GCM Grosvenor is a strategic LP to managers and catalyzes GP fundraising. In doing so, the firm seeks creative and meaningful ways to support the fundraising efforts of small, diverse, and emerging private equity managers by providing investment capital, resources, and expertise. Here’s a case study of how GCM Grosvenor acted as a strategic investor and formed a partnership that benefited its clients, the manager, and the firm.
The Manager: The investment manager (the “manager”) is a certified Minority and Women-Owned Business, founded over a decade ago. One of company’s co-founders has more than 25 years of experience in the commercial real estate industry, having invested in and loaned CRE assets on behalf of large pension funds and institutional investors. The manager has invested over $4 billion in CRE debt and structured equity.
The Partnership: GCM Grosvenor partnered with the manager to help launch its commingled fund business and create potential upside for GCM Grosvenor and its clients via promote-sharing with the manager, while seeking to invest in a lower-risk investment strategy that looks to provide downside mitigation.
The Win: The partnership provided the manager with capital to make investments that ultimately served as seed assets for its initial commingled fund; investors appreciated the ability to buy into a partial seed portfolio.
How the Partnership Evolved
- 2012: One of the company’s co-founders meets with GCM Grosvenor team. The manager is considered an established emerging manager, having raised more than $400 million in pre-fund assets.
- 2013: GCM Grosvenor recommends changes to pitch materials.
- 2014: GCM Grosvenor facilitates industry relationships and encourages future development of track record.
- 2016: GCM Grosvenor and the manager form a joint venture partnership with GCM Grosvenor providing $55 million in seed capital.
- 2016 to 2018: GCM Grosvenor participates in reference calls with new investors on the manager’s behalf. GCM Grosvenor consults and advises on the manager’s capital raising strategy and key investor relations hire.
- 2017: Funds hold first close with more than $180 million in commitments.
- 2019: Fund holds final close with more than $410 million raised.
