Good day, and welcome to the GCM Grosvenor second quarter 2026 results webcast. Later, we will conduct a question and answer session. If you are interested in asking a question, please ensure you dial in using the numbers you have been provided for this call and press star one on your keypad to join the queue. If anyone should require operator assistance, please press star zero on your telephone. As a reminder, this call will be recorded. I will now like to hand the call over to Stacie Selinger, Head of Investor Relations. You may begin. Thank you. Good morning. Before we discuss our results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business, our financial performance, and projections. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties, and other important factors that may cause our actual results to differ materially from those indicated by the forward-looking statements on this call. Please refer to the factors in the Risk Factors section of our filings with the SEC related to these statements. We will also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP measures to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are available on our website. Thank you again for joining us. Now I will turn the call over to Michael Sacks, our Chairman and CEO. Thanks, Stacie, and thank you to all listening to the second quarter 2026 earnings call. I am pleased to report that GCM Grosvenor had another strong quarter, both generating returns for our clients while growing revenue and profits for the firm and our shareholders. We ended the second quarter with $97 billion of assets under management and $78 billion of fee-paying assets under management, an increase of approximately 13% for each from a year ago. Constructively, all investment strategies and all investor channels contributed to that growth. During the quarter, as expected, we saw an increase in fundraising from the first quarter's $1.5 billion to $2.3 billion in the second quarter, bringing first half fundraising to approximately $3.9 billion. Importantly, those results were again broad-based across the platform. We continue to expect second half fundraising to exceed the levels experienced in the first half and are pleased to report that our pipeline remains full. Credit was the largest contributor to second quarter fundraising, accounting for more than $900 million of the $2.3 billion raised in Q2, making credit $1.4 billion of the first half's $3.9 billion of fundraising. Jon is going to go into some detail on our credit vertical in his remarks. It's worth mentioning that the individual investor and insurance channels were significant drivers of fundraising, representing 23% and 18% of our year-to-date fundraising against the 5% and 4% of AUM they represented, respectively, at the start of the year. As you know, both channels are areas of focus for us. From a revenue and profitability perspective, we saw second quarter fee-related revenue grow by 11%, fee-related earnings grow by 21%, and adjusted net income grow by 22% as compared to the second quarter of 2025. On the last couple of earnings calls, we have been asked about the impact of AI disruption generally. We have maintained that we have more upside from AI disruption than risk associated with it and noted that we have some direct exposure to disruptors. We continue to believe that. Last quarter, we were specifically asked about SpaceX, and we said that we thought that in the wake of a successful IPO, it would likely be appropriate to address that exposure. I want to do that now. GCM Grosvenor, in our ARS and private markets portfolios, through primary fund allocations to managers, direct investments into dedicated vehicles, and secondary market share purchases, invested approximately $150 million in SpaceX, a conservative sum for our capital base. The average cost of our investment is approximately $6.37 per share, and as of last week's market close, those investments had a value of approximately $3.5 billion, split fairly evenly between ARS and private market portfolios. While these gains have not yet been realized and generally remain subject to lock-up, that investment is the largest single-issuer gain in the history of the firm. For the overwhelming majority of our SpaceX exposure, the timing and form of exit is controlled by underlying managers. Should we receive shares in a distribution, we will decide on a course of action in real-time based on facts and circumstances. The SpaceX investment is a good example of the strength of our origination platform and the breadth and quality of opportunities we can bring to investors, as well as the way our various verticals strengthen and enhance the whole of our firm for our investors. We are of course pleased with this investment thus far. Given the magnitude of the SpaceX success, real time versus one quarter lag timing differences in mark-to-market policy between ARS and private markets, and stock price variability, we feel it is important to highlight for all of our constituents ARS returns both inclusive and exclusive of SpaceX impact. For the quarter, our ARS multi-strategy composite delivered gross returns of approximately 14% inclusive of SpaceX, and 10% excluding SpaceX. Year to date, those numbers are 15% and 11%. It is worth noting that excluding SpaceX, ARS performance is very strong on both an absolute and relative to peer and benchmark basis. Pam will talk in a bit about how to think about SpaceX with regard to annual ARS performance fees. The combination of strong second quarter investment performance and positive net ARS inflows drove a 22% year-over-year increase in ARS fee-paying AUM as of June 30th, and our ARS pipeline remains full. Investment results were also strong across private market strategies without the benefit of the SpaceX IPO marks, where private equity, infrastructure, real estate, and private credit all delivered positive quarter-over-quarter performance. We remain long origination with considerable operating leverage, meaning our sourcing capacity meaningfully exceeds our current investment pace, leaving substantial room to scale activity without sacrificing selectivity. The middle market, the area of private markets where we primarily operate, has held up better than the broader private equity market. While deal activity and realizations are not yet firing on all cylinders, we see the opportunity for a pickup in activity and acceleration of realizations going forward. The precise timing of that is not predictable. Importantly, as we have discussed in the past, we have a high ratio of firm unrealized carry relative to market cap, meaning that as the realization environment improves, there is significant upside to our earnings. We remain confident in our ability to achieve the profitability targets we laid out at our investor day and think that our durable, highly visible management fee growth, significant upside from embedded incentive fee earnings, full fundraising pipeline across verticals, operating leverage, and dividend provide an attractive value proposition for shareholders today and over the long term. With that, I'll turn the call over to Jon. Thank you, Michael. Today I will cover our credit platform, which is one of the fastest-growing areas of our business and an increasingly important differentiator for the firm with clients. As of quarter end, our credit platform managed nearly $18 billion of assets. The credit vertical was the largest contributor to fundraising in the quarter, reflecting strong client demand in what has been frankly an uncertain credit environment. That to me is a great endorsement of our capabilities. We raised over $900 million for credit strategies in Q2, doubling what we raised in Q1. During the quarter, we successfully closed our inaugural credit secondaries fund, which raised approximately $1.2 billion across the flagship fund and related vehicles. We're pleased with that outcome, but believe it is just the beginning of what can be a huge opportunity for us. Secondary markets develop, of course, after the formation of the primary market. But as the primary market matures, the secondary market growth almost always grows considerably faster than the overall category. When you think about the total addressable market here, it is important to remember that the overall size of the credit markets far exceed that of the private equity markets. So being early and meaningful in a category with such massive growth opportunities is an exciting opportunity for the firm. Providing liquidity to the private credit markets through purchasing other investors' positions in funds or specified assets at a discount to market is a huge opportunity. Not all the headlines surrounding private credit this year have been positive. Certain parts of the market, particularly direct lending, have experienced increased scrutiny around valuation, exposure to software categories, leverage levels, and liquidity, particularly in the evergreen semi-liquid market. Fortunately, our exposure to those more challenged areas is relatively limited. What continues to resonate with clients is the highly diversified and flexible nature of our credit platform. From an investment perspective, our competitive advantage begins with sourcing and broad coverage of the market. Across our global platform, we review approximately 1,400 investment opportunities annually, spanning virtually every corner of the private credit market. That breadth of sourcing allows us to identify attractive opportunities across primary funds, co-investments, secondaries, and direct transactions, which we then combine into client portfolios diversified across strategy, sub-strategy, geography, vintage year, and industry. The result is portfolios with dozens of underlying investments rather than concentrated exposure to a small number of transactions or a specific part of the credit market. Equally important is the flexibility on how we deliver those investments to clients. Every client enters the credit market from a different starting point. Some have mature credit programs and are seeking complementary strategies or specialized exposures. Others are entering private credit for the first time and need assistance designing an allocation from the ground up. Our platform allows us to partner effectively with both types of investors. A couple fundraising examples from this quarter illustrate that flexibility. First, in credit co-investments, we expanded our relationship with a longstanding institutional client by developing a strategic partner designed to accelerate deployment into credit co-investments. The program combines our sourcing capabilities with the client's own deal flow and includes both discretionary investments as well as client-originated opportunities, enabling the client to pursue attractive opportunities that otherwise would have been difficult to execute on. The result is a highly tailored solution that leverages the strengths of both organizations. A second example highlights the range of our broader capabilities, of which credit is an important piece. We were selected by an institutional investor making its first allocation of private markets. Rather than starting with a single strategy, we designed a customized program providing diversified exposure across both private equity and private credit. The solution incorporated co-investments and secondaries alongside fund investments to accelerate deployment, reduce the J-curve, and provide immediate diversification. These examples exhibit that we are not tied to a single part of the credit market or implementation style. Instead, we begin with the client's objectives and then utilize the full toolset we have as a platform to deliver a solution that best fits the needs. We believe our position in delivering those solutions for clients has never been stronger. With that, I will turn the call over to Pam. Thanks, Jon. Fee-paying AUM grew a healthy 13% year-over-year, ending the quarter at $78 billion. Contracted, not yet fee-paying AUM grew to $9.7 billion, up 11% from a year ago, which provides a strong foundation for continued organic growth as that capital is deployed and converted into fee-paying AUM over the coming years. Private markets management fees this quarter continued to benefit from solid fundraising and investment activity and increased 10% over the second quarter of last year. As we look ahead to the third quarter, we expect private markets management fees to increase in the mid-single digits year-over-year. As a reminder, based on the timing of our specialized funds in the market, we are not expecting material catch-up fees in the back half of the year. Absolute Return Strategies had another outstanding quarter, driven by strong investment performance combined with positive net inflows. ARS management fees in the quarter increased 11% year-over-year. ARS management fees are primarily charged in advance, so given the strong second quarter investment performance, we expect third quarter ARS management fees to increase by approximately 10% sequentially, which would equate to a nearly 20% growth rate year-over-year. Total fee-related revenue for the quarter was $111 million, an increase of 11% year-over-year, reflecting solid management fee growth across both private markets and Absolute Return Strategies. Turning to expenses, we remain disciplined in managing our expense base while investing thoughtfully in the business. FRE compensation and benefits totaled approximately $38 million during the quarter, and we estimate FRE compensation to be $1 million higher in the third quarter. Q2 non-GAAP general administrative and other expenses were almost $22 million, in line with our expectations. While we continue to invest in technology, including AI initiatives across the firm, we remain focused on driving operating leverage and expect G&A expenses in the third quarter to remain relatively consistent with Q2. Putting these factors together, fee-related earnings for the quarter were $50 million, representing growth of 21% year-over-year, and our FRE margin was 45%. We believe there is significant scalability embedded in our business and remain confident in our ability to further expand margins over time. Turning briefly to incentive fees, investment performance across the platform remained strong. We earned approximately $7 million of annual performance fees in the first half of the year, and we estimate, based on recent ARS investment performance, we have approximately $35 million- $40 million of unrealized annual performance fees. The majority of our performance fees crystallize in the fourth quarter, so the amount of performance fees ultimately realized will depend on ARS investment performance in the second half of the year, of which SpaceX is an important driver. Specifically, as Michael discussed, SpaceX has been a great investment for the firm and is a terrific example of our origination power. We made investments across many different ARS and private market portfolios that were appropriately sized for their risk at the time, and we have generated billions of dollars of profits for our clients. Given the current size of the position, you can expect some variability in our unrealized incentive fees as the price moves. The $35 million- $40 million of unrealized performance fees I mentioned assumed a $110 share price for SpaceX. That number would be higher as of the end of last week. Each additional $10 movement in SpaceX's share price is worth about $4 million of performance fees. Ultimately, performance fees will fluctuate based on broader ARS investment performance for the year. As of June 30th, gross unrealized carried interest was $965 million, with $493 million attributable to the firm's share. A variety of factors can cause fluctuations to our unrealized carry balance from quarter to quarter. Our private markets portfolios are marked on a one-quarter lag, meaning that next quarter's unrealized carry balance will reflect valuations as of June 30th. For example, the SpaceX exposure in our Q2 unrealized carried interest was marked at $84 per share, so we could see a meaningful increase in our unrealized carry next quarter due to our SpaceX exposure, again, given the one-quarter lag. Our balance sheet remains strong, providing us with significant financial flexibility. We are maintaining our quarterly dividend of $0.12 per share while also investing in the long-term growth of the business and opportunistically repurchasing shares. We continue to actively manage dilution through our buyback program, repurchasing 1.6 million shares for approximately $17 million during the quarter. We have $55 million remaining in our buyback authorization. Overall, we are pleased with our results for the second quarter and first half of the year. Accelerating fundraising, strong investment performance, expanding management fees, growing embedded incentive fee earnings, and ongoing operating leverage position us well for the balance of 2026. We remain confident in both our near-term outlook and our long-term financial objectives. Thank you again for joining us today. We'd now be happy to take your questions. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. Please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, star one for questions. We'll take our first question from Chris Kotowski with Oppenheimer. Yeah, good morning, and thanks for taking the question. Pam mentioned that the mark on SpaceX was $84 a share, I think, at March 30. I'm curious what that was at year-end. I think, how typical is that kind of lift in the marks between, say six months before an IPO or monetization event and the ultimate outcome? I guess I'm curious if you think about some of the other high profile IPOs that are in the pipeline. Is that a typical lift that we might expect if some of these major IPOs come to fruition in the next three, six, nine months? Thanks, Chris, for the questions. Michael, I don't think anything about SpaceX is typical. I think it would be a mistake to look at that and try to project that out onto anything. Obviously, a lot of these companies, they've built tremendous revenue streams and tremendous value in a short period of time, and there are a range of views as to how that plays out going forward. But SpaceX, just everything about it is a little bit one-on-one. I wouldn't look to put that onto anything. I think you just got to see how it all rolls forward. Okay, fair enough. You saw from the fourth quarter of last year to the first quarter to the IPO, and frankly, since the IPO, you've just seen a tremendous amount of movement and valuation. For what it's worth, they seem to have done a terrific job. Some of the concerns with regard to the magnitude of expiring lockups seem to have been a bit overinflated, but I don't think you project anything from that onto anything else. Okay. Can you remind us how is ARS billed? Is that billed a value at the beginning of each quarter or at the beginning of each month? Yeah. For the most part in ARS, fees are quarterly in advance based on the beginning quarter AUM number. The performance of the second quarter is in the third quarter beginning AUM number. You bill on that number for the third quarter. You then have your inflows and outflows, and you have your appreciation and hopefully not depreciation, and then you bill for the fourth quarter and so on. Okay, great. That is it for me. Thank you. Thank you. We will take our next question from Bill Katz with TD Cowen. Okay, thank you very much. I wanted to come back to a couple of different things. In your prepared remarks, at least on the press release, Michael, you are quoted saying, "Excited around the momentum of the franchise." I wonder if you could maybe, as you look ahead, where you see the greatest lift. It sounds like a lot of good things are happening on the ARS side. Maybe broaden out the pipe of what your perspective is on that "exciting momentum." Thank you. Yeah, I think, Bill, I am not going to anything with you. We are doing well everywhere, and this would have been a good, upbeat, positive call without the SpaceX conversation. The reality is that SpaceX IPO and the increase in value in Q2 did not really impact revenue at all yet in Q2. I mentioned our insurance efforts, our individual investor efforts. We highlighted credit, which we think has real momentum. We mentioned our pipeline. We are head down, we are working. Nobody is taking anything for granted. We have all been around for a long time, and get that. We are enthusiastic about a lot of different areas of the business right now, and it feels good to us. Bill, I would just add one other comment there, which is, we mentioned that we thought second quarter fundraising would be larger than first, and it was. We mentioned again that we think second half fundraising will be larger than first half. Obviously what we see in our pipeline and in our activity gives us the confidence to go out there with that prediction. Great. Thank you. Just as a follow-up, you mentioned, excuse me, that you also feel good about the realization opportunity. So how should we be thinking about that on the kind of line of sight you have just given your footprint? Then just from a technical perspective, when we think through the compensation waterfall, how are we thinking about the carry payout ratio and then the overall firm payout ratio once you get to the net level? Thank you. Let me take the last piece first, then kind of just get back to the macro market environment. We've maintained roughly, I think for 50% margin, I think, where the firm holds 50% of the firm share of the incentive fees for a long time. We've said a number of times, it starts out in the year we hold. At the beginning of the year, we hold a little bit less. We see how the year evolves, we have landed at about 50%, at least I think the last two years. We have said at times when we start to see that carry asset cashflow more, and/or you see extraordinary performance fees out of the ARS business growth and extraordinary performance fees out of the ARS business, we think the firm can hold more of that over time. We do think we have margin there over time when we start to see the sort of real value of that come through. We have never put a number on that. We're not going to put a number on that. 50% assumption's been a safe base case the last couple of years. We do think we have opportunity in excess of that over time because as you've noted in the past, it's a very big asset relative to our market cap. As far as realizations, as mentioned on the call, improving. Not yet I wouldn't say robust. You've got a better IPO market. For us in the middle market, that's probably a little bit less relevant. We see in our co-invest business, transaction activity is up pretty significantly from this time a year ago. The number of transactions that have been done inside our co-invest portfolios is up significantly, that's a positive sign. We just can't. Nobody can predict timing. Frankly, I think the whole industry's been waiting for this for a little while. It's been a volatile world. Thank you. The important thing is that the asset's there, and that the value of the asset is growing, and Pam touched on that a little bit in her remarks. We're going to see a lift in that asset next quarter as Q2 values roll through for the Q3 mark. SpaceX alone is going to give you a lift there. So, that value continues to move in the right direction. Thank you. Thank you. We'll take our next question from Jeff Schmitt with William Blair. Hi. Good morning. On the ARS business performance was obviously really good. Michael, I think you mentioned the timing of fees earlier. Is that what kind of drove the average fee rate down a bit, the strong AUM growth and the denominator effect versus any sort of fee pressures? Yeah. So no fee pressures. Anything that impacts that fee growth is really just about mix of investor size and the size of money coming in, that type of thing. We haven't had any kind of rewriting of fees or anything like that, and we're not feeling that, and that's not really any place we're feeling any pressure. I don't believe that the second quarter numbers were impacted by anything that went on with profitability in the funds or marks or anything like that in Q2. That wouldn't affect the second quarter numbers at all. Okay, great. Then in international fundraising, it's been pretty strong. I think you recently added some senior talent in a couple of markets there. Just curious, how scalable is your international platform today? Will you need to make additional investments as you scale that? Or would you expect to see operating leverage from here? You want to take that, Jon? Sure. In general, I would say, Jeff, yes and yes, meaning the business overall is scalable. Our ability to continue to raise assets from all of our channels, whether it's the insurance channel, the individual investor channel, the institutional channel in the U.S., outside the U.S., is something we've proven the ability to do now over the last several years as we continue to raise capital from the investments we're making. The nice thing is, those are relatively modest investments because we've been able to do that with pretty good controls around expenses generally. That being said, we are always looking to add talent and where we see opportunities to accelerate distribution efforts. We continue to think there's just great opportunity out there, kind of everywhere, for alts businesses and particularly for our business that can meet anyone where they are on their alts journey. Great. Thank you. We will take our next question from Ken Worthington with JP Morgan. Hi, good morning, and thanks for taking the question. Solid fundraising quarter. You mentioned the $900 million in credit. How much of the $2.3 billion this quarter was in private market funds versus the SMA business? Jon, do you have that number handy, or Stacie? I don't have Stacie, I don't know if I have that right in front of me. Do you? Maybe asked another way, which of the funds in market had closes this quarter, and about how big were those closes? Let me just- While Jon's looking, Ken, for a specific number, what's interesting is we're in market. We're at a place now where, and it's funny because we talked about this a little, where we're in market all the time with all kinds of different funds. We're in different markets. So we're in traditional institutional markets with traditional closed-end specialized funds. We're in the wealth channel with open-end product. Which fund had a close and when's that fund expire? Those questions are a little bit less impactful today than they were seven years ago, with just maybe the exception of the general comments we give on catch-up fees. Because, as you know, some of these funds are in market for 18 months. Last close, the power of that last close is pretty significant when you have a catch-up fee involved. We still try to give you a sense of what kind of catch-up fees we are looking at. There are always funds in market now, and there is just a lot more activity than there was originally. I do not know, Jon, if you found anything specific you wanted to touch on or not. I think year to date, Stacie, you can correct me if I am wrong here, about $400 million of it is for private market specialized funds. That's correct. Just to add on to Michael’s commentary, to give you some perspective around it, Ken, we probably have, at any given time, 10 to 15 specialized funds in market. You are going to have around half of those be closed-end private market funds. You are going to have the other half be evergreen, which could either be for ARS or for the individual investor channel. At any given time, you have obviously got a lot going on there. Right. To that point, I think the number Jon gave is really the traditional closed and institutional specialized or commingled funds, not including the wealth channel where you had other flows in the first half in those channels. Just to put a point on the number Jon gave you. Perfect. Then you mentioned the pickup expected for second half. You clearly see the pipeline, and we see the generalized pipeline. Where do you expect the pickup in second half sales to come from? I think it will be pretty broad-based, Ken, just like what we have seen so far this year, meaning all this stuff we just touched on, meaning your specialized funds that are your traditional private market one, your evergreen specialized funds, which could be either in the ARS space or in the semi-liquid or individual investor channel, your separate accounts. I think you will see it across asset classes. Credit and infrastructure still tend to be the leading contributors right now. I think you will see it from all the different types of channels and geographies. Just in general, when we look across our pipeline right now, the strength is pretty broad-based. Okay, great. Thank you very much. We will take our next question from Crispin Love with Piper Sandler. Thank you. Good morning. I am looking at slide nine, focusing on the 20%+ real assets CAGR. Definitely a step function higher, looking at 2025 relative to 2024, and then solid momentum recently. With all of the anxiety year to date around direct lending and credit uncertainty, as you referenced, have you seen investors lean more into real assets? Can you just share what you have been seeing as it relates to demand and infrastructure versus real estate? Jon, you should address it. The one thing I would say is that I think that the demand. We just talked about growth in credit. Jon just talked about growth in credit in a tough environment for credit with lots of headlines swirling around and all kinds of stuff. I sort of think of it, the demand is pretty significant everywhere. I think in real assets, it is not like demand has increased necessarily. It has been strong for a while, and it has been, as you point out, growing at a terrific rate for a while. Maybe it has got a little bit less headwinds and a little bit less noise, fair bit less headwinds and noise than credit has had, but we have experienced growth in credit. I think we are seeing this growth everywhere. Jon, I do not know what you want to add to that. Yeah. Look, infrastructure has been on at least a, I would call it a 10 to 12-year run so far, and I do not see the run stopping anytime soon. I think that it is a fantastic asset class for what investors look for generally in the terms of a stable return profile, a yield-based profile to it, an inflation protection profile to it. A long duration asset that is a nice matching for liabilities. In general, I just see the infrastructure market continuing to grow. It was 25% of our second quarter fundraising. It has been the highest contributor over the last 12 months. Our platform there is very experienced and has excellent flexibility with respect to how to deliver solutions. And that's obviously before you get into what all the consultants around the world would be talking about in terms of the trillions and trillions of dollars that are needed over the next several decades to improve infrastructure globally. I think it has a lot going for it. I don't think that it necessarily has been all of a sudden a good thing because of what's going on in credit by any stretch. Although I do think that it also does show that the ability for the role it to play in a portfolio that you thought private credit played, that it competes well with that. It's not a zero-sum game, but that it's also a nice asset class to have part of your well-constructed portfolio generally. Great. Thank you. Can you just discuss what you're seeing in Grove Lane recently, the wealth channel distribution, just any update there would be helpful. Sure. We mentioned in the prepared remarks that the individual investor, and we mentioned insurance being much more meaningful contributors to our capital formation than they are of our AUM, which just means they're obviously growing quickly. Our efforts there, in terms of the investments we've made to expand our distribution, are paying off, but it's still early. And still feel like there's just a tremendous amount of growth opportunity, but also a tremendous amount of product creation opportunity there. We've got infrastructure registered product. We've got absolute return registered product. We talked on the last quarter about coming to market with a private equity registered product that we think will be differentiated in the marketplace. And as Michael has always cautioned, it'll be some time before all of that momentum and excitement is hugely meaningful to the financial results of the business. But it's absolutely going well and will be a great growth driver for the business for years to come. Thank you. With no additional questions in queue at this time, I'd like to turn the call back over to our speakers for any additional or closing remarks. Thank you. Appreciate everyone joining this morning, and thank you for your questions and engagement. We look forward to speaking with you again next quarter. Have a great day. That will conclude today's call. We appreciate your participation.