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]