Slide 1: Second Quarter Fiscal Year 2025 Earnings Presentation
Second Quarter Fiscal Year 2025 Earnings Presentation November 7, 2024 STEPSTONE GROUP 1
Slide 2: Today's presenters
Today’s Scott Hart CEO Jason Ment President & Co-COO presenters Mike McCabe David Park Head of Strategy CFO STEPSTONE GROUP 2
Slide 3: GAAP consolidated statements of income
GAAP consolidated statements of income ($ in thousands, except per share amounts) Quarter Year-to-Date Sep '23 Sep '24 % Fav / Unfav Sep '23 Sep '24 % Fav / Unfav Revenues Management and advisory fees, net $ 142,123 $ 184,758 30% $ 280,238 $ 362,773 29% Performance fees: Incentive fees 4,946 3,155 -
Slide 4: Non-GAAP financial results
Non-GAAP financial results1 ($ in thousands, unless otherwise mentioned) Quarter Year-to-Date Sep '23 Sep '24 % Fav / Unfav Sep '23 Sep '24 % Fav / Unfav Adjusted management and advisory fees, net(2) $ 142,327 $ 185,481 30% $ 280,628 $ 363,995 30% Less: Adjusted cash-based compensation 74,277 82,586
Slide 5: Fiscal Q2 2025 overview
Fiscal Q2 2025 overview FQ2’25 FQ2’24 vs. FQ2’24 FQ1’25 vs. FQ1’25 Assets under management (“AUM”) $176.1 B $145.8 B 21% $169.3 B 4% Fee-earning AUM (“FEAUM”) $104.4 B $87.3 B 20% $100.4 B 4% Key Business Drivers Undeployed fee-earning capital $29.7 B $18.1 B 64% $27.6 B 8% Gross accrued carry $1,38
Slide 6: Overview
Overview STEPSTONE GROUP 6
Slide 7: Scale that delivers
Scale that delivers Opportunity Assets under management $176 The capital and relationships that unlock growth BILLION Total capital Reach Assets under advisement $506 responsibility True global presence, deep local knowledge BILLION $682 Flexibility Average annual private markets allocations ~$70 BI
Slide 8: Growth drivers
Growth drivers AUM & AUA Separately Managed Accounts Focused Commingled Funds Advisory $107 billion $54 billion $506 billion 26% growth from the prior year 16% growth from the prior year • $7 billion of net client activity decreased AUA over the LTM $21 billion of new capital additions during the LT
Slide 9: Evolution of fee-earning AUM
Evolution of fee-earning AUM 35% clients with exposure to more than one asset class FEE-EARNING AUM BY COMMERCIAL STRUCTURE ($B) Total AUM $67 $86 $134 $138 $157 $176 $104.4 Organic CAGR1: 20% $93.9 $85.4 $75.2 42.3 FEAUM + UNDEPLOYED FEE-EARNING CAPITAL ($B) Focused 30.1 35.0 $52.0 25.6 commingled
Slide 10: Trend in adjusted management and advisory fees
Trend in adjusted management and advisory fees ADJUSTED MANAGEMENT & ADVISORY FEES ($M)1 Advisory fees $664 LTM Focused commingled funds FY’20 FY’21 FY’22 FY’23 FY’24 FQ2’25 62 $581 Blended management fee rates3 Separately managed accounts 60 Overall 0.51% 0.52% 0.52% 0.54% 0.59% 0.63% $494 By Type:
Slide 11: Financial update
Financial update STEPSTONE GROUP 11
Slide 12: Financial highlights
Financial highlights • Adjusted management and advisory fees, net increased 30% for both the quarter and year-to-date, driven by FEAUM growth and higher retroactive fees • Fee-related earnings increased 65% for the quarter and 63% year-to-date, driven by growth in fee revenues and expansion of FRE m
Slide 13: Accrued carry and fund investments
Accrued carry and fund investments1 NET ACCRUED CARRY ($M)2 NET UNREALIZED CARRY AS OF 9/30/2024 BY VINTAGE AND TYPE Post 2019 2015 & Prior 17% 22% Private Equity $677 $701 83% $634 $635 $569 2019 2016 Infrastructure 16% 18% 12% Real Estate FQ2'24 FQ3'24 FQ4'24 FQ1'25 FQ2'25 5% 2018 2017 83% from 20
Slide 14: Appendix
Appendix STEPSTONE GROUP 14
Slide 15: Consolidated balance sheets
Consolidated balance sheets ($ in thousands) Sep '23 Mar '24 Sep '24 Assets Cash and cash equivalents $ 117,484 $ 143,430 $ 179,066 Restricted cash 679 718 763 Fees and accounts receivable 45,237 56,769 68,103 Due from affiliates 51,050 67,531 80,280 Investments: Investments in funds (1) 129,768 135
Slide 16: FEAUM overview
FEAUM overview Fav / Unfav Change ($B, unless noted) FQ2'25 FQ2'24 $ % Walk from AUM to FEAUM $B Total AUM as of 9/30/24 $ 176.1 SMAs Less: Non-fee earning AUM 17.3 Beginning balance $ 60.3 $ 56.6 $ 3.6 6% Less: Market appreciation included in AUM 24.7 Contributions 1 1.7 1.0 0.7 66% Less: Undeploye
Slide 17: Adjusted revenues
Adjusted revenues ($M, except per share amounts) ADJUSTED Management fees increased 33% YTD driven by growth in +30% $364 MANAGEMENT $281 FEAUM and a higher level of retroactive fees $670 & ADVISORY Advisory fees increased 7% YTD FEES $235 Sep-23 Sep-24 YTD Mar-20 LTM Sep-24 Long-Term Growth GROSS R
Slide 18: Profitability
Profitability ($M, except per share amounts) FEE-RELATED EARNINGS • Fee-related earnings growth driven primarily by growth in fee $246 revenues and margin expansion • FRE margins were 40% YTD as compared with 31% in the prior +63% $144 year and 26% four fiscal years ago $88 $62 Sep-23 Sep-24 Mar-20
Slide 19: StepStone occupies an important position within the GP & LP ecosystem
StepStone occupies an important position within the GP & LP ecosystem A strategic partner to our clients and managers, we listen deeply, share generously, and search diligently for new ways to address each challenge. CLIENTS A self-reinforcing Corporations growth cycle of STEPSTONE clients, capital,
Slide 20: Our global reach powers possibility
Our global reach powers possibility Local teams with valuable regional insights collaborate across 26 cities, 16 countries and 5 continents. London Dublin Frankfurt Toronto Luxembourg Zurich San Francisco Rome Chicago New York Seoul Palo Alto Cleveland Baltimore Beijing Dallas Charlotte Tokyo La Jol
Slide 21: Comprehensive private markets solutions
Comprehensive private markets solutions StepStone’s flexible business model helps clients access opportunities across all asset classes: ASSET MANAGEMENT ADVISORY RESEARCH Separately managed accounts Focused commingled funds Advisory & data services Portfolio analytics & reporting • Owned by one cli
Slide 22: Offering a full-service model to clients seeking a customized solution
334 35% Offering a full-service model to clients seeking a bespoke SMAs + focused commingled funds of advisory clients with an AUM relationship customized solution to private markets investing Industry-transforming technology capabilities create a virtuous cycle of client engagement and provide a si
Slide 23: Uncommon insights
Uncommon insights Our view is both panoramic and precise, framed by a powerful combination of proprietary data and technology that empowers clients to act with uncommon clarity and conviction. Investment selection Portfolio planning StepStone’s consolidated due diligence library contains qualitative
Slide 24: Investment expertise across all private markets asset classes
Investment expertise across all private markets asset classes As of September 30, 2024 BY AUM BY AUA 49% / $335B Private Debt combined AUM/AUA Private Debt $19B / 4% in RE / INFRA / PD $32B / 18% Infrastructure $63B / 12% Private Equity $92B / 52% $176 $506 BILLION Private Equity BILLION Infrastruct
Slide 25: Net realized performance fees
Net realized performance fees QUARTERLY NET REALIZED PERFORMANCE FEES ($M) LTM NET REALIZED PERFORMANCE FEES ($M) $123 $122 $33 $33 $32 $110 $107 $29 $28 $91 $85 $22 $68 $65 $66 $18 $18 $16 $57 $14 $43 $12 $12 $41 $38 $36 $23 $31 $8 $8 $7 $27 $25 $26 $6 $24 $5 $6 $20 $18 $1 Note: Net realized perfor
Slide 26: Revenues – Adjusted management and advisory fees, net
Revenues – Adjusted management and advisory fees, net LTM SEP ’23 LTM SEP ’24 SMAs 41% SMAs 34% Advisory and Advisory and other services other services 10% 9% Focused Fund Fund reimbursement Focused commingled reimbursement revenues commingled funds revenues 1% funds 48% 1% 56% ($ in thousands) Quar
Slide 27: Blue-chip, sophisticated, global clientele
Blue-chip, sophisticated, global clientele As of September 30, 2024 BY TYPE BY GEOGRAPHY LTM management and advisory fees (%) LTM management and advisory fees (%) Pension Funds North America 3% 4% 5% Insurance Companies 6% Asia/Australia 32% Private Wealth/ 17% 12% 35% Europe Defined Contribution Pl
Slide 28: Our diversified platform spans private markets solutions
Our diversified platform spans private markets solutions Private Equity Real Estate Infrastructure Private Debt • Total AUM: $92B • Total AUM: $17B • Total AUM: $35B • Total AUM: $32B - SMA AUM: $49B - SMA AUM: $8B - SMA AUM: $32B - SMA AUM: $19B - FCF AUM: $43B - FCF AUM: $5B - FCF AUM: $2B - FCF A
Slide 29: Notable StepStone focused commingled funds
Notable StepStone focused commingled funds Vintage Fund Size Fund Name Description Year ($M) PRIVATE EQUITY StepStone Tactical Growth Fund III Multi-strategy growth equity 2020 $ 696 Current funds in market include: StepStone VC Asia Fund I Multi-strategy Asia venture capital 2020 251 StepStone VC E
Slide 30: Reconciliation of GAAP income before income tax to ANI and FRE
Reconciliation of GAAP income before income tax to ANI and FRE ($ in thousands) Quarter Year-to-Date Full Year Last Twelve Months Sep '23 Sep '24 Sep '23 Sep '24 Mar '20 Sep '24 Income before income tax $ 66,980 $ 57,888 $ 125,023 $ 112,730 $ 148,740 $ 183,103 Net income attributable to non-controll
Slide 31: Reconciliation of GAAP measures to adjusted measures
Reconciliation of GAAP measures to adjusted measures ($ in thousands) Quarter Year-to-Date Full Year Last Twelve Months Sep '23 Sep '24 Sep '23 Sep '24 Mar '20 Sep '24 Total revenues $ 191,422 $ 271,677 $ 369,433 $ 458,078 $ 446,611 $ 800,276 Unrealized carried interest allocations (55,371) (52,215)
Slide 32: Calculation and reconciliation of adjusted net income per share
Calculation and reconciliation of adjusted net income per share ($ in thousands, except share and per share amounts) Quarter Year-to-date Full Year Last Twelve Months Sep '23 Sep '24 Sep '23 Sep '24 Mar '20 Sep '24 ANI $ 30,173 $ 53,569 $ 59,561 $ 110,810 $ 50,143 $ 190,642 Weighted-average shares o
Slide 33: Reconciliation of total performance fees to gross and net realized performance fees
Reconciliation of total performance fees to gross and net realized performance fees ($ in millions) Quarter FQ1'20 FQ2'20 FQ3'20 FQ4'20 FQ1'21 FQ2'21 FQ3'21 FQ4'21 FQ1'22 FQ2'22 FQ3'22 FQ4'22 FQ1'23 FQ2'23 FQ3'23 FQ4'23 FQ1'24 FQ2'24 FQ3'24 FQ4'24 FQ1'25 FQ2'25 Incentive fees $ 1.6 $ 0.8 $ 0.2 $ 0.8
Slide 34: Definitions
Definitions Adjusted net income, or “ANI,” is a non-GAAP performance measure that we present Assets under advisement, or “AUA,” consists of client assets for which we do not have full before the consolidation of StepStone Funds on a pre-tax and after-tax basis used to discretion to make investment d
Slide 35: Definitions (continued)
Definitions (continued) Assets under management, or “AUM,” primarily reflects the assets associated with our Fee-earning AUM, or “FEAUM,” reflects the assets from which we earn management fee separately managed accounts (“SMAs”) and focused commingled funds. We classify revenue (i.e., fee basis) and
Slide 36: Definitions (continued)
Definitions (continued) Gross realized performance fees represent realized carried interest allocations and Partnership refers solely to StepStone Group LP, a Delaware limited partnership, and not to any adjusted incentive fees, including the deferred portion. We believe gross realized of its subsid
Slide 37: Footnotes
Footnotes GAAP consolidated statements of income (slide 3) 1 Reflects amounts attributable to consolidated VIEs for which we did not acquire any direct economic interests. Such amounts are attributable to employees and therefore have been reflected as legacy Greenspring performance fee-related compe
Slide 38: Footnotes (continued)
Footnotes (continued) Evolution of fee-earning AUM (slide 9) 1 Organic CAGR excludes $11.4B of FEAUM and $0.5B of undeployed fee-earning capital acquired as part of Greenspring as of 9/20/21. Trend in adjusted management and advisory fees (slide 10) 1 Excludes fund reimbursement revenues. 2 The acqu
Slide 39: Footnotes (continued)
Footnotes (continued) Consolidated balance sheets (slide 15) 1 The Company’s investments in funds were $232 million as of September 30, 2024, $205 million as of March 31, 2024, and $188 million as of September 30, 2023, respectively. The consolidation of the Consolidated Funds results in the elimina
Slide 40: Footnotes (continued)
Footnotes (continued) Our diversified platform spans private markets solutions (slide 28) 1 Investment returns reflect NAV data for underlying investments as of June 30, 2024, as reported by underlying managers up to the business day occurring on or after 100 days following June 30, 2024. For invest
Slide 41: Footnotes (continued)
Footnotes (continued) Our diversified platform spans private markets solutions (continued) (slide 28) 4 Investments of former clients are included in performance summary past the client termination date until such time as StepStone stops receiving current investment data (quarterly valuations and ca
Slide 42: Footnotes (continued)
Footnotes (continued) Reconciliation of GAAP income before income tax to ANI and FRE (continued) (slide 30) 3 Includes (income) expense related to compensation paid to certain equity holders as part of an acquisition earn-out ($1.4 million in fiscal 2020), transaction costs ($0.1 million and $0.2 mi
Slide 43: Footnotes (continued)
Footnotes (continued) Reconciliation of GAAP measures to adjusted measures (slide 31) 1 Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation. 2 Reflects the add-back of incentive fee revenues for the Consolidated Funds,
Slide 44: Disclosure
Disclosure Some of the statements in this presentation may constitute “forward-looking statements” The non-GAAP financial measures contained in this presentation (including, without limitation, within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the adjusted revenues, adj
Slide 45: stepstonegroup.com
stepstonegroup.com STEPSTONE GROUP 45