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 September 30, 2022

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 November 4, 2022, there were 42,238,879 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 September 30, 2022 and December 31, 2021	4
	Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	6
	Condensed Consolidated Statements of Equity (Deficit) for the Three and Nine Months Ended September 30, 2022 and 2021	7
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	9
	Notes to Condensed Consolidated Financial Statements	10
Item2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item3.	Quantitative and Qualitative Disclosures about Market Risk	49
Item 4.	Controls and Procedures	49
Part II - Other Information
Item1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item6.	Exhibits	51
Signatures		52

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;

•“Mosaic” are to Mosaic Acquisitions 2020, L.P.;

•“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 expectations regarding the impact of COVID-19 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 effect of the COVID-19 pandemic on GCM Grosvenor’s business; 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, 2021 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
	September 30, 2022		December 31, 2021
	(Unaudited)
Assets
Cash and cash equivalents	$	101,575	$	96,185
Management fees receivable	17,249		21,693
Incentive fees receivable	27,219		91,601
Due from related parties	11,927		11,777
Investments	223,969		226,345
Premises and equipment, net	5,589		5,411
Lease right-of-use assets	12,146		—
Intangible assets, net	4,519		6,256
Goodwill	28,959		28,959
Deferred tax assets, net	61,806		68,542
Other assets	54,096		24,855
Total assets	549,054		581,624
Liabilities and Equity (Deficit)
Accrued compensation and benefits	68,494		98,132
Employee related obligations	31,271		30,397
Debt	388,348		390,516
Payable to related parties pursuant to the tax receivable agreement	59,313		59,366
Lease liabilities	15,615		—
Warrant liabilities	10,540		30,981
Accrued expenses and other liabilities	22,440		28,033
Total liabilities	596,021		637,425
Commitments and contingencies (Note 14)
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; 42,534,524 and 43,964,090 issued and outstanding as of September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 2021	14		14
Additional paid-in capital	—		1,501
Accumulated other comprehensive income (loss)	4,982		(1,007)
Retained earnings	(23,909)		(26,222)
Total GCM Grosvenor Inc. deficit	(18,909)		(25,710)
Noncontrolling interests in subsidiaries	81,835		96,687
Noncontrolling interests in GCMH	(109,893)		(126,778)
Total deficit	(46,967)		(55,801)
Total liabilities and equity (deficit)	$	549,054	$	581,624

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues
Management fees	$	90,715	$	87,796	$	275,655	$	256,015
Incentive fees	45,467		29,178		67,964		79,619
Other operating income	1,032		1,101		3,083		5,363
Total operating revenues	137,214		118,075		346,702		340,997
Expenses
Employee compensation and benefits	86,502		72,867		213,836		232,054
General, administrative and other	21,982		20,131		66,333		66,314
Total operating expenses	108,484		92,998		280,169		298,368
Operating income	28,730		25,077		66,533		42,629
Investment income (loss)	(2,276)		13,732		7,387		40,239
Interest expense	(5,797)		(5,432)		(16,672)		(14,486)
Other income	87		1,329		88		2,385
Change in fair value of warrant liabilities	(3,790)		(9,550)		17,872		(2,231)
Net other income (expense)	(11,776)		79		8,675		25,907
Income before income taxes	16,954		25,156		75,208		68,536
Provision for income taxes	2,789		2,450		7,133		3,991
Net income	14,165		22,706		68,075		64,545
Less: Net income attributable to redeemable noncontrolling interest	—		—		—		19,827
Less: Net income attributable to noncontrolling interests in subsidiaries	1,719		10,142		7,399		30,439
Less: Net income attributable to noncontrolling interests in GCMH	9,347		8,508		45,246		7,020
Net income attributable to GCM Grosvenor Inc.	$	3,099	$	4,056	$	15,430	$	7,259
Earnings per share of Class A common stock:
Basic	$	0.07	$	0.09	$	0.35	$	0.17
Diluted	$	0.02	$	0.03	$	0.23	$	0.03
Weighted average shares of Class A common stock outstanding:
Basic	43,518,580		44,387,598		44,401,559		43,673,347
Diluted	187,899,485		188,877,077		188,964,526		188,136,198

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(In thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income	$	14,165	$	22,706	$	68,075	$	64,545
Other comprehensive income (loss):
Net change in cash flow hedges	13,861		2,005		40,375		3,349
Foreign currency translation adjustment	(1,278)		(290)		(3,637)		(908)
Total other comprehensive income	12,583		1,715		36,738		2,441
Comprehensive income before noncontrolling interests	26,748		24,421		104,813		66,986
Less: Comprehensive income attributable to redeemable noncontrolling interest	—		—		—		19,827
Less: Comprehensive income attributable to noncontrolling interests in subsidiaries	1,719		10,142		7,399		30,439
Less: Comprehensive income attributable to noncontrolling interests in GCMH	19,065		9,812		73,495		8,891
Comprehensive income attributable to GCM Grosvenor Inc.	$	5,964	$	4,467	$	23,919	$	7,829

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 June 30, 2022	$	4	$	14	$	1,775	$	(22,400)	$	2,984	$	82,938	$	(110,267)	$	(44,952)
Capital contributions from noncontrolling interests in subsidiaries	—		—		—		—		—		395		—		395
Capital distributions paid to noncontrolling interests	—		—		—		—		—		(3,217)		—		(3,217)
Repurchase of Class A common stock	—		—		(1,746)		(79)		—		—		(6,206)		(8,031)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		—		(1,326)		—		—		—		(4,527)		(5,853)
Partners’ distributions	—		—		—		—		—		—		(19,525)		(19,525)
Deemed contributions	—		—		—		—		—		—		7,329		7,329
Net change in cash flow hedges	—		—		—		—		3,157		—		10,704		13,861
Translation adjustment	—		—		—		—		(292)		—		(986)		(1,278)
Equity-based compensation	—		—		1,238		—		—		—		4,208		5,446
Declared dividends	—		—		—		(4,499)		—		—		—		(4,499)
Deferred tax and other tax adjustments	—		—		59		—		(867)		—		—		(808)
Equity reallocation between controlling and non-controlling interests	—		—		—		(30)		—		—		30		—
Net income	—		—		—		3,099		—		1,719		9,347		14,165
Balance at September 30, 2022	$	4	$	14	$	—	$	(23,909)	$	4,982	$	81,835	$	(109,893)	$	(46,967)
	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	—		—		—		—		—		1,359		—		1,359
Capital distributions paid to noncontrolling interests	—		—		—		—		—		(23,610)		—		(23,610)
Repurchase of Class A common stock	—		—		(4,623)		(79)		—		—		(15,787)		(20,489)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		—		(1,464)		—		—		—		(4,981)		(6,445)
Partners’ distributions	—		—		—		—		—		—		(71,664)		(71,664)
Deemed contributions	—		—		—		—		—		—		21,471		21,471
Net change in cash flow hedges	—		—		—		—		9,327		—		31,048		40,375
Translation adjustment	—		—		—		—		(838)		—		(2,799)		(3,637)
Equity-based compensation	—		—		4,583		—		—		—		15,270		19,853
Declared dividends	—		—		—		(13,957)		—		—		—		(13,957)
Deferred tax and other tax adjustments	—		—		3		—		(2,500)		—		—		(2,497)
Equity reallocation between controlling and non-controlling interests	—		—		—		919		—		—		(919)		—
Net income	—		—		—		15,430		—		7,399		45,246		68,075
Balance at September 30, 2022	$	4	$	14	$	—	$	(23,909)	$	4,982	$	81,835	$	(109,893)	$	(46,967)

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Equity (Deficit) — (Continued)

(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)		Redeemable Noncontrolling Interest
Balance at June 30, 2021	$	4	$	14	$	15,383	$	(33,185)	$	(2,209)	$	98,707	$	(128,532)	$	(49,818)	$	125,923
Capital contributions from noncontrolling interests in subsidiaries	—		—		—		—		—		500		—		500		—
Capital distributions paid to noncontrolling interests	—		—		—		—		—		(4,910)		—		(4,910)		—
Capital distributions paid to redeemable noncontrolling interest	—		—		—		—		—		—		—		—		(34,464)
Exercise of Mosaic Call Right	—		—		(14,033)		—		—		—		(47,462)		(61,495)		(91,459)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		—		(2,479)		(499)		—		—		(3,921)		(6,899)		—
Partners’ distributions	—		—		—		—		—		—		(19,295)		(19,295)		—
Deemed contributions	—		—		—		—		—		—		6,029		6,029		—
Net change in cash flow hedges	—		—		—		—		479		—		1,526		2,005		—
Translation adjustment	—		—		—		—		(68)		—		(222)		(290)		—
Equity-based compensation	—		—		1,345		—		—		—		4,470		5,815		—
Declared dividends	—		—		—		(4,235)		—		—		—		(4,235)		—
Deferred tax and other tax adjustments	—		—		(216)		—		(47)		—		—		(263)		—
Equity reallocation between controlling and non-controlling interests	—		—		—		(1,914)		—		—		1,914		—		—
Net income (loss)	—		—		—		4,056		—		10,142		8,508		22,706		—
Balance at September 30, 2021	$	4	$	14	$	—	$	(35,777)	$	(1,845)	$	104,439	$	(176,985)	$	(110,150)	$	—
	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)		Redeemable Noncontrolling Interest
Balance at December 31, 2020	$	4	$	14	$	2,705	$	(29,832)	$	(2,233)	$	94,013	$	(146,861)	$	(82,190)	$	115,121
Capital contributions from noncontrolling interests in subsidiaries	—		—		—		—		—		2,558		—		2,558		11
Capital distributions paid to noncontrolling interests	—		—		—		—		—		(22,571)		—		(22,571)		—
Capital distributions paid to redeemable noncontrolling interest	—		—		—		—		—				—		—		(43,500)
Issuance of Class A common stock due to exercised warrants	—		—		5,252		—		—		—		18,064		23,316		—
Exercise of Mosaic Call Right	—		—		(14,033)		—		—		—		(47,462)		(61,495)		(91,459)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	—		—		(2,479)		(499)		—		—		(3,921)		(6,899)		—
Partners’ distributions	—		—		—		—		—		—		(57,998)		(57,998)		—
Deemed contributions	—		—		—		—		—		—		20,958		20,958		—
Net change in cash flow hedges	—		—		—		—		777		—		2,572		3,349		—
Translation adjustment	—		—		—		—		(207)		—		(701)		(908)		—
Equity-based compensation	—		—		8,654		—		—		—		29,430		38,084		—
Declared dividends	—		—		—		(10,791)		—		—		—		(10,791)		—
Deferred tax and other tax adjustments	—		—		(99)		—		(182)		—		—		(281)		—
Equity reallocation between controlling and non-controlling interests	—		—		—		(1,914)		—		—		1,914		—		—
Net income (loss)	—		—		—		7,259		—		30,439		7,020		44,718		19,827
Balance at September 30, 2021	$	4	$	14	$	—	$	(35,777)	$	(1,845)	$	104,439	$	(176,985)	$	(110,150)	$	—

See accompanying notes to Condensed Consolidated Financial Statements.

GCM Grosvenor Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities
Net income	$	68,075	$	64,545
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	2,913		3,037
Equity-based compensation	19,853		38,083
Deferred taxes	4,405		2,083
Other non-cash compensation	1,157		2,704
Partnership interest-based compensation	21,471		20,958
Amortization of debt issuance costs	832		743
Amortization of terminated swap	4,068		3,263
Loss on extinguishment of debt	—		675
Change in fair value of derivatives	—		212
Change in fair value of warrant liabilities	(17,872)		2,231
Amortization of deferred rent	26		(1,184)
Proceeds received from investments	18,701		15,417
Non-cash investment (income) loss, net	(7,387)		(40,239)
Other	(82)		49
Change in assets and liabilities:
Management fees receivable	4,143		(2,484)
Incentive fees receivable	64,382		41,150
Due from related parties	(150)		1,891
Lease right-of-use assets and lease liabilities, net	(1,235)		—
Other assets	5,866		25,367
Accrued compensation and benefits	(29,179)		(1,344)
Employee related obligations	(122)		181
Accrued expenses and other liabilities	64		(32,542)
Net cash provided by operating activities	159,929		144,796
Cash flows from investing activities
Purchases of premises and equipment	(1,398)		(392)
Proceeds from assignment of aircraft share interest	—		1,337
Contributions/subscriptions to investments	(23,164)		(20,808)
Distributions from investments	14,224		7,910
Net cash used in investing activities	(10,338)		(11,953)
Cash flows from financing activities
Capital contributions received from noncontrolling interests	1,359		2,569
Capital distributions paid to partners and member	(71,664)		(57,998)
Capital distributions paid to noncontrolling interests	(23,610)		(66,071)
Exercise of Mosaic call option	—		(150,122)
Proceeds from senior loan issuance	—		110,000
Principal payments on senior loan	(3,000)		(52,259)
Debt issuance costs	—		(3,080)
Payments to repurchase Class A common stock	(20,489)		—
Proceeds from exercise of warrants	—		24,468
Payments to repurchase warrants	(2,569)		(450)
Settlement of equity-based compensation in satisfaction of withholding tax requirements	(6,445)		(6,899)
Dividends paid	(13,801)		(10,120)
Net cash used in financing activities	(140,219)		(209,962)
Effect of exchange rate changes on cash	(3,982)		(1,046)
Net increase (decrease) in cash and cash equivalents	$	5,390	$	(78,165)
Cash and cash equivalents
Beginning of period	96,185		198,146
End of period	$	101,575	$	119,981
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	12,067	$	10,080
Cash paid during the period for income taxes	$	6,605	$	4,027
Supplemental disclosure of non-cash information from financing activities
Deemed contributions from GCMH Equityholders	$	21,471	$	20,958
Establishment of deferred tax assets, net related to tax receivable agreement and the Transaction	$	3	$	(99)
Dividends declared but not paid	$	1,130	$	669

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 September 30, 2022 and December 31, 2021 was approximately 22.8% and 23.4%, 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 and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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, 2021, 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.

Continuing Impact of COVID-19

The COVID-19 pandemic and the subsequent spread of multiple variants has continued to impact the global economy and financial markets. Given the amount of uncertainty currently regarding the scope and duration of the COVID-19 pandemic, the Company is unable to predict the precise impact the COVID-19 pandemic will have on the Company’s consolidated financial statements. In line with public markets and credit indices, the Company’s investments may be adversely impacted.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act (the “IRA”) was signed into law. The IRA contains a number of tax related provisions including a 15% minimum corporate income tax on certain large corporations as well as a 1% excise tax on stock repurchases. The Company is in the process of evaluating the IRA but does not expect it to have a material impact on the Company’s consolidated financial statements.

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:

•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 (loss) in the Condensed Consolidated Statements of Income.

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.

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. See Note 6 for additional information regarding the Company’s other investments.

Leases

The Company’s leases primarily consist of operating lease agreements for office space in various countries around the world, including for its headquarters in Chicago, Illinois. On January 1, 2022, the Company adopted Accounting Standards

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Update (“ASU”) 2016-02, Leases (Topic 842) on a prospective basis. As a result, prior periods were not adjusted. The new standard requires lessees to use a right-of-use (“ROU”) model where lease ROU assets and lease liabilities are recorded on the Condensed Consolidated Statements of Financial Condition for all operating leases with initial terms exceeding one year. Lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s remaining minimum lease obligations. The Company made a permitted accounting policy election not to apply the ROU model to short-term leases, which are defined as leases with initial terms of one year or less.

The Company determines whether a contract contains a lease at inception. Lease ROU assets and lease liabilities are initially recognized on the lease commencement date based on the present value of the minimum lease payments over the lease term. When determining the lease term, the Company generally does not include options to renew as it is not reasonably certain at contract inception that the Company will exercise the option(s). The implicit rate is not generally readily determinable, so the Company uses its incremental borrowing rate to determine the present value of future minimum lease payments. Lease ROU assets may include initial direct costs incurred by the Company and are reduced by lease incentives. Operating lease expense is recognized on a straight-line basis over the lease term within general, administrative and other in the Condensed Consolidated Statements of Income.

Recently Issued Accounting Standards

Recently Issued Accounting Standards – Adopted in Current Fiscal Year

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842), which requires that operating leases be recorded as assets and liabilities in the statement of financial position, among other changes. The amendments in this ASU are effective for public business entities for annual reporting periods beginning after December 15, 2018. On June 3, 2020, the FASB extended the adoption date for all other entities to annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, with early adoption permitted. The Company adopted this standard on January 1, 2022 on a prospective basis. Adoption increased both the Company’s assets and liabilities for the recorded lease ROU and lease liability, with no material impact to the Company’s Condensed Consolidated Statements of Income as expense for operating leases continues to be recognized on a straight-line basis. The Company elected to apply practical expedients provided in the guidance to not reassess: (1) whether expired or existing contracts are or contain leases, (2) existing lease classification and (3) initial direct costs. On adoption, the Company recognized approximately $16 million of lease ROU assets and approximately $21 million of lease liabilities related to its operating leases in its Condensed Consolidated Financial Statements, including approximately $5 million that was reclassified from accrued rent (included in accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition as of December 31, 2021) to lease liabilities.

Recently Issued Accounting Standards – To be Adopted in Future Periods

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which modifies ASC 740 to simplify the accounting for income taxes. The guidance, among other changes, (i) provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax and (ii) provides guidance to evaluate whether a step-up in tax basis of goodwill relates to a business combination in which book goodwill was recognized or a separate transaction. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted. The Company will defer adoption until the guidance is effective for non-public entities, as the Company currently qualifies as an EGC and has elected to take advantage of the extended transition period afforded to EGCs as it applies to the adoption of new accounting standards. The method of adoption varies for the updates included in the ASU. The Company is evaluating this guidance but currently expects that adoption will not have a material impact on its consolidated financial statements.

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

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 is evaluating this guidance but currently expects that adoption will not have a material impact on its consolidated financial statements.

3. Mosaic Transaction

Prior to Amendment and Exercise of Mosaic Call Right

Effective January 1, 2020, the Partnership and several subsidiaries, (collectively, the “Seller”) entered into a Purchase and Sale Agreement (“Agreement”) and issued certain limited partnership interests in several subsidiaries (“Carry Plan Entities”) to Mosaic Acquisitions 2020, L.P. (“Mosaic”). In addition, Mosaic also acquired the rights to receive a percentage of carried interest from certain GCM Funds and agreed to provide additional funding under certain circumstances up to a maximum amount as defined in the Agreement (collectively, the “Mosaic Transaction”). Mosaic issued Class A and Class B equity interests to GCMH, Holdings and Mosaic Feeder, L.P. (“Mosaic Feeder”). The Partnership served as the general partner of Mosaic, which was consolidated as the Partnership holds a controlling financial interest in Mosaic. Mosaic Feeder was beneficially owned by Lakeshore Investments GP, LLC (“Lakeshore”), a related party, and an unaffiliated third-party investor (“Mosaic Counterparty”) and was not consolidated.

On December 31, 2020, the Company paid $2.6 million to Mosaic Feeder for the right, but not the obligation, to require Mosaic Feeder to sell to GCMH all of the Class A and Class B equity interests held by Mosaic Feeder in Mosaic (the “Mosaic Call Right”) for a purchase price equal to the greater of 1.3x its investment or a 12% internal rate of return on its investment.

Further, Mosaic Counterparty had the right, but not the obligation, to require the Partnership to acquire all of the Class A and Class B Interests held by Mosaic Feeder in Mosaic (the “Put Option”) for a purchase price equal to Mosaic Counterparty receiving the greater of 1.3x of its investment or a 12% internal rate of return on its investment (the “Put Price”). The Put Option could only be exercised if a Triggering Event as defined in the Agreement occurred, which management had deemed to be remote. If the Partnership declined to pay the Put Price, Mosaic Counterparty may either step in and act as the general partner of Mosaic and control Mosaic until Mosaic Counterparty recoups the Put Price or effect a transfer of the underlying assets of Mosaic to Mosaic Counterparty.

Management determined that the Mosaic Transaction should be evaluated under the guidance in ASC 810 and concluded that Mosaic was accounted for as a variable interest entity (“VIE”). The Partnership was deemed the primary beneficiary and therefore consolidated Mosaic. In addition, the Partnership concluded that the Put Option was embedded in an equity host contract but did not meet the net settlement criterion of an embedded derivative and therefore no separate accounting was required. However, as the Put Option was not solely within the control of the Partnership, the noncontrolling interest related to Mosaic had been classified as mezzanine equity.

Amendment and Exercise of Mosaic Call Right

The terms of the Mosaic Call Right were amended and the purchase price was reduced to 1.225x the investment for the period through July 15, 2021 in exchange for the Company bearing certain interim funding costs of Mosaic Feeder. On July 2, 2021, GCMH exercised the amended Mosaic Call Right to purchase the interest in Mosaic for a net purchase price of $165.0 million inclusive of distributions through the closing date but net of $19.5 million of consolidated Mosaic cash to fund investments and option premiums. GCMH’s purchase resulted in the interest previously held by Mosaic Counterparty no longer being accounted for as a redeemable noncontrolling interest of the Company following July 2, 2021. As the Company continues to consolidate Mosaic, the transaction was accounted for as an equity transaction without a change in control at the July 2, 2021 net carrying value, including associated tax impacts. As a result, $14.0 million was recorded as a reduction to additional paid-in capital and $47.5 million was recorded as a reduction to noncontrolling interests in GCMH on the Company’s Condensed Consolidated Statements of Equity (Deficit) in the third quarter of 2021.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

4. Revenue

For the three and nine months ended September 30, 2022 and 2021, management fees and incentive fees consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
Management fees	2022		2021		2022		2021
Management fees, net	$	87,600	$	85,521	$	267,669	$	248,826
Fund expense reimbursement revenue	3,115		2,275		7,986		7,189
Total management fees	$	90,715	$	87,796	$	275,655	$	256,015			Three Months Ended September 30,				Nine Months Ended September 30,
---	---	---	---	---	---	---	---	---
Incentive fees	2022		2021		2022		2021
Performance fees	$	1,006	$	316	$	2,324	$	9,320
Carried interest	44,461		28,862		65,640		70,299
Total incentive fees	$	45,467	$	29,178	$	67,964	$	79,619

The Company recognized revenues of $0.4 million for the nine months ended September 30, 2022, compared with $0.6 million and $2.3 million during the three and nine months ended September 30, 2021, respectively, that were previously received and deferred at the beginning of the respective periods. The Company did not recognize revenue during the three months ended September 30, 2022 that was previously deferred.

5. Investments

Investments consist of the following:

	As of
	September 30, 2022		December 31, 2021
Equity method investments	$	213,024	$	214,153
Other investments	10,945		12,192
Total investments	$	223,969	$	226,345

As of September 30, 2022 and December 31, 2021, the Company held investments of $224.0 million and $226.3 million, respectively, of which $71.0 million and $88.0 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 6 for fair value disclosures of certain investments held within other investments.

6. 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 September 30, 2022 and December 31, 2021:

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 September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	3,064	$	—	$	—	$	3,064
Interest rate derivatives	—		39,003		—		39,003
Other investments	—		—		9,763		9,763
Total assets	$	3,064	$	39,003	$	9,763	$	51,830
Liabilities
Public warrants	$	9,903	$	—	$	—	$	9,903
Private warrants	—		—		637		637
Total liabilities	$	9,903	$	—	$	637	$	10,540			Fair Value as of December 31, 2021
---	---	---	---	---	---	---	---	---
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	27,209	$	—	$	—	$	27,209
Interest rate derivatives	—		2,695		—		2,695
Other investments	—		—		11,010		11,010
Total assets	$	27,209	$	2,695	$	11,010	$	40,914
Liabilities
Public warrants	$	29,397	$	—	$	—	$	29,397
Private warrants	—		—		1,584		1,584
Total liabilities	$	29,397	$	—	$	1,584	$	30,981

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.

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”). These positions were classified as Level 3 as of September 30, 2022 and December 31, 2021 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)

	September 30, 2022			December 31, 2021			Impact to Valuation from an Increase in Input2
Significant Unobservable Inputs1	Range	Weighted Average		Range	Weighted Average
Discount rate3	25.5% – 26.5%	26.0	%	25.0%	N/A		Decrease
Expected term (years)	10 – 15	N/A		10 – 15	N/A		Decrease
Expected return – liquid assets4	2.0% – 6.0%	5.0	%	3.0% - 7.0%	4.9	%	Increase
Expected total value to paid in capital – private assets5	1.32x – 2.40x	1.87x		1.20x – 2.65x	1.90x		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 value of $9.8 million and $11.0 million was recorded within investments in the Condensed Consolidated Statements of Financial Condition as of September 30, 2022 and December 31, 2021, respectively.

The following table presents changes in Level 3 assets measured at fair value for the three and nine months ended September 30, 2022:

	Three Months Ended<br>September 30, 2022		Nine Months Ended<br>September 30, 2022
Balance at beginning of period	$	9,956	$	11,010
Change in fair value	(193)		(1,247)
Balance at end of period	$	9,763	$	9,763

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 September 30, 2022 and December 31, 2021 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 $0.71 and $1.76 per unit as of September 30, 2022 and December 31, 2021, respectively. The resulting fair values of $0.6 million and $1.6 million were recorded within warrant liabilities in the Condensed Consolidated Statements of Financial Condition as of September 30, 2022 and December 31, 2021, respectively.

See Note 8 for additional information regarding the warrant activity for the three and nine months ended September 30, 2022.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

The following table presents changes in Level 3 liabilities measured at fair value for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance at beginning of period	$	(408)	$	(1,557)	$	(1,584)	$	(6,372)
Transfer out of Level 3	—		—		—		2,952
Change in fair value	(229)		(459)		947		1,404
Balance at end of period	$	(637)	$	(2,016)	$	(637)	$	(2,016)

7. Equity

The following table shows a rollforward of the common stock outstanding for the three and nine months ended September 30, 2022:

	Three Months Ended September 30, 2022			Nine Months Ended September 30, 2022
	Class A common stock	Class B common stock	Class C common stock	Class A common stock	Class B common stock	Class C common stock
Beginning of period	42,530,342	—	144,235,246	43,964,090	—	144,235,246
Exercise of warrants	—	—	—	30	—	—
Net shares delivered for vested RSUs	1,046,453	—	—	1,120,432	—	—
Repurchase of Class A Shares	(1,042,271)	—	—	(2,550,028)	—	—
End of period	42,534,524	—	144,235,246	42,534,524	—	144,235,246

As of September 30, 2022, 127,498 RSUs were vested, but not yet delivered, and are therefore not yet included in outstanding Class A common stock.

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 2022:

Declaration Date	Dividend per Common Share	Record Date	Payment Date
February 10, 2022	$0.10	March 1, 2022	March 15, 2022
May 5, 2022	$0.10	June 1, 2022	June 15, 2022
August 8, 2022	$0.10	September 1, 2022	September 15, 2022
November 7, 2022	$0.11	December 1, 2022	December 15, 2022

Dividend equivalent payments of $1.1 million were accrued for holders of RSUs as of September 30, 2022. Distributions to partners represent distributions made to GCMH Equityholders.

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

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

repurchased as part of this program will be canceled. On February 10, 2022, GCMG’s Board of Directors increased its stock repurchase authorization for shares and warrants by $20.0 million, from $25.0 million to $45.0 million. On May 5, 2022, GCMG’s Board of Directors further increased its stock repurchase authorization for shares and warrants by $20.0 million, from $45.0 million to $65.0 million.

In the three and nine months ended September 30, 2022, the Company is deemed to have repurchased 679,687 and 740,699 shares withheld in connection with the payment of tax liabilities on behalf of employees upon the settlement of vested RSUs for $5.9 million and $6.4 million, or an average of $8.61 and $8.70 per share. In the nine months ended September 30, 2022, the Company repurchased 2,812,764 public warrants to purchase shares of Class A common stock for $2.6 million, or an average of $0.91 per warrant. No warrants were repurchased during the three months ended September 30, 2022. In the three and nine months ended September 30, 2022, the Company repurchased 1,042,271 and 2,550,028 shares of Class A common stock, respectively, for $8.0 million and $20.5 million, respectively, or an average of $7.70 and $8.03 per share, respectively. As of September 30, 2022, the Company had $26.4 million remaining under the stock repurchase plan.

On November 7, 2022, the Company’s Board of Directors increased its stock repurchase authorization for shares and warrants by $25 million, from $65 million to $90 million.

8. Warrants

The following table shows a rollforward of public and private warrants outstanding for the three and nine months ended September 30, 2022:

	Three Months Ended September 30, 2022			Nine Months Ended September 30, 2022
	Public Warrants	Private Warrants	Total	Public Warrants	Private Warrants	Total
Outstanding, beginning of period	16,784,970	900,000	17,684,970	19,597,764	900,000	20,497,764
Exercises of warrants	—	—	—	(30)	—	(30)
Repurchases	—	—	—	(2,812,764)	—	(2,812,764)
Outstanding, end of period	16,784,970	900,000	17,684,970	16,784,970	900,000	17,684,970

Pursuant to the stock repurchase plan described in Note 7, during the nine months ended September 30, 2022, the Company repurchased 2,812,764 public warrants for $2.6 million, or an average of $0.91 per warrant. No warrants were repurchased during the three months ended September 30, 2022.

9. 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 nine months ended September 30, 2022 or the year ended December 31, 2021. As of September 30, 2022 and December 31, 2021, the total unfunded commitments from the special limited partner and general partners to the unconsolidated VIEs were $35.3 million and $34.7 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 September 30, 2022 and December 31, 2021 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
	September 30, 2022		December 31, 2021
Investments	$	101,653	$	104,609
Receivables	15,590		13,554
Maximum exposure to loss	$	117,243	$	118,163

The above table includes investments in VIEs which are owned by noncontrolling interest holders of approximately $40.7 million and $50.4 million as of September 30, 2022 and December 31, 2021, respectively.

10. Employee Compensation and Benefits

For the three and nine months ended September 30, 2022 and 2021, employee compensation and benefits consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Cash-based employee compensation and benefits	$	39,833	$	39,792	$	121,997	$	122,629
Equity-based compensation	5,706		5,878		21,191		38,518
Partnership interest-based compensation	7,329		6,029		21,471		20,958
Carried interest compensation	25,946		16,708		37,840		41,164
Cash-based incentive fee related compensation	7,367		3,380		10,180		6,081
Other non-cash compensation	321		1,080		1,157		2,704
Total employee compensation and benefits	$	86,502	$	72,867	$	213,836	$	232,054

Partnership Interest in Holdings, Holdings II and Management LLC

Payments to the employees for partnership interest awards are made by Holdings, Holdings II and Management LLC. 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 made by the GCMH Equityholders. As the payments 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 $7.3 million and $6.0 million for the three months ended September 30, 2022 and 2021, respectively, and $21.5 million and $21.0 million for the nine months ended September 30, 2022 and 2021, respectively, for partnership interest-based compensation expense which will ultimately be paid 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. Partnership interest-based compensation expense related to award modifications of $1.6 million was recognized for each of the three months ended September 30, 2022 and 2021, and $4.7 million was recognized for each of the nine months ended September 30, 2022 and 2021.

The liability associated with awards that contain a stated target has been retained by Holdings as of September 30, 2022 and December 31, 2021 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. Certain recipients had unvested stated target payments of $1.6 million and $7.8 million as of September 30, 2022 and 2021, respectively, which has not been reflected as employee

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

compensation and benefits expense by the Company. The Company recognized partnership interest-based compensation expense of $5.6 million and $4.5 million for the three months ended September 30, 2022 and 2021, respectively, and $16.6 million and $16.3 million for the nine months ended September 30, 2022 and 2021, respectively, related to profits interest awards that are in substance profit-sharing arrangements.

In the third quarter of 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 had an aggregate grant date fair value of $15.5 million. The Company recognized partnership interest-based compensation expense related to the GCMH Equityholders Awards of $0.2 million for each of the three and nine months ended September 30, 2022. As of September 30, 2022, total unrecognized compensation expense related to unvested GCMH Equityholders Awards was $15.3 million and is expected to be recognized over the remaining weighted average period of 2.6 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.

11. Equity-Based Compensation

In March 2021, the Company granted 4.8 million RSUs to certain employees and directors in connection with the Transaction. Of the RSUs granted, the Company intends to settle less than 0.1 million RSUs in cash. The RSUs had an aggregate grant date fair value of $62.1 million. In addition to the March 2021 grant, an additional 0.4 million RSUs with an aggregate grant date fair value of $4.1 million were granted to certain employees during the year ended December 31, 2021.

In March 2022, the Company granted 1.1 million RSUs with an aggregate grant date fair value of $10.8 million to certain employees. Of the RSUs granted, the Company intends to settle approximately 0.1 million RSUs in cash. In addition to the March 2022 grant, an additional 0.3 million RSUs with an aggregate grant date fair value of $2.5 million were granted to certain employees during the nine months ended September 30, 2022.

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. The March 2021 and March 2022 grants generally vest one-third at the grant date with the remainder over two years in equal annual installments. Other awards generally vest over a one to three year period. See Note 10 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 RSU activity for the nine months ended September 30, 2022 is as follows:

	Number of RSUs	Weighted-Average Grant-Date Fair Value Per RSU
Balance as of December 31, 2021	3,004,411	$	12.84
Granted	1,373,816	9.67
Vested	(1,999,286)	12.00
Forfeited	(77,669)	12.85
Balance as of September 30, 2022	2,301,272	$	11.67

The total grant-date fair value of RSUs that vested during the nine months ended September 30, 2022 was $24.0 million. For the three months ended September 30, 2022 and 2021, $5.7 million and $5.9 million of compensation expense related to RSUs was recorded within employee compensation and benefits in the Condensed Consolidated Statements of Income, respectively. For the nine months ended September 30, 2022 and 2021, $21.2 million and $38.5 million of compensation expense related to the RSUs was recorded within employee compensation and benefits in the Condensed Consolidated Statements of Income, respectively. As of September 30, 2022, total unrecognized compensation expense related to unvested RSUs was $14.3 million and is expected to be recognized over the remaining weighted average period of 1.2 years.

The total tax benefit recognized related to the delivered RSUs for the nine months ended September 30, 2022 and 2021 was $0.9 million and $1.3 million, respectively.

12. Debt

The table below summarizes the outstanding debt balance as of September 30, 2022 and December 31, 2021:

	As of
	September 30, 2022		December 31, 2021
Senior loan	$	394,000	$	397,000
Less: debt issuance costs	(5,652)		(6,484)
Total debt	$	388,348	$	390,516

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

Year Ended December 31,
Remainder of 2022	$	1,000
2023	4,000
2024	4,000
2025	4,000
2026	4,000
Thereafter	377,000
Total	$	394,000

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 (the “2025 Term Loans”) to a maturity date of February 24, 2028, (as extended, the “2028 Term Loans”). The 2028 Term Loans have an interest rate of 2.50% over the LIBOR, subject to a 0.50%

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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).

Concurrently with the effectiveness of the Amended Credit Agreement, the Company made a voluntary prepayment on the Senior Loan in an aggregate principal amount of $50.3 million. As a result of the prepayment in February 2021, the Company recorded an expense of $0.7 million related to the acceleration of deferred debt issuance costs, which was recorded within other income in the Condensed Consolidated Statements of Income for the nine months ended September 30, 2021. The Company capitalized $0.9 million of debt issuances costs related to payments to lenders in connection with the amendment and extension of its Senior Loan, which was recorded within debt in the Condensed Consolidated Statements of Financial Condition, and expensed $2.6 million of third-party costs related to the amendment which was recorded within general, administrative and other in the Condensed Consolidated Statements of Income for the nine months ended September 30, 2021.

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 increased, the “Incremental 2028 Term Loans”). The Company capitalized $2.2 million of debt issuance costs related to payments to lenders in connection with the Incremental 2028 Term Loans, which was recorded within debt in the Condensed Consolidated Statements of Financial Condition.

Quarterly principal payments of $1.0 million are required to be made toward the Incremental 2028 Term Loans beginning June 30, 2021 (less any reduction for prior or future voluntary or mandatory prepayments of principal).

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 and nine months ended September 30, 2022, the Company did not make any Cash Flow Payments.

As of September 30, 2022 and December 31, 2021, $394.0 million and $397.0 million of Incremental 2028 Term Loans were outstanding, respectively, with weighted average interest rates of 3.65% and 3.25% for the nine months ended September 30, 2022 and 2021, 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 September 30, 2022, 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.

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 September 30, 2022 and December 31, 2021.

Other

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

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

Amortization of deferred debt issuance costs was $0.2 million for each of the three months ended September 30, 2022 and 2021, and $0.8 million and $0.7 million for the nine months ended September 30, 2022 and 2021, respectively. These amounts were recorded within interest expense in the Condensed Consolidated Statements of Income.

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 September 30, 2022 and December 31, 2021. As the Senior Loan was not accounted for at fair value, it was not included in the Company’s fair value hierarchy in Note 6, however had it been included, it would have been classified in Level 2.

13. 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 an asset within other assets in the Condensed Consolidated Statements of Financial Condition as of September 30, 2022 and December 31, 2021:

Derivative	Notional Amount		Fair Value as of September 30, 2022		Fair Value as of December 31, 2021		Fixed Rate Paid		Floating Rate Received	Effective Date(2)	Maturity Date
Interest rate swap	$	232,000	$	30,309	$	2,264	1.33	%	1 month LIBOR (1)	March 2021	February 2028
Interest rate swap	68,000		8,694		431		1.39	%	1 month LIBOR (1)	July 2021	February 2028
			$	39,003	$	2,695

____________

(1)Floating rate received subject to a 0.50% Floor. Refer to Note 12 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.

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Derivative gain (loss) at beginning of period	$	22,892	$	(9,819)	$	(3,622)	$	(11,163)
Amount recognized in other comprehensive income	12,489		(13)		35,241		(1,633)
Amount reclassified from accumulated other comprehensive loss to interest expense	1,372		2,018		5,134		4,982
Derivative gain (loss) at end of period	36,753		(7,814)		36,753		(7,814)
Less: gain (loss) attributable to noncontrolling interests in GCMH	28,090		(6,171)		28,090		(6,171)
Derivative gain (loss) at end of period, net	$	8,663	$	(1,643)	$	8,663	$	(1,643)

On February 24, 2021, the Company terminated derivative instruments which were entered into in 2017 and 2018. Prior to termination, certain derivative instruments did not qualify for hedge accounting due to floor rate mismatches and as a result, all changes in fair value for those derivative instruments were reflected within other income (expense) in the Condensed Consolidated Statements of Income. The amount previously recorded as a hedge in AOCI remains in AOCI and was recorded in interest expense within the Condensed Consolidated Statements of Income over the original life of the swap. The Company reclassified $1.4 million for each of the three months ended September 30, 2022 and 2021, and $4.1 million and $3.3 million for the nine months ended September 30, 2022 and 2021, respectively, from AOCI to interest expense relating to the terminated

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

derivative instrument that initially qualified for hedge accounting. Prior to terminating the instruments in February 2021, the Company recognized a gain of $1.9 million related to interest rate contracts not designated as hedging instruments, which was recorded within other income (expense) in the Condensed Consolidated Statements of Income during the nine months ended September 30, 2021.

Effective on March 1, 2021, the Company entered into a swap agreement (“2028 Swap Agreement”) to hedge interest rate risk related to payments made during the extended maturity of the 2028 Term Loans that has a notional amount of $232.0 million. The 2028 Swap Agreement and 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.

Effective on July 1, 2021, the Company entered into a swap agreement (“2028 Incremental Swap Agreement”) to hedge interest rate risk related to payments made for the increase in aggregate principal amount of the Incremental 2028 Term Loans that has a notional amount of $68.0 million. The 2028 Incremental Swap Agreement and Incremental 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 6 for further details.

As of September 30, 2022, all of the Company’s derivative exposure is with one financial institution. By using derivatives, the Company is exposed to counterparty credit risk if the counterparty to the derivative contracts does not perform as expected. If a counterparty fails to perform, the Company's counterparty credit risk is equal to the amount reported as a derivative asset in the Condensed Consolidated Statements of Financial Condition. The Company minimizes counterparty credit risk through credit approvals and monitoring procedures, where appropriate.

See Note 18 for more information regarding the Company’s termination of the 2028 Swap Agreement and 2028 Incremental Swap Agreement effective November 1, 2022. During the next twelve months, the Company expects to reclassify approximately $5.1 million from AOCI to interest expense (which will offset interest expense), including the impact of the swap terminations.

14. Commitments and Contingencies

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 $84.1 million and $83.5 million of unfunded investment commitments as of September 30, 2022 and December 31, 2021, respectively, representing general partner capital funding commitments to several of the GCM Funds.

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 with an option to terminate early between September 2022 to September 2023 subject to a termination fee. 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 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 September 30, 2022		Nine Months Ended September 30, 2022
Operating lease cost(1)	$	1,888	$	5,672
Variable lease cost(2)	870		3,047
Less: sublease income	49		145
Total lease cost	$	2,709	$	8,574

____________

(1)Includes less than $0.1 million and $0.2 million of short term lease expense for the three months and nine months ended September 30, 2022, respectively.

(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:

	Nine Months Ended September 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	6,547
Non-cash ROU assets obtained in exchange for new operating leases	$	693
Weighted average remaining lease term in years	3.0 years
Weighted average discount rate	3.7		%

As of September 30, 2022, the maturities of operating lease liabilities were as follows:

Remainder of 2022	$	2,203
2023	7,280
2024	3,636
2025	3,544
2026	1,974
Thereafter	—
Total lease payments	18,637
Less: minimum future rental payments for which the lease has not commenced	(2,084)
Total lease payments for which the Company has a right-of-use-asset and corresponding liability	16,553
Less: imputed interest	(938)
Total operating lease liabilities	$	15,615

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.

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

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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.

15. 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 10 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 in the Condensed Consolidated Statements of Income 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. Due from related parties in the Condensed Consolidated Statements of Financial Condition includes net receivables of $11.9 million and $11.7 million as of September 30, 2022 and December 31, 2021, 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 September 30, 2022 and December 31, 2021, such investments and future commitments were $378.8 million and $441.8 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, approximately $0.6 million and $0.2 million for the three months ended September 30, 2022 and 2021, respectively, and $2.0 million and $0.8 million for the nine months ended September 30, 2022 and 2021, 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.

16. 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 16% and 10% for the three months ended September 30, 2022 and 2021, respectively, and 9% and 6% for the nine months ended September 30, 2022 and 2021, respectively. These rates were different

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 September 30, 2022, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months.

17. Earnings Per Share

The following is a reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator for earnings per share calculation:
Net income attributable to GCM Grosvenor Inc., basic	$	3,099	$	4,056	$	15,430	$	7,259
Exercise of private warrants	—		—		—		(303)
Exchange of Partnership units	1,289		2,221		27,917		(1,754)
Assumed vesting of RSUs	—		—		—		2
Net income attributable to common stockholders, diluted	4,388		6,277		43,347		5,204
Denominator for earnings per share calculation:
Weighted-average shares, basic	43,518,580		44,387,598		44,401,559		43,673,347
Exercise of private warrants - incremental shares under the treasury stock method	—		—		—		120,083
Exchange of Partnership units	144,235,246		144,235,246		144,235,246		144,235,246
Assumed vesting of RSUs - incremental shares under the treasury stock method	145,659		254,233		327,721		107,522
Weighted-average shares, diluted	187,899,485		188,877,077		188,964,526		188,136,198
Basic EPS
Net income attributable to common stockholders, basic	$	3,099	$	4,056	$	15,430	$	7,259
Weighted-average shares, basic	43,518,580		44,387,598		44,401,559		43,673,347
Net income per share attributable to common stockholders, basic	$	0.07	$	0.09	$	0.35	$	0.17
Diluted EPS
Net income attributable to common stockholders, diluted	$	4,388	$	6,277	$	43,347	$	5,204
Weighted-average shares, diluted	187,899,485		188,877,077		188,964,526		188,136,198
Net income per share attributable to common stockholders, diluted	$	0.02	$	0.03	$	0.23	$	0.03

When applying the if-converted method to calculate the potential dilutive impact of the exchangeable common units of the Partnership, the earnings per share numerator adjustment reflects the net income 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.

GCM Grosvenor Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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

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 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 per share attributable to common stockholders because their impact would have been antidilutive for the periods presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Public warrants	16,784,970	20,036,269	16,784,970	20,036,269
Private warrants	900,000	900,000	900,000	—

18. Subsequent Events

On November 7, 2022, 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 December 1, 2022. The payment date will be December 15, 2022.

On November 7, 2022, the Company’s Board of Directors increased its stock repurchase authorization for shares and warrants by $25 million, from $65 million to $90 million.

In October 2022, the Company terminated the 2028 Swap Agreement and 2028 Incremental Swap Agreement effective on November 1, 2022. The Company received $40.3 million of cash for the fair market value of the interest rate swaps at termination. The amount previously recorded as a hedge in AOCI will remain in AOCI and will be recorded in interest expense within the Condensed Consolidated Statements of Income over the original life of the swaps.

Effective on November 1, 2022, the Company entered into a new 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.

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, 2021. 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, 2021, 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 due to the current COVID-19 pandemic addressed further below, 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. 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.

The prolonged COVID-19 pandemic.

The COVID-19 pandemic has resulted in significant disruption and continued uncertainty in the global economic markets, which in turn has impacted our business.

The COVID-19 pandemic has impacted, and may further impact, our business in various ways, including but not limited to the following:

•Restrictions on travel and public gatherings have resulted in many of our client and prospect meetings not currently taking place in person. The majority of our employees work from home on at least a partially remote schedule. As a consequence, we conduct many client and prospective client dialogue remotely, which has impeded and may continue to impede our ability to market our funds and raise new business, which may result in lower or delayed revenue growth, and it has become more difficult to conduct due diligence on investments.

•A slowdown in fundraising activity has in the past resulted in delayed or decreased management fees and could result in delayed or decreased management fees in the future compared to prior periods.

•In light of uncertainty in public equity markets and other components of their investment portfolios, investors may become restricted by their asset allocation policies to invest in new or successor funds that we provide, or may be prohibited by new laws or regulations from funding existing commitments.

•Our liquidity and cash flows may be adversely impacted by declines or delays in realized incentive fees and management fee revenues.

•Our funds invest in industries that have been materially impacted by the COVID-19 pandemic, including healthcare, travel, entertainment, hospitality and retail, which in turn has impacted and may continue to impact the value of our investments.

We believe COVID-19’s adverse impact on our business, financial condition and results of operations will be significantly driven by a number of factors that we are unable to predict or control, including, for example: the severity and duration of the pandemic, including the timing of vaccination of the global population or the availability of a treatment for COVID-19; the impact of new variants of COVID-19; the pandemic’s impact on the U.S. and global economies; the timing, scope and effectiveness of additional governmental responses to the pandemic; the timing and path of economic recovery; and the negative impact on our clients, counterparties, vendors and other business partners that may indirectly adversely affect us.

As of September 30, 2022, we believe we have adequate liquidity with approximately $101.6 million in available cash and $48.2 million of available borrowing capacity under our Revolving Credit Facility (defined below). For more information on our Credit Facilities, see “—Liquidity and Capital Resources—Indebtedness”.

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

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 $72.6 billion and $72.1 billion as of September 30, 2022 and December 31, 2021, 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 September 30, 2022, 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 $38.6 billion as of September 30, 2022.

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 $12.7 billion as of September 30, 2022.

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.

Other Income (Expense)

Other income (expense) consists primarily of gains and losses on certain derivatives and 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 redeemable noncontrolling interest related to certain limited partnership interests that were subject to redemptions by third-party investors. As these interests were redeemable upon the occurrence of an event that is not solely within the control of the Company, amounts relating to third-party interests in such consolidated entities were classified within the mezzanine section of the Consolidated Statements of Financial Condition as redeemable noncontrolling interest. There was no remaining redeemable noncontrolling interest following the exercise of the Mosaic call right on July 2, 2021, as further described in Note 3 of our Condensed Consolidated Financial Statements included elsewhere in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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 and nine months ended September 30, 2022 and 2021. 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, unaudited)
Revenues
Management fees	$	90,715	$	87,796	$	275,655	$	256,015
Incentive fees	45,467		29,178		67,964		79,619
Other operating income	1,032		1,101		3,083		5,363
Total operating revenues	137,214		118,075		346,702		340,997
Expenses
Employee compensation and benefits	86,502		72,867		213,836		232,054
General, administrative and other	21,982		20,131		66,333		66,314
Total operating expenses	108,484		92,998		280,169		298,368
Operating income	28,730		25,077		66,533		42,629
Investment income (loss)	(2,276)		13,732		7,387		40,239
Interest expense	(5,797)		(5,432)		(16,672)		(14,486)
Other income	87		1,329		88		2,385
Change in fair value of warrant liabilities	(3,790)		(9,550)		17,872		(2,231)
Net other income (expense)	(11,776)		79		8,675		25,907
Income before income taxes	16,954		25,156		75,208		68,536
Provision for income taxes	2,789		2,450		7,133		3,991
Net income	14,165		22,706		68,075		64,545
Less: Net income attributable to redeemable noncontrolling interest	—		—		—		19,827
Less: Net income attributable to noncontrolling interests in subsidiaries	1,719		10,142		7,399		30,439
Less: Net income attributable to noncontrolling interests in GCMH	9,347		8,508		45,246		7,020
Net income attributable to GCM Grosvenor Inc.	$	3,099	$	4,056	$	15,430	$	7,259

Revenues

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021			2022		2021
	(in thousands, unaudited)
Private markets strategies	$	49,347	$	43,643		$	146,582	$	126,376
Absolute return strategies	38,253		41,878			121,087		122,450
Fund expense reimbursement revenue	3,115		2,275			7,986		7,189
Total management fees	90,715		87,796			275,655		256,015
Incentive fees	45,467		29,178			67,964		79,619
Administrative fees	813		799			2,340		4,243
Other	219		302			743		1,120
Total other operating income	1,032		1,101			3,083		5,363
Total operating revenues	$	137,214	$	118,075		$	346,702	$	340,997

Three Months Ended September 30, 2022 and September 30, 2021

Management fees increased $2.9 million, or 3%, to $90.7 million, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. Private markets strategies fees increased $5.7 million, primarily due to a $2.4 million increase in fees related to private markets strategies specialized funds and a $3.3 million increase in fees related to private markets strategies customized separate accounts, both as a result of capital raising and deployment. Fund expense reimbursement revenue increased $0.8 million, or 37% to $3.1 million. The increase was partially offset by a $3.6 million decrease in absolute return strategies fees driven by lower FPAUM as a result of lower returns in the second quarter of 2022 and net withdrawals.

Incentive fees consisted of carried interest of $44.5 million and $28.9 million and performance fees of $1.0 million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively. The increase in carried interest is primarily due to higher tax carry realizations during the three months ended September 30, 2022 based off 2021 taxable income.

Nine Months Ended September 30, 2022 and September 30, 2021

Management fees increased $19.6 million, or 8%, to $275.7 million, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Private markets strategies fees increased $20.2 million, primarily due to a $11.4 million increase in fees related to private markets strategies specialized funds and a $8.8 million increase in fees related to private markets strategies customized separate accounts, both driven by capital raising and deployment. The increase was partially offset by a $1.4 million decrease in absolute return strategies fees driven by lower average FPAUM as a result of lower market performance and net withdrawals.

Incentive fees consisted of carried interest of $65.6 million and $70.3 million and performance fees of $2.3 million and $9.3 million for the nine months ended September 30, 2022 and 2021, respectively. The decrease in carried interest is primarily due to higher carried interest realized during the nine months ended September 30, 2021. The decrease in performance fees is primarily due to lower returns for absolute return strategies funds with March 31 and June 30 fiscal year ends during the nine months ended September 30, 2022, as compared to in the nine months ended September 30, 2021.

Expenses

Employee Compensation and Benefits

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021			2022		2021
	(in thousands, unaudited)
Cash-based employee compensation and benefits	$	39,833	$	39,792		$	121,997	$	122,629
Equity-based compensation	5,706		5,878			21,191		38,518
Partnership interest-based compensation	7,329		6,029			21,471		20,958
Carried interest compensation	25,946		16,708			37,840		41,164
Cash-based incentive fee related compensation	7,367		3,380			10,180		6,081
Other non-cash compensation	321		1,080			1,157		2,704
Total employee compensation and benefits	$	86,502	$	72,867		$	213,836	$	232,054

Three Months Ended September 30, 2022 and September 30, 2021

Employee compensation and benefits increased $13.6 million, or 19%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. Partnership interest-based compensation increased $1.3 million, or 22%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, primarily due to amendments to partnership interest-based awards occurring during the three months ended September 30, 2022. Carried interest compensation increased $9.2 million and cash-based incentive fee related compensation increased $4.0 million for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, primarily due to higher realized carried interest during the three months ended September 30, 2022.

Nine Months Ended September 30, 2022 and September 30, 2021

Employee compensation and benefits decreased $18.2 million, or 8%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Equity-based compensation decreased $17.3 million, or 45%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, as the prior year first quarter included expense for larger awards made in connection with the Transaction, including a portion that vested immediately upon grant. Carried interest compensation decreased $3.3 million, or 8% for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to lower realized carried interest during the nine months ended September 30, 2022. Cash-based incentive fee related compensation increased $4.1 million, or 67%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily due to an increase in the firm’s share of carried interest revenues.

General, Administrative and Other

Three and Nine Months Ended September 30, 2022 and September 30, 2021

General, administrative and other increased $1.9 million, or 9%, to $22.0 million, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, primarily driven by increases in travel costs and professional fees, partially offset by a decrease in distribution expenses.

General, administrative and other remained consistent at $66.3 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Net Other Income (Expense)

Three Months Ended September 30, 2022 and September 30, 2021

Investment loss was $2.3 million for the three months ended September 30, 2022 compared to investment income of $13.7 million for the three months ended September 30, 2021, primarily due to the change in value of private and public market investments.

Interest expense increased $0.4 million, or 7%, to $5.8 million, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021, primarily due to a higher effective interest rate on the Term Loan Facility principal amount outstanding during the three months ended September 30, 2022.

Other income was $0.1 million for the three months ended September 30, 2022 compared to other expense of $1.3 million for the three months ended September 30, 2021.

Change in fair value of warrant liabilities of $(3.8) million for the three months ended September 30, 2022 was due to an increase in the fair value of the warrants from June 30, 2022 to September 30, 2022.

Nine Months Ended September 30, 2022 and September 30, 2021

Investment income was $7.4 million for the nine months ended September 30, 2022 compared to investment income of $40.2 million for the nine months ended September 30, 2021, primarily due to the change in value of private and public market investments.

Interest expense increased $2.2 million, or 15%, to $16.7 million, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to the increase in the Term Loan Facility principal amount outstanding as of September 30, 2022 as compared to September 30, 2021, and an increase in amortization expense related to an interest rate swap agreement that was terminated during the first quarter of 2021. The nine months ended September 30, 2022 included a full nine months of amortization on the terminated interest rate swap compared to only seven months of amortization in the nine months ended September 30, 2021.

Other income was $0.1 million for the nine months ended September 30, 2022 compared to other income of $2.4 million for the nine months ended September 30, 2021. Other income for the nine months ended September 30, 2021 was primarily due to the change in value of interest rate derivatives.

Change in fair value of warrant liabilities of $17.9 million for the nine months ended September 30, 2022 was due to a decrease in the fair value of the warrants from December 31, 2021 to September 30, 2022.

Provision for Income Taxes

Three and Nine Months Ended September 30, 2022 and September 30, 2021

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 16% and 10% for the three months ended September 30, 2022 and 2021, respectively, and 9% and 6% for the nine months ended September 30, 2022 and 2021, respectively. Our overall effective tax rate is less than the statutory rate primarily because a majority of income is allocated to noncontrolling interests, and the tax liability on such income is borne by the holders of such noncontrolling interests.

Net Income (Loss) Attributable to Noncontrolling Interests

Three and Nine Months Ended September 30, 2022 and September 30, 2021

Net income attributable to redeemable noncontrolling interest was $19.8 million for the nine months ended September 30, 2021. No income was allocated to redeemable noncontrolling interest in the other periods presented due to the exercise of the Mosaic call right on July 2, 2021as further described in Note 3 of our Condensed Consolidated Financial Statements included elsewhere in Part I, Item 1 of this Quarterly Report on Form 10-Q.

General, Administrative and Other.

Net income attributable to noncontrolling interests in subsidiaries was $1.7 million and $10.1 million for the three months ended September 30, 2022 and 2021, respectively, and $7.4 million and $30.4 million for the nine months ended September 30, 2022 and 2021, respectively. The decreases were primarily attributable to a decrease in income generated by our consolidated subsidiaries not wholly owned by the Company.

Net income attributable to noncontrolling interests in GCMH was $9.3 million and $8.5 million for the three months ended September 30, 2022 and 2021, respectively, and $45.2 million and $7.0 million for the nine months ended September 30, 2022 and 2021, respectively. The increase was primarily attributable to the underlying performance of 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 September 30, 2022						Nine Months Ended September 30, 2022
(in millions, unaudited)	Private Markets Strategies		Absolute Return Strategies		Total FPAUM		Private<br>Markets<br>Strategies		Absolute<br>Return<br>Strategies		Total
Fee-paying AUM
Balance, beginning of period	$	34,773	$	22,679	$	57,452	$	33,080	$	25,575	$	58,655
Contributions	974		190		1,164		3,842		534		4,376
Withdrawals	(58)		(580)		(638)		(141)		(1,537)		(1,678)
Distributions	(206)		—		(206)		(987)		(24)		(1,011)
Change in market value	54		326		380		(79)		(1,795)		(1,874)
Foreign exchange and other	(49)		(52)		(101)		(227)		(190)		(417)
Balance, end of period	$	35,488	$	22,563	$	58,051	$	35,488	$	22,563	$	58,051

Contracted, not yet fee-paying AUM represents limited partner commitments during the initial commitment or investment period where fees are not yet being charged, but are expected to be charged in the future based on invested capital (capital committed to underlying investments) or on a ratable ramp-in of total commitments.

	As of
(in millions)	September 30, 2022 (unaudited)		December 31, 2021
Contracted, not yet Fee-Paying AUM	$	8,042	$	7,683
AUM	$	72,602	$	72,130

Three Months Ended September 30, 2022

FPAUM increased $0.6 billion, or 1%, to $58.1 billion during the three months ended September 30, 2022 primarily due to $1.2 billion of contributions and a $0.4 billion increase in market value, partially offset by $0.6 billion and $0.2 billion of withdrawals and distributions, respectively.

•Private markets strategies FPAUM increased $0.7 billion, or 2%, to $35.5 billion during the three months ended September 30, 2022, primarily due to $1.0 billion of contributions, partially offset by $0.2 billion of distributions.

•Absolute return strategies FPAUM decreased $0.1 billion, or 1%, to $22.6 billion during the three months ended September 30, 2022, primarily due to $0.6 billion of withdrawals, partially offset by a $0.3 billion increase in market value and $0.2 billion of contributions.

Contracted, not yet fee-paying AUM increased $1.4 billion, or 21%, to $8.0 billion during the three months ended September 30, 2022 due to the closing of new commitments during the period net of reductions for Contracted, not yet fee-paying AUM that became fee-paying AUM during the period.

AUM increased $1.4 billion to $72.6 billion during the three months ended September 30, 2022, 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.

Nine Months Ended September 30, 2022

FPAUM decreased $0.6 billion, or 1%, to $58.1 billion during the nine months ended September 30, 2022 primarily due to a $1.9 billion decrease in market value, and $1.7 billion and $1.0 billion of withdrawals and distributions, respectively, partially offset by $4.4 billion of contributions.

•Private markets strategies FPAUM increased $2.4 billion, or 7%, to $35.5 billion during the nine months ended September 30, 2022, primarily due to $3.8 billion of contributions, partially offset by $1.0 billion of distributions.

•Absolute return strategies FPAUM decreased $3.0 billion, or 12%, to $22.6 billion during the nine months ended September 30, 2022, primarily due to a $1.8 billion decrease in market value and $1.5 billion of withdrawals, partially offset by $0.5 billion of contributions.

Contracted, not yet fee-paying AUM increased $0.4 billion, or 5%, to $8.0 billion during the nine months ended September 30, 2022 due to the closing of new commitments during the period net of reductions for Contracted, not yet fee-paying AUM that became fee-paying AUM during the period.

AUM increased $0.5 billion, or 1%, to $72.6 billion during the nine months ended September 30, 2022, 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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, unaudited)
Revenues
Private markets strategies	$	49,347	$	43,643	$	146,582	$	126,376
Absolute return strategies	38,253		41,878		121,087		122,450
Management fees, net (1)	87,600		85,521		267,669		248,826
Administrative fees and other operating income	1,032		1,101		3,083		5,363
Fee-Related Revenue	88,632		86,622		270,752		254,189
Less:
Cash-based employee compensation and benefits, net (2)	(39,412)		(39,200)		(120,795)		(120,647)
General, administrative and other, net (1,3)	(17,853)		(16,452)		(54,320)		(49,923)
Fee-Related Earnings	31,367		30,970		95,637		83,619
Incentive fees:
Performance fees	1,006		316		2,324		9,320
Carried interest	44,461		28,862		65,640		70,299
Incentive fee related compensation and NCI:
Cash-based incentive fee related compensation	(7,367)		(3,380)		(10,180)		(6,081)
Carried interest compensation, net (4)	(25,468)		(17,022)		(37,751)		(42,492)
Carried interest attributable to noncontrolling interests	(3,627)		(3,187)		(7,148)		(18,178)
Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (5)	526		629		3,983		629
Interest income	131		4		176		15
Other (income) expense	(44)		21		(88)		85
Depreciation	382		408		1,176		1,288
Adjusted EBITDA	41,367		37,621		113,769		98,504
Depreciation	(382)		(408)		(1,176)		(1,288)
Interest expense	(5,797)		(5,432)		(16,672)		(14,486)
Adjusted Pre-Tax Income	35,188		31,781		95,921		82,730
Adjusted income taxes (6)	(8,621)		(7,945)		(23,501)		(20,682)
Adjusted Net Income	$	26,567	$	23,836	$	72,420	$	62,048

____________

(1)    Excludes fund reimbursement revenue of $3.1 million and $2.3 million for the three months ended September 30, 2022 and 2021, respectively, and $8.0 million and $7.2 million for the nine months ended September 30, 2022 and 2021, respectively.

(2)    Excludes severance expense of $0.4 million and $0.6 million for the three months ended September 30, 2022 and 2021, respectively, and $1.2 million and $2.0 million for the nine months ended September 30, 2022 and 2021, respectively.

(3)    Excludes amortization of intangibles of $0.6 million for each of the three months ended September 30, 2022 and 2021, and $1.7 million for each of the nine months ended September 30, 2022 and 2021. Also excludes corporate transaction related costs of $0.3 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively, and $2.1 million and $7.2 million for the nine months ended September 30, 2022 and 2021, respectively, and non-core expenses of $0.1 million for each of the three months ended September 30, 2022 and 2021, and $0.2 million for each of the nine months ended September 30, 2022 and 2021.

(4)    Excludes the impact of non-cash carried interest expense of $(0.5) million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively, and $(0.1) million and $1.3 million for the nine months ended September 30, 2022 and 2021, 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. Amounts were de minimis for periods prior to the Mosaic repurchase on July 2, 2021.

(6)    Represents corporate income taxes at a blended statutory rate of 24.5% applied to Adjusted Pre-Tax Income for the three and nine months ended September 30, 2022, and of 25.0% for the three and nine months ended September 30, 2021. The 24.5% and 25.0% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.5% and 4.0%, 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 provide investors useful information regarding the amount that such fees contribute to the Company’s earnings and are used by management in making compensation and capital allocation decisions.

The following table shows reconciliations of incentive fees to net incentive fees attributable to GCM Grosvenor for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, unaudited)
Incentive fees:
Performance fees	$	1,006	$	316	$	2,324	$	9,320
Carried interest	44,461		28,862		65,640		70,299
Less incentive fees contractually owed to others:
Cash carried interest compensation	(25,946)		(16,708)		(37,840)		(41,164)
Non-cash carried interest compensation	478		(314)		89		(1,328)
Carried interest attributable to redeemable noncontrolling interest holder	—		—		—		(8,059)
Carried interest attributable to other noncontrolling interest holders, net	(3,627)		(3,187)		(7,148)		(10,119)
Firm share of incentive fees (1)	16,372		8,969		23,065		18,949
Less: Cash-based incentive fee related compensation	(7,367)		(3,380)		(10,180)		(6,081)
Net Incentive Fees Attributable to GCM Grosvenor	$	9,005	$	5,589	$	12,885	$	12,868

____________

(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, (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 minus adjusted income taxes.

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. 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 and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, unaudited)
Adjusted Pre-Tax Income & Adjusted Net Income
Net income attributable to GCM Grosvenor Inc.	$	3,099	$	4,056	$	15,430	$	7,259
Plus:
Net income attributable to noncontrolling interests in GCMH	9,347		8,508		45,246		7,020
Provision for income taxes	2,789		2,450		7,133		3,991
Change in fair value of derivatives	—		—		—		(1,934)
Change in fair value of warrant liabilities	3,790		9,550		(17,872)		2,231
Amortization expense	579		583		1,737		1,749
Severance	421		592		1,202		1,982
Transaction expenses (1)	346		744		2,050		7,227
Loss on extinguishment of debt	—		—		—		675
Changes in TRA liability and other	168		(1,097)		295		(815)
Partnership interest-based compensation	7,329		6,029		21,471		20,958
Equity-based compensation	5,706		5,878		21,191		38,518
Other non-cash compensation	321		1,080		1,157		2,704
Less:
Unrealized investment (income) loss, net of noncontrolling interests	815		(6,278)		(3,208)		(7,507)
Non-cash carried interest compensation	478		(314)		89		(1,328)
Adjusted Pre-Tax Income	35,188		31,781		95,921		82,730
Less:
Adjusted income taxes (2)	(8,621)		(7,945)		(23,501)		(20,682)
Adjusted Net Income	$	26,567	$	23,836	$	72,420	$	62,048
Adjusted EBITDA
Adjusted Net Income	$	26,567	$	23,836	$	72,420	$	62,048
Plus:
Adjusted income taxes (2)	8,621		7,945		23,501		20,682
Depreciation expense	382		408		1,176		1,288
Interest expense	5,797		5,432		16,672		14,486
Adjusted EBITDA	$	41,367	$	37,621	$	113,769	$	98,504

____________

(1)    Represents 2021 expenses related to a debt offering, other contemplated corporate transactions, and other public company transition expenses and 2022 expenses related to contemplated corporate transactions.

(2)    Represents corporate income taxes at a blended statutory rate of 24.5% applied to Adjusted Pre-Tax Income for the three and nine months ended September 30, 2022 and of 25.0% for the three and nine months ended September 30, 2021. The 24.5% and 25.0% are based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 3.5% and 4.0%, 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 and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
$000, except per share amounts	2022		2021		2022		2021
	(in thousands, except share and per share amounts; unaudited)
Adjusted Net Income Per Share
Adjusted Net Income	$	26,567	$	23,836	$	72,420	$	62,048
Weighted-average shares of Class A common stock outstanding - basic	43,518,580		44,387,598		44,401,559		43,673,347
Exercise of private warrants - incremental shares under the treasury stock method	—		—		—		120,083
Exercise of public warrants - incremental shares under the treasury stock method	—		—		—		—
Exchange of partnership units	144,235,246		144,235,246		144,235,246		144,235,246
Assumed vesting of RSUs - incremental shares under the treasury stock method	145,659		254,233		327,721		107,522
Weighted-average shares of Class A common stock outstanding - diluted	187,899,485		188,877,077		188,964,526		188,136,198
Effective dilutive warrants, if antidilutive for GAAP	—		—		—		921,862
Effective RSUs, if antidilutive for GAAP	—		—		—		—
Adjusted shares - diluted	187,899,485		188,877,077		188,964,526		189,058,060
Adjusted Net Income Per Share - Diluted	$	0.14	$	0.13	$	0.38	$	0.33

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 and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands, unaudited)
Adjusted EBITDA	$	41,367	$	37,621	$	113,769	$	98,504
Less:
Incentive fees	(45,467)		(29,178)		(67,964)		(79,619)
Depreciation expense	(382)		(408)		(1,176)		(1,288)
Other non-operating income	(87)		(25)		(88)		(100)
Realized investment income, net of amount attributable to noncontrolling interests in subsidiaries (1)	(526)		(629)		(3,983)		(629)
Plus:
Incentive fee-related compensation	32,835		20,402		47,931		48,573
Carried interest attributable to redeemable noncontrolling interest holder	—		—		—		8,059
Carried interest attributable to other noncontrolling interest holders, net	3,627		3,187		7,148		10,119
Fee-Related Earnings	$	31,367	$	30,970	$	95,637	$	83,619

____________

(1)    Amounts were de minimis for periods prior to the Mosaic repurchase on July 2, 2021.

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 September 30, 2022, we had $101.6 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.

We are required to maintain minimum net capital balances for regulatory purposes for our Japan, Hong Kong, United Kingdom and U.S. broker-dealer subsidiaries. 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 September 30, 2022 we are in compliance with these regulatory requirements.

Cash Flows

	Nine Months Ended September 30,
	2022		2021
	(in thousands, unaudited)
Net cash provided by operating activities	$	159,929	$	144,796
Net cash used in investing activities	(10,338)		(11,953)
Net cash used in financing activities	(140,219)		(209,962)
Effect of exchange rate changes on cash	(3,982)		(1,046)
Net increase (decrease) in cash and cash equivalents	$	5,390	$	(78,165)

Net Cash Provided by Operating Activities

Net cash provided by operating activities was primarily driven by our net income in the respective periods after adjusting for significant non-cash activities, including depreciation and amortization expense, 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 operating activities was $159.9 million and $144.8 million for the nine months ended September 30, 2022 and 2021, respectively. These operating cash flows were primarily driven by:

•net income of $68.1 million and $64.5 million for the nine months ended September 30, 2022 and 2021, respectively, adjusted for $29.4 million and $32.6 million of non-cash activities, respectively, as well as changes in working capital; and

•proceeds received from investments of $18.7 million and $15.4 million for the nine months ended September 30, 2022 and 2021, respectively.

Net Cash Used in Investing Activities

Net cash used in investing activities was $(10.3) million and $(12.0) million for the nine months ended September 30, 2022 and 2021, respectively. These investing cash flows were primarily driven by:

•contributions/subscriptions to investments of $(23.2) million and $(20.8) million during the nine months ended September 30, 2022 and 2021, respectively; partially offset by

•proceeds received from investments of $14.2 million and $7.9 million during the nine months ended September 30, 2022 and 2021, respectively.

Net Cash Used in Financing Activities

Net cash used in financing activities was $(140.2) million and $(210.0) million for the nine months ended September 30, 2022 and 2021, respectively. These financing cash flows were primarily driven by:

•capital contributions received from noncontrolling interest holders of $1.4 million and $2.6 million during the nine months ended September 30, 2022 and 2021, respectively;

•capital distributions paid to partners and member of $(71.7) million and $(58.0) million during the nine months ended September 30, 2022 and 2021, respectively;

•capital distributions paid to noncontrolling interest holders of $(23.6) million and $(66.1) million during the nine months ended September 30, 2022 and 2021, respectively;

•the exercise of the Mosaic call option for $(150.1) million during the nine months ended September 30, 2021;

•proceeds from the Term Loan Facility of $110.0 million during the nine months ended September 30, 2021;

•principal payments on the Term Loan Facility of $(3.0) million and $(52.3) million during the nine months ended September 30, 2022 and 2021, respectively;

•debt issuance costs of $(3.1) million during the nine months ended September 30, 2021;

•payments to repurchase Class A common stock of $(20.5) million during the nine months ended September 30, 2022;

•proceeds from exercise of warrants of $24.5 million during the nine months ended September 30, 2021;

•the repurchase of warrants of $(2.6) million and $(0.4) million during the nine months ended September 30, 2022 and 2021, respectively;

•the settlement of equity-based compensation to satisfy withholding tax requirements of $(6.4) million and $(6.9) million during the nine months ended September 30, 2022 and 2021, respectively; and

•dividends paid of $(13.8) million and $(10.1) million during the nine months ended September 30, 2022 and 2021, 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 September 30, 2022, GCMH had borrowings of $394.0 million outstanding under the Term Loan Facility and no outstanding balance under the Revolving Credit Facility. As of September 30, 2022, we had available borrowing capacity of $48.2 million under our Revolving Credit Facility.

See Note 12 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 September 30, 2022, the Total Leverage Ratio was below 2.75x and the Company was in compliance with all financial covenants.

See Note 13 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%. Refer to Note 18 of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

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 November 7, 2022, 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 December 1, 2022. The payment date will be December 15, 2022. 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, 2022, GCMG’s Board of Directors increased its stock repurchase authorization for shares and warrants by $20.0 million, from $25.0 million to $45.0 million. On May 5, 2022, GCMG’s Board of Directors further increased the repurchase authorization for shares and warrants by $20.0 million, from $45.0 million as of February 10, 2022 to $65.0 million.

For the three and nine months ended September 30, 2022, we spent $5.9 million and $6.4 million, respectively, to reduce Class A shares to be issued to employees to satisfy tax obligations in connection with the settlement of RSUs, and $8.0 million and $20.5 million, respectively, to repurchase shares of Class A common stock. In the nine months ended September 30, 2022, we spent $2.6 million to repurchase the Company’s outstanding warrants to purchase Class A common stock. No warrants were repurchased during the three months ended September 30, 2022. As of September 30, 2022, $26.4 million remained available under our stock repurchase plan.

On November 7, 2022, the Company’s Board of Directors increased its stock repurchase authorization for shares and warrants by $25 million, from $65 million to $90 million.

We review our capital return plan on an on-going basis, considering the potential impacts of the COVID-19 pandemic, 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 September 30, 2022, the amount payable to related parties pursuant to the Tax Receivable Agreement was $59.3 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, 2021.

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 nine months ended September 30, 2022. For additional information, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

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 September 30, 2022.

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 September 30, 2022 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, 2021.

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 September 30, 2022 for the periods indicated:

	Total Number of Warrants/Shares Purchased (1)		Average Price Paid Per Warrant		Average Price Paid Per Share		Total Number of Warrants Purchased as Part of Publicly Announced Plans or Programs	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2)
	Warrants	Common Stock
July 1-31, 2022	—	410,102	$	—	$	7.07	3,494,564	1,996,589	$	37,386,095
August 1-31, 2022	—	319,954	$	—	$	8.22	3,494,564	2,316,543	$	28,902,728
September 1-30, 2022	—	312,215	$	—	$	8.00	3,494,564	2,628,758	$	26,404,802
Total	—	1,042,271					3,494,564	2,628,758

____________

(1)Represents warrants to purchase shares of Class A common stock, purchased pursuant to a stock repurchase plan, as described in note (2) below. Excludes 679,687 shares of Class A common stock equivalents purchased for $5.9 million that we are deemed to have repurchased in August 2022 in conjunction with the payment of tax liabilities in respect of stock delivered to our employees in settlement of vested RSUs.

(2)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, 2022, the aggregate amount authorized under the Repurchase Plan was increased to $45.0 million. On May 5, 2022, GCMG’s Board of Directors increased its Repurchase Plan authorization by $20.0 million, from $45.0 million as authorized on February 10, 2022 to $65.0 million. The dollar value of shares that may yet be repurchased includes the deemed repurchases of common stock equivalents discussed in note (1) above. On November 7, 2022, the Company’s Board of Directors further increased its stock repurchase authorization for shares and warrants by $25 million, from $65 million to $90 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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#	Form of Employee Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Agreement pursuant to GCM Grosvenor Inc. 2020 Incentive Award Plan (Settlement Options)					*
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.

Indicates management contract or compensatory plan

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: November 9, 2022	By:	/s/ Michael J. Sacks
		Michael J. Sacks
		Chief Executive Officer
		(Principal Executive Officer)
	GCM GROSVENOR INC.
---	---	---
Date: November 9, 2022	By:	/s/ Pamela L. Bentley
		Pamela L. Bentley
		Chief Financial Officer
		(Principal Financial Officer)

52

Document

Exhibit 10.1

GCM GROSVENOR INC. 2020 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AWARD GRANT NOTICE AND RESTRICTED STOCK UNIT AGREEMENT

GCM Grosvenor Inc., a Delaware corporation (the “Company”), pursuant to its 2020 Incentive Award Plan, as amended from time to time (the “Plan”), hereby grants to the holder listed below (“Participant”) the number of Restricted Stock Units set forth below (the “RSUs”). The RSUs are subject to the terms and conditions set forth in this Restricted Stock Unit Grant Notice (the “Grant Notice”), the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, each of which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in the Grant Notice and the Agreement.

Participant:	______________________
Participant ID:	______________________
Grant Date:	______________________
Vesting Start Date:	______________________
Number of RSUs:	______________________
Type of Shares Issuable:	Class A Common Stock
Vesting/Delivery Schedule:	Vesting Date    Amount Vested*    Delivery Date**
Restrictive Covenants Addendum:	[Applicable]/[Not Applicable]

By accepting this Award electronically through the stock plan administrator’s online grant acceptance policy, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and the Grant Notice. If you do not accept this Award through the online acceptance process by sixty (60) days from the Grant Date, or such other date that may be communicated to you, your Award will be canceled, and you will not be entitled to any benefits from the Award or to any compensation or benefits in lieu of the canceled Award. Participant has reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of the Grant Notice, the Agreement, and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, the Grant Notice or the Agreement.

If you decline your Award, your Award will be canceled, and you will not be entitled to any benefits from the Award or to any compensation or benefits in lieu of the canceled Award.

* Subject to Participant’s continuous service through the applicable vesting date.

** With respect to the portion of the RSUs scheduled to vest, delivery will be made as soon as administratively practicable, generally within thirty (30) days after the Delivery Date, but in no event later than March 15th of the year following the relevant vesting date.

EXHIBIT A

TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE

RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number of RSUs set forth in the Grant Notice.

ARTICLE I GENERAL

Section1.1Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan or the Grant Notice. For purposes of this Agreement:

(a)“Cause” shall mean, unless such term or an equivalent term is otherwise defined in any employment agreement or offer letter between a Participant and a Participating Company, any of the following: (i) Participant shall have committed (whether or not at the workplace) an act of fraud, embezzlement, misappropriation of funds or property or breach of fiduciary duty against the Company, including, but not limited to, the offer, payment, solicitation or acceptance of any unlawful bribe or kickback with respect to the business of the Company or any of its Affiliates, (ii) Participant shall have been convicted by a court of competent jurisdiction of, or pleaded guilty or nolo contendere to, any felony or any crime involving moral turpitude, (iii) Participant shall have committed a breach of any applicable restrictive covenants set forth in any agreement between Participant and the Company or any Participating Company or (iv) Participant shall have breached any one or more of the provisions of this Agreement or any employment agreement or offer letter between Participant and a Participating Company and such breach shall have continued for a period of ten (10) days after written notice to Participant specifying such breach in reasonable detail.

(b)“Delivery Date” shall be as provided in the Grant Notice.

(c)“Disability” shall mean a medical doctor selected by the Company certifies that Participant has for one hundred eighty (180) days, consecutive or non-consecutive, in any twelve (12) month period, been disabled in a manner that seriously interferes with Participant’s ability to perform Participant’s duties with the Company or any Participating Company. Any failure or refusal by Participant to submit to a medical examination for the purpose of certifying whether Participant is Disabled shall, at the option of the Company, be deemed to constitute reasonable evidence that Participant is Disabled.

(d)“Employer” shall mean the Participating Company that employs Participant.

(e)“Participating Company” shall mean the Company or any of its parents, Subsidiaries or Affiliates.

(f)“Person” shall mean 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.

Section 1.2Incorporation of Terms of Plan. The RSUs and the shares of Class A Common Stock issued to Participant hereunder (“Shares”) are subject to the terms and conditions set forth in this Agreement, the Grant Notice and the Plan, which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement or the Grant Notice, the terms of the Plan shall control.

ARTICLE II. AWARD OF RESTRICTED STOCK UNITS

Section 2.1Award of RSUs

(a)In consideration of Participant’s continued employment with or service to a Participating Company and for other good and valuable consideration, effective as of the grant date set forth in the Grant Notice (the “Grant Date”), the Company has granted to Participant the number of RSUs set forth in the Grant Notice, upon the terms and conditions set forth in the Grant Notice, the Plan and this Agreement, subject to adjustment as provided in Section 12.2 of the Plan. Each RSU represents the right to receive one Share (or the Fair Market Value thereof in cash) at the times and subject to the conditions set forth herein. However, unless and until the RSUs have vested, Participant will have no right to the payment in respect of any Shares subject thereto. Prior to the actual delivery of any Shares or cash in lieu thereof, the RSUs will represent an unsecured obligation of the Company.

Section 2.2Vesting of RSUs. Subject to Participant’s continued employment with or service to a Participating Company on each applicable vesting date and subject to the terms of this Agreement, the RSUs shall vest in such amounts and at such times as are set forth in the Grant Notice.

Section 2.3Impact of Termination of Service on Restricted Stock Units. In the event Participant incurs a Termination of Service prior to a vesting date set forth in the Grant Notice, except as may be otherwise provided herein, in the Grant Notice, by the Administrator or as set forth in a written agreement between Participant and the Company or Employer, then any unvested RSUs shall become vested and subject to distribution or payment or be canceled and forfeited on the reason for Termination of Service as follows:

(a)Death or Disability. In the event Participant incurs a Termination of Service as a result of Participant’s death or Disability, any unvested RSUs shall become immediately vested and subject to distribution or payment as of the date of Participant’s death or Disability. Distribution will be made as soon as administratively practicable, generally within thirty (30) days following Participant’s death or Disability.

(b)Termination of Service for Cause. In the event Participant incurs a Termination of Service for Cause, except as may be otherwise provided by the Administrator or as set forth in a written agreement between Participant and the Company or Employer, Participant shall immediately forfeit any and all RSUs granted under this Agreement (whether or not vested), Participant’s rights in any such RSUs shall lapse and expire, and Participant shall also be subject the repayment and clawback and offset obligations set forth in Section 6.12.

(c)All Other Terminations. In the event Participant incurs a Termination of Service other than as set forth in Section 2.3(a) or Section 2.3(b), except as may be otherwise provided herein or by the Administrator or as set forth in a written agreement between Participant and the Company or Employer, Participant shall immediately forfeit any and all RSUs granted under this Agreement that have not vested or do not vest on or prior to the date on which such Termination of Service occurs, and Participant’s rights in any such RSUs that are not so vested shall lapse and expire.

(d)Outside the United States. For purposes of this Agreement, if Participant is employed or providing services outside the United States, the date Participant incurs a Termination of Service shall mean the date Participant is no longer actively providing services to a Participating Company (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction in which Participant is employed or providing services or the terms of Participant’s employment or service agreement, if any) and, unless otherwise expressly provided in this Agreement or by the Company, Participant’s right to vest in the RSUs under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction in which Participant is employed or

providing service or the terms of Participant’s employment or service agreement, if any); the Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the RSUs (including whether Participant may still be considered to be providing services while on a leave of absence).

Section 2.4

(a)Distribution or Payment of RSUs. Participant’s RSUs shall be distributed in Shares (either in book-entry form or otherwise), or, in the sole discretion of the Company, an amount in cash equal to the Fair Market Value of such Shares or a combination of cash and Shares as determined by the Company on the Delivery Date applicable to the vested portion of the RSUs. For the avoidance of doubt, the distribution applicable to the vested portion of the RSUs may consist, in whole or in part, of Shares or cash equal to the Fair Market Value of the Shares calculated as of the distribution date. Notwithstanding the foregoing, the Company may delay a distribution or payment in settlement of RSUs if it reasonably determines that such payment or distribution will violate U.S. federal securities laws or any other Applicable Law, provided that such distribution or payment shall be made at the earliest date at which the Company reasonably determines that the making of such distribution or payment will not cause such violation, as required by U.S. Treasury Regulation Section 1.409A-2(b)(7)(ii), and provided further that no payment or distribution shall be delayed under this Section 2.4(a) if such delay will result in a violation of Code Section 409A.

(b)All distributions of Shares shall be made by the Company in the form of whole Shares, and any fractional share shall be distributed in cash in an amount equal to the value of such fractional share determined based on the Fair Market Value as of the date immediately preceding the date of such distribution.

(c)Notwithstanding the foregoing, if Participant is resident or employed outside of the United Sates, the Company, in its sole discretion, may settle the RSUs in the form of Shares but require Participant to sell such Shares immediately or within a specified period following Participant’s Termination of Service (in which case, this Agreement shall give the Company to issue sales instructions on Participant’s behalf).

(d)For the avoidance of doubt, this Award represents a right to receive Shares, and not a right to receive cash, and the Company is authorized to deliver cash in settlement of all or any portion of the Award in its sole discretion.

Section 2.5Conditions to Issuance of Certificates. The Company shall not be required to issue or deliver any certificate or certificates for any Shares or to cause any Shares to be held in book-entry form prior to the fulfillment of all of the following conditions: (a) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (b) the completion of any registration or other qualification of the Shares under any U.S. state or federal law or under rulings or regulations of the U.S. Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable, (c) the obtaining of any approval or other clearance from any U.S. state or federal governmental agency or non-U.S. regulatory agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable, and (d) the receipt of full payment of any applicable withholding tax in accordance with Section 2.6 by the Participating Company with respect to which the applicable withholding obligation arises.

Section 2.6Tax Withholding. Notwithstanding any other provision of this Agreement:

(a)The provisions of Section 10.2 of the Plan are incorporated herein by reference and made a part hereof. Participant acknowledges that he or she may be required to pay to the Company or, if different, the Employer, and that the Company, the Employer, or any Affiliate shall have the right and are hereby authorized to withhold from any compensation or other amount owing to Participant, applicable income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items (including taxes that are imposed on the Company or the Employer as a result of Participant’s participation in the Plan but are deemed by the Company or the Employer to be an appropriate charge to Participant) (collectively, “Tax-Related Items”), with respect to any issuance,

transfer, or other taxable event under this Agreement or under the Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such Tax-Related Items. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to the grant, vesting and/or settlement of the RSUs and the subsequent sale of Shares acquired upon settlement of the vested RSUs; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate Participant’s liability for Tax-Related Items or achieve a particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

(b)The Company shall withhold, or cause to be withheld, Shares or cash otherwise vesting or issuable under the RSUs in satisfaction of any applicable withholding tax obligations, unless the Administrator permits Participant to elect to satisfy such obligations by (i) cash, wire transfer of immediately available funds or check or (ii) if approved by the Administrator, by delivery of a written or electronic notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon vesting of the RSUs, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate applicable withholding tax obligations; provided that payment of such proceeds is then made to the Company upon settlement of such sale in satisfaction of the applicable withholding tax obligations, the number of Shares that may be so withheld or surrendered shall be limited to the number of Shares that have a Fair Market Value on the date of withholding no greater than the aggregate amount of such obligations based on the maximum individual statutory withholding rates in Participant’s applicable jurisdictions for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income. Notwithstanding the foregoing, Participant authorizes the Company to satisfy the applicable withholding tax obligations from proceeds of the sale of Shares issuable under the RSUs through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization). If the obligation for Tax-Related Items is satisfied by withholding in Shares, Participant is deemed to have been issued the full number of Shares subject to the vested RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items. Participant acknowledges that, regardless of any action taken by the Company, the Employer, or any Affiliate the ultimate liability for all Tax-Related Items, is and remains Participant’s responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer.

(c)Notwithstanding any other provision of this Agreement, the Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to, or to cause any such Shares to be held in book-entry form by, Participant or Participant’s legal representative unless and until Participant or Participant’s legal representative shall have paid the Tax-Related Items resulting from the grant, vesting or settlement of the RSUs or any other taxable event related to the RSUs.

(d)Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any other Participating Company takes with respect to any tax withholding obligations that arise in connection with the RSUs. No Participating Company makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares. The Participating Companies do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.

Section 2.7Rights as Stockholder. Neither Participant nor any Person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in book-entry form) will have been issued and recorded on the records of the Company or its transfer agents or registrars and delivered to Participant (including through electronic delivery to a brokerage account). Except as otherwise provided herein, after such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to such Shares, including, without limitation, the right to receipt of dividends and distributions on such Shares. From and after the Grant Date and until the earlier of (a) the time when the Shares or cash in lieu thereof are delivered in settlement of the RSUs

and (b) the time when Participant’s right to receive Shares or cash in lieu thereof in settlement of the RSUs is forfeited, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, Participant shall be credited with a dollar amount equal to (i) the per Share cash dividend paid by the Company on its Shares on such date, multiplied by (ii) the total number of RSUs subject to the Award that are outstanding on the record date for that dividend (the “Accrued Dividend Right”). Such Accrued Dividend Rights (if any) shall be subject to the same terms and conditions, including payment timing, vesting and the obligation to satisfy any withholding tax obligations, in the same manner and at the same time as the RSUs to which the Accrued Dividend Rights relate; provided, that amounts payable in respect of the Accrued Dividend Rights shall be paid in cash.

ARTICLE III.

RESTRICTIONS

Section 3.1Non-Competition. If the Grant Notice indicates that the Restrictive Covenants Addendum is “Applicable,” then Participant shall be subject to the obligations and undertakings set forth in the Restrictive Covenants Addendum attached hereto. Otherwise, such obligations and undertakings set forth therein shall not apply to the Participant.

Section 3.2Confidential Information. “Confidential Information” as used herein shall mean all confidential and proprietary information of the Company and its Subsidiaries, 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 Participant or is embodied in written, electronic, or other tangible form.

Section 3.3Non-Disclosure. Participant 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. Participant shall not, either before or at any time after the termination of Participant’s employment for any reason or under any circumstance, use for Participant’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 Participant’s service for the GCM Group, 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 Participant of Participant’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 Participant is, in the opinion of counsel acceptable to the Company, compelled by law to disclose Confidential Information or else stand liable for contempt or suffer other censure or penalty, Participant may disclose such information, provided, that Participant shall promptly notify the Company of such requirement so that the Company may seek a protective order. Nothing in this Article III or otherwise in this Agreement prohibits Participant 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. Participant does not need the Company’s prior authorization to make any such reports or disclosures, and Participant is not required to notify the Company that Participant has made such reports or disclosures. Participant also expressly acknowledges that Performance Records constitute Confidential Information. For the avoidance of doubt, Participant 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 Participant is not authorized to use or disclose them for any reason other than the Employer’s legitimate business purposes.

Section 3.4Return of Information. Upon Participant’s Termination of Service, Participant shall cause to be delivered to the GCM Group 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. The Company retains, on behalf of the GCM Group, the right to examine any home or laptop computers or similar devices used by Participant, and to copy and/or erase all Confidential Information contained on such computers and devices.

Section 3.5Interference. Participant shall not, directly or indirectly (except in a Permitted Capacity), until one (1) year after Participant’s Termination of Service, 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 Participant’s employment by the Company commenced until Participant’s Termination of Service, 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) (a “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”).

Section 3.6No Solicitation of Clients or Marketing Agents. Participant shall not, directly or indirectly (except in a Permitted Capacity), until one (1) year after Participant’s Termination of Service, 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.

Section 3.7No Employee Solicitation. Participant shall not, directly or indirectly (except in a Permitted Capacity), until one (1) year after Participant’s Termination of Service, induce or attempt to induce any officer or employee of or consultant to any Grosvenor Party (other than Participant’s personal secretary) or of any investment fund managed directly or indirectly by it, to terminate his/her employment or consultancy with such entity.

Section 3.8Hiring by Participant. Participant shall not, directly or indirectly (except in a Permitted Capacity), until one (1) year after Participant’s Termination of Service, directly or indirectly hire or retain, or attempt to hire or retain, any Person described in Section 3.7.

Section 3.9Time Limitation. During the period after Participant’s Termination of Service, Sections 3.5 and 3.6 shall apply only to (i) Past Clients, Present Clients and Potential Clients who were such as of such Termination of Service, (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 such Termination of Service, 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 such Termination of Service.

Section 3.10Clients. For purposes of Sections 3.5 and 3.6, “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 years prior to such time, offered or solicited (by means of personal meeting, telephone call, or a letter or written proposal specifically 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.

Section 3.11Permitted Capacity. As used in this Agreement, “Permitted Capacity” means Participant acting in his or her capacity as an employee of or consultant to the Company or any Grosvenor Party.

Section 3.12No Disparagement. Participant shall not at any time disparage any Grosvenor Party, or any officer or employee of any Grosvenor Party. Participant shall not, without the prior written consent of the Company, make any written or oral statement concerning the termination of Participant’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 Section 3.12 shall prevent Participant 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.

Section 3.13Future 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 Article III shall apply to all such business and activities.

Section 3.14In the event Participant materially breaches any provisions of this Article III or any other written covenants between such Participant and any Participating Company, Participant shall immediately forfeit any and all RSUs granted under this Agreement (whether or not vested), and Participant’s rights in any such RSUs shall lapse and expire.

ARTICLE IV.

NATURE OF GRANT

Section 4.1In accepting the grant of the RSUs, Participant acknowledges, understands and agrees that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

(b)the grant of the RSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of an award, or benefits in lieu of an award, even if RSUs have been granted in the past;

(c)all decisions with respect to future grants of RSUs or other grants, if any, will be at the sole discretion of the Company;

(d)Participant is voluntarily participating in the Plan;

(e)the RSUs and the Shares or cash subject to the RSUs, and the income from and value of same, are not intended to replace any pension rights or compensation;

(f)the RSUs and the Shares or cash subject to the RSUs, and the income from and value of same, are not part of normal or expected compensation for purposes of, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments;

(g)unless otherwise agreed with the Company in writing, the RSUs and the Shares or cash subject to the RSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service Participant may provide as a director of an Affiliate;

(h)the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

(i)no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from the termination of Participant’s Termination of Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment or service agreement, if any); and

(j)neither the Company nor the Employer shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the RSUs or of any amounts due to Participant pursuant to the settlement of RSUs or the subsequent sale of any Shares acquired upon settlement.

ARTICLE V.

DATA PRIVACY

As a condition of receipt of the RSUs, Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Article V by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan. The Company and its Affiliates may hold certain personal information about Participant, including but not limited to, the Participant’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), any shares of stock held in the Company or any of its Affiliates, details of all Awards, in each case, for the purpose of implementing, managing and administering the Plan and Awards (the “Data”). The Company and its Affiliates may transfer the Data amongst themselves as necessary for the purpose of implementation, administration and management of Participant’s participation in the Plan, and the Company and its Affiliates may each further transfer the Data to any third parties assisting the Company and its Affiliates in the implementation, administration and management of the Plan. These recipients may be located in Participant’s country, or elsewhere, and Participant’s country may have different data privacy laws and protections than the recipients’ country. Through acceptance of the RSUs, Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or any of its Affiliates or Participant may elect to deposit any Shares. The Data related to Participant will be held only as long as is necessary to implement, administer, and manage Participant’s participation in the Plan. Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to Participant or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel Participant’s ability to participate in the Plan, and, in the Administrator’s discretion, Participant may forfeit any outstanding Awards if Participant refuses or withdraws his or her consents as described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participant may contact his or her local human resources representative.

ARTICLE VI.

OTHER PROVISIONS

Section 6.1Administration. The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested Persons. To the extent allowable pursuant to Applicable Law, no member of the Committee or the Board will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement.

Section 6.2RSUs Not Transferable. The RSUs may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the Shares or cash underlying the RSUs have been issued, and all restrictions applicable to such Shares or cash have lapsed. No RSUs or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. Notwithstanding the foregoing, with the consent of the Administrator, the RSUs may be transferred to Permitted Transferees, pursuant to any such conditions and procedures the Administrator may require.

Section 6.3Adjustments. The Administrator may accelerate the vesting of all or a portion of the RSUs in such circumstances as it, in its sole discretion, may determine. Participant acknowledges that the RSUs and the Shares or cash subject to the RSUs are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan, including Section 12.2 of the Plan.

Section 6.4Cooperation; Repatriation and Compliance Obligations. Participant agrees to cooperate with the Company and the Employer in taking any action reasonably necessary or advisable to consummate the transactions contemplated by this Agreement. Further, Participant agrees to repatriate all payments attributable to the RSUs in accordance with local foreign exchange rules and regulations in Participant’s country of residence (and country of employment, if different). In addition, Participant agrees to take any and all actions, and consents to any and all actions taken by the Employer, the Company and its Affiliates as may be required to allow the Employer, the Company and its Affiliates to comply with Applicable Law in Participant’s country of residence (and country of employment, if different). Finally, Participant agrees to take any and all actions that may be required to comply with Participant’s personal legal and tax obligations under local laws, rules and regulations in Participant’s country of residence (and country of employment, if different).

Section 6.5Non-US Addendum. Notwithstanding any provisions in this Agreement to the contrary, the RSUs shall be subject to any special terms and conditions set forth in the Non-US Addendum to this Agreement for Participant’s country of residence (and country of employment or service, if different). Moreover, if Participant relocates to another country, any special terms and conditions for such country will apply to Participant, to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable for legal or administrative reasons (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer). The Non-US Addendum constitutes part of this Agreement.

Section 6.6Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Company’s General Counsel and Secretary at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant at Participant’s last address reflected on the Company’s records. By a notice given pursuant to this Section 6.6, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be

deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service or similar foreign entity.

Section 6.7Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the RSUs and on any Shares or cash acquired under the Plan, to the extent the Company determines, in its sole discretion, it is necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the RSUs and the Plan. Such requirements may include (but are not limited to) requiring Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

Section 6.8Language. Participant acknowledges that he or she is proficient in the English language, or has consulted with an advisor who is proficient in the English language, so as to enable Participant to understand the provisions of this Agreement and the Plan. If Participant has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

Section 6.9Electronic Delivery and Acceptance. The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

Section 6.10Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

Section 6.11Governing Law; Venue. The laws of the State of Delaware, USA shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. For any legal action relating to this Agreement, the parties to this Agreement consent to the exclusive jurisdiction and venue of the federal courts of the Northern District of Illinois, USA, and, if there is no jurisdiction in federal court, to the exclusive jurisdiction and venue of the state courts in Cook county, Illinois, USA.

Section 6.12Repayment of Proceeds; Clawback and Offset Policy. The Shares or cash in lieu thereof underlying the RSUs and all proceeds related to such Shares or cash in lieu thereof are subject to the Company’s clawback and offset policy, as in effect from time to time. In addition, in the event of a breach of any of the restrictive covenants set forth in Article III or any Termination of Service for Cause, Participant shall be required, in addition to any other remedy available to the Company (on a non-exclusive basis), to pay to the Company, within ten (10) business days of the Company’s request to Participant therefor, an amount equal to the aggregate proceeds Participant received in respect of the settlement of the RSUs (based on the Fair Market Value of any Shares received as of the relevant settlement dates). In addition, if Participant receives any amount in excess of what Participant should have received under the terms of this Agreement for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), then Participant shall be required to repay any such excess amount to the Company. Without limiting the foregoing, all RSUs shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with Applicable Law.

Section 6.13Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement, are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act, and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan, the Grant Notice and this Agreement, shall be deemed amended to the extent necessary to conform to Applicable Law.

Section 6.14Amendment, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the RSUs in any material way without the prior written consent of Participant.

Section 6.15Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in Section 6.2 and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

Section 6.16Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the RSUs, the Grant Notice and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

Section 6.17Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of any Participating Company or shall interfere with or restrict in any way the rights of any Participating Company, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent (i) expressly provided otherwise in a written agreement between a Participating Company and Participant or (ii) where such provisions are not consistent with applicable foreign or local laws, in which case such applicable foreign or local laws shall control.

Section 6.18Entire Agreement. The Plan, the Grant Notice and this Agreement (including the Addenda attached hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.

Section 6.19Code Section 409A. The intent of the parties is that the payments and benefits under this Agreement comply with or be exempt from Code Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.

Section 6.20Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.

Section 6.21Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust. Neither the Plan nor any underlying program, in and of itself, has any assets. Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs.

Section 6.22Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

Section 6.23Private Offering. If Participant is resident outside the United States, the grant of the RSUs is not intended to be a public offering of securities in Participant’s country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local securities authorities with respect to the grant of the RSUs unless

otherwise required under local law. No employee of the Company is permitted to advise Participant on whether Participant should acquire Shares under the Plan or provide Participant with any legal, tax or financial advice with respect to the grant of the RSUs. Investment in Shares involves a degree of risk. Before deciding to acquire Shares pursuant to the RSUs, Participant should carefully consider all risk factors and tax considerations relevant to the acquisition of Shares under the Plan or the disposition of them. Further, Participant should carefully review all of the materials related to the RSUs and the Plan, and Participant should consult with Participant’s personal legal, tax and financial advisors for professional advice in relation to Participant’s personal circumstances.

Section 6.24Exchange Control, Foreign Asset/Account and/or Tax Reporting. Participant acknowledges that there may be certain exchange control, foreign asset/account and/or tax reporting requirements that may affect Participant’s ability to acquire or hold Shares or cash received from participating in the Plan (including the receipt of any dividends paid on Shares and the proceeds from the sale of Shares) in a brokerage or bank account outside Participant’s country. Participant may be required to report such accounts, assets or related transactions to the tax or other authorities in Participant’s country. Participant also may be required to repatriate sale proceeds or other funds received as a result of participating in the Plan to Participant’s country within a certain time after receipt. Participant acknowledges that it is Participant’s responsibility to comply with such regulations and that Participant should speak to his or her personal advisor on this matter.

Section 6.25Insider Trading/Market Abuse. Participant may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions, including the United States, Participant’s country and the designated broker’s country, which may affect Participant’s ability to accept, acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., the RSUs) or rights linked to the value of Shares under the Plan during such times that Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in Participant’s country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions and that Participant should speak to his or her personal advisor on this matter.

Section 6.26Waiver. The waiver by the Company with respect to Participant’s (or any other participant’s) compliance of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

Section 6.27Consent and Agreement With Respect to Plan. Participant (a) acknowledges that a copy of the Plan and the U.S. prospectus for the Plan has been available to Participant; (b) represents that he or she has read and is familiar with the terms and provisions thereof, has had an opportunity to obtain the advice of counsel of his or her choice prior to executing this Agreement and fully understands all provisions of this Agreement and the Plan; (c) accepts the RSUs subject to all of the terms and provisions thereof; and (d) agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Agreement.

* * * * *

RESTRICTIVE COVENANTS ADDENDUM TO

THE RESTRICTED STOCK UNIT AWARD AGREEMENT

In addition to the terms of the Plan, the Grant Notice and the Agreement, if the Grant Notice indicates that the Restrictive Covenants Addendum is “Applicable,” then the RSUs are subject to the following additional terms, conditions and provisions. All capitalized terms as contained in this Restrictive Covenants Addendum shall have the same meaning as set forth in the Plan, the Grant Notice and/or the Agreement.

Participant acknowledges that (i) the GCM Group conducts business throughout the world, (ii) the Company 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 (the “Interests”), (iii) the covenants contained in this Restrictive Covenants Addendum are reasonably necessary to protect the Interests, including, but not limited to, those identified above, and (iv) the restrictions and other provisions hereafter set forth in this Restrictive Covenants Addendum are reasonable and necessary in all respects including, without limitation, duration, geographic reach, and scope of activities covered, to provide such protection of the Interests. Participant further acknowledges and represents that the RSUs provided by the Company in this Agreement adequately compensate Participant for any potential employment opportunities Participant may forego as a result of Participant’s compliance with the protective covenants contained in this Restrictive Covenants Addendum, that such compensation will enable Participant to provide for the needs and wants of Participant’s family without violating such restrictions, and that the truth of the foregoing representations is a material condition to Participant’s employment by the Company. Accordingly, in consideration of the promises and covenants given to Participant under this Agreement, including, without limitation, Participant’s entitlement to the RSUs in this Agreement, Participant agrees to be bound by and to faithfully observe the restrictions and covenants set forth hereafter in this Restrictive Covenants Addendum and further agrees that Participant will not do or attempt to do indirectly, through any other Person, or by any other manner, means, or artifice, anything which this Restrictive Covenants Addendum prohibits Participant from doing directly.

Investment Management or Advisory Services. Participant shall not, directly or indirectly (except in a Permitted Capacity), until one (1) year after Participant’s Termination of Service, 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).

Multi-Manager Alternative Strategies. Participant shall not, directly or indirectly (except in a Permitted Capacity), until one (1) year after Participant’s Termination of Service, either:

(a)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

(b)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).

Investment of Participant’s Own Funds. Without the consent of the Company, Participant shall not, directly or indirectly, until one (1) year after Participant’s Termination of Service, invest (or assist in the investment of) Participant’s own funds or any other funds controlled, advised or administered in any way by him/her in (i) any investment entity or vehicle of a type commonly known as a “hedge fund,” a 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.

Invest In. For purposes of this Restricted Covenants Addendum, 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.

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

Revision. The parties hereto expressly agree that in the event that any of the provisions, covenants, warranties or agreements in this Restricted Covenants Addendum are held to be in any respect an unreasonable restriction upon Participant 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.

In the event Participant materially breaches any provisions of this Restricted Covenants Addendum or any other written covenants between such Participant and any Participating Company, Participant shall immediately forfeit any and all RSUs granted under this Agreement (whether or not vested), and Participant’s rights in any such RSUs shall lapse and expire.

2

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: November 9, 2022	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: November 9, 2022	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 September 30, 2022 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: November 9, 2022	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 September 30, 2022 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: November 9, 2022	By:	/s/ Pamela L. Bentley
		Pamela L. Bentley
		Chief Financial Officer<br><br>(principal financial officer)