StepStone (STEP) 3 Nov 222023 Q2 Earnings call transcript

Welcome to the StepStone Fiscal Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session.

I'll now turn the call over to your host, Seth Weiss, Managing Director, Corporate Investor Relations. Mr. begin. may you Weiss,

good and afternoon. you, Thank

Johnny the Joining Chief McCabe, are Officer. and Hart, today Officer; me Head Jason, Strategy; Mike on Executive Officer; President Scott Operating Financial call and Chief Randel, of Co-Chief

During which available shareholders.stepstonegroup.com. presentation our to website Investor is prepared be on we referring remarks, a Relations our at will

financial periods begin, we well remind the the our contains presentation to expected as future statements company's this dividends. regarding future that Before everyone like performance operating for plans and certain and I'd as conference for forward-looking call

Forward-looking statements plans, uncertainties estimates to and expectations and and and risks, uncertain are reflect management's various current are inherently assumptions. subject

Actual the These XX-K. of today, undertake described revise or circumstances number of update results may expressed most implied section declared by as forward-looking that dividends except risks or or statements these Factors or a no other due as in and StepStone's of for made in required, future factors we forward-looking actual changes only to those differ and materially of are and recent statements Risk obligation periods them. are to any

In comparable addition, are financial references today's filings our in measures. non-GAAP SEC. presentation with included our earnings and GAAP our release, measures most the the presentation Reconciliations to financial contains directly to

quarter fiscal fee-related $X.X revenue This income. in no ended million, million Turning $X.X Inc. quarter earnings net adjusted fee-related Group, quarter compares XXXX impact fees. net a pretax September results that fiscal income retroactive earnings million. and StepStone XX, GAAP net $XX.X income error to of The attributable million of for of contributed $XX.X reported to second adjusted of the our had XXXX. adjusted net fees to financial XXXX. $XX.X to We net the $XX.X retroactive million of and We The the quarter million from second for loss and loss was to $X.XX. of generated GAAP

StepStone's Chief over Hart. Executive I'll Officer, Scott the to call now turn

another capital in delivered resilience evidence our economic very and We results earnings volatility further period's everyone. of fee-related revenue This afternoon, fee-related good and highest business the highest generating markets. strong the our cycles. continued Seth, across model you, Thank of offer quarter, despite ever

Turning on record This We net generated in down levels. the the from quarter adjusted per for income million results $X.XX $XX in to or Slide have is as fees quarter prior X. from moderated our share. $X.XX performance year

ever, Looking our Included XX% we our up ago. generated per year net period XX% from in of quarter These per retroactive year on from are quarters, trailing prior four $X.XX quarterly adjusted quarter. fees come record despite in up best income XX% which our up share, the a no of million results earnings, the and over a fee-related share basis. $XX is results

of The majority our As extremely fee-related fees last years. for revenues contractually are our highlighted resilient. vast committed we management multiple are quarter,

markets. a Additionally, managers our our impacted fees Furthermore, Stepstone and, tools provides to navigate fluctuations. with are strategies classes, invested asset and challenging of tied our not therefore, clients by across generally geographies, committed diversification wide help capital these to or array market

dividend. produced our shortly. FRE by give recurring funded We were be we earnings that utilize that will with deliver fee-related to performance supplemental and more view will This our a with strong visibility the excited be extremely balance dividend coupled the outline to and To management end, cash fees, a earnings our our performance-related earnings. approach as annual flow. of efficient the when by stable predictability that to that, growth engine quarterly detail complemented high Mike will and our growing will generally capital

and with $XXX $XX finished billion of fee management. under of We earning assets Moving billion quarter AUM to the assets.

class asset consistent grown year, have and XX% $XX generating and billion and by last structure. over or across fee-earning AUM the we balanced commercial the Over growth

had active delivered on meeting the validated calls. and and conversations message further long-standing clients, an recent we have have with We period new these

limited our and across selection particularly are StepStone to Manager partners cautious important uniquely and investors private asset While in to markets. the and conditions. environment, expect allocation are compelling selective, stay undoubtedly clients and see they opportunities help invested looking and navigate current are positioned to today's is

Late the month, event were it annual York, XXX years. prior we last host conference. holding two the StepStone the New hosted Conference virtually after We to investor live our in thrilled

up conference traveling in Our attendees pre-COVID clients half enthusiastic U.S. to with outside return were attendance and levels XX% person our the to with from roughly the

a announce markets the is private central accessible individual strategy Conversus rebranding to to we the growth making are private wealth. StepStone's and as of Shifting for investor story, the retail, to excited StepStone

since inception. the approximately We of Monthly of quarter, average an continue to at the which per over see reached which first have its million this raising of generated million into year. product, in our investor, annualized $XX rebranded flows and S-Prime, individual be quarter AUM from $XX last return subscriptions for and years stands time our will more $XXX XX% the $XXX up X from strong an million approximately investors to million month than has now SeaPrime

prior are first rebranded of end. Growth our after intend Private of As spring discussed products a retail we calls, to million be Venture pipeline years, on quarter we Fund to the excited launch additional the and and $XXX in have coming close of to announce

also which Wealth feeder $XXX this globally. detail. StepStone strategies change outline investors executed in our across our have approximately Spring individual market comes will opening We funds private also and million, with parallel a of more totaling further team, Mike With the for offshore Private into closes and reorganization S-Prime relationship funds

to the McCabe growth detail. revenue growth, strategic over in to initiatives I'll more about fee-related Mike and now speak our turn call asset

Scott. Thanks,

than Slide to Turning $XX our last commingled in billion billion and accounts. separately $XX We inflows coming X. XX greater AUM billion of $X gross funds the greater generated months with managed in from than

shows X and asset AUM Slide our structure fee-earning class.

fund, by capital will venture $X our billion. result in to funds third are fund our fundraising assets mode, assets quarter. These $X.X our earning we over fee of And fee fiscal multi-strategy subsequent earning PE global quarter, the and co-investment we grew approximately fund. in first-ever but activations contributions For the in the to quarter, infrastructure billion still secondaries activated

Additionally, U.S. this movements quarter roughly a drag strengthening our had enough assets dollar dramatic $XXX as million impact. past earning on had fee Currency sized

Looking organic over the XX% have $XX fearing assets last by rate XX%. over grown billion viewed generated since we XX have longer months, When we term, a or XXXX. growth the

$XX.X lower at stands capital quarter. fee-earning prior undeployed slightly than our billion, Our

fee-earning assets quarter, part driven growth growth funds of Lending quarter. and by Fund from We structure our separately for in managed the generated fee Senior million Now commercial contributed assets Commingled deployments moving the to our retail large products. in by $XXX million earning net in accounts. for in $XXX Corporate about

S at of more X, November As sits than million of AUM. $XXX Prime

for When the launched platform combined threshold $X announce retail are recently Conversus, as billion $X.X our with has mentioned, as of the total with Wealth. and billion. Fund well Spring rebranding Private Scott as as the funds, milestone, to Along this thrilled crossed feeder of parallel offshore and a we funds important StepStone

subsidiary team well business platform a that architecture buy and open agreed in distribution, But other to to as the and StepStone XXXX we the administration with initially launched as a governance the we right available to provided flexible it arrangement as wholly make third-party Conversus an owned managers.

within changes along retail tremendous in and remains the to product growth ensure align growth strategy. making with we Given are that the with the strategy platform enjoyed, growth to development, StepStone our we've success institutional its

private of ownership, for First, a alignment team franchise of we're wealth the team, culture eliminating management a the equity in the building StepStone's option tenet of the with participate incentivize around compensation. further in wealth established performance-based the and consistent interest to buyout private We've our growth for to core mechanism platform. growth and

Private interest team, the by team StepStone with distribution, and equal to profits a Wealth will an with dedicated the portion Wealth Private covering associated earned revenue. the all allocated receive governance the administration expenses forward, Going fee StepStone after of associated ANI,

While this similar will reporting, our arrangement lead effect dilutive to will to eventually this be on near-term noncontrolling our not non-GAAP earnings. to interest an

in to to profits quick beginning July future to an the locking ability the allows July the interest profits buy call StepStone the interest beginning are we team of put Private allows This and a StepStone StepStone the through XXXX. arrangement. our in management in call Additionally, of out at accretive arrangement XXXX in interest profits Wealth price to

moves times and one of infrastructure is traveled private strategy our important capabilities facilitate retail full afternoon we and debt. these better this The this many document real growth that the private provide We estate, shareholders' terms platform. equity we summarized website. are compensation filed of option taking incorporated in a with agreement we X-K the The towards in we and FAQ on as for are into beyond posted related our have believe incentives our that and alignment approach accelerating are strategic we expanded

fees generated our nearly representing last per where We a points management a Spring. X are due Green shift mix XX we the rate toward evolution the over shows advisory growth Slide XX in the than an rate slightly contribution of generating is since of annual which funds XX% $X management of commingled revenues to blended and months, XXXX. of basis fee prior years higher from share

the to how and approach call dividends plan over turning opportunity forward. we take to Johnny, I like would to management discuss Now going capital before to the

two our cash past, model we we capital-efficient free significant discussed As our have comes to from in free the sources. flow earnings, a generation business cash generates have that Similar flow.

to which over linked carry that as through revenues which we First, view to net adopt fee-related but after to preferences $XXX more flow contractually to years; of the our several engaging be visible accrued we stakeholders, time, are plan backlog our thinking highly aligned are second, of committed a both to realized dividends shareholders. over for episodic earnings, business investors cash performance linked in of in million and approach with is an will fees, nature. to and that many earnings In sources and model these and

of have this for quarter. a $X.XX We dividend approved

same grow payout. expect as normal to the dividend pace and fee-related quarterly yield strong this This a generally earnings. our at provides We dividend

is each supplemental full to augment earnings. regular approval. to We cash year Additionally, with our year dividend plan we funded performance-based plan tied a recurring in the to to board our addition dividend excess supplemental pay by June, to payout dividend subject that each generally quarterly

value shareholders value will our an expect fees alternative both fees this growth from tangible to we from annual believe the and dividend performance will little steady through quarterly is growing a We and assigning market supplemental realize FRE performance benefit managers' With with approach, relatively the today. our payout. in

a shareholders this presents for payout supplemental Our and our value. transparent concrete way to realize

I to Johnny our Randel. will turn CFO, call now the over

I'd to our to Slide speak Mike. you, like to a highlights. your XX to financial few of Thank turn attention

our as quarter, primarily fee to revenue strong in growth earning points we strength the management XXX FRE million. The up Profitability XX% expanded driven year-over-year approximately the $XXX fees margin in was quarter, quarter-over-quarter. of for continued earned remains For basis assets. and advisory by very and

current prior Scott did nearly retroactive basis. any from impact the on mentioned, in year-over-year X not we margin comparisons, we As a quarter expanded quarter-over-quarter in receive our quarter, by both points fees the FRE percentage fees excluding and the retroactive

million the seen expenses. versus near a by elevated Gross five Compensation quarter, given moderation We term. was we incremental bonus quarter, some offset increased pace in realizations accruals, had fees. last modest from in saw pace incentive to professional nominally fees. while and a as Shifting travel down realizations to $XX were anticipate the adjustments prior strong the quarters, realized for incentive of the performance we continued at fees as G&A partially slowed and the costs

performance Moving to share the a fees, by Slide fiscal offset per two revenue by year, XX% the growth is of first and XX% quarters fees. X% driven per for management share in advisory in higher decrease Adjusted XX.

adjusted per XX% Speaking to term, share fiscal XXXX. a rate annual revenue grown the compounded longer by since has

was profitability Shifting quarters. Slide XX% has expansion. advisory two fees on management and by in by related and Fee per increase growth our earnings in margin driven to our grown by first share XX. The

generated since Looking term, over longer and fee-related share XXXX. have the per annual growth XX% an we earnings rate of

by over earnings the net down but fee-related an is and growth year's last period rate elevated driven growth of year-to-date realized share fees. in both robust long-term relative per XX% annual level, Our performance ANI to has

Moving $XXX underlying reduction to The period. accrued during Gross balance the the on driven previous lower of quarter XX carry quarter. is by finished than is at sheet the primarily approximately billion, decrease which the valuations XX. million the June Slide $X.X

our reminder, is on reported As a a one lag. quarter carry accrued balance

essentially end. own flat the Our quarter. portfolio ended million, were investment these Unfunded to $XXX prior programs at quarter $XX as million the of versus commitments quarter

this of multiple earlier, capital diversified Our with unrealized vintage our XXXX years of mode. the across their largely programs. be to capital billion, is pool programs vintages has carry to these which XX% widely and realized of programs harvest XXX vehicles and sourced payable waterfalls, have or with entered may performance exits. of grown carry are XX% of $XX that and tied carry from meaning of investment periods eligible deal-by-deal investment this is means is out at time unrealized

now This for concludes it I'll open over turn the our operator prepared the to remarks. line any questions. to back

from first state Ben [Operator Budish Barclays. your comes question Please question. Instructions] Our from

for taking about the Thanks questions. wanted my guys. I to ask FRE Hi, margin.

trajectory? think of quarter. quarter, full year your that our for model were kind and bit year, last and you good in expectations update XX% you the ahead looks I came like said about maybe expecting longer-term you it of to and the you're of for tracking a Any the ahead

But of about kick changed, came on. that thanks the of expenses feel guidance we as as some things little McCabe full into feel has we think here. well the year, medium other it's in in will that in year the I we a in should are. the as the still good the be over we we feel And as we Ben, quarter, end what good discussed from nothing scale, Hi, margin our leverage what of think from about that But of a part and expected had Yeah, we've for going good to the ahead our as as part question. bit result. perspective we we our we still in look, in past, benefits continue Mike And term, a to offered and operating somewhere, hasn't a expectations we head maintained. terms and the changed but thesis the mid-XXs

I versus we $XX kind at growing a of on what follow-up the retail we should enough hesitancy maybe quarter, the quarter a are sales of of fast nicely kind those saw a seeing you of to on versus the if to picked due through investors still in It as up small that and And kind other could areas? like Great. distribution increased month. is retail seeing and same-store of your of ask you flows. that? you of enough some kind kind Or in kind least go guys continue much kind million Are last winter. How like grow looks we're through of on that

part and to Ben. same-store on the Thanks, here. Jason Look, in sales on platforms that in of with expansion on. the It we're platforms so buyers, number is the of types driven the channels by getting funds we're speak, as as repeat well

month. pretty reaction continues spite markets, be and both S Spring, been uptake obviously, to the and encouraging. just of very it's started for to So volatile product, that broad Spring. strong, has is and relates in like getting based. the The and this And to the positive really Prime meetings

for my much so Thanks great. Okay, taking questions.

your comes next from Our question JPMorgan. Ken state Please from Worthington question.

touch this the for Ken. did Or challenge I could pension we Cho And the And and earlier is that This year, to commitments and funds all year. so, step you Michael that fundraising one, capacity return. commitments? early are invest XXXX. have of I that year? then all? December if that flows on the capacity And could we're in the I calendar potentially two, September seeing? at just is commitments depress of see given up something through fundraising hearing in that this it the conversely, next quarter could next good year actually end guess, many evening. kind don't Hi, in guess wanted to

Scott. be continuation question. a we've of that the some fundraising comments think Yeah, environment And commentary the This the quarters. really I our thanks of made of the will couple around Michael, last over is for

cases, market I the was of in have think you number portion re-ups a in spent year. budget some of highlight that, meant of number and many of has significant are funds right early pipeline, to in in that good because that been had the LPs that their have a XXXX fundraising, their

just Obviously, effect. what the the markets that has the denominator further complicated and is public resulting in decline

the Conference as is the be what that but weeks to may with at would a we been seem We've being denominator don't ago. are would X. Look, conversations I we've panicking. tell effect Now and LPs. in But budgets, is some to out many prospective been as speaking cases, real. our reduced you say, many Certainly, few of having budgets those our with I reduced welcomed clients clients on have XXX road, clients our not

there's of has bit during markets I here. the timing the sense just we've couple a had fundraising in longer resulted over think little last the which that been, no challenge taking hot there's years urgency, -- no just has than been of

of during the activated Mike ultimately quarter the the our that But we on is remarks, standpoint. slowdown that $X the a next And to which to so closed, have comment post our get from now in approved help and much couple being funds, think whether another the this a we closing quarter. timing. time of prepared will is time a bit timing a is have drive amount end, whether made of billion of AUM between commitment commingled next fee-earning seen of a commingled funds I that a

budget in think that XXXX, And LP's budgets that there. will up as I do enter calendars we free some and

switch -- Okay. just if on and Great. then I a your for retail follow-up the gears ask comments. Wonderful. quick And could Thanks that just on color.

is space? -- can wondering, environment I terms provide products competition around I'm retail competitive very and your clearly less from perspective, in more kind Your of or any progress alternative for color of there shelf the, of just that for the kind strong. guess, is a you competitive

a we bit then S-Prime start to raise products But in and Jason and space, to that about both the we think detail. to the I'll more it as have started maybe two talk in retail hand So Spring.

prior we the the on key approach solutions-oriented really to capitalizing being and markets really differentiators about quarters, being way class, a our private that has ticket the single a multi-strategy multi-asset that platform product took such As as there. the of StepStone, one. Prime that we for offer in we ability global solution some talked the market that a approach of

like to we I year ask other not post But moved ability, just to as to spring. Green and the it relates market the a offer think product Spring, as in acquisition Spring ago, particularly I'll make that any might over is particularly until similarly, competitive differentiated maybe closed market. existed our a provide on Jason this comments the he to just

it which The as S from thing today. is private addition on of eligible, only I'd are add, peer many funds other is multi-asset, in focused Prime, is it this being the that accredited relates Yeah. equity out Scott, to remember, to there that differentiated

Okay, great. Thank you.

Bank from America. your question next Please state of from Platt comes Our Samantha question.

taking for my you Thank question.

So client you product some retail where from of I retail. Can the both demand side in on give the terms see want white start to spaces the us color and offering? with you

are but hold effects Again, we the where strengths Sure. opportunities in equity. we room created. create classes that we we real S retail-oriented beyond announce that responsive classes development the infrastructure, think our Jason. products. flywheel exactly first asset products cover and the estate, that the to just there is the two not for debt and we've two for yet, private ready fund play exist not the Spring asset are just market live product look our Thanks and that of Prime asset question, for the The to last platform private across classes, think a They're across products. include StepStone, going And that to can

you that funds to on just coming then XXXX? want currently I And any what back Can quickly. are in a touch ones commingled coming Great. to are remind fundraising are raising and -- us follow-up. large market

Samantha. Thanks, Sure.

our have currently as about look earnings One, that a our you'll recently held that a I final VC historic you Micro if our are fund we few So close target. on of table both A in as XX commingled comments well the those list $XXX at funds at would make. see above of presentation, that market. million funds with Slide

list you of at table If different here, at funds, page remarks. which his the you'll bottom see look the the prepared Mike during some mentioned of a of

secondaries billion $X.X fund, to So our on closed which end. post equity private was has, date, activated quarter

was a had here fund similarly venture on global multistrategy million first closing co-investment infrastructure of post kind well. initial Our end quarter as closed and has its $XXX over has capital activated fund, our the StepStone at

have both here. obviously, special held would funds corporate situations, several our equity fund. are real have multi-strategy will lending growth prime Those our our as yet to that a to fund, estate well raise And spring include fund not first market and There closings. returned then go-forward as on basis direct continue

you. Great, thank

Please next Our state Adam Please from from comes question your your question. Beatty state question. UBS.

just you wanted some about good ask afternoon. changes there's to obviously, and I transition at the Thank to structure. and economic Conversus the

kind guess, coming I what start on of some group one what per your level expect million have you $X impact ANI or number AUM of statement, you. of have it's seeing income we or notable So through adjusted whether or share what $X.XX would maybe is to that

-- was Also, anything ask So terms will operationally there to if of changing. should we the expect timing of how I that. that in wanted helpful be when and

good good and It momentum. traction there's sounds like

at Or it all planning questions. are you Sorry And to still the adjusting open all? it You're for grow architecture is was at the also, you. group. like that inception? Thank

hand on second. first So to maybe one thanks, for Jason appreciate. start I'll and then the the

will our So haven't the fee again, on side given as think asset which of business need as that on Clearly, here will business be to hopefully some rebranded and over the management I on management rate of splits that part but some the its has as profitable. we specific the the and is terms the during between being been of of not to date, of distribution the fact progress. sort question, the and in that guidance private the part historically and own business, remarks, cross helpful the well we separate wealth have mentioned business business, when asset first we disclosed StepStone, of distribution

updated we part And to to the we'll of products. retail-oriented on done obviously, across of Jason for all the the and you continue maybe both flows have as But keep current in AUM past, your the question. the second

Yeah.

no to out So as team. ironed work partners been how We've the and with the together over real last model operating great. change two the years, going to it's

reason to isn't something no So fix that broken.

been administration terms governance of team private size, the inflows, it from to we've and In a part but and team parallel the also an adding distribution operations that's number and team and only the not the the continuously with of the wealth number AUM with platform of the to vehicles perspective perspective. scale like funds the and of

So team inside grow today. XX will nearly continue to

then number we have time create that their channel needs and expanded that a that terms great year, think scope the closed we Scott where alluded acquisition the example this spending are as a to capabilities, earlier, in of last can responsive and spring of the they're offerings directly being of channel. Green we our as And Spring for and to

StepStone And wealth focused will the so would product here future. private be expect the I platform on that into powered

detail. could, quicker a maybe one great if I just That's more, Maybe one.

kind shareholders. development seems secondary a allocations, it the the for positive dividend performance like the Just should around of around be which really

which dividends, of might level compare the are a the quarters. how obviously or terms implied Thanks. Just that fixed wondering for with in your of few what FRE-oriented payout levels you, have around payout

model year, supplemental my we Mike the we as expect the dividend capitalizing a It's base fund mentioned And of or think it's to in shareholders Adam. the once growing June here. the benefit FRE. out dividend give dual in I every steady, And remarks, our of Thanks, look, very to addition reliable, to the dividend. way a a align on quarterly better dividend and business Yeah. with

and allowing importantly, year with a tied to interest. generally to based the shareholders fees. The a carried full payout very dividend more reliable capitalize performance on performance from be will our earnings growing base our But

performance a fee-based to as subject at and I approval, we're looking make earnings, well. year as basically discussed, board this yeah, to think we're So excited we announcement full

So thank you.

Okay.

you, Appreciate Thank Mike. good. Sounds it.

Welcome.

Our from comes Goldman next question. state Sachs. your Alex Blostein from question Please

to Thanks for Good of I especially yes. and back around LP the conference behavior the Yeah, the you back go are allocation of of seeing, evening. you to one guys the earlier recently on some wanted questions trends question the had.

headwinds private feels we've like space surrounded up seen equity, have in it point, pension the the predominantly -- U.S. this the until of plans. So majority

and of footprint, classes Given equity obviously, headwinds sort on but kind the outside seeing focused well. asset costs U.S. broad denominator spilling your pension any global of asset you fairly other of into again, and of plan private base. guys you not as effect other the just equity Are profit and outside particularly of LP

question. thanks Alex, Yeah, for the

funds. not the I that in I'm sure agree pension said I past is think I've completely the U.S. with narrative that only to limited

I bit probably find LPs many think themselves asset the prevalent, in today. where been well. as the denominator classes allocated think as you But impact less it's others has I other under mentioned, effect

LPs where large allocations have of is to difference online we've still I with it that for as certain we've in first think the coming of market past private you number the relates markets the time. that the cited a been international active

other think are movements late, have And international our FX some clients, with our commitments. of I some of factors as may that we some of there LPs, their unfunded which of engage impacted impact including the

of variety factors a are are impacting there think LP that I today. So allocations

us think diversified class. our about what that across continues is to with our position platform asset in I marketplace the excite

strategies other but may interesting may come over to look of be have will vintage have geographies, last you an the this to for out that the may they find this, more of it into favor things these and be or you years reasons. one is attractive several believe of years, a clients things various time time were one that -- favor mean -- and I the been invest, like where that at that will many our of

space whether result only transition or rates, largely increase. a we're private you that seen a energy the that have or security, of in also seeing So not rate, which debt energy is infrastructure as where whether spreads you, rise base that floating embedded is not only protection in is opportunities have inflation around of the some the but

And so the very think structure seeing of at investing renewed when I there. think teams about interest top at we're the you capital increased our rates, those

debt so you identify other just complexity But can and about taking to areas of in we where space classes market within will on credit, Our returns. I gaps funding in teams result secondary thinking generate asset not estate, or the but even today. opportunities private distress, place many take see like the real attractive around equity a private where of that as are things think and the opportunistic

and So opportunities are vintage attractive there interest in among here. of I to identify the opportunities coming plenty there's LPs plenty think of years

My helpful. bit a capital clarification a of I about dividend. [indiscernible] management. in Very question, job comments, broader as guess, well broadly just with maybe a kind question of nice and the second

moved the be fiscal decided that? PRE calendar is kind that will Is year? So year it timing Is think the you're or by a XXX% the you year. out a kind a what I once is well. And it of as line. of end December so -- of welcome event? paying essentially, the That's bottom of of

don't have out guess. sorry the your the infrastructure buying And debt my bigger the broader where from including the or I you does inform that question, allocation picture ownership. of on currently XXX% side interest multicolor, capital But potential for side decisions, how noncontrolling teams

Alex. Sure. Thanks,

close line, to and be going fee next frankly, the in subject performance-based your -- little tied going are market. for it in be as I year to it's tied again, or what That's XXX%? mentioned, And to I think also with to see your with in our it's But the largely rate. expectations as I Is full we opportunities bit to line payout Alex, is approval. of to the the now. it's question, mentioned, a board XXX%

So to each to would have we we on arise. may is to But flexibility the payout a a once wanted recurring year year it do any basis expectation that the June. make throughout opportunities that the react and the

in fiscal approval to June in will So be the to out base that it's based quarterly board paid addition dividend. subject

shape externally in way, does pursue and form other past. or ability the or this opportunities, The our buying in it's M&A second any internal we've not of as inhibit NCI done to your part the question is, any in whether

past, kind based. priority continue to interest, we prioritize equity of that be that I buying the NCI likely with As think cash ownership. as much our of alignment any do the in about we make you've think so not M&A, seen whenever in our we equity-based, we we'll prioritize subs, And

those have shared we but use of strategies. important equity to based across culture that expect we're are we cash in. to that flexibility not that and would the would collaboratively of of much environment interest that the the asset But across we of transaction a the maintaining a also today got and alignments between on working us and and classes maintaining But toggle more be kept teams that where considerations equity-like have

much. very Thanks Super.

next from question Our comes from Morgan state Cyprys Stanley. question. Please Michael your

Yeah, good question. afternoon. taking Thanks my for

allocations. their LPs coming some perhaps being around the less activities, back effect over going distributions LP. the to back you less of in there's Just to layer alluding commentary you and realization were maybe just to And then denominator some that

and you're of there? the what are help transaction of sort how what activity So levels activity in that trending? seeing discounts What LPs you that just And marketplace? solutions might setup, And liquidity around you from that seeing be could accelerate to is are that interest of seeing secondary How given that What is here? trending? sort offered activity. curious sort

something of their to as Yes, that a that different slowing Mike. I the LPs secondaries we continues, to that solution I about more But this see over selective secondaries Thanks, may typically by do couple the bit LPs looking will be allocated, re-ups find expect in quarters market. in is the time, this just few ways. a pursue. in commitments, being think more we've Sure. tap be One which suspect environment look, this their seen if I to mean market. handle talked LPs particular, over we've the you of we last about of looking think to is part over

which bit that deal least we've flow secondaries the by secondary couple now at about hitting quite seen driven in years had our as have in the been prior so of terms GP-led a activity funnel. And growth is LP quarters, talked market, of in over of the last

a it's a I have actually still think a in of spread. transacting, what low is Bid-Ask terms still percentage, of bit

will But still environment. that few pipeline the routes side, own the exit in look as we uncertainty the on potential out shake where And in will this year-over-year of this of saw around LP-led I continued coming area. well one the in at think, quarters. side frankly, expect interest valuations we growth exactly we when as to remain GP-led secondary on There's our activity tremendous see

there a to I that quite of fact buyers dry in secondary activity. that certainly about to both think hands that we've increase. low depends We looking is strategy that but have past the in powder the of the buyout whereas firms, likely seen the a continue of to are now on bit hands from but the down drive in in also traditional XXs market talked bit the probably at, went pricing discounts It high across buyouts XXs. to you're the

transaction, discounts growth and actually is into at to bit marked you now, on a had on greater right premium. thinking is out fund, quarter a question enter you paid a to But you're venture I where saw going less discount next than don't You a that. the so is discount buying you've be the think find only the more again,

just a Great. And rates. follow-up on re-up question

separate funds what raising as as commingled you're the and funds over quarter seeing activity two past there. you've Just curious or been there account

to the are how what the re-up what curious are you're they size much in past? average as your And re-upping, commitments side. relative on of the Just they had funded seeing on the of increasing customers sort

this can that separately, new COVID, traveling that then during well. the down, an was you activity? some see talk I we And it you're and customer slowed but to had of the as area out now there know G&A in

on you. Just new if to you're you're anything too. curious And that helpful, customer able would trends? the quantify Thank what be seeing

Sure.

So was And was that is quarter to was one we've started share to last shared on separate account, north but that the increase average, tell that which quarters, I subsequent stat XX% those last accounts. rate, our of inception prior re-up on XX% of accounts rates haven't stat separate but I particularly to that re-up you account on a would seeing rates, continued we the we the that re-up more doesn't separate be of since separate what strong, the a quite would on there, from shared reflect tell have the couple a side. a

general, lower side you engage find given see rates, it's great on those but of In number the in to funds, the a to the new slightly are often tend looking we also re-up clients access platform. LPs with commingled that to opportunity StepStone who

both on continued And see get we market So again, you're I the that there continue able to I right, in as road, re-up it were commingled of the relates some the to to accounts. activity. strong think been separate we've the around think but out funds with, dialogue also as that

over making partially new the feel making been new good I urgency, taking still account very if but an about I earlier, today. clients driven approved slight between the timing will, we progress very getting with We've progress by finish just but clients. it lack we're the of been challenges good time. and the some referenced think it is line Again, this you with one of has actually

you. Great, thank

Instructions] we further this At time, [Operator have questions. no

everyone, time today. Well, thanks, for great. Well, your

StepStone to quarters the you appreciate ahead. much. Thank in we keeping to look interest always, in As story and your date the forward up you very

conference Thank today's call. concludes for This you attending.