Company Overview - StepStone Group is expected to report quarterly earnings of $0.35 per share, reflecting a year-over-year increase of +34.6% [2] - Revenues for StepStone Group are anticipated to reach $183.5 million, which is a 3.1% increase from the same quarter last year [2] - The stock has recently seen a price increase of 6.6%, closing at $44.18, with a notable 9.2% gain over the past four weeks [4] Market Trends - The consensus EPS estimate for StepStone Group has remained unchanged over the last 30 days, indicating stability in earnings expectations [3] - The stock's price typically does not continue to rise without trends in earnings estimate revisions, suggesting that monitoring future revisions is crucial [3] - There is growing optimism regarding StepStone's inclusion in the S&P SmallCap 600 index, which is expected to drive further price appreciation [5] Industry Context - StepStone Group operates within the Zacks Financial - Miscellaneous Services industry, alongside Blackstone Inc. [3] - Blackstone Inc. has a consensus EPS estimate of $1.04, reflecting a year-over-year change of +11.8%, but has seen a slight decrease of -0.6% in estimates over the past month [6] - Blackstone Inc. currently holds a Zacks Rank of 3 (Hold), indicating a more cautious outlook compared to StepStone's strong buy rating [3][6] Investment Activity - StepStone Group has raised $3.3 billion for a new secondary venture fund, driven by increased demand for its venture-capital secondary services [5] - The recent price movements and volume of shares traded for StepStone suggest heightened investor interest and potential for continued growth [4]

NEW YORK, June 06, 2024 (GLOBE NEWSWIRE) -- StepStone Private Wealth ("SPW") today announced the launch of the StepStone Private Credit Income Fund ("CRDEX"), an evergreen interval fund that can be purchased daily via ticker CRDEX. CRDEX offers individual investors and institutions exposure to a highly diversified, open-architecture portfolio of private credit assets in a single investment, seeking to generate current income and long-term capital appreciation, mainly by investing in various credit-related s ...

NEW YORK, June 05, 2024 (GLOBE NEWSWIRE) -- StepStone Group Inc. (Nasdaq: STEP), a global private markets investment firm focused on providing customized investment solutions, advisory, and data services, today announced that it has raised $3.3 billion for StepStone VC Secondaries Fund VI, L.P. ("VSF VI"), the firm's sixth secondaries fund focused on opportunities in the venture capital asset class. The oversubscribed fund had strong participation from existing investors, as well as select new limited partn ...

Core Viewpoint - StepStone Group Inc. has successfully raised $3.3 billion for its sixth venture capital secondaries fund, VSF VI, marking it as the largest fund dedicated to venture capital secondaries to date [1][2]. Company Overview - StepStone Group is a global private markets investment firm that provides customized investment solutions, advisory, and data services, managing approximately $678 billion in total capital as of March 31, 2024, with $157 billion in assets under management [4]. Fund Details - The VSF VI fund received strong participation from both existing and new investors, indicating robust demand in the venture capital secondary market [1][2]. - The fund aims to provide liquidity to founders and early investors in mature venture-backed companies, purchase interests in venture capital funds from limited partners, and assist fund managers with structured solutions [2]. Market Context - The venture capital market has seen significant growth, with assets under management increasing from approximately $600 billion in 2014 to around $3.3 trillion by the end of 2023, representing a 123% growth since 2014 [2]. - Venture capital now constitutes 64% of the assets held by traditional private equity funds, highlighting its increasing importance in the investment landscape [2]. Strategic Positioning - StepStone has established itself as one of the largest allocators to venture funds globally, supported by a dedicated 75-person investment team and extensive data on venture-backed companies [3]. - The firm is positioned to effectively diligence, price, and structure a wide range of secondary opportunities, aiming to achieve strong returns by financing innovation [3].

Group 1: Company Overview - StepStone Group Inc. (STEP) currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), which is associated with a historical outperformance in the market [3] Group 2: Price Performance - Over the past week, STEP shares have increased by 11.76%, while the Zacks Financial - Miscellaneous Services industry has decreased by 0.48% [5] - In the last month, STEP's price change is 23.23%, significantly outperforming the industry's 2.33% [5] - Over the past quarter, STEP shares have risen by 33.52%, and they have increased by 107.03% in the last year, compared to the S&P 500's gains of 5.02% and 27.85%, respectively [6] Group 3: Trading Volume - STEP's average 20-day trading volume is 383,829 shares, which serves as a bullish indicator when combined with rising stock prices [7] Group 4: Earnings Outlook - In the past two months, three earnings estimates for STEP have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.56 to $1.68 [9] - For the next fiscal year, three estimates have also moved upwards, with no downward revisions during the same period [9] Group 5: Conclusion - Considering the strong momentum indicators and positive earnings outlook, STEP is positioned as a 1 (Strong Buy) stock with a Momentum Score of A, making it a potential candidate for near-term investment [10]

NEW YORK, May 28, 2024 (GLOBE NEWSWIRE) -- StepStone Group Inc. (NASDAQ:STEP) today announced that Scott Hart, CEO, and Mike McCabe, Head of Strategy, are scheduled to present at the Morgan Stanley US Financials, Payments and CRE Conference on Tuesday, June 11, 2024, at 9:30 am ET. A live webcast and replay will be accessible through the StepStone website at https://shareholders.stepstonegroup.com. About StepStone StepStone Group Inc. (NASDAQ:STEP) is a global private markets investment firm focused on prov ...

Company Overview - StepStone Group Inc. is a global private markets investment firm focused on customized investment solutions and advisory services [2] - As of March 31, 2024, StepStone managed approximately $678 billion in total capital, including $157 billion in assets under management [2] - The firm's clients include large public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, family offices, and high-net-worth individuals [2] Upcoming Events - Scott Hart, CEO, and Mike McCabe, Head of Strategy, will present at the Morgan Stanley US Financials, Payments and CRE Conference on June 11, 2024, at 9:30 am ET [1] - A live webcast and replay of the presentation will be available on the StepStone website [1]

Part I [Item 1. Business](index=8&type=section&id=Item%201.%20Business) StepStone Group is a global private markets investment firm managing $157 billion in AUM and $521 billion in AUA, providing customized solutions across diverse private asset classes - StepStone is a global private markets investment firm with **$678 billion** of total capital responsibility as of March 31, 2024, comprising **$157 billion** in AUM and **$521 billion** in AUA[31](index=31&type=chunk) AUM and AUA by Asset Class (as of March 31, 2024) | Asset Class | AUM (billions) | FEAUM (billions) | AUA (billions) | | :--- | :--- | :--- | :--- | | **Private Equity** | $82 | $50 | $270 | | **Infrastructure** | $30 | $20 | $60 | | **Private Debt** | $28 | $15 | $22 | | **Real Estate** | $16 | $8 | $168 | - The company's proprietary data platform, SPI Research, contained information on approximately **18,000 fund managers**, **46,000 funds**, **105,000 companies**, and **227,000 investments** as of March 31, 2024[52](index=52&type=chunk) - As of March 31, 2024, the company had **$22.6 billion** of committed but undeployed fee-earning capital, expected to generate management fees upon deployment or activation[59](index=59&type=chunk)[65](index=65&type=chunk) [Investment Strategies](index=15&type=section&id=Investment%20Strategies) - The company's investment strategies are synergistic, spanning primaries, secondaries, and co-investments[74](index=74&type=chunk) - Primary investments typically have a duration of **10-18 years** for private equity, real estate, and infrastructure, and **8-10 years** for private debt[76](index=76&type=chunk) - Secondary investments are considered more mature, typically made when a primary fund is **3-7 years** into its life, offering visibility into known assets[78](index=78&type=chunk)[79](index=79&type=chunk) [Responsible Investment Philosophy](index=18&type=section&id=Responsible%20Investment%20Philosophy) - StepStone integrates Environmental, Social, and Governance (ESG) factors into its investment process and corporate operations, believing it improves long-term, risk-adjusted returns[92](index=92&type=chunk)[95](index=95&type=chunk) - The firm has a global Diversity, Equity, and Inclusion (DEI) Committee established in 2017 to lead initiatives, and it supports several industry organizations advocating for diversity[101](index=101&type=chunk)[105](index=105&type=chunk) - StepStone aims to maintain carbon neutrality in its operations and has engaged a consultant annually since 2019 to measure its carbon footprint and fund sustainable development projects to offset emissions[106](index=106&type=chunk) [Regulatory Environment](index=25&type=section&id=Regulatory%20Environment) - The company's business is subject to extensive regulation in the U.S. by the SEC under the Investment Advisers Act, which imposes fiduciary duties and requirements on conflicts of interest, marketing, and reporting[131](index=131&type=chunk)[132](index=132&type=chunk) - The SEC has recently adopted new rules for private fund advisers that impose significant new disclosure and reporting requirements and restrict certain practices, which will increase compliance risks and operational costs[133](index=133&type=chunk)[256](index=256&type=chunk) - Internationally, the company is subject to various regulatory regimes, including AIFMD and MiFID II in the European Union, which govern marketing, remuneration, and reporting, adding to operational complexity and costs[140](index=140&type=chunk)[141](index=141&type=chunk) [Risk Factors](index=31&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant business, industry, and organizational risks, including investment performance, intense competition, evolving regulations, and its controlled company structure - **Business Risks:** The company's success depends on identifying suitable investments, and poor performance could lead to a decline in revenues and difficulty raising future capital. The business is also vulnerable to the loss of senior leadership, cybersecurity threats, and potential clawback obligations on performance fees[160](index=160&type=chunk)[161](index=161&type=chunk)[169](index=169&type=chunk)[185](index=185&type=chunk)[204](index=204&type=chunk) - **Industry Risks:** The investment management industry is intensely competitive and heavily regulated. Difficult market conditions, such as rising interest rates and inflation, can adversely affect investment values and the ability to deploy capital. Evolving regulations, including new SEC rules for private fund advisers and increased focus on ESG, add to compliance burdens and costs[243](index=243&type=chunk)[245](index=245&type=chunk)[252](index=252&type=chunk)[266](index=266&type=chunk) - **Organizational Structure Risks:** As a "controlled company," StepStone is exempt from certain corporate governance requirements. The holding company (SSG) depends on distributions from the Partnership to pay taxes, dividends, and obligations under Tax Receivable Agreements. The dual-class stock structure gives disproportionate voting power to Class B shareholders[288](index=288&type=chunk)[292](index=292&type=chunk)[312](index=312&type=chunk) [Item 1C. Cybersecurity](index=72&type=section&id=Item%201C.%20Cybersecurity) StepStone maintains a comprehensive cybersecurity program overseen by its Board and Audit Committee, employing multi-faceted strategies to mitigate evolving threats, with no material incidents identified to date - The Board of Directors and its Audit Committee oversee the company's cybersecurity risk management processes, receiving periodic reports from the Head of Information Technology and legal team[325](index=325&type=chunk)[326](index=326&type=chunk) - The company has an Incident Response Plan (IRP) based on the NIST framework and an Enterprise Risk Management Committee (ERMC) to manage enterprise risks, including cybersecurity[328](index=328&type=chunk)[329](index=329&type=chunk) - Risk management strategies include regular employee training, phishing exercises, information security diligence on vendors, and annual penetration testing by third-party firms[333](index=333&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=76&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) StepStone's Class A common stock trades on Nasdaq under 'STEP,' with recent dividend declarations and a cumulative total return of 55.14% since IPO through March 2024, underperforming key indices - On May 23, 2024, the company declared a quarterly cash dividend of **$0.21 per share** of Class A common stock and a supplemental cash dividend of **$0.15 per share**, both payable on June 28, 2024[342](index=342&type=chunk) Quarterly Dividends on Class A Common Shares (FY2022-FY2024) | Fiscal Year | Total Dividend Per Share | | :--- | :--- | | **FY2022** | $0.44 | | **FY2023** | $0.80 | | **FY2024** | $1.08 | - The stock performance graph indicates that from September 16, 2020, to March 31, 2024, the cumulative total return for StepStone Group Inc. was **55.14%**, underperforming the S&P 500 Index (**63.89%**) and the Dow Jones US Asset Managers Index (**82.85%**)[354](index=354&type=chunk)[355](index=355&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=80&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2024, StepStone reported total revenues of $711.6 million and net income of $58.1 million, driven by positive carried interest allocations and growth in management fees, while maintaining strong liquidity Consolidated Results of Operations (Fiscal Years 2022-2024) | (in thousands) | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | **Total revenues** | $711,631 | $(67,574) | $1,365,525 | | Management and advisory fees, net | $585,140 | $497,179 | $380,257 | | Total performance fees | $126,491 | $(564,753) | $985,268 | | **Total expenses** | $539,860 | $(67,077) | $913,163 | | **Net income (loss)** | $167,820 | $(45,275) | $484,281 | | **Net income (loss) attributable to StepStone Group Inc.** | $58,091 | $(18,398) | $193,885 | Key Operating Metrics (as of March 31) | (in billions) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **AUM** | $157 | $138 | $134 | | **AUA** | $521 | $482 | $436 | | **FEAUM** | $93.9 | $85.4 | $75.2 | Non-GAAP Financial Measures (Fiscal Years 2022-2024) | (in thousands) | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | **Fee-Related Earnings (FRE)** | $189,793 | $156,158 | $122,242 | | **Adjusted Net Income (ANI)** | $139,393 | $142,663 | $172,943 | | **ANI per share** | $1.21 | $1.24 | $1.61 | - On February 7, 2024, the company entered into agreements to acquire all outstanding equity interests of its asset class entities (SRA, SRE, and SPD) over a defined period, with the first exchange having a reference date of April 1, 2024[373](index=373&type=chunk)[376](index=376&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=126&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) StepStone's primary market risk stems from fund investment fair values impacting performance fees and investment income, with additional exposure to interest rate fluctuations on its revolving credit facility - A hypothetical **10% decline** in the market value of fund investments as of March 31, 2024, would result in an estimated **$5.8 million decrease** in annual management fees and a **$13.5 million decrease** in investment income[602](index=602&type=chunk)[604](index=604&type=chunk) - As of March 31, 2024, the maximum potential contingent repayment (clawback) of carried interest, net of tax, was estimated at **$287.5 million**, assuming the fair value of all investments dropped to zero[603](index=603&type=chunk) - The company is exposed to interest rate risk on its **$150.0 million of outstanding borrowings** under the Revolver. A **100 basis point increase** in interest rates would increase annual interest expense by an estimated **$1.5 million** as of March 31, 2024[607](index=607&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=128&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents StepStone Group Inc.'s consolidated financial statements for fiscal years 2022-2024, accompanied by Ernst & Young LLP's unqualified opinion on both the financials and internal control over financial reporting - The independent registered public accounting firm, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of the company's internal control over financial reporting as of March 31, 2024[613](index=613&type=chunk)[622](index=622&type=chunk) Consolidated Balance Sheet Data (as of March 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | **Total Assets** | $3,788,807 | $3,497,403 | | Cash and cash equivalents | $143,430 | $102,565 | | Investments (incl. Accrued Carried Interest) | $2,120,294 | $2,113,012 | | Goodwill | $580,542 | $580,542 | | **Total Liabilities** | $1,915,673 | $1,844,086 | | Accrued carried interest-related compensation | $719,497 | $644,517 | | Debt obligations | $148,822 | $98,351 | | **Total Stockholders' Equity** | $1,654,591 | $1,628,787 | - The critical audit matter identified by the auditor was the valuation of underlying investments of equity method investments, specifically for co-investment funds valued using significant unobservable inputs, which involved a high degree of auditor subjectivity[618](index=618&type=chunk) [Item 9A. Controls and Procedures](index=184&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that StepStone's disclosure controls and internal control over financial reporting were effective as of March 31, 2024, with no material changes during the fourth fiscal quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[855](index=855&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of March 31, 2024, based on the criteria in the Internal Control-Integrated Framework (2013) issued by COSO[860](index=860&type=chunk) Part III [Items 10-14](index=186&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%2014) Information for Items 10 through 14, covering governance, compensation, and related party disclosures, is incorporated by reference from the company's forthcoming 2024 Proxy Statement - The information for Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, Certain Relationships and Related Transactions, and Principal Accountant Fees and Services is incorporated by reference from the forthcoming 2024 Proxy Statement[868](index=868&type=chunk)[869](index=869&type=chunk)[870](index=870&type=chunk)[873](index=873&type=chunk)[874](index=874&type=chunk) Part IV [Item 15. Exhibit and Financial Statement Schedules](index=188&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section provides an index to the consolidated financial statements and a comprehensive list of all exhibits filed with the Form 10-K, including key corporate documents and certifications - This section contains the index to the consolidated financial statements and a list of all exhibits filed with the Form 10-K[876](index=876&type=chunk)

Financial Data and Key Metrics Changes - The company reported fee-related earnings of $50.9 million, a 35% increase from the prior year quarter, with an FRE margin of 33% [4][58] - GAAP net income was $82.5 million, with net income attributable to StepStone Group Incorporated at $30.8 million or $0.48 per share [20] - Adjusted net income for the quarter was $37.7 million or $0.33 per share, up from $27.1 million or $0.24 per share in the fourth fiscal quarter of last year [21][60] - The company grew fee-earning AUM by 10% and fee-related earnings by over 20% year-over-year [10][58] Business Line Data and Key Metrics Changes - Fee-earning assets grew by $4.4 billion, split evenly between managed accounts and commingled funds [13] - Management and advisory fees for the quarter were $154 million, up 16% from the prior year quarter [31] - The blended management fee rate increased to 59 basis points from 54 basis points in the prior year [29] Market Data and Key Metrics Changes - Gross new commitments in the fourth quarter matched the strong fundraising result from the third quarter at $6 billion [8] - The company raised $18.6 billion of new AUM commitments for the full year, doubling the pace of fundraising in the second half of the year [9][54] - The undeployed fee-earning capital (UFEC) reached a record $22.6 billion, representing a 15% year-over-year increase [55] Company Strategy and Development Direction - The company plans to double its fee-related earnings over the next five years and expand FRE margins to the mid-30s [25] - New commingled funds and private wealth funds have been introduced, including the infrastructure co-investment fund and the private wealth credit product, CredEx [26][24] - The company is executing agreements to buy non-controlling interests in its infrastructure, private debt, and real estate businesses, aiming for a simpler ownership model [11][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improved market environment compared to the previous year, with public markets near all-time highs [22] - The sentiment shift is translating into results, with strong demand for private wealth solutions and record subscriptions [23][24] - Management anticipates continued margin improvement and a trajectory towards mid-30s FRE margins in the medium term [44] Other Important Information - A supplemental cash dividend of $0.15 per share was declared, in addition to the normal $0.21 per share quarterly cash dividend [14] - The company expects future supplemental dividends to increase as capital market activity normalizes [30] Q&A Session Summary Question: Insights on private wealth platform inflows - Management noted broad-based inflows across different channels, with strong performance in all four identified channels [37] Question: Fundraising opportunities and cross-selling strategies - Management indicated a recovery in the fundraising market, with 20% to 25% of AUM flows coming from new clients [39][40] Question: Product placements and distribution channels - Management discussed the distribution of existing products and the ongoing development of the distribution syndicate for private wealth funds [42][69] Question: FRE margin outlook for fiscal 2025 - Management expects continued margin improvement in fiscal 2025, with a focus on full-year margins rather than quarterly variability [44] Question: Accretion from acquisitions and operational changes - Management clarified that while individual exchanges will be modestly accretive, the overall structure is designed to be accretive over time [47][89]

Core Viewpoint - StepStone Group Inc. reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.28 per share, and showing an increase from $0.24 per share a year ago, representing an earnings surprise of 17.86% [1][2] Financial Performance - The company posted revenues of $356.81 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 116.82%, compared to revenues of $172.37 million a year ago [2] - Over the last four quarters, StepStone Group has exceeded consensus EPS estimates three times and has also topped consensus revenue estimates three times [2] Stock Performance - StepStone Group shares have increased approximately 18% since the beginning of the year, outperforming the S&P 500's gain of 11.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $176.52 million, and for the current fiscal year, it is $1.63 on revenues of $810.17 million [7] Industry Outlook - The Financial - Miscellaneous Services industry, to which StepStone Group belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact StepStone Group's stock performance [5][6]