StepStone (US:STEP)2026-02-05 21:09Capital Management - As of December 31, 2025, the company managed approximately $811 billion in total capital, including $220 billion in assets under management (AUM) and $591 billion in assets under advisement (AUA) [212] - The company generated $130 billion in AUM from separately managed accounts (SMAs) and $73 billion from focused commingled funds as of December 31, 2025 [214] - Advisory relationships accounted for $591 billion of AUA and $16 billion of AUM as of December 31, 2025 [218] - The company provided portfolio analytics and reporting on over $871 billion of client commitments through its proprietary performance monitoring software as of December 31, 2025 [218] - As of December 31, 2025, the company had over $105 billion of performance fee-eligible capital across over 225 programs [250] - The company has a credit agreement with a revolving facility of $300.0 million, which was extended to May 2029 [395] - The company has a multi-currency revolving credit facility of up to $125.0 million, with no outstanding borrowings as of December 31, 2025 [404] - The company must collect at least 80% of all management fees payable by material subsidiaries each period without deferral, waiver, or reduction [407] Employee and Operational Insights - The company has over 1,275 total employees, including over 420 investment professionals, as of December 31, 2025 [213] - The company operates in 31 cities across 19 countries, enhancing client relationships through local staffing and regional insights [213] - Approximately 50% of carried interest allocation revenue is awarded to employees as part of the long-term incentive compensation plan [260] Financial Performance - Total revenues increased by $247.5 million, or 73%, to $586.5 million for the three months ended December 31, 2025, compared to the same period in 2024 [291] - Management and advisory fees, net rose by $49.1 million, or 26%, to $239.9 million for the three months ended December 31, 2025, driven by new client activity and a 24% growth in average FEAUM [292] - Incentive fees surged by $185.6 million, or 830%, to $208.0 million for the three months ended December 31, 2025, largely due to higher fees from StepStone's Private Venture and Growth Fund [293] - Total revenues for the nine months ended December 31, 2025 increased by $607.9 million, or 76%, to $1,405.0 million compared to the same period in 2024 [296] - Unrealized carried interest allocation revenues increased by $264.6 million, or 130%, to $468.7 million for the nine months ended December 31, 2025, reflecting a higher net increase in cumulative allocation of gains [299] - Total fee revenues for the nine months ended December 31, 2025, were $671.3 million, a 20.7% increase from $555.8 million in the same period of 2024 [368] Expenses and Compensation - Total expenses rose by $109.7 million, or 16%, to $807.8 million for the three months ended December 31, 2025, due to increases in performance fee-related compensation and cash-based compensation [301] - Cash-based compensation increased by $21.9 million, or 26%, to $107.1 million for the three months ended December 31, 2025, attributed to higher average headcount and increased compensation levels [302] - Total performance fee-related compensation expense increased by $116.1 million, or 155%, to $191.3 million for the three months ended December 31, 2025, reflecting higher carried interest allocation and incentive fee revenues [304] - Total expenses increased by $1,350.0 million, or 128%, to $2,408.1 million for the nine months ended December 31, 2025 compared to the same period in 2024 [307] - Cash-based compensation increased by $57.1 million, or 23%, to $303.4 million for the nine months ended December 31, 2025 compared to the same period in 2024 [308] - Equity-based compensation increased by $999.1 million, or 184%, to $1,542.0 million for the nine months ended December 31, 2025 compared to the same period in 2024 [309] Debt and Financing - The company issued $175 million in 5.52% Series A senior notes due October 22, 2029, on October 22, 2024 [227] - The weighted-average interest rate for the Revolver as of December 31, 2025, was 6.02% [396] - Borrowings under the Fund Credit Facility bear interest at a variable rate, with a margin of 250 basis points added to the applicable federal funds target rate for USD [405] - The debt obligations of the Consolidated Funds are non-recourse to the company [403] - The company is required to maintain a total net leverage ratio and a minimum total of fee-earning assets under management as per the covenants in the Note Purchase Agreement [407] - As of December 31, 2025, the company was in compliance with the covenants under its various debt agreements [409] Investment Performance - The investment performance summary indicates a net IRR of 13.8% for private equity primaries, with a net TVM of 1.5x [381] - FEAUM includes assets in SMAs, focused commingled funds, and assets held directly by clients for which the company has fiduciary oversight [281] - Total FEAUM for private equity reached $73.2 billion as of December 31, 2025, up from $65.0 billion in March 2025 [342]