Stepstone Group Inc. · NASDAQ:STEP
Stepstone — Investor Presentation (May 2025)
18 slides from Stepstone's investor presentation, May 2025
Slide 1: StepStone Academy: Private Markets Overview
StepStone Academy Private Markets Overview For financial professional use only.
Slide 2: Notes
NOTES This document is for informational purposes and is meant only to provide a broad overview for discussion purposes. Prospective investors should inform themselves and take appropriate advice as to any applicable legal requirements This document does not constitute an offer to sell, a solicitati
Slide 3: Today's narrative
Today’s narrative What are private markets: The basics Navigating the private markets: The potential challenges Private markets investing: The potential advantages STEPSTONE GROUP 3
Slide 4: The basics
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Slide 5: The different types of market investments
The different types of market investments Private markets offer 5 general asset types via 3 general investment strategies Investment strategies Asset types 1 Private equity 1. Fund investing (primaries) Large vs. small buyout, specific geographies, etc. Capital invested to private markets fund durin
Slide 6: Characteristics of private markets investing
Characteristics of private markets investing Public markets Private markets Ownership Many passive owners Active owners Liquidity Liquid investments Illiquid investments Information availability Information publicly available Opaque information Market correction Sensitive to market conditions Lower
Slide 7: How are sophisticated institutions investing?
How are sophisticated institutions investing? Institutional investors maintain significant private market allocations. Current target allocation to private market alternatives 37% 38% 34% 31% 28% Sovereign Wealth Funds Public Pension Funds Foundations Endowment Plans Single Family Offices For illust
Slide 8: Individual investors share of private assets is set to rise
Individual investors share of private assets is set to rise Percentage of global alternative assets under management by investment category CAGR $60T 2022-2032 10% 10% 6% 9% $25T 10% 9% 11% 4% Other institutional investors: 10% Endowments, foundations: 6% 11% 5% Insurance: 11% Public pension funds:
Slide 9: The potential challenges
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Slide 10: Private markets investment cycle
Private markets investment cycle Investment cycle cash flows follow the “J-Curve”, with LP capital called over the first 4-5 years of the mandate. Secondary & Co-Investment strategies can mitigate the J-Curve. Drawdowns Distributions Primary fund return Return Secondary fund return Co-Investment fun
Slide 11: Private equity risk considerations
Private equity risk considerations Illiquid Asset Timing of Returns is Uncertain Limited Partnership (“LP”) interests are not readily Exit events / distributions are difficult to project marketable or redeemable Valuation “Blind Pool” Investing Not marked-to-market Underlying fund investments are no
Slide 12: Manager selection is a critical success factor
Manager selection is a critical success factor Greater performance variability of smaller buyouts compared to larger buyouts, as indicated by the dispersion of returns between quartiles and within each quartile Quartile Analysis (2002–2018 North America Buyout Funds) 50% 1st Quartile 2nd Quartile 3r
Slide 13: Challenges to investing in private markets
Challenges to investing in private markets Access Information Liquidity Access to top Data is not widely available or Liquidity constraints require managers may be easily accessible sophisticated modeling limited Cost Expertise Resources Limited number of Broad skill set needed to Due diligence and
Slide 14: The potential advantages
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Slide 15: Why invest in the private markets?
Why invest in the private markets? Much of the growth, value creation, and opportunity has taken place in the private vs. public markets. Number of US IPOs per year1 Current blend of US private vs. public companies2 800 Public 700 13% 600 Companies 500 have been staying private 400 2x longer 300 7x
Slide 16: Private markets beat public equivalents on return and risk
Private markets beat public equivalents on return and risk Over nearly the last 20 years, private markets have outperformed public market equivalents, delivering higher returns at lower levels of risk across asset classes ANNUAL RETURN VS. ANNUAL VOLATILITY Annual 20 return 18 16 Venture capital 14
Slide 17: Outperformance driven by asymmetric risk capture
Outperformance driven by asymmetric risk capture Dot-com bubble Global financial crisis COVID-19 Tech pullback March 31, 2000, to September 30, 2002 September 30, 2007, to March 31, 2009 December 31, 2019, to March 31, 2020 December 31, 2021, to September 30, 2022 Public equity Private equity Total
Slide 18: Risks and other considerations
RISKS AND OTHER CONSIDERATIONS Risks Associated with Investments. Identifying attractive investment opportunities and the right underlying fund Allocation of Investment Opportunities. StepStone currently makes investments, and in the future will make managers is difficult and involves a high degree