Good afternoon, everyone. This is Rodrigo Ferreira from Bank of America, and thank you all for joining Bank of America's 34th Annual Financial Services Conference. I am pleased to introduce Michael Sacks, Chairman and CEO of GCM Grosvenor. GCM Grosvenor has been a leading global alternative asset manager for over 50 years. Michael joined the firm in 1990 and became the CEO in 1994. Under his guidance, GCM Grosvenor grew from an early participant in the cottage industry to its current position as one of the largest open architecture alternative asset managers. The firm currently manages $87 billion of AUM, with a client-centric approach, evidenced by 70% of AUM being in customized separate accounts. With that said, Michael, thank you for joining us. Thank you for having us. It's our pleasure to participate. We're glad to be here. Are you guys looking to swap something out? Okay. Not sure what it is. Okay. Michael, maybe to start, you reported earnings today, your stock had a very positive reaction. It was up 14%. For those who may not have had a chance to see the results, can you talk about what the highlights of the call were, and if there were any key takeaways to mention? Sure. Craig, first, I just want to acknowledge you, and that was a good catch on the feedback on the mic there. I saw you. I did that. We had a good call. We had a good year. We had a very strong year, and we had a very strong close to the year, strong fourth quarter. So what we announced today was that we had record fundraising for the firm at $10.5 billion for the year, that we had a record quarter in terms of fundraising at $3.5 billion for the quarter, that we had a very good performance in our ARS business. So we had very strong performance fees from our ARS business for the full year, which are realized in the fourth quarter, and we announced that today. And then, the only thing that I think wasn't, you know, just kind of lights out for the quarter was the level of realized carry revenue in the quarter, which was actually kind of light. It was lighter than we expected, but our unrealized carry at net asset value, which is, you know, mark all the carry to market, liquidate it tomorrow, here's what you get. That number jumped pretty significantly in the quarter, and it now stands at a, at a pretty significant number relative to our, to our total enterprise value. We told everybody that we'd had a pretty good year with regard to some of our strategic milestones. First, we realized some of the operating leverage that we've been talking about in the business, so our fee-related earnings margin increased by a couple of hundred basis points, and we said that we see operating leverage continuing. Going forward, we see more operating leverage, more room in that margin. We had made the wealth channel a priority, and we had a number of unique developments in the wealth channel that we talked about on the call. Both I touched on that and John touched on that, and those are in terms of the $10.5 billion we raised, what, how much of it came from the wealth channel, it was a good number. What we've done in the wealth channel over the last couple of years, we have a new distribution partnership that we're an equity owner in, that is working in the wealth channel now, and we have launched a fund earlier in the year that's raising money every day, and we just filed to launch a second fund. So we kind of went through all of that. All in all, it was a very good year, and I think maybe the most important thing that we... You know, we gave pretty good guidance for Q1, but the most important thing I think we said on the call was a year ago, we had a pipeline, and we told everybody the pipeline was full. I might take a step back. 2022, alts kind of slowed down, private equity slowed down, it got tougher. We've been saying consistently throughout that period of time that demand has not moved. Demand has stayed really strong, but sales cycle stretched out. And so we were raising $7-$8 billion a year, and then 2022 came, and we got knocked down, I think in 2023 to $5.2 billion, 2024 up to $7.4 billion last year, $10.5 billion. And that, that demand has stayed strong. What's interesting is we raised $10.5 billion last year as a record for our firm. That's all third-party fundraising. No, we don't have insurance assets that generate liabilities. And, our pipeline is bigger today than it was a year ago. So we're optimistic with regard to 2026 on the heels of a very good, strong 2025. Maybe staying on that topic and looking a little bit at the macro, when you look around and think about interest rates, what you're seeing in transaction volumes, this AI concentration, tariffs, credit quality, just these more broader topics, and how does, I guess, how does the rate backdrop shape where GCM Grosvenor sees risk and opportunity today? There's a lot in there, and it's actually, I think, interesting, and it's all reasonably constructive. So what I should have mentioned with to your first question is one of the things that we spent time on today, that a week and a half ago, when Stacy gave me the first draft of our script, wasn't in the script at all, was talk about your SaaS exposure, talk about it firm-wide, talk about it in your credit book, talk about what it means, because that obviously blew up in the last, you know, week or so. We joked, you know, Hamilton Lane got lucky, and they didn't have to address it on the earnings call because it was Monday last week. Everybody after that said, give all this facts and all this information. So, we happen to have a fairly low level of exposure there at about 4% of AUM. We said on the call today, we really went through that in a fair bit of detail for anybody that wants to, you know, go, is interested in the company and wants to go look at that. But, we basically think, actually, that the attachment point. We don't think all SaaS companies are going away. We, think there was kind of no differentiation, lots of volatility. Happens to be a good environment for our ARS business. We actually have more long exposure to AI directly and to beneficiaries from AI than we have exposure to, you know, re-rating or, you know, reworking the business, re-rating the pricing or reworking the business model of SaaS. But with regard to the credit specifically, which is where a lot of the, the conversation seems to have been, our view is the attachment points are pretty protective of capital. So we see a tremendous amount of change from AI. We think it's a huge opportunity for our firm. We think it's gonna change a lot of things. We actually, like, push on it certainly every week, and we're trying to push the whole of the firm to embrace and become better through the use of AI. But a little bit there were. And I think we were one of them, there were a lot, you know, a lot of things that were just painted with a very broad brush over the last week and a half. And so, you know, we're glad to have had a good call and a good result. Interestingly, and I think this matters, you know, I talked about demand hasn't wavered from 2022, when rates gapped up 400 basis points shortly after Ukraine started. And we said this repeatedly on our quarterly call, so we've not, you know, you can fact-check that. We're saying demand is strong, sales cycle stretched. So that's, you know, that matters, but it wasn't like anybody was running away from. And this is institutional. It wasn't like anybody was running away from increasing or committing capital to alts, and we felt that very clearly. We're in very close contact with our clients in the market, and so you saw that kinda, you've seen that now prove out, that that demand is there. There's a huge opportunity in the wealth channel. What's interesting, I think, is when we had the tariff volatility in April, nothing slowed down. Deal deployment slowed down a little bit. You may have got foggy in terms of, you know, deploying capital and making commitments, but fundraising didn't slow down. And so with a lot of volatility from a policy perspective, a lot of certainly lack of clarity in terms of which way rates are going, and you know, you've seen, we've enjoyed very strong demand for alternative investment product. Mostly, the biggest piece, infrastructure, followed by private credit. On the call today, we pointed out that all of the verticals, so we're broadly, you know, we're a $90 billion firm, broadly defined, you know, private equity, private credit, real estate, infrastructure, hedge funds, open architecture in all of those areas, solutions provider, so a big, heavy, separate account business or fund of one business, if you will, where we sit down with large institutions, and we figure out the program with them and then implement for them. You know, that through all the policy volatility, you know, business has grown nicely. As you think about strategic priorities over the next few years, which areas of the business are most critical to sustaining durable long-term growth? So I think that one of the most promising strategic priorities is the wealth channel, that I want to put a pin in that and come back to it, because I think it an important sort of feature of our business in terms of durable long-term growth. When you look at the amount of capital that we raise every year, we have incredibly high re-up rates with our clients. And so first of all, we always have a pool of capital, we call it committed, not yet fee-paying AUM. These are signed contracts where the fees turn on over time, either with the passage of time or as capital is deployed, and so that's a chunk of capital. That is more than 10% of our total AUM today that's sitting there. It was up significantly last year. Our CNYF plump grew as our fee-paying AUM grew. And so you love to see that because that's, like, more than just replenishing the pipeline. Clients have very high re-up rates, so we've shown slides before. We did an investor day. In the fall, we make an initial sale. There's a 3-4-year investment period. There's a re-up. There's another 3-4-year investment period, another re-up. You go out 8 years, 12 years, and you see this growing amount of AUM and a growing fee stream, and those re-up rates happen with very high, you know, high, at very high rates, 90%. And so clients are long-term clients, and clients are very sticky clients. Beyond the re-up, we have a cross-selling element to our annual fundraising, where a client that hired us in strategy A, three years down the road, wants to work with us in a new— You know, they're gonna re-up on strategy A, but they wanna also work with us on strategy B, and we start doing some, a new activity for them. We actually gave a couple of examples of that on the call today, real, you know, actual, you know, told some stories about that on the call today. And so, I, I think the core business is a durable, growing business that without, you know, anything particularly exciting happen is – we believe is likely to compound at very good rates. Then you get take a look at the wealth channel, where there is an underallocation to alts relative to institutional portfolios, and there is an under diversification inside. I don't even know if that's a word, but under allocation I'll go with. But there's a lack of diversification inside the allocation that is there, and there's just tremendous opportunity in the wealth channel. It's a huge, you know, it. That's. So I'd say that's probably, you know, my strategic priority is always: take care of your existing clients and keep doing what you do, keep doing it well, keep delivering performance for your clients. We did good returns last year. But I think in terms of where we see opportunities for growth, the wealth channel is a very big one. And then we're in the midst of a shift as well to sort of higher value add activities. I think the client base has become more, much more sophisticated over the last five to 10 years, and so we have a lot more capital that is engaging with us to implement co-investment portfolios for them, direct investment portfolios for them, secondary portfolios for them, and those are higher revenue, higher margin activities for us. So that's kind of a shift that's good as well. But the business is a pretty durable business with pretty good tailwinds. You started to touch on this, but late last year, you held your investor day, and you laid out goals for the different businesses within GCM. As we sit here today, how are you tracking against those objectives, and are there any areas you're especially focused on in the near term? Yeah, so we basically had two goals. We had a goal of doubling FRE from 2023 to 2028, and we have a goal of $1.20 a share of adjusted net income for 2028. And we think if you do the math and we achieve those goals, it represents a significant stock price appreciation opportunity, and we are now, you know, two-fifths of the way through that. We're tracking perfectly well in that regard. I think the first year, we maybe outperformed the average that we needed to execute on a little bit. This year, we were a tiny... You know, it's implied 15% CAGR on FRE, and some years we'll be over that, and some years we'll be a little under that, but it-- we're tracking well, and we feel like there's ample opportunity to do that. And again, because of what I said earlier about CNYF, Tom, about re-ups, about cross-sells, the amount of actual pure new go-get that we need to kinda raise to achieve that is probably less than most people would guess at. And so we think it's we think those goals are achievable, and everything's contributing. The last couple of years, infrastructure and private credit have been our two fastest growing verticals. Absolute return had a terrific year last year, and it's great performance for the last three years, and so, you know, we'll see, we'll see how we continue to move forward, how we continue to move forward. The adoption of private equity co-investment has been good. So, you know, we're everything has moved forward, just all slightly different paces, but all progress. I did wanna touch on ARS. So based on your platform, what have been the recent dynamics within absolute return strategies in terms both of inflows and performance? And given that backdrop, how are you thinking about organic growth in the strategy in the near term? So if you look at all of the alternative investment strategies, I would argue... None of this is, like, you know, precise, but I would argue that hedge funds and private equity are probably the most mature. They're, they've, they've been around the longest. They're on the efficient frontier for a while. They have a portfolio allocation, you know, and, and they're probably the most mature. That doesn't mean they don't evolve, and secondaries doesn't get hot, and co-investment doesn't get hot, but the, the, the fundamental allocation of those two. Infrastructure is not as mature, and so it's, I believe, we believe it's gonna see, you know, increased target allocations. Whatever somebody's target for infra is today, likely to be higher five years from now. So though they're below target now, and they'll keep moving towards target, and then the target will go up, and they'll keep moving. So I think you're early innings on the evolution of infrastructure, and that is a strategy that's gonna take capital going forward. Credit's a little different. I should have said real estate also, efficient frontier, long time, somewhat mature, pretty mature. Credit is a little different because credit is more of a fixed income restructuring or reallocation. So there's plenty of fixed income capital that is in private credit or that is rated IG only that can shift on margins to different types of credit. And then credit is also, you know, private credit is kind of a big brush to paint, you know, consumer asset-backed, a sponsor-led, you know, all different types of exposures in the private credit space. But that's how we see the strategies, and we do see them all growing. The ARS strategy will grow, we believe, more from compounding the assets than from, you know, increasing model portfolio allocations and capital flow shifts, but there's nothing wrong with that. And, you know, it has the ability to compound nicely. And just as a fact, it maybe shouldn't be, but, you know, when you have a period of time of good performance, flows tend to follow that. You touched on credit. You've grown the credit business to around $17 billion of AUM. Which areas of credit are most attractive to you today? Are you expanding within those segments, and how would you characterize the competitive landscape, that you're operating in? Well, today it could be picking over, like, crushed SaaS credit. I don't know. But I think, you know, we deployed capital everywhere last year. I think one of the places that we've found interesting opportunity is in credit secondaries, which is not something that you have heard sort of talked about a lot. But you're basically, you know, buying credit portfolios, and you're buying them at a discount, and we think that's interesting, and we've been raising capital for credit secondaries and deploying capital in the credit secondaries space. And that's maybe, you know, we have liked asset-backed for a long time. We've probably been a little bit light on buying, you know, sponsor-backed credit for, for a bit, but we've been deploying capital across the whole spectrum. Staying on credit, how did the negative press last year around private credit and concerns over credit quality impact your business? Was there anything you learned from that period that you're carrying forward in 2026? So separate, you know, what, the press from what we learned. I- having been in this general business since the late 1980s, and at Grosvenor since 1990, you get used to bad press around alternative asset management. It's just like a constant. So, you know, I started out in the late 1980s in the hedge fund business. You can go back to the 1960s, the 1970s, and you can literally find articles, you know, the death of hedge funds, the end hedge funds, going back decades. You know, and, and this is kind of constantly comes up, the private equity model's broken. There was a much, story last week about ghost private equity funds and stuff. You know, we had the biggest fundraising year that we've ever had in the midst of bad headlines on private credit, headlines on ghost middle-market private equity, where we happen to focus. So, you know, I don't put a ton of stock in that. I actually think there's, like, something about alternative asset management firms and the alternative asset space. I've never totally understood, but there's just a lot of... There's always some chatter, and so you have to separate out, you know, we have to separate wheat from chaff. You have to separate out noise. We always think that the best proof point is your performance and your fundraising. So the clients are pretty smart, you know, and if there is a worry about how things are marked and that there's some chronic over-marking or something, the clients are gonna be worried about that. The clients are not gonna be, you know, allocating a lot of capital. They're three steps closer to it and two more, three more levels of detail than the press. And so they're, you know, and they're, you know, there's plenty of money allocated. So credit is always, you know, credit goes in cycles. You have credit, you know, cycles. We've been through a period of time with very low default rates, and you know, and so you expect an element of cycles. Like, we haven't outlawed these things. They're supposed to happen to some degree, but in general, you know, we think with good private credit managers who do their work on security selection, I would expect, you know, some of the if problems are gonna show up, they're maybe gonna show up in more of the ratings-based buyers that have to buy certain things because they fit, whether it's a BDC, could be, you know, or some regulated financial, an insurance company, whatever. That's where these kinds of things will show up more than in the portfolio of a private credit firm that can actually has degrees of freedom to do work and make individual, you know, security-specific selection. Okay. We talked a little bit about infrastructure. Infra has become an increasingly attractive asset class, as you mentioned, globally, particularly as AI-driven demand for power, data centers, and related assets continues to grow. What type of infrastructure assets have you been targeting? What funds do you currently have in place, and how do you see this platform continuing to scale from here? Yeah. So infrastructure is a really interesting space. I, I think one of the things that's most interesting about sort of infrastructure writ large is that there is actual significant fundamental demand for the assets underpinning the industry. So you, we think about stocks, we think about bonds. Business needs capital to grow. So you need a, you need a stock market, you need capital to grow, you need to sell more debt at times to be able to invest in your business and grow. But whether you're doing that, you know, through private equity, or you're doing it through the public equity markets, whether you're doing it through private credit, you're doing it through bank debt, like, that's not sort of necessarily like fundamentally transformational. I know it is, and on the margin, the cost of capital, you know, changes the growth rate, and I get, you know, I get all that. But you're looking when you look at infrastructure, you're looking at, you know, whole huge markets that, that need capital because supply is behind demand. So everybody talks about the data centers, and everybody talks about the AI phenomenon. That is exciting, super exciting. It's wild. The numbers are sort of crazy, but the power generation that's needed to actually enable that and make that happen is, is, you know, equally as exciting. So, you know, any, anything that you can do to unlock, unblock, or, you know, increase and provide power in infrastructure today, there's just so much underlying demand for it. It's, you know, it's, it's very exciting. We've done, you know, cold storage platforms. We've done. We've invested in ports. We've, you know, just—and it's a space that needs capital, and it just, to me, it's a different kind of need than the need for private equity capital or the need for private credit capital. It's a true, you know, it's that it requires capital to come to the assets and come to the space, and so I think that generally sort of tilts things in your favor when you're investing in that environment. The deployment and realization environment has been rapidly evolving over the past few quarters. What's your updated view on that backdrop for both private equity and real estate? So I think the most important thing is, like, we really look at our, we carry it net asset value, and for us, that is a question of when, not if. And, you know, when, not if, can be a different answer if the assets are not appreciating along the way. But if you look at our carried NAV, it's just, you know, it's appreciating. So we would love to realize it sooner, but it's, as long as it's growing, it's, and I'd rather have it grow at a high rate and get it, you know, a couple of years later than get it today and give up that growth. And so you can look at, you know, how that has grown. There are, you know, IPO market's better. It's open. It was closed for a while. We're seeing more transaction activity. It feels, you know, your bankers will have a point of view on how busy they think they are. We've been fooled a little bit the last few years, so I have to, you know, just being candid, we expected an increased transaction environment a couple of times since 2022. That didn't really come to fruition. I mean, we thought, you know, there were, I think, a lot of expectations, animal spirits after the last election, and I think the animals got smaller with less spirit in terms of what actually happened, although the markets have been terrific. So, we're more focused on how that is compounding than when. We have no ability to really precisely predict when we do see some positive signs. I'm a little gun-shy because we thought this once or twice in the last few years. But I will, you know. But you look at our near $900 million of carry at NAV, and which is up a lot over the last few years, and so it is when, not if, and it'll be great when that comes. I should mention, we have, I think, 20% of our total enterprise value in our carry, in carry at NAV. And so it's like a significant asset for us, you know, as a company. It's just not – that's just not reflected in our current earnings. It was diminished last year. You can go back and look at, like, 2022 levels of revenue, and they're, you know, 3x or whatever they are last year. So we've and we had a fraction of the size of the asset at that time. So there's a lot of earnings power in that carry, and realizations will pick up. Meanwhile, you for the cycle, the investing cycle, the evolution of GP-led secondaries has enabled sponsors who want to offer liquidity to clients but don't like the pricing and don't like where they can execute transactions, to come up with, you know, transactions that can let the clients choose to roll or exit. And so that's, you know, I think from a market perspective, from a client perspective, a sponsor perspective, that's a good development. Does it mean you permanently have longer hold times? Maybe. But, you know, I think this is, you know, at some point you're gonna see, you know, a pickup in active realizations and a lot more money being distributed. There's no doubt the sponsors would prefer to sell at good prices and distribute capital to the LPs who are kind of banking on that model than they would to do a GP secondary at a, you know, some kind of a discount. If we turn to distribution and focus on the insurance channel for a moment, this is an area that was relatively small for GCM and for much of the industry three to five years ago, but has since become one of the most important sources of capital. Can you talk about how you've been able to scale your presence within insurance, and what do you see the opportunity to further expanding that channel for you? Yeah, I think for us it's a little bit, you know, shame on us 'cause it took us a little while. But, you know, insurance is truly like a unique channel with a unique language, and you have to have insurance people who speak insurance. We've said sometimes, you know, to be a good salesperson in the insurance space, a good business development person, you almost have to have enough knowledge and education to be able to be, you know, like a CFO, or a CFO, you know, at a small insurance company. Like, you just have to understand how the insurance companies work, what works for them and doesn't work for them, and it's different than the pension community or the endowment foundation community, or what the issue sets are for sovereigns or things like that. So I think we started to add sophisticated insurance people a few years ago, and we've seen, you know, we've seen return on that, and we've seen results on that. I think last year we raised north of 10% of our capital came from insurance companies against the insurers making up 4% or 5% of our AUM. So it's, you know, we're raising at twice the rate of representation, and the conversations we're having are increasingly more sophisticated conversations about various ways to work with the insurers and partner with the insurers. So we're very bullish there, and we expect that will continue to be a more important channel for us. We have put that pin on wealth. Maybe we come back to that now. Last year, formed Grove Lane Partners, joint venture. Yep. Can you talk about how this JV has helped to scale the wealth platform and how the platform itself has evolved since it's launched? Sure. So, Grove Lane Partners is really, I think the way to think about it is it's a distribution team. It's a sales, marketing, and client service team for the wealth channel. There, you know, there were a number of firms that had pretty significant success in the wealth channel. You know, everybody in the room knows who those firms are. Very, very good firms. And there were, I think, some a bunch of people working in those firms that kinda got there when there were no wealth channel assets, saw the wealth channel assets grow to be pretty significant, and were making more money by the end of that three or four or five-year period, but didn't really participate in the tremendous value creation of opening up that market. And so we found a few of those people, and we said: "You know, why don't you become partner with us? Start an entity, we'll fund it, we'll finance it, and you'll own equity, and we'll own equity, and we'll have the ability to call your equity in the future, but you can capture this equity value creation. We've got a capped price on it, but you can capture this equity value creation that you didn't capture last time around." So there's a lot of very good people who had been very successful at some of the bigger, well-known alts firms, have real experience selling alts in the RIA channel, as an example, putting together, you know, seed capital for launching funds, things like that, that were very... You know, we got great talent, and that's what Grove Lane is, and they're out there selling every day now, and we're, you know, we watch those flows every day. We watch the relationships that they turn on and that they create, and we're thrilled with it. We're excited about it, and we think it's got a really bright, important future for us. Maybe staying on the topic of wealth, what other opportunities do you see in the channel, both in terms of products and distribution, and how are you currently pursuing those opportunities or planning to pursue them over the long term? So for a smaller firm like ours, you know, we've had success historically with wirehouses, and this is for closed-end fund, you know, 3(c)(1) kind of private placement with the wirehouses. I think the market moved to registered funds, and the wirehouses don't wanna own the product. They want enough capital from other intermediaries so that it's the, so that their clients aren't the only investor in a vehicle, and if they decide they wanna move, they have some flexibility. So, we have Grove Lane, and we have a JV partnership on an infrastructure interval fund, where we're targeting the RIA space, and the goal is to get it the flows up to a level that the flows are big enough that then, you know, one of the wirehouses says: "Great, we'd like to put it on the shelf," and then another one does. And we think that's what will happen with product, and it's registered product, and it's either interval fund or tender fund, and, you know, who wants which of those structures can change and evolve. Our infrastructure fund's an interval fund. We just are registered a private equity product that's a tender fund. Outside of that, put a product on a shelf, have a sales team, you know, go out and do a great job with it. There are a couple of other opportunities in that wealth channel that I think are really well suited for Grosvenor. One we talked about on the earnings call today is the ability for us to private label a product for RIA firms, for big teams inside a wirehouse. We've done that. We, I think we said, said today we have done 11 of those in the last two years, and we think that's a real, you know, growth opportunity, it, there's a lot of reasons why that's very good for the advisors because they're involved. It's something created specifically for them. It's true that it is unique and created for them, and they can tweak bells and whistles on it that they want, but that's also a valuable part of a value-add story for an advisor to be able to tell a client that, "We created this with our best views for you," as opposed to, "We're buying an off-the-shelf product you could buy at five other places." So we think that's gonna continue to grow, and as I said, we turned on 11 of those relationships in the last couple of years. Excuse me. And then the last piece is, we believe that there's, like, a concentration in the wealth channel now with a relatively small number of large, very large, kinda brand name alts firms. And the majority of the capital that's kinda come is in a pretty small number of big, big global brand name alts firms with, you know, 100x the market cap that we have, 10x the market cap that we have. So the... And, and inside a given strategy, in, inside any kind of wealth channel, there's not a lot of diversification. So those portfolios, in addition to having total allocation size that doesn't look like the institutional world, they have an absence of diversification that makes it very clearly different from the institutional world. Our belief is that the level of diversification there will increase, that the number of names will increase, and that there will be almost like sub-advisors to take a piece. You know, they'll target model model portfolio and have a sub-adviser take a piece of model portfolio and say, "You run the private equity piece." That's kind of a third way. You have direct product, you have private label, and you have, you know, manage this part of our model portfolio, or we're gonna have these three people manage the private equity piece of the model portfolio, and you be one of them, and we think all three of those have pretty huge markets in front of them. Great! With that, Michael, I think we're out of time, but thank you so much for joining us. Thank you. Thanks for having us. Thank you.