets, but it's happening much faster. We see thoughtful diversification across market capitalizations, subsectors and geographies. And we're seeing the development of robust secondaries and co-investment markets. Our infrastructure platform is ideally positioned to capitalize on these trends. With over 2 decades of experience, our platform is among the most tenured in the industry. It's global by design with investment professionals across the U.S., Canada, Europe and Asia. What sets us apart is the breadth, depth and flexibility of our manufacturing engine in combination with a client delivery mechanism that can meet varied needs. Our sourcing model is broad and scalable. Our deep relationships across the infrastructure ecosystem unlock investment opportunities of all types, direct control investments, consortium deals, co-investments and secondaries flow. We look at hundreds, if not thousands of deals a year. With our flexible investment model, we are closing on some sort of transaction, whether it be a fund commitment or a direct-oriented deal every 2 to 3 weeks. This origination platform enables us to build diversified portfolios for our clients quickly and cost effectively. We're especially strong in small and mid-cap investments, a segment often overlooked by many investors. This combination of robust origination, asset-based focus and quicker deployment enables us to build more holistic client solutions that are more diversified than your typical infrastructure fund. Our client offerings have exposure to a large number of investments, and those investments are diversified by investment partners, geography and sector. Infrastructure has been the leading contributor to our fundraising success this year, accounting for over 35% of total capital raised. Since going public, we've raised $12.5 billion for infrastructure, proof of the strong demand for our strategies and the trust placed in us by our clients. The results speak for themselves. Our infrastructure AUM has nearly tripled since 2020 from $6 billion to $17 billion, a 26% CAGR. We now serve over 150 institutional clients across customized solutions and specialized funds. We're one of the few firms capable of being a complete solution for clients' infrastructure allocations and our separate account practice has flourished with both comprehensive and completion offerings. But we're not just growing, we're innovating. As previously discussed, we launched the infrastructure interval fund this year with a $320 million seeded portfolio. It's an early mover in the individual investor channel with a unique position in the market, and we're encouraged by early traction. Additionally, this quarter, we announced our partnership with Wilshire Indexes to launch the FT Wilshire Private Markets Infrastructure Index, the first comprehensive benchmark for private infrastructure. Wilshire Indexes will govern the index while we contribute market and risk insights. We also plan to launch single point of entry investment vehicles tracking the index, further expanding access to diversified infrastructure for broad groups of investors. We believe infrastructure capital formation will continue to outpace broader private markets. And with our experience, sourcing capabilities and innovation, we're positioned to capture more than our fair share of that growth. And with that, I'll turn the call over to Pam.

Pamela Lyn Bentley, CFO

Thanks, Jon. We are pleased with our second quarter results, which highlight the multiple avenues we have to achieve success and drive growth. Given our strong fundraising and investment performance this quarter, assets under management grew to $86 billion and fee-paying AUM grew to $69 billion, a 9% increase year-over-year, respectively. Our contracted not yet fee-paying AUM grew 19% year-over-year to $8.7 billion, providing a foundation for continued organic growth as that capital converts to fee-paying AUM over the next few years. Year-to-date private markets management fees grew 11% year-over-year from a combination of solid fundraising and conversion of contracted not yet fee-paying AUM. We expect third quarter private markets management fees to increase in the low single digits on a sequential quarter basis. As a reminder, we are not expecting material catch-up fees in the back half of the year. Absolute return strategies had a strong first half of the year, both from investment performance and flows. We anticipate that ARS management fees in the third quarter will increase slightly from this quarter. Turning to expenses. Our compensation philosophy is centered on attracting and retaining top talent by aligning their interest with those of our clients and shareholders. We do this through a combination of annual and long-term incentives, including FRE compensation, incentive fee-related compensation and equity awards. We remain disciplined in managing expenses and second quarter FRE compensation slightly declined from the first quarter to $37 million. Non-GAAP general, administrative and other expenses were stable at $21 million. We expect FRE compensation and our non-GAAP general administrative and other expenses to remain stable in the third quarter. Pulling together these factors, on a year-to-date basis, our fee-related earnings grew 14% year-over-year, resulting in expansion of our FRE margin to 43%. Turning to incentive fees. We realized $16 million in the quarter, comprised of $1 million of annual performance fees and $15 million of carried interest. We're seeing some positive indicators in the deal market that will eventually translate into more normalized levels of carry realizations. We have substantial embedded incentive fee earnings potential from unrealized carried interest of over $900 million as of quarter end. As for annual performance fees, our run rate now stands at $32 million based on an assumed average annual gross return of 8% across multi-strategy portfolios. Given our strong ARS investment performance year-to-date, we have $18 million in unrealized performance fees as of quarter end in addition to the $5 million we realized during the first half of the year. Last quarter, we spoke about our Japanese partnership, which we believe will provide significant lift to our strategic positioning and capital raising efforts in the region. The partnership included the issuance of approximately 3.8 million Class A shares at a price of $13.32 per share. Separately, in the quarter, we actively managed dilution from employee stock-based compensation through our buyback program and repurchased approximately $25 million of Class A stock. This morning, we announced a $30 million increase to our buyback authorization, bringing the remaining amount available to $87 million. Our financial position is strong, reflecting robust cash generation, investment appreciation and growing unrealized carried interest. Our primary focus remains on strategically investing for long-term growth. We also continue to pay a healthy quarterly dividend of $0.11 per share with potential for future increases as earnings momentum builds. Our business is built on a strong foundation and is well positioned to capitalize on numerous opportunities for growth and scaling. We are excited to create further value for our clients and shareholders and remain confident in our long-term goal to double our '23 FRE by 2028. Thank you again for joining us, and we're now happy to take your questions.

Operator, Operator

As a reminder, we will now take your questions. Your first question comes from Chris Kotowski with Oppenheimer & Company.

Christoph M. Kotowski, Analyst

You talked a bit about the evergreen retail vehicle, which was seeded with $300 million of institutional money. And I'm wondering if you could talk a bit about the retail uptake on that and the strategy for building that out and also the status on the private equity vehicle.

Michael Jay Sacks, Chairman and CEO

Sure. And thanks for the question, Chris. As you know, we have a distribution partner for that infrastructure interval fund. They have a full team of salespeople that are out in the market every day. We also have the Grove Lane team helping with that. And that team, as we mentioned, is building. And I said in my remarks, we're very confident in the future of that channel for us and broadly and specifically with regard to this product, we think it's a relatively early mover in the infrastructure space, which has, we think, strong demand. We're seeing that product generate modest sales on a daily basis, and we're seeing those modest sales on a daily basis or weekly basis build. And we're very enthusiastic about that. It seems to be a lot of receptivity, a lot of interest in taking meetings and in learning and demonstrable slowly building uptake. I think, as I mentioned, my biggest concern there is that nobody gets too carried away in terms of the speed. We think it is a multiyear build, but we're certainly encouraged by everything that we see.

Jonathan Reisin Levin, President

And Chris, on the private equity side, you're probably mentioning something we had talked about a bit ago, it was probably last year, the year before, which is really different from our kind of core individual investor strategy, which we noted at the time. That was a situation where we were not the manager of a registered fund. We were just like a sub-adviser to somebody else's vehicle, almost like think of it as a separate account, Chris. And our view on that was if they raise money, great. And if they don't, we would always be in the business of making sure we have our own private equity product just like we do in the infrastructure space. And so what you should expect from us in terms of what we're talking about in private equity, and again, as Michael just said, these things take time, is our goal would be, and we work on it every day that at some point in time, you see something from us in private equity and hopefully not too long of a period of time that's similar to infrastructure in the sense that it would be our product that we manage that may or may not have a distribution partner. Certainly, Grove Lane would work on it that would be seeded by one of our clients or one of our relationships that would have assets in it sourced out of our portfolio, which was one of the great attributes of the infrastructure product. And that's where our focus will be. And obviously, we'll communicate that in due course.

Operator, Operator

Your next question is coming from the line of Ken Worthington with JPMorgan.

Kenneth Brooks Worthington, Analyst

So absolute returns, your absolute return business had better returns, better gross sales, solid gross redemption levels. Does it seem like 2Q is a one-off? Or do you feel like the business has kind of really turned the corner here and not that we would expect positive flows forever here, but like have we sort of reached a tipping point for that business given this combination of better market conditions, better performance and so on?

Michael Jay Sacks, Chairman and CEO

Thanks, Ken, for the question. As I said in my remarks, we have not changed our internal forecasting with regard to flat flows. That said, the performance this year, the performance of the last couple of years and the performance rebound in the second quarter, no doubt help. And typically, when you have good performance, your pipeline builds in the wake of that performance. And so we're not moving off that internal assumption set, but it's clearly a better position, a better environment with a better outlook for ARS than we've been in for a while, and we've seen that in the last 6 months.

Kenneth Brooks Worthington, Analyst

Okay. And then still absolute return. The fee rate, which had been so resilient, fell a couple of basis points this quarter. Maybe talk about the influences of the fee rate this quarter? Was it flows? Or how is the mix adjusting to drive the fee rate numbers that we see in the deck?

Jonathan Reisin Levin, President

Yes, it came out. Michael Jay Sacks: Jon, go ahead. Sorry, Jon, go ahead. You go ahead, Jon. Yes, I was just going to mention that it's unique, Ken. In any given quarter, one portfolio may perform slightly better than another due to factors like the size of the investors and different fees. The flows in that specific quarter can also play a role. The key point I want to emphasize is that as we price our business and engage with clients, as Michael mentioned, we're not anticipating a significant change. However, from my experience spending a lot of time meeting with clients, this topic is more relevant now than it has been in a long time. The fee landscape remains stable regarding how we are pricing that business.

Kenneth Brooks Worthington, Analyst

Okay, excellent.

Michael Jay Sacks, Chairman and CEO

Yes, the demand is more relevant to Jon's point than it has been for quite some time. However, we are not experiencing significant discussions about fees, and we believe the fee structure remains stable.

Kenneth Brooks Worthington, Analyst

Okay. That always makes sense.

Jonathan Reisin Levin, President

You can't really see this in the numbers, but it's interesting to consider how people perceive that business. Don't hold me to the exact figures, but there was a time around Liberation Day when there was probably a market downturn in the low double-digit range. This was a period where we could observe performance and assess its effects. We experienced about a 10% capture of that downturn, which is a very good interval for protective capital. Often, the challenge after such an environment is whether you can participate in the rebound, and here we did see some positive capture on the recovery as well. I believe this time of volatility has opened the eyes of some investors.

Operator, Operator

Your next question is coming from the line of Jeff Schmitt with William Blair.

Jeffrey Paul Schmitt, Analyst

How have re-ups been in this kind of volatile environment versus a typical year? Have you seen any pauses at all? Or how is that, I guess, percentage of total fundraising been trending?

Michael Jay Sacks, Chairman and CEO

Jon, you have some specifics on fundraising re-ups and new investors that are worth sharing. In general, the re-ups are very strong, and we continue to maintain a very high re-up business. Our client tenure and re-ups are consistently a strong positive aspect of the business with no decline whatsoever.

Jonathan Reisin Levin, President

Yes. And then... I was just going to say to follow up on Michael's point, what you saw during a period of time maybe in '23, which was obviously like a weaker period of time of capital formation for the industry for us is you saw the elongation of re-up periods. You didn't see people not re-upping. You just saw people slowing down programs because of denominator effect, market uncertainty and things of that nature. We always said '24 would be better than '23. That happened. We always said '25 is going to be better than '24. As Michael said in his remarks, we feel good about '25 being better than '24. And part of that is just a function of kind of re-up cycles getting back to probably more normalized time frames. And one of the things that we really like in our business in particular is if you look at capital raising over long periods of time, in any given year, you get about 70% or 80% of that capital raising coming from your existing clients. And of that, you have about half of that being people that are just re-upping with you to do the same thing they've always done. About half of that is an existing client doing something new with you, which is just a great example of the power of the cross-sell, the power of the value proposition to clients as you can deepen those relationships and then obviously, you're picking up new clients every year as well.

Jeffrey Paul Schmitt, Analyst

Okay. And then are you seeing any fee pressures in private markets in this environment? I mean, I know some of the specialized funds are coming on at higher fees, but the overall fee rate in private markets is down a little bit. But just curious if there's any pressures in specific verticals.

Michael Jay Sacks, Chairman and CEO

No, the conversations about fees have been constructive everywhere, and it's not currently a major area of focus on fees.

Operator, Operator

Your next question is coming from the line of Bill Katz with TD Cowen.

William Raymond Katz, Analyst

So maybe just tapping into, Jon, your conversation on the infrastructure side. I was wondering if you could step back a little bit. I know you had an Investor Day on this a little while ago, but maybe just remind us on just sort of the differentiated origination capabilities, if you will? And then relatedly, I was wondering if you could just speak to the fact that you feel pretty good about the sales opportunity in the second half of the year and where you sort of see that across the verticals, whether it be the SMA side or on the specialized side.

Jonathan Reisin Levin, President

I'll address the first part of your question regarding infrastructure, and then I’ll let Michael discuss the sales opportunities for the latter half of the year. On the infrastructure side, I want to emphasize that my response could also apply to private equity and private credit. The core concept here is our flexible investment model, which allows us to deploy capital in various funds, although this represents a relatively small portion of our infrastructure practice, around 20% to 30%. We can also engage in co-investments, but the co-investment market in infrastructure is still developing. This means co-investments aren’t always straightforward, like standard private equity deals; they may involve consortium agreements or leading roles on transactions where we could be significant investors alongside the sponsor. The secondaries market is also becoming more active, particularly for single asset transactions. This is intriguing because long-term asset holders may look to exit when market conditions are less favorable, allowing us to purchase assets at compelling times. Moreover, our infrastructure advantage strategy lets us take control positions in infrastructure. With multiple investment avenues available, we’re not limited to our own sourcing; direct infrastructure firms might close three or four deals a year at most. In contrast, by leveraging external opportunities, we can access much more deal flow. As I mentioned earlier, we may close on deals every few weeks instead of the few months it would take a direct firm. When considering infrastructure as a credit asset rather than a private equity asset, we find that diversification is crucial to mitigate risk, especially since tough investments can't be easily bailed out. Therefore, it's important to avoid left-tail risks, and our diversified approach has proven beneficial for our clients. We focus on net returns without getting bogged down by deal classifications, which allows us to build diversified portfolios quickly and economically on a global scale.

Michael Jay Sacks, Chairman and CEO

Thank you, Bill, for your questions. Regarding fundraising, we had a very strong first half. We plan to raise more capital this year compared to last year, and the only question is how much more. Our pipeline is robust, with many opportunities close to finalization, so we feel confident about fundraising in the second half and into the first quarter of next year. We expect the second half fundraising to be primarily concentrated in the fourth quarter due to the timing of anticipated signings and closings. While it’s challenging to predict the exact size of the second half fundraising and whether any significant deals will extend into the first quarter, we have a positive outlook on fundraising. It’s important to note that we don’t have a major catch-up fee product available in the market, so we don’t anticipate seeing significant numbers in that area during the second half. Consequently, while we expect substantial fundraising, it may not significantly impact revenue for 2025. The guidance provided by Pam for Q3 appears solid, and although we look forward to a strong Q3 and an even better Q4 regarding fundraising, we expect to see the benefits reflected in our revenue moving into next year.

Operator, Operator

Okay. Super helpful. And if I could ask maybe one follow-up. Normally, I wouldn't ask this kind of question on a call here, but I'm sort of intrigued that you sort of proffered it up in your prepared remarks. Can you talk a little bit about the AI opportunity maybe at either the portfolio level or at the operational level and how we should think about maybe modeling that through from an earnings perspective?

Michael Jay Sacks, Chairman and CEO

Let me share a few thoughts and then Jon can chime in since he has been dedicating a lot of time to this topic. We are actively pursuing this opportunity across the board. When I mention that there is an AI discussion happening every day within the firm, it signifies our focus on each investment area and how AI contributes to enhancing our efficiency as investors. It assists us in terms of margins and workload, ultimately helping us make improved investment decisions. From an operational standpoint, this applies to all departments within the firm as well. For instance, how does it benefit our client service efforts and support our legal and finance teams? It has become a significant focus for senior management, and I believe it holds great potential. This topic is so crucial that it seems impossible to imagine our Q2 '25 call without discussing it. It positively impacts our long-term margin and efficiency, giving us peace of mind. Jon?

Jonathan Reisin Levin, President

Yes, I would just add that I wouldn’t recommend anything specific for your model, Bill, but what we've indicated is that we have operating leverage in the business. We have seen continued margin improvement, around 1,200 basis points or so over the past five years, and we believe there is still room for further margin growth. I think that’s all encompassed here, so it’s not just a unique modeling exercise but also supports scalability. I have to say that my favorite meeting of the month is when our Chief Technology Officer and I meet with our top five users of Enterprise ChatGPT. We do this every month to understand their usage, what has been successful, and to spread best practices throughout the firm. As Michael noted, this is happening every day across the organization, and our job as the leadership team is to figure out how to scale those best practices while preserving the entrepreneurial spirit and curiosity we see among our employees. I can share numerous examples of small victories, though they might not make a huge impact to you, they represent incremental progress. For instance, our tax team recently created a Custom GPT that allows them to read tax returns and automatically input data that was previously done manually. In the private markets industry, much of this is not done by facts anymore, but rather with many PDFs. The ability to extract information from PDFs, whether reports on portfolio companies or financial statements that used to be manually entered, and automatically input that data into our data lake is remarkable. There are many exciting use cases, such as generating the first draft of a marketing deck for a client using GPT, which can then be tailored and verified for accuracy since we know it can sometimes produce incorrect information. There are creative and productive applications emerging everywhere, and we encourage everyone to view it as not just a tool for efficiency but also as a creative partner. So, you're witnessing this across the industry, Bill, and we are still in the early days.

Operator, Operator

Your next question is coming from the line of Crispin Love with Piper Sandler.

Crispin Elliot Love, Analyst

First on fundraising, do you expect a first close for GSF IV in the second half? And then are there any other meaningful closes we should be looking out for in the second half that are currently in market?

Jonathan Reisin Levin, President

We had a first close for GSF in July, although you won't see it in this report because it happened after the quarter. We'll discuss that more in the next quarter. Additionally, we anticipate having a first close on our CIS IV infrastructure product towards the end of this year.

Crispin Elliot Love, Analyst

Great, Jon. I appreciate that. And then just one last modeling question. Is your 5% to 8% private markets management fee growth for the year unchanged? I just don't think I heard any color on that in the prepared remarks.

Michael Jay Sacks, Chairman and CEO

Yes, unchanged.

Operator, Operator

And it appears there are no additional questions at this time. I'll now turn the call back to you for any closing remarks.

Stacie Driebusch Selinger, Head of Investor Relations

Thank you. Thank you, everyone, for joining us today. We appreciate the interest and the questions, and we look forward to speaking with you again next quarter, if not sooner. Have a great day.

Operator, Operator

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. We hope everyone has a great day. You may all disconnect.