StepStone Group (NasdaqGS:STEP) Q3 2026 Earnings call February 05, 2026 05:00 PM ET Company ParticipantsAlex Blostein - Managing DirectorDavid Park - Partner and CFOJason Ment - Partner, President, and Co-COOMichael Cyprys - Managing Director and Equity Research In FinancialsMichael McCabe - Head of StrategyScott Hart - Partner and CEOSeth Weiss - Managing Director and Corporate Investor RelationsConference Call ParticipantsBrennan Hawken - Senior Equity Research AnalystJohn Dunn - Managing Director and Sen ...

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]

StepStone Group (NasdaqGS:STEP) Q3 2026 Earnings call February 05, 2026 05:00 PM ET Speaker7Good day and thank you for standing by. Welcome to the Q3 2026 StepStone Group Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdra ...