Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $123 million or $1.55 per share for Q3 2026, primarily due to the change in fair value of the buy-in of StepStone Private Wealth profits and interests [4] - Fee-related earnings were $89 million, up 20% year-over-year, with a FRE margin of 37% [5][17] - Adjusted net income for the quarter was $80 million or $0.65 per share, an increase from $53 million or $0.44 per share in the same quarter last year [5][20] Business Line Data and Key Metrics Changes - The company generated gross AUM additions of over $8 billion in the quarter and over $34 billion for the calendar year, marking its best 12-month fundraising period ever [7][13] - In private wealth, the platform grew to $15 billion with over $2.2 billion in new subscriptions for the quarter [8][15] - The Evergreen Funds saw nearly $1 billion in subscriptions across various offerings, indicating strong demand [8] Market Data and Key Metrics Changes - Approximately two-thirds of the inflows came from outside North America, with strong fundraising in Asia and Europe [13][60] - The company reported a retention rate on managed accounts of over 90%, with reups growing by nearly 30% [14] Company Strategy and Development Direction - The company is focused on a diversified approach to private markets investing, emphasizing portfolio construction and risk management [24][25] - There is a strong emphasis on artificial intelligence, with the company backing category-defining companies across the AI ecosystem [10][11] - The company plans to continue expanding its international footprint and fund families, with no new product launches expected in the next 12 months [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the earnings trajectory, citing an improving capital market environment that may yield stronger realizations [6] - The company anticipates continued growth in private wealth subscriptions and a solid foundation for private market solutions [12][11] - Management acknowledged the risks and opportunities presented by AI disruption, emphasizing a diversified investment strategy [11][53] Other Important Information - The company plans to pay out a supplemental dividend at the end of the fiscal year, subject to board approval [20] - The net accrued carry finished the quarter at $875 million, up 4% from the previous quarter [21] Q&A Session Summary Question: Exposure to software companies and Spring fund performance - Management highlighted the diversified approach to private markets investing, noting that not all software companies are equal and emphasizing the importance of portfolio construction [24][25] Question: Growth in private wealth business and scaling existing products - Management indicated that they are in the early stages of building syndicates for new funds and expect to see growth in distribution over the coming year [32] Question: Managing inflows for the Spring fund - Management stated that they have not faced issues with inflows and continue to see strong opportunities in the venture and growth sectors [36] Question: Expectations for new fund vintages - Management tempered expectations for modest growth in fund sizes, emphasizing the importance of matching fundraising to the size of the opportunity [38] Question: Breakdown of performance attribution for Spring - Management clarified that the majority of performance is driven by direct secondaries rather than discounts, highlighting the proactive approach to sourcing investments [44][46] Question: Insights on AI disruption risk - Management discussed the importance of diligence in assessing AI risks and opportunities, focusing on how GPs manage their portfolios and select new investments [53][55] Question: Sourcing subscriptions and regional demand - Management noted that Asia and Europe have been significant drivers of demand, with infrastructure and private credit strategies performing well in these regions [60]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $123 million or $1.55 per share for Q3 2026, primarily due to the change in fair value of StepStone Private Wealth profits interests [4] - Fee-related earnings were $89 million, up 20% year-over-year, with a FRE margin of 37% [5][17] - Adjusted net income for the quarter was $80 million or $0.65 per share, an increase from $53 million or $0.44 per share in the same quarter last year [5][20] Business Line Data and Key Metrics Changes - Core fee-related earnings, excluding retroactive fees, were $88 million, reflecting a 35% increase compared to the prior year [5] - The company generated gross AUM additions of over $8 billion in the quarter and over $34 billion for the calendar year, marking its best fundraising period [7][13] - In private wealth, the platform grew to $15 billion with over $2.2 billion in new subscriptions for the quarter [8][15] Market Data and Key Metrics Changes - Approximately two-thirds of the inflows were from outside North America, with strong fundraising in Asia and Europe [13][60] - The company reported a retention rate on managed accounts of over 90%, with reups growing by nearly 30% [14] Company Strategy and Development Direction - The company is focused on diversifying its investment approach across various asset classes and capital structures, particularly in the context of AI evolution [10][11] - The firm is currently in the market with several funds, including private equity co-investment and secondaries funds, expecting to activate fee-earning capital in the coming year [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the earnings trajectory, citing an improving capital market environment that may yield stronger realizations [6] - The company anticipates continued growth in private wealth subscriptions and is optimistic about the upcoming fundraising efforts [8][9] Other Important Information - The company plans to pay out a supplemental dividend at the end of the fiscal year, subject to board approval based on performance-related revenues [20] - The net accrued carry finished the quarter at $875 million, indicating a mature investment portfolio ready for harvesting [21] Q&A Session Summary Question: Exposure to software companies across the portfolio - Management highlighted the diversified approach to private markets investing, emphasizing that not all software companies are equal and that they focus on portfolio construction and diversification to manage risks [24][25] Question: Growth in private wealth business and scaling existing products - Management noted that they are in early stages of building syndicates for new funds and expect to see growth in distribution over the coming year, with no new product announcements planned [31] Question: Managing inflows for Spring fund - Management stated that they have not faced issues with inflows and continue to see strong opportunities for deployment across various avenues [35] Question: Expectations for next vintages of funds - Management tempered expectations for modest growth in fund sizes, emphasizing the importance of matching fundraising to the size of the opportunity [37] Question: Performance attribution for Spring fund - Management explained that the performance was driven more by direct secondaries rather than discounts, highlighting the proactive approach in identifying value drivers [44][46]

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.

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $18.5 million or $0.24 per share for the fourth quarter [5] - Fee related earnings reached $94.1 million, an increase of 85% from the prior year quarter, with an FRE margin of 44% [5][31] - Adjusted net income for the quarter was $80.6 million or $0.68 per share, up from $37.7 million or $0.33 per share in the same quarter last year [6][31] - The total dividend payout for the fiscal year was $1.36, up from $0.99 the previous year [6][29] Business Line Data and Key Metrics Changes - The company raised over $31 billion in assets under management (AUM) for the fiscal year, with a growth of $27.5 billion in fee earning AUM, marking a 29% growth rate [8][18] - Managed account re-up rates remained above 90%, with average growth of approximately 30% [9] - The private wealth platform saw significant growth, increasing from $3.4 billion to over $8 billion in assets [11] Market Data and Key Metrics Changes - Total gross inflows for the quarter were $9.9 billion, the second highest on record [12] - Fee earning assets under management grew to over $121 billion, up $7.2 billion from the previous quarter [13] - The undeployed fee earning capital (UFEC) increased from approximately $22 billion to $25 billion [22] Company Strategy and Development Direction - The company aims to continue expanding its private wealth offerings and has introduced new products to enhance distribution [11][27] - The strategy includes focusing on scenario planning to assess impacts by asset class, strategy, region, and sector amid a volatile market environment [14] - The company is actively pursuing opportunities in private markets, leveraging its scale and expertise to navigate through cycles [17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the operating environment, noting recent progress in trade policy but acknowledging ongoing uncertainty [14] - The company believes that private markets will continue to outperform public markets, emphasizing the importance of a long-term investment approach [15][16] - Management highlighted the importance of maintaining a disciplined investment strategy to capitalize on market dislocations [17] Other Important Information - The company plans to conduct a buy-in of non-controlling interests using $10 million in cash and $161 million in equity [28] - The board declared a supplemental dividend of $0.40 per share, in addition to a base quarterly dividend of $0.24 [29] Q&A Session Summary Question: What were the one-time fees mentioned in the quarter? - The one-time fees were approximately $4 million in advisory fees, which were larger than usual for the quarter [39] Question: How does the pipeline of new business look? - Management expressed a positive outlook on the pipeline, noting strong opportunities in new capital allocations to private markets [44] Question: How do you see the fundraising environment evolving? - Management noted a barbell fundraising trend with strong first and final closes, indicating a healthy fundraising environment [50] Question: What is the outlook for the secondaries marketplace? - Management expects increased selling in the secondaries market due to liquidity constraints among investors, positioning the company as an active buyer [59] Question: How is the private wealth product platform evolving? - The company sees significant growth potential in the private wealth space, particularly in expanding its offerings and distribution in Europe [63]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $18.5 million or $0.24 per share for the fourth quarter [4] - Fee related earnings (FRE) reached $94.1 million, an increase of 85% from the prior year quarter, with an FRE margin of 44% [4][12] - Adjusted net income for the quarter was $80.6 million or $0.68 per share, up from $37.7 million or $0.33 per share in the same quarter last year [5][12] - The total dividend payout for the fiscal year was $1.36, up from $0.99 the previous year [5][28] Business Line Data and Key Metrics Changes - The company raised over $31 billion in assets under management (AUM) for the fiscal year, with a growth of $27.5 billion in fee earning AUM, marking a 29% increase [6][12] - Managed account re-up rates remained above 90%, with an average growth of approximately 30% [6] - The private wealth platform saw AUM increase from $3.4 billion to over $8 billion [10] - Total gross inflows for the quarter were $9.9 billion, with $1.2 billion of evergreen subscriptions, marking the best private wealth quarter ever [11][20] Market Data and Key Metrics Changes - The company experienced strong fundraising and deployment of undeployed fee earning capital, driving fee earning AUM to over $121 billion, an increase of $7.2 billion from the previous quarter [12][22] - The undeployed fee earning capital (UFEC) grew from approximately $22 billion to $25 billion [22] - The blended management fee rate increased to 65 basis points from 59 basis points in the prior fiscal year [22] Company Strategy and Development Direction - The company aims to double its fee related earnings over five years and expand its FRE margin to the mid-30s, achieving a doubling of fee related earnings in just two years [23][24] - The company is focused on scenario planning to assess impacts by asset class, strategy, region, and sector due to market uncertainties [13] - The company is expanding its private wealth offerings and distribution partners, increasing from 300 to nearly 500 unique platforms [10][26] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the evolving global trade policy and its impact on market volatility [13] - The company believes that private markets will continue to outperform public markets, emphasizing the importance of a long-term disciplined investment approach [14][15] - Management highlighted the importance of leveraging data and technology to enhance client acquisition and retention [26] Other Important Information - The company plans to conduct a buy-in of non-controlling interests using $10 million in cash and $161 million in equity [27] - The company declared a supplemental dividend of $0.40 per share, in addition to a base quarterly dividend of $0.24 [28] Q&A Session Summary Question: What were the one-time fees in the quarter? - The one-time fees were approximately $4 million in advisory fees, which impacted the FRE margin [38] Question: How does the pipeline of new business look? - The company is optimistic about the pipeline of new opportunities, with a healthy mix of re-ups and new business expected [44] Question: How do you see the secondaries marketplace evolving? - The company anticipates increased selling in the secondaries market and is positioned as an active buyer across various private markets [60] Question: What is the outlook for the private wealth product platform? - The company sees significant growth potential in both the US and European markets, with plans to expand its product offerings [64]