Slide 1: Fiscal Year 2022 Fourth Quarter and Full Year Earnings Presentation
Fiscal Year 2022 Fourth Quarter and Full Year Earnings Presentation MAY 26, 2022
Slide 2: Today's Presenters
Today’s Presenters Scott Hart Jason Ment Mike McCabe Johnny Randel CEO President & Co-COO Head of Strategy Chief Financial Officer STEPSTONE GROUP 2
Slide 3: GAAP Consolidated Income Statements
GAAP Consolidated Income Statements GAAP net income was $103.6 million for the quarter and $484.3 million for the full year. GAAP net income attributable to StepStone Group Inc. was $41.8 million (or $0.69 per share) for the quarter and $193.9 million (or $3.84 per share) for the full year. ($ in th
Slide 4: Robust Growth Profile Since Inception
Robust Growth Profile Since Inception TOTALS ASSETS UNDER MANAGEMENT AND ADVISEMENT ($B) $570 Assets under management $427 Assets under advisement $296 $266 $155 $116 $130 $84 $62 $64 $47 $54 $27 $5 $9 $1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FY'17 FY'18 FY'19 FY'20 FY’21 FY'22 Note: Fis
Slide 5: Fiscal Q4 and Full Year 2022 Overview
Fiscal Q4 and Full Year 2022 Overview FQ4’22 FQ3’22 FQ4’21 vs. FQ3’22 vs. FQ4’21 Assets under management (“AUM”) $134.5 B $127.0 B $86.4 B 6% 56% Fee-Earning AUM (“FEAUM”) $75.2 B $71.2 B $52.0 B 6% 45% KEY BUSINESS DRIVERS Undeployed fee-earning capital $17.0 B $17.3 B $14.0 B -2% 21% Gross accrued
Slide 6: Overview
OVERVIEW
Slide 7: StepStone's Growth Drivers
StepStone’s Growth Drivers AUM AUA SEPARATELY MANAGED ACCOUNTS FOCUSED COMMINGLED FUNDS ADVISORY $79B $44B1 $436B 21% growth from prior year 44% organic growth from prior year2 • A total of ~$16B of new capital • A total of ~$5B raised in focused • Net client activity increased AUA by additions duri
Slide 8: Fee-earning AUM Evolution
FEAUM Growth 35% SMAs +22% from prior year Fee-earning AUM Evolution clients with exposure to more Commingled +25% organic than one asset class growth from prior year FEE-EARNING AUM BY COMMERCIAL STRUCTURE ($B) Total AUM $40 $53 $67 $86 $1341 $75.2 FEAUM + UNDEPLOYED FEE-EARNING CAPITAL ($B)1 $92.2
Slide 9: Trend in Management and Advisory Fees
Trend in Management and Advisory Fees MANAGEMENT & ADVISORY FEES ($M)1 $3802 MANAGEMENT & ADVISORY FEES PER SHARE6 $3.55 Advisory fees 57 $2.91 Focused commingled funds $285 $2.40 Separately managed $234 52 accounts 149 $1.95 $190 48 97 $1.44 $140 45 79 40 59 174 49 136 107 86 52 FY'18 FY'19 FY'20 F
Slide 10: Financial Update
FINANCIAL UPDATE
Slide 11: Financial Highlights
Financial Highlights • FEAUM growth of 45% drove fee revenue increases of 47% for the quarter and 33% for the full year • ANI per share increased 52% for the quarter and 85% for the full year, reflecting higher FRE and net realized performance fees • Results for the quarter include $3.4M of revenue,
Slide 12: Adjusted Revenues
Adjusted Revenues ($M, except per share amounts) MGMT. & ADVISORY FEES +22% CAGR Per Share $3.55 +25% $3.55 • Management fees per share increased 27% for the full year driven by strong FEAUM growth $2.90 $380 $380 – SMA and Commingled Funds fees per share increased by 18% and 40%, respectively $285
Slide 13: Profitability
Profitability ($M, except per share amounts) FEE-RELATED EARNINGS Per Share $1.14 $1.14 +25% $122 CAGR $122 • Fee-related earnings growth driven primarily by growth in FEAUM for the full year and by $0.91 +48% growth in FEAUM and margin expansion in the long-term growth period $89 • FRE margins were
Slide 14: Accrued Carry and Fund Investments
Accrued Carry and Fund Investments1 ACCRUED CARRY ($M)2 NET UNREALIZED CARRY AS OF 3/31/2022 BY VINTAGE AND TYPE $1,600 +65% $1,481 2013 & Prior $1,347 Private $1,400 Post 2017 9% Equity 95% $1,216 $1,200 $1,073 31% $1,000 $897 2014 $800 13% Infrastructure 2% $600 2015 $400 Real Estate 13% $200 3% $
Slide 15: Appendix
APPENDIX
Slide 16: Consolidated Balance Sheets
Consolidated Balance Sheets ($ in thousands) Mar '2 1 D ec '2 1 Mar '2 2 Asset s Cash and cash equivalents $ 179,886 $ 135,885 $ 116,386 Restricted cash 3,977 1,031 1,063 Fees and accounts receivable 32,096 32,641 34,141 Due from affiliates 7,474 11,092 19,369 Investments: Investments in funds 74,37
Slide 17: Non-GAAP Financial Results
Non-GAAP Financial Results ($ in thousands, unless otherwise mentioned) Qua rter F ul l Y ea r Mar '21 Mar '22 % Fav / Unfav Mar '21 Mar '22 % Fav / Unfav Management and advisory fees, net $ 76,217 $ 112,229 47% $ 285,462 $ 380,257 33% Less: Cash-based compensation 43,265 59,265 -37% 157,123 197,482
Slide 18: FEAUM Overview
FEAUM Overview Fav / Unfav Change ($B, unless noted) FQ4'22 FQ4'21 $ % W a l k f rom A U M to F EA U M $B Total AUM as of 3/31/22 $ 134.5 SMAs Less: Non-Fee Earning AUM 14.3 Beginning balance $ 45.9 $ 35.4 $ 10.5 30% Less: Market appreciation included in AUM 28.0 Contributions 5.2 5.1 0.1 2% Less: U
Slide 19: StepStone Occupies a Critical Position within the GP & LP Ecosystem
StepStone Occupies a Critical Position within the GP & LP Ecosystem Global Private Markets Primaries Secondaries Co-investments Over $75B in annual private markets capital allocations¹ Corporations Endowments/Foundations Family Offices Asset management Private Equity Private Wealth/Defined Advisory
Slide 20: StepStone is a Global Private Markets Solutions and Services Provider
StepStone is a Global Private Markets Solutions and Services Provider StepStone is a global private markets investment $ 570B $ 134B $ 75B $ 75B+ 791 firm focused on providing customized investment combined assets under fee-earning annual private professionals AUM/AUA1 management1 assets under marke
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 ADVISORY & PORTFOLIO ANALYTICS & FOCUSED COMMINGLED FUNDS ACCOUNTS DATA SERVICES REPORTING • Owned by one cli
Slide 22: Comprehensive, Full Service Model
240 37% Comprehensive, Full Service Model bespoke SMA accounts and focused commingled funds of advisory clients also have an AUM relationship • Offers a comprehensive, full-service model to clients seeking a customized solution to private markets investing • Each solution is offered across each of t
Slide 23: Investment Expertise Across All Private Markets Asset Classes
47% ($267B) Investment Expertise Across All Private Markets Asset Classes combined AUM / AUA in RE / INFRA / PD asset classes As of March 31, 2022 BY AUM1 BY AUA Private Debt Private Debt $22B / 17% Infrastructure $15B / 3% $44B / 10% Private Equity $76B / 56% Private Equity Infrastructure $228B / 5
Slide 24: Net Realized Performance Fees
Net Realized Performance Fees QUARTERLY NET REALIZED PERFORMANCE FEES LTM NET REALIZED PERFORMANCE FEES ($m, unless otherwise mentioned) ($m, unless otherwise mentioned) $130 $130 $123 $120 $120 $110 $110 $107 $100 $100 $91 $90 $90 $80 $80 $70 $70 $68 $60 $60 $50 $50 $43 $40 $40 $33 $33 $31 $29 $28
Slide 25: Revenues - Management and Advisory Fees, Net
Revenues - Management and Advisory Fees, Net ($ in thousands) Q uarter Full Year Mar '21 Mar '22 % Fav / Unfav Mar '21 Mar '22 % Fav / Unfav Focused commingled funds $ 22,982 $ 49,552 116% $ 97,223 $ 148,725 53% SMAs 40,754 47,181 16% 135,784 174,318 28% Advisory and other services 12,310 14,860 21%
Slide 26: Blue-chip, Sophisticated, Global Clientele
Blue-chip, Sophisticated, Global Clientele As of March 31, 2022 BY TYPE BY GEOGRAPHY LTM management and advisory fees (%) LTM management and advisory fees (%) 6% Pension Funds 3% 6% Insurance Companies North America 19% 6% Private Wealth/ 31% 40% Defined Contribution Plans Asia/Australia 10% Soverei
Slide 27: StepStone's Diversified Platform Spans Private Markets Solutions
StepStone’s Diversified Platform Spans Private Markets Solutions PRIVATE EQUITY REAL ESTATE INFRASTRUCTURE PRIVATE DEBT • Total AUM: $76B • Total AUM: $11B • Total AUM: $26B • Total AUM: $22B - SMA AUM: $38B - SMA AUM: $3B - SMA AUM: $24B - SMA AUM: $13B - FCF AUM: $37B - FCF AUM: $3B - FCF AUM: $--
Slide 28: Track Record Disclosures
Track Record Disclosures Note: Descriptions for certain terms can be found on the definitions page starting on slide 33 of this presentation. 1 Investment returns reflect NAV data for underlying investments as of December 31, 2021, as reported by underlying managers up to 115 days following December
Slide 29: Notable StepStone Focused Commingled Funds
Notable StepStone Focused Commingled Funds1 Fund 2 Vintage Fund Name Desc ription Size Year ($ M) PRIV A T E EQU IT Y StepStone Capital Partners IV Private Equity Co-Investments 2018 $ 1,302 StepStone Secondary Opportunities Fund IV Private Equity Secondaries 2019 2,097 StepStone VC Global Partners
Slide 30: Reconciliation of GAAP to ANI and FRE
Reconciliation of GAAP to ANI and FRE ($ in thousands) Qu ar t er Fu ll Year Fu ll Year Mar '21 Mar '22 Mar '21 Mar '22 Mar '18 Income before income tax $ 162,866 $ 115,842 $ 337,849 $ 512,581 $ 85,805 Net income attributable to non-controlling interests in subsidiaries(1) (4,655) (8,759) (23,952) (
Slide 31: Reconciliation of Adjusted Net Income Per Share
Reconciliation of Adjusted Net Income Per Share ($ in thousands, except share and per share amounts) Q uarter Full Year Full Year Mar '21 Mar '22 Mar '21 Mar '22 Mar '18 Adjusted net income $ 24,626 $ 43,714 $ 85,402 $ 172,943 $ 35,020 Weighted-average shares of Class A common stock outstanding – Ba
Slide 32: Reconciliation of Gross and Net Realized Performance Fees
Reconciliation of Gross and Net Realized Performance Fees ($ in millions) Quarter FQ4'18 FQ1'19 FQ2'19 FQ3'19 FQ4'19 FQ1'20 FQ2'20 FQ3'20 FQ4'20 FQ1'21 FQ2'21 FQ3'21 FQ4'21 FQ1'22 FQ2'22 FQ3'22 FQ4'22 Realized carried interest allocations(1) $ 9.9 $ 11.3 $ 10.1 $ 5.4 $ 9.9 $ 12.9 $ 11.1 $ 19.6 $ 2.6
Slide 33: Definitions
Definitions • Company refers to SSG and its consolidated subsidiaries, including the Partnership, following the Reorganization and IPO and to the Partnership and its consolidated subsidiaries prior to the Reorganization and IPO. • StepStone Group Inc. or “SSG” refers solely to StepStone Group Inc.,
Slide 34: Definitions (continued)
Definitions (continued) • Fee-Earning AUM, or “FEAUM”, reflects the assets from which we earn management fee revenue (i.e., fee basis) and includes assets in our SMAs, focused commingled funds and assets held directly by our clients for which we have fiduciary oversight and are paid fees as the mana
Slide 35: Definitions (continued)
Definitions (continued) • Net Realized Performance Fees represents gross realized performance fees, less realized performance fee-related compensation. Excludes legacy Greenspring entities. • Invested Capital refers to the total amount of all investments made by a fund, including commitment-reducing
Slide 36: Disclosure
Disclosure Some of the statements in this presentation may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than s