| Item 1.01. | Entry into a Material Definitive Agreement. |
On May 31, 2024, StepStone Group Inc., a Delaware corporation (the “Company”) and StepStone Group LP, a Delaware limited partnership (the “Partnership”), completed the first annual exchange (the “2024 Exchange”) as part of the previously announced transactions to acquire equity interests of StepStone Group Real Estate LP, a Delaware limited partnership (“SRE”), StepStone Group Real Assets LP, a Delaware limited partnership (“SIRA”) and StepStone Group Private Debt AG (formerly known as Swiss Capital Alternative Investments AG), a private company limited by shares incorporated in the canton of Zurich (“SPD”, and collectively with SRE and SIRA, the “Asset Class Entities”, and each, an “Asset Class Entity”) pursuant to (i) the Transaction Agreement (the “SRE Transaction Agreement”), dated as of February 7, 2024, with SRE, Jeffrey Giller, solely in his capacity as seller representative, and the seller parties signatory thereto (the “SRE Sellers”), (ii) the Transaction Agreement (the “SIRA Transaction Agreement”), dated as of February 7, 2024, with SIRA, James O’Leary, solely in his capacity as seller representative, and the seller parties signatory thereto (the “SIRA Sellers”), and (iii) the Transaction Agreement (the “SPD Transaction Agreement”, and collectively with the SRE Tranaction Agreement and the SIRA Transaction Agreement, the “Transaction Agreements”), dated as of February 7, 2024, with StepStone Europe Limited, a private limited liability company incorporated in England and a wholly-owned subsidiary of the Company, SPD, Marcel Schindler, solely in his capacity as seller representative, and SC Partner LP, a Cayman Islands exempted limited partnership (the “SPD Seller”, and collectively with the SRE Sellers and the SIRA Sellers, the “Sellers”, and each, a “Seller”), respectively.
The portion of the equity interests acquired in the 2024 Exchange was approximately 5% of each Asset Class Entity. As a result of the 2024 Exchange, the Partnership now owns approximately 56% of the outstanding equity interests of SRE, 54% of the outstanding equity interests of SIRA and 55% of the outstanding equity interests of SPD. The amount of consideration delivered was calculated using exchange ratios based on a formula establishing an assumed value of each Asset Class Entity based on its estimated adjusted net income, relative to an adjusted trading multiple for the Company’s Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”), relative to the Company’s estimated adjusted net income. The aggregate consideration paid by the Company and the Partnership in the 2024 Exchange was approximately (i) $13 million in cash, (ii) 513,394 shares of Class A Common Stock, and (iii) 2,239,185 Class D Units of the Partnership (the “Class D Units”).
Tenth Amended & Restated Limited Partnership Agreement
In connection with the transactions contemplated by the SRE Transaction Agreement and SIRA Transaction Agreement, the Partnership entered into a Tenth Amended & Restated Limited Partnership Agreement of StepStone Partnership LP (the “A&R Partnership Agreement”) at the closing of the 2024 Exchange on May 31, 2024. The A&R Partnership Agreement creates Class D Units of the Partnership (the “Class D Units”) to be issued to the Sellers under the SRE Transaction Agreement and SIRA Transaction Agreement. The rights and obligations applicable to holders of the Class D Units are substantially the same as those applicable to existing holders of Class C Units of the Partnership under the Ninth Amended & Restated Limited Partnership Agreement of the Partnership.
The foregoing summary does not purport to be a complete description and is qualified in its entirety by reference to the full text of the A&R Partnership Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference
Second Amended and Restated Registration Rights Agreement
In connection with the transactions contemplated by the Transaction Agreements, the Company entered into a Second Amended and Restated Registration Rights Agreement (the “Second A&R RRA”) at the closing of the 2024 Exchange on May 31, 2024, on substially the same terms as the existing Amended and Restated Registration Rights Agreement, dated as of September 20, 2021. The Second A&R RRA grants customary registration rights to the Sellers, including demand registration rights, shelf registration rights and piggback registration rights.
The foregoing summary does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Second A&R RRA, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
