GCM Grosvenor (NASDAQ:GCMG) reported higher third-quarter fee-related revenue and earnings as assets and fundraising grew, and executives said they expect fundraising in the second half of 2026 to exceed the first half.
Assets under management reached $98 billion, up 13% from a year earlier, while fee-paying assets under management rose 11% to $78 billion. The alternative asset manager raised $2.7 billion during the quarter and $10 billion over the preceding 12 months.
Chairman and CEO Michael Sacks said the company’s near-term fundraising pipeline was 20% larger than a year earlier. He said full-year fundraising could rival 2025 levels, though that did not necessarily mean the company would match the prior year’s total.
“That is a pretty strong statement with regard to our expectations for Q4,” Sacks said.
Revenue and Margins Improve
Third-quarter fee-related revenue rose 10% year over year to $115 million. Fee-related earnings increased 15% to approximately $54 million, with the fee-related earnings margin expanding to 47% from 45%.
Adjusted net income climbed 20% to $45 million, while adjusted net income per share rose 16% to $0.22.
Private markets management fees increased 7% to $66 million, and Absolute Return Strategies, or ARS, management fees rose 19% to $47 million. CFO Pam Bentley said fourth-quarter private markets management fees are expected to rise 7% to 9% from the same period in 2025, while ARS management fees are expected to increase in the mid-teens percentage range.
Bentley said the board approved a quarterly dividend of $0.12 per share. The company ended the quarter with approximately $54 million remaining under its share repurchase authorization.
Hedge Fund Flows and Fundraising Outlook
Sacks said ARS fee-paying assets reached $28 billion at quarter end, up 18% year over year. The business recorded net inflows for four consecutive quarters, and management expects another quarter of positive inflows in the fourth quarter.
The ARS multi-strategy composite declined 2% on a gross basis in the third quarter, influenced in part by movement in SpaceX, Sacks said. The composite returned 13% gross for the first nine months of 2026 and nearly 19% over the preceding year.
Despite what he described as a tough October for hedge funds, Sacks said the ARS pipeline was the strongest in recent memory. He said demand was coming from new clients, existing clients adding hedge fund mandates and current investors contributing more capital.
Across the company, 30% of year-to-date fundraising came from new clients, Sacks said. Contracted assets not yet paying fees stood at $10.6 billion. Asked about the $8.7 billion of that balance that becomes fee-paying as it is invested, he suggested modeling deployment over three years at an even pace as a conservative assumption, although he said it could be more front-loaded.
SpaceX Sales and Incentive Fees
GCM Grosvenor monetized more than $500 million of its SpaceX investment in the third quarter, Sacks said. Firm-wide exposure was just over $3 billion at quarter end, and the company continued selling in the fourth quarter.
Sacks said SpaceX contributed to the growth in unrealized carried interest, but private-markets carry revenue recorded so far was not significantly attributable to the investment. He noted that realized carry depends not only on a fund being in a carry position but also on where it stands in its distribution waterfall.
Gross unrealized carried interest at net asset value reached approximately $1.1 billion at quarter end, including $592 million attributable to the firm, up about $100 million from June 30. Bentley noted that private-markets valuations generally are reflected on a one-quarter lag.
The company also had $49 million of accrued unrealized performance fees at the end of October, driven by ARS performance. Bentley said actual fees will depend on investment results and fund terms through the applicable crystallization dates.
Individual Investors and Insurance
President Jon Levin said GCM Grosvenor raised approximately $1.5 billion from individual investors so far in 2026, representing 23% of its fundraising. Individual investor assets rose approximately 40% year over year to $5.3 billion.
Levin said the company manages approximately $5 billion for 50 insurance clients. Insurance accounted for about 12% of fundraising over the past two years, despite representing 5% of assets under management.
Management also pointed to growth in credit and infrastructure. Levin said the firm raised approximately $4 billion for credit over the past two years and recently closed its inaugural credit secondaries fund at $1.2 billion, including related vehicles. Its broader infrastructure business manages approximately $20 billion.
About GCM Grosvenor (NASDAQ:GCMG)
GCM Grosvenor is an alternative asset management firm that provides investment solutions across private markets and hedge fund strategies. Its offerings include private equity, infrastructure, real estate and credit investments, as well as customized portfolios and multi-manager strategies.
The firm invests on behalf of institutional investors and other clients through primary investments, co-investments and secondary-market transactions. Its activities span global markets, with offices in North America, Europe and Asia.
Founded in 1971, the firm traces its roots to Grosvenor Capital Management.
