Private Markets - The newsletter "Going Private" focuses on private markets [1] - A talent war is emerging in the booming secondaries market [1]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the second quarter increased to $591 million from $524 million in the prior period, reflecting improved underlying operating performance and tax benefits [18][19] - Adjusted EFO for the quarter was $234 million, benefiting from lower interest expenses due to reduced corporate borrowings compared to the prior period [18] Business Line Data and Key Metrics Changes - The Industrial segment generated adjusted EBITDA of $307 million, an increase from $213 million in the previous year, supported by tax benefits and contributions from recent acquisitions [19] - The Business Services segment's adjusted EBITDA rose to $205 million from $182 million last year, aided by increased volumes of new insurance premiums and stable performance in technology services [20] - The Infrastructure Services segment's adjusted EBITDA decreased to CAD 109 million from CAD 157 million, primarily due to the sale of the offshore oil services shuttle tanker operation [21] Market Data and Key Metrics Changes - The U.S. economy showed resilience with stabilized GDP expectations and low unemployment, while Europe is seeing increased stimulus spending [11][13] - The GCC markets in the Middle East remain strong, and India continues to be a growth economy [13] Company Strategy and Development Direction - The company is focused on acquiring high-quality, market-leading businesses with strong competitive advantages, which allows for pricing power and resilience against economic fluctuations [14] - The strategy includes leveraging secondary market opportunities to surface value and enhance shareholder returns through buybacks and reinvestments [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the operating environment, noting that while there are challenges, the principles of acquiring high-quality businesses are serving the company well [14][15] - The company is confident in its ability to maintain or increase margins despite economic slowdowns, with a focus on optimizing operations and integrating recent acquisitions [15][16] Other Important Information - The company has realized over $800 million from asset sales and distributions while investing $300 million in acquiring two market-leading businesses [6] - The company ended the quarter with approximately $2.9 billion in corporate liquidity, providing options for capital allocation [21][22] Q&A Session Summary Question: Performance of Scientific Games - Management acknowledged that while hardware deliveries were lower, the overall EBITDA performance was flat, and they remain positive about the business's future growth potential [26][29] Question: Repositioning of Brand Safeway - Management noted that they are repositioning the business towards higher growth markets, although they expect volume softness to continue through the second half of the year [30][32] Question: Leveraging AI for Productivity - Management highlighted numerous AI initiatives across the portfolio that have led to significant operational improvements and cost savings [35][41] Question: Impact of the Big Beautiful Bill - Management expects the provisions in the bill, including accelerated depreciation, to be net positive for the business, enhancing flexibility and reducing tax burdens [42][44] Question: Secondary Transaction Insights - Management explained the decision-making process behind the secondary transaction, emphasizing the strategic choice of assets and the favorable terms achieved [52][55]

Summary of StepStone Group Conference Call Company Overview - **Company**: StepStone Group - **Industry**: Private Markets Investment and Advisory - **Assets Under Management**: Approximately $190 billion, overseeing nearly $500 billion in private market allocations [3][4] Key Points and Arguments Business Model and Market Position - StepStone operates as a solution provider, differentiating itself from traditional General Partners (GPs) like Blackstone and KKR by allocating capital on behalf of clients to funds managed by GPs while also managing direct strategies [4][5] - The private markets have grown from approximately $2 trillion in assets under management (AUM) in 2007 to over $15 trillion today, indicating a significant market opportunity for solution providers [7][8] - StepStone's strategies include primary fund investments, co-investments, and secondary interests across four asset classes: private equity, venture capital, real estate, and private credit [6] Fundraising Success - Fiscal year 2025 was a record year for StepStone with total inflows of $30 billion, including $20 billion from separate accounts and $10 billion from commingled funds [10][11] - The company achieved a 90% re-up rate for managed accounts, with clients increasing their investments by an average of 30% upon re-upping [14][15] - The commingled fund side saw significant success, with over $3 billion raised across three different funds, marking the largest fundraising year for commingled funds since inception [12][13] Global Footprint and Client Base - Over 60% of StepStone's business comes from outside the U.S., allowing the firm to tap into growing allocations in emerging markets [11][24] - The firm aims to work with a diverse range of clients, from large sovereign wealth funds to individual investors, reflecting a solutions-oriented approach [9] Partnership with FTSE Russell - StepStone announced a partnership with FTSE Russell to develop private asset indices and analytics products, aiming to address the challenge of measuring performance across liquid and illiquid assets [17][20] - The partnership will initially focus on benchmarking solutions, with potential for investable products like index funds in the future [18][19] Macro Environment and Market Dynamics - The macroeconomic environment has been volatile, impacting fundraising and investment activity; however, StepStone's diversification across asset classes and geographies has mitigated some risks [22][24] - The secondary market has seen significant growth, with total secondary volume reaching approximately $160 billion in 2024, more than doubling in the last five to six years [33][34] Opportunities in Private Wealth and Institutional Markets - Private wealth management has seen substantial growth, with assets on the platform exceeding $8 billion, driven by a strong performance and efficient capital structures [40][42] - There is a growing interest in private credit and infrastructure as newer asset classes, with many institutional investors beginning to allocate to these areas [30][29] Future Outlook - StepStone is focused on expanding its international operations and product offerings, particularly in the private wealth channel and retirement markets [48][54] - The firm is exploring opportunities in public-private partnerships and the retirement channel, recognizing the potential for significant asset growth in these areas [50][53] Additional Important Insights - The firm has developed a comprehensive product suite for private wealth, catering to a wide range of investors and emphasizing a solutions-oriented approach [44][45] - The secondary market is expected to continue growing, driven by liquidity challenges faced by limited partners (LPs) and the increasing importance of secondary transactions [31][33] This summary encapsulates the key insights and developments discussed during the conference call, highlighting StepStone Group's strategic positioning, fundraising success, and future opportunities in the private markets landscape.