Dependence on managed vehicle performance and AUM
Management and incentive fees rise or fall with assets under management and investment performance.
- Scope
- GECC, Monomoy UpREIT and other managed vehicles
- Materiality
- high
Great Elm Group, Inc.
Great Elm Group, Inc. is a U.S.-based alternative asset management company that builds and manages investment vehicles across credit, real estate, specialty finance, and related strategies. It also holds minority stakes in some of the vehicles it manages and uses its platform to pursue additional investment management opportunities and other capital allocation opportunities.
−45,8 %
52,3 %
−132,9 %
+70,2 %
12.89
13.18
| % | |
|---|---|
| Alternative Credit Management | 55% Management of credit-oriented vehicles and specialty finance strategies that generate fee income. |
| Real Estate Management | 25% Investment management and property-related services for IOS-focused real estate vehicles. |
| Real Estate Property Sales | 15% Sale of land and build-to-suit developments after lease commencement or completion. |
| Construction and Project Management | 5% Project management services tied to real estate and build-to-suit development activity. |
Great Elm’s direct customers are the investment vehicles and operating platforms it manages, including GECC and Monomoy...
- Managed investment vehiclesprimary
GECC, Monomoy UpREIT and other funds/vehicles that pay management, incentive and administration fees.
- Real estate development counterpartiessecondary
Buy build-to-suit land and development execution through MBTS and related real estate activities.
- Construction services clientssecondary
Use project management services for real estate projects and pay fees based on project size and volume.
- Minority investment holdingssecondary
Economic exposure to GECC and Monomoy-related entities that supports dividends and capital redeployment.
Great Elm is headquartered in Palm Beach Gardens, Florida and operates primarily in the United States...
- •Headquartered in Palm Beach Gardens, Florida
- •Primary operating footprint is in the United States
- •Real estate land parcels disclosed in Mississippi and Florida
- •Exposure to U.S. capital markets and credit conditions
- •Domestic real estate and construction activity drives revenue timing
Great Elm is trying to scale a diversified platform of long-duration and permanent-capital vehicles across credit and...
01
Scale alternative asset managementmedium-term
Higher AUM supports recurring fees and improves operating leverage.
02
Expand real estate platformmedium-term
Real estate management and development can add fee income and asset monetization opportunities.
03
Recycle capital into higher-yielding opportunitiesshort-term
Minority stakes and asset sales can fund new investments and improve returns on capital.
Great Elm’s earnings are exposed to market volatility, funding conditions, and the performance of the vehicles and...
Lumpy real estate monetization
Revenue from property sales and build-to-suit projects depends on lease timing and asset sales.
- Scope
- MBTS land parcels and development projects
- Materiality
- high
Capital markets and funding risk
The company relies on market access and liquidity to pursue acquisitions and investments.
- Scope
- Convertible notes, investment portfolio, acquisition program
- Materiality
- high
Competition for mandates and personnel
Larger asset managers and financial sponsors can outbid the company for opportunities and talent.
- Scope
- Investment management and construction services
- Materiality
- medium
Operational and cyber risk
Systems failures or cyber incidents could interrupt transactions, data processing and client service.
- Scope
- Financial reporting, trading and administrative systems
- Materiality
- medium
Revenue recognition across multiple fee streams
Can cause uneven quarterly revenue and margin patterns
Real estate property sales and development timing
Creates lumpy revenue and cost recognition
Fair value measurement of investments
Can materially affect other income and balance sheet values
Business combination accounting
Can affect future earnings through amortization or impairment
Great Elm Capital Corp.
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