Slide 1: First Quarter Fiscal Year 2025 Earnings Presentation
First Quarter Fiscal Year 2025 Earnings Presentation August 8, 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 Jun '23 Jun '24 % Fav / Unfav Revenues Management and advisory fees, net $ 138,115 $ 178,015 29% Performance fees: Incentive fees 6 841 na Carried interest allocations: Realized 14,473 41,804 189% Unrealized 49
Slide 4: Non-GAAP financial results
Non-GAAP financial results1 ($ in thousands, unless otherwise mentioned) Quarter Jun '23 Jun '24 % Fav / Unfav Adjusted management and advisory fees, net(2) $ 138,301 $ 178,514 29% Less: Adjusted cash-based compensation 69,550 77,796 -12% Adjusted equity-based compensation 1,301 2,394 -84% Adjusted
Slide 5: Fiscal Q1 2025 overview
Fiscal Q1 2025 overview FQ1’25 FQ1’24 vs. FQ1’24 FQ4’24 vs. FQ4’24 Assets under management (“AUM”) $169.3 B $142.6 B 19% $156.6 B 8% Fee-earning AUM (“FEAUM”) $100.4 B $87.4 B 15% $93.9 B 7% Key Business Drivers Undeployed fee-earning capital $27.6 B $16.9 B 63% $22.6 B 22% Gross accrued carry $1,32
Slide 6: Overview
Overview STEPSTONE GROUP 6
Slide 7: Scale that delivers
Scale that delivers Opportunity Assets under management $169 The capital and relationships that unlock growth BILLION Total capital Reach Assets under advisement $531 responsibility True global presence, deep local knowledge BILLION $701 Flexibility Average annual private markets allocations ~$70 BI
Slide 8: Growth drivers
Growth drivers AUM & AUA Separately Managed Accounts Focused Commingled Funds Advisory $103 billion $52 billion $531 billion 21% growth from the prior year 16% growth from the prior year • $34 billion of net client activity increased AUA over the LTM $18 billion of new capital additions during the L
Slide 9: Evolution of fee-earning AUM
Evolution of fee-earning AUM 36% clients with exposure to more than one asset class FEE-EARNING AUM BY COMMERCIAL STRUCTURE ($B) Total AUM $67 $86 $134 $138 $157 $169 Organic CAGR1: 20% $93.9 $100.4 $85.4 $75.2 FEAUM + UNDEPLOYED FEE-EARNING CAPITAL ($B) Focused 35.0 40.1 $52.0 30.1 commingled 25.6
Slide 10: Trend in adjusted management and advisory fees
Trend in adjusted management and advisory fees ADJUSTED MANAGEMENT & ADVISORY FEES ($M)1 Advisory fees $621 LTM Focused commingled funds $581 61 FY’20 FY’21 FY’22 FY’23 FY’24 FQ1’25 60 Blended management fee rates3 Separately managed accounts $494 Overall 0.51% 0.52% 0.52% 0.54% 0.59% 0.61% By Type:
Slide 11: Financial update
Financial update STEPSTONE GROUP 11
Slide 12: Financial highlights
Financial highlights • Adjusted management and advisory fees, net increased 29% over the prior year quarter, driven by FEAUM growth and strong retroactive fees • Fee-related earnings increased 61% over the prior year quarter, driven by growth in fee revenues and expansion of FRE margins • ANI per sh
Slide 13: Accrued carry and fund investments
Accrued carry and fund investments1 NET ACCRUED CARRY ($M)2 NET UNREALIZED CARRY AS OF 6/30/2024 BY VINTAGE AND TYPE Post 2019 2015 & Prior 15% Private Equity 22% $677 84% $634 $635 $609 $569 2019 2016 Infrastructure 16% 18% 11% Real Estate FQ1'24 FQ2'24 FQ3'24 FQ4'24 FQ1'25 2018 5% 85% from 2019 18
Slide 14: Appendix
Appendix STEPSTONE GROUP 14
Slide 15: Consolidated balance sheets
Consolidated balance sheets ($ in thousands) Jun '23 Mar '24 Jun '24 Assets Cash and cash equivalents $ 91,733 $ 143,430 $ 141,633 Restricted cash 699 718 735 Fees and accounts receivable 46,091 56,769 58,334 Due from affiliates 62,365 67,531 100,277 Investments: Investments in funds (1) 122,149 135
Slide 16: FEAUM overview
FEAUM overview Fav / Unfav Change ($B, unless noted) FQ1'25 FQ1'24 $ % Walk from AUM to FEAUM $B Total AUM as of 6/30/24 $ 169.3 SMAs Less: Non-fee earning AUM 17.0 Beginning balance $ 58.9 $ 55.3 $ 3.6 6% Less: Market appreciation included in AUM 24.4 Contributions 1 2.1 1.4 0.7 46% Less: Undeploye
Slide 17: Adjusted revenues
Adjusted revenues ($M, except per share amounts) ADJUSTED Management fees increased 32% over the prior year MANAGEMENT quarter driven by FEAUM growth and strong retroactive +29% $627 fees & ADVISORY $138 $179 FEES $235 Advisory fees increased 5% over the prior year quarter Jun-23 Jun-24 Mar-20 LTM J
Slide 18: Profitability
Profitability ($M, except per share amounts) FEE-RELATED EARNINGS • Fee-related earnings growth driven primarily by growth in $217 FEAUM and margin expansion • FRE margins were 40% for the quarter as compared with 32% +61% $72 in the prior quarter and 26% five fiscal years ago $44 $62 Mar-20 LTM Jun
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 27 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
327 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 June 30, 2024 BY AUM BY AUA 47% / $332B Private Debt combined AUM/AUA Private Debt $22B / 4% in RE / INFRA / PD $30B / 18% Infrastructure $63B / 12% Private Equity $89B / 53% $169 $531 BILLION Private Equity BILLION Infrastructure T
Slide 25: Net realized performance fees
Net realized performance fees QUARTERLY NET REALIZED PERFORMANCE FEES ($M) LTM NET REALIZED PERFORMANCE FEES ($M) $123 $122 $33 $33 $32 $110 $107 $29 $28 $91 $85 $22 $68 $65 $18 $18 $16 $57 $43 $12 $12 $41 $38 $36 $31 $8 $8 $7 $25 $24 $26 $6 $23 $5 $6 $1 Note: Net realized performance fees is a non-
Slide 26: Revenues – Adjusted management and advisory fees, net
Revenues – Adjusted management and advisory fees, net LTM JUNE ’23 LTM JUNE ’24 SMAs SMAs 41% 36% Advisory and Advisory and other services other services 11% 10% Fund Fund Focused reimbursement Focused reimbursement commingled revenues commingled revenues funds 1% funds 1% 47% 53% ($ in thousands) Q
Slide 27: Blue-chip, sophisticated, global clientele
Blue-chip, sophisticated, global clientele As of June 30, 2024 BY TYPE BY GEOGRAPHY LTM management and advisory fees (%) LTM management and advisory fees (%) Pension Funds 3% 3% North America 5% Insurance Companies 8% Asia/Australia Private Wealth/ 15% 11% 34% Europe Defined Contribution Plans 38% S
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: $89B • Total AUM: $17B • Total AUM: $33B • Total AUM: $30B - SMA AUM: $47B - SMA AUM: $8B - SMA AUM: $30B - SMA AUM: $18B - FCF AUM: $42B - FCF AUM: $5B - FCF AUM: $1B - FCF A
Slide 29: Notable StepStone focused commingled funds
Notable StepStone focused commingled funds Vintage Fund Size Fund Name Description Year ($M) PRIVATE EQUITY StepStone Secondary Opportunities Fund IV Private equity secondaries 2019 $ 2,097 Current funds in market include: StepStone Tactical Growth Fund III Multi-strategy growth equity 2020 696 • Pr
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 Full Year Last Twelve Months Jun '23 Mar '24 Jun '24 Mar '20 Jun '23 Jun '24 Income before income tax $ 58,043 $ 94,515 $ 54,842 $ 148,740 $ 36,774 $ 192,195 Net income attributable to non-controlling interests i
Slide 31: Reconciliation of GAAP measures to adjusted measures
Reconciliation of GAAP measures to adjusted measures ($ in thousands) Quarter Full Year Last Twelve Months Jun '23 Mar '24 Jun '24 Mar '20 Jun '23 Jun '24 Total revenues $ 178,011 $ 356,810 $ 186,401 $ 446,611 $ 187,655 $ 720,021 Unrealized carried interest allocations (49,364) (151,757) 25,170 (161
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 Full Year Last Twelve Months Jun '23 Mar '24 Jun '24 Mar '20 Jun '23 Jun '24 ANI $ 29,388 $ 37,716 $ 57,241 $ 50,143 $ 124,917 $ 167,246 Weighted-average shares of Class A com
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 Incentive fees $ 1.6 $ 0.8 $ 0.2 $ 0.8 $ 3.6
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 $218 million as of June 30, 2024, $205 million as of March 31, 2024 and $154 million as of June 30, 2023. The consolidation of the Consolidated Funds results in the elimination of the Company’s inv
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 March 31, 2024, as reported by underlying managers up to the business day occurring on or after 100 days following March 31, 2024. For inve
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 ($0.7 million for the thr
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