StepStone Group Earnings Presentation SECOND QUARTER FISCAL YEAR 2026 November 6, 2025 1 Today's presenters STEPSTONE GROUP 2 Scott Hart CEO Jason Ment President & Co-COO Mike McCabe Head of Strategy David Park CFO GAAP consolidated statements of income (loss) GAAP net loss was $575.5 million for the quarter and $587.5 million year-to-date. GAAP net loss attributable to StepStone Group Inc. was $366.1 million (or $4.66 per share) for the quarter and $404.6 million (or $5.17 per share) year-to-date. | ($ in ...

Core Viewpoint - Horizon Kinetics LLC is an independently owned investment boutique that emphasizes a long-term, contrarian, fundamental value investment philosophy established over 26 years ago [1] Company Overview - Horizon Kinetics was formed in May 2011 and is the parent company of Horizon Asset Management LLC, Kinetics Asset Management LLC, and Kinetics Advisers, LLC, along with various affiliates [1] - The company has over 70 employees and operates primarily from New York City and White Plains, New York [1] Investment Philosophy - The firm believes that a short-term investment approach leads to sub-optimal long-term returns and advocates for extending investment time horizons to leverage the power of compounding [1] - Horizon Kinetics employs independent, fundamental research to drive its investment strategies, often taking contrarian views to capitalize on the marketplace's short-term focus [1] Research Approach - Publishing research has been fundamental to the investment process since Horizon's inception in 1994, with a focus on framing investment ideas in writing to mitigate behavioral finance errors [1] - The research team consists of fifteen analysts producing six different reports for the institutional investment community [1] Investment Strategies - Horizon Kinetics offers separately managed accounts, mutual funds, and alternative investment products for both individual and institutional investors, including Kinetics Mutual Funds, Inc. [1] - The company aims for absolute returns and constructs concentrated portfolios based on explicit research and broad investment guidelines, avoiding attempts to track any benchmark or index [1] - The independent investment process seeks to deliver superior risk-adjusted returns that are generally less correlated with peers, making its strategies potentially attractive for broader asset allocations [1]

Group 1: Market Trends and Investment Strategies - The article discusses the historical difficulty in identifying market bubbles in real-time, emphasizing the role of crowd behavior in driving prices to unsustainable levels [1] - Financial advisors are encouraged to act as behavioral coaches rather than mere forecasters, highlighting the importance of personal resilience during market volatility [2] - The oil market is currently oversupplied, with global inventories at near four-year highs, which is limiting the impact of sanctions on Russia [3] - The traditional 60/40 portfolio may not be sufficient to protect retirement savings from long-term stagnation in investment returns, referred to as the "lost decade" [4] Group 2: Alternative Investments and Fundraising - Franklin Templeton is focusing on expanding its outsourced chief investment officer (OCIO) business by catering to the demand for customized portfolio management from wealth and family office clients [5] - Alternative investment fundraising has reached approximately $148.4 billion year-to-date, with public non-traded business development companies leading the way at $34.5 billion [6] - There are concerns that retail investors may not fully understand the complexities and risks associated with alternative investment products being marketed to them [7] Group 3: Infrastructure and Real Estate Investments - McKinsey's research indicates that global data centers will require $6.7 trillion in investment to meet the growing demand for computing power, with an additional $5.2 trillion needed for AI-related infrastructure by 2030 [8] - Investment in qualified opportunity zone funds (QOFs) saw a significant decline in Q3 2025, raising only $436.8 million, as investors show caution ahead of a projected "dead period" for opportunity zone investments [9] - Apollo Global Management has appointed Bert Crouch as head of its real estate equity division, following its acquisition of Bridge Investment Group, which nearly doubled its real estate assets under management to $110 billion [10][2] Group 4: Leadership Changes in Financial Firms - Goldman Sachs Asset Management has appointed David Blank from UBS as the head of sales for separately managed accounts and portfolio solutions, indicating a strategic move to enhance its offerings in this area [11]

Group 1 - Wealthy investors in the U.S. and Asia have cancelled plans to invest in U.S. hedge funds, shifting focus to Europe and the Middle East [1] - Half of the allocators who previously intended to invest in U.S. hedge funds have abandoned these plans according to a Bank of America survey [1][2] - The survey included 263 respondents representing approximately $840 billion in industry cash, showing European allocations exceeded expectations by 8% [2] Group 2 - U.S. and Asian investors are increasingly investing in hedge funds based in Europe and the Middle East, where many global hedge funds have established operations [2] - Hedge funds managing over $10 billion are favoring separately managed accounts, which are special investment vehicles created for individual allocators [3] - So far this year, firms such as pension funds, sovereign wealth funds, and family offices have invested $37 billion into hedge funds, marking the highest influx of new money since at least 2016 [3] Group 3 - In public markets, there has been a recent return of money to U.S. equity funds, with weekly flows reaching a year-to-date high of nearly $58 billion [4]

Financial Performance - GAAP consolidated statements of income (loss)显示，截至2025年6月，净亏损为1201.1万美元[7] - 归属于StepStone Group Inc的GAAP净亏损为3842.4万美元，即每股亏损0.49美元[7,8] - 截至2025年6月，调整后的净收入（ANI）为4853.4万美元，同比下降15%[9] - ANI每股0.40美元，同比下降17%[9] - 费用收入同比增长19%，达到2.127亿美元[9,12] - 实际业绩费用总额下降42%[9,12] - 费用相关收益（FRE）增长13%，达到8120万美元[9,12] Assets Under Management (AUM) and Advisement (AUA) - 资产管理规模（AUM）达到1993亿美元，同比增长18%[11,15] - 费用收入资产管理规模（FEAUM）达到1272亿美元，同比增长27%[11,18] - 待配置的费用收入资本为287亿美元，同比增长4%[11] - 顾问管理资产（AUA）为5240亿美元[15,18] Capital Raising and Deployment - 过去12个月内，为独立管理账户（SMA）筹集了180亿美元的新资本[12,18] - 过去12个月内，为混合基金筹集了100亿美元[12,18]

Core Insights - Franklin Resources modestly surpassed analysts' expectations for Q3 FY2025 in both revenue and non-GAAP earnings per share, with EPS at $0.49 versus an estimate of $0.48 and GAAP revenue reaching $2,064.0 million compared to a consensus of $1,582.2 million [1][2] - Despite the positive surprise, both revenue and profit metrics declined year-over-year, with GAAP revenue down 2.8% and operating income down 30.7% [2][5] - The company experienced improved net flows outside of its Western Asset Management subsidiary, although pressures from Western continued to impact overall profitability and margins [1][6] Financial Performance - Non-GAAP EPS for Q3 FY2025 was $0.49, down 18% from $0.60 in Q3 FY2024 [2] - GAAP revenue was $2,064.0 million, a decrease of 2.8% from $2,122.9 million in the previous year [2] - Operating income fell to $154.1 million, a 30.7% decline year-over-year [2] - Operating margin decreased to 7.5% from 10.5% a year ago, while adjusted operating margin narrowed to 23.7% from 25.7% [2][5] - Assets under management (AUM) were $1,611.8 billion, down 2.1% from the previous year [2][6] Business Overview - Franklin Resources manages a diverse range of investment portfolios across various asset classes, with a business model focused on collecting management fees based on AUM [3][4] - The company aims to capture client assets through mutual funds, ETFs, separately managed accounts, and alternative investment strategies [4] Growth Areas - Alternative investments are a significant growth area, with fundraising totaling $19.0 billion year-to-date, including $15.7 billion in private markets [7] - The company announced an agreement to acquire a majority interest in Apera Asset Management, enhancing its capabilities in private credit [7] - The ETF platform achieved record assets of $44.1 billion, supported by $4.3 billion in positive flows, marking 15 consecutive quarters of inflows [8] Geographic Performance - The international business performed well, with AUM from outside the U.S. nearing $500 billion, and positive net flows reported in both the EMEA region and the Americas ex-U.S. [9] Cost Management and Shareholder Returns - The company is focused on expense control, with FY2025 expenses expected to remain consistent with the previous year, excluding performance compensation related to acquisitions [9] - A quarterly dividend of $0.32 per share was declared, reflecting a 3% increase from the same period last year, alongside a share buyback of 7.3 million shares [10] Strategic Focus - Management emphasized priorities such as the integration of new acquisitions, expansion in alternatives, and disciplined cost management, with a goal to reduce costs by $200–$250 million entering FY2026 [11] - The firm's institutional "won-but-unfunded" pipeline reached a record $24.4 billion, indicating strong future potential [11] - Ongoing investments in ETFs, digital asset vehicles, and custom indexing are part of the company's strategy to diversify its product lineup [12]

Financial Performance Highlights - Management and advisory fees increased by 39% for the quarter, reaching $213.401 million, and by 31% for the full year, totaling $767.014 million[7] - Total revenues increased by 6% for the quarter, amounting to $377.729 million, and by 65% for the full year, reaching $1.17483 billion[7] - Fee revenues increased by 40% for the quarter to $214.662 million and 31% for the full year to $770.489 million[9] - Fee-related earnings increased by 85% for the quarter to $94.081 million and 64% for the full year to $312.204 million[9] - Adjusted net income per share increased by 106% for the quarter to $0.68 and 69% for the full year to $2.05[9] - Gross realized performance fees increased by $120 million for the full year[46] Assets Under Management (AUM) - Assets under management increased by 21% to $189.4 billion[10] - Fee-earning AUM increased by 29% to $121.4 billion[10] - Undeployed fee-earning capital totaled $24.6 billion, a 9% increase[10] Capital Activity - Raised a total of $21 billion of new capital for separately managed accounts over the last twelve months[14] - Raised a total of $10 billion for commingled funds over the last twelve months[14]