StepStone (STEP) 9 Feb 232023 Q3 Earnings call transcript

Greetings and welcome to StepStone Fiscal Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Seth Weiss, Head of Investor Relations. Thank you, sir.

You may begin.

you. Thank

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

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

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

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

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 periods StepStone’s of for made in required, and factors we forward-looking actual changes only to those differ and materially of are from recent statements Risk obligation future 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

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

New York. I hold Day Tuesday, will in Scott, our to announce turning on Before June am Investor first X to excited that we

grown ago and have are offering forward and X.X years key our We initial several our in instrumental progress business who our growth. introducing our look public we covering and of evolved driving since to leaders

share event details as further We will approaches. the

now will Scott the StepStone’s Officer, Chief Hart. Executive hand call to I over

everyone. in year you, is at to strong our the Seth the outperform We the equivalents whether the performance delivered continue for we or results calendar afternoon you solid XXXX true clients, performance to good and investment that we market generated public Thank financial which look shareholders. delivered

This quarter financial by Slide million entirely earned per $X.XX to share. share results from last activity. of $XX in dependent adjusted million $X.XX or capital or on on we are X, is $XX for income fees for driven in which market third realizations Turning year down the those net performance quarter the lower per

strong steady of at remain continue Importantly, grow our and our reflecting have fee-related durability business, earnings the a while core carried our strong. investments balances to pace, accrued

We diversification billion quarter, continued we generated give today’s assets. critical edge, the platform capital versus and asset commercial fee-related the deployment year’s earnings, the strong This across classes, up structures. For quarter. growth formation by of earnings prior is driven and $XX geographies million XX% $XXX and us our nature of with assets quarter in management billion of offerings fee-earning the of of finished The under environment. particularly $XX specialized the and our

moment Given we and would to I largest positioned. position environment to how to private the like our one markets, market as the in are the investors of speak a take

a markets. year XXXX we are capital As all aware, challenging was for

asymmetric COVID, fraction better to Its of financial or generally only is While crisis market XXX% including public of fared take Examining are trough Yet pressures, peak and drives markets major in advantage dotcom subsequent market drawdown. of that a than positioned significantly outperformance they experienced global risk bubble, assets have not private in well broader events a immune environment. feature capture cycles, key these more private spurred and StepStone is their equivalents. cases, private captured market to markets opportunities past of the any to each private recovery. public that the assets the

toolbox to co-investments with primaries, in and by Specifically, managers our the quality secondaries across play extensive or offense us highest enables investments. best the defense partnering

Pivoting back over several to fundraising we current to elevated environment, softer the are activity the years. last compared observing the

secondaries, as for However, $XXX in activity topped and discounts to anticipate volumes cost co-investments the only remains means coming robust. XXXX. demand volumes as access the at a to trailing billion strong. remain capture We XXXX year’s In secondaries point industry-wide effective record from a deal

and is estate. with private real in StepStone reminder, equity, private in a a managed secondaries venture leader debt and funds As accounts infrastructure, active comingled capital,

and capabilities challenging secondaries returns, private strong key are particularly Our ability delivering to in our been markets launch products. to critical and have wealth in

$X function naturally billion in unrealized a also capital trillion to Secondary to prior, asset trillion which from compares since volume available trade, year averaged lags backdrop for investments of over has market promising. the roughly the approximately years stands fundraising just and is at double more or years primary just an of over $XXX the $XX very is private secondaries assets the ground. value raises a average X X while value well ago. in XXXX, Private currently With

valuations overallocated accelerated several distributions the declines a slower pace years, deals, and in from private resulted of to fundraising market public in last some markets. LP-led combined have the cycle On with being

to from high looking utilize continuation capture portfolios. expect rebalance no future vehicles are market are quartile this to secondary legacy mechanism secondaries On their funds. managers the just a for investors assets. increasingly and value the managers at market to conviction restructure to longer lead secondary will deals, Top GP-led We

in of the remains few ways to without quality. one private fees Moving mitigate co-investments, the to this markets sacrificing

is better asset to very with investment The demand discriminating sourcing a drive to As for a LP superior success diligence result, combined strong, continues due to and high-quality insights underwriting decisions. be capabilities funnel data, key allow selection to our high.

to divergence have favorable maintained by who equity, moderation in trends have to discipline to a private growing that in those those the deployment market a and riding capital market see simply a been exit and less led asset Shifting class, environment. have between Tougher conditions expect tailwinds. we

see are coupled in correction buyout to across and spreads. valuation uncertainty with We wide slowing certain bid-ask to activity response transaction starting a sectors, market

buying a down-market catalyze through exit we look relative discounts prove vintages, believe historical the those outperformance with investments the with while in GP-led effect denominator will environment may that a Given general equity LP reward private partners of to Furthermore, challenging the favorable liquidity in transactions. to years we made available in capital. generate pickup may secondary opportunities coming expect secondary

Venture of Great created recession came the best cycles. and the market the the after been early We has Capital layoffs tech worst a public day-to-day technology headlines crisis vintages in Venture Despite long-term companies public are to will the structural all of given during proven years among of Capital the next the ability volatility market has aftermath durable the of be XXXXs. point. and the a highly attractive XXXXs of The performance Capital, tech Venture to entry a its believe in on trends. growth In appear be to the performance global sector occurrence. financial in provide stocks capitalize of sector, daily few

earlier, well $X active. becoming in There an Furthermore, which of and anticipate BC more the are secondary unrealized venture acceleration trillion spur secondaries capital much we over market XXXX flow. deal assets vintages venture is will and from

we XXX venture in and week, is continue largest our market funds. we Last have to in by clients. interest today Venture Annual We where fund well benefit clients had equity venture are future nearly the secondaries and Capital positioned shared hosted Meeting, believe the we we with to This attend. growth our

While optimism go-forward been have about venture impacted, is there portfolios growing investment the opportunity.

given The such capital the cash and class senior as private positive generated interest we debt characteristics positioning structure in rates. Moving offering favorable. remains protection our underwriting defensive XXXX private conservative to an the all-weather primarily floating against debt, the payments, strategy. provides and investment rate rising makes income, asset returns Further, environment

deployment, and We may volumes, thereby less ability expect consistent volume of impact drag as dynamically allows slower for improving the refinancing reducing total among opportunities pivot pace our allocations but deployment to and returns. a sponsors cash industry-wide M&A moderate

assets against providing cash to real today. Real proven biggest risks market be and to linked estate infrastructure hedge the are inflation, through have of market Many cycles. one a resilient flows

environment. months comingled and XX We have that purpose for current has are the last our built growth classes product. been has fastest the without both Infrastructure asset a products that the in flagship in class of come asset growing benefit

We are now very comingled in market for fund which with has first infrastructure demand healthy. our been co-investment

environment. a secondaries present in manager-led In unique opportunity today’s real estate,

As debt an is area of likely equity which matures, to high-quality recapitalizations thrive. assets. catalyze in This we gaps are

are manager-led flagship which product, secondaries in is our market estate We with real a situation special currently fund.

deploy in to opportunities the environment. fund current from expect We this attractive capital

Mike to speak over fundraising more fee-earning growth asset now I StepStone’s the call will turn in to about McCabe detail. and

Scott. Thanks,

X, $X billion Slide $XX generated accounts. with we AUM inflows coming comingled $XX our billion gross funds and months, from during Turning managed million last from of XX to the

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

and across accounts. $X For Capital driven separately of distributions the wealth from billion private our closings as funds Global in $X SMAs, Offsetting additions multi-strategy evergreen fee-earning Fund deployment line our offerings. we quarter, several and by incremental healthy secondaries grew well over billion, by activations comingled assets PE managed largely in were fund the these as Venture

fee base. expiring step-downs As exit in reminder, include distributions activities, a mandates and

for wealth our over The investors credited our evergreen quarter. continues minimis generate for third just platform. markets with private monthly X% the fiscal strong quarter period was for subscriptions private an of redemptions fund exciting de our SPRIM, to

first $X.X fund parallel Aggregate million our for Additionally, and feeder these products over we Europe our across and bringing billion SPRING, executed quarter, qualified of we the venture to launched $XXX offshore over private were Australia our on funds wealth clients. AUM private growth total during in and platform. subscriptions and close

Our strong start off its strong launch inception with very generating to return November. very be annualized continues a to XX% SPRIM and since investment since a in performance SPRING

differentiator these us As platform a in is allowing secondaries products, manner returns. our capital to strong leading Scott deploying with diversified a key efficiently for referenced,

assets have over months, by Looking fee-earning billion XX%. last we $XX or the XX grown

given current for all half impacted very the industry of in second are participants, this pleased with timing result environment, last We which of year. the market fundraising particularly the

Going in factor subsequent deployment a do size we ourselves closing of launching funds. We changed prior steady a around but the The a of delay the our launches fund. rather determining our fund, pride a on multiyear not forward, we on discipline have target in horizon. anticipate is a funds deployment the over new of expectations market on fund the not current prior of nor

comingled flow unchanged. have re-ups We capital deploying funds deal expect and our and healthy at a in of account timeline raises largely continue This future for are pipeline to attractive means opportunities. separately our fund committed sufficient market in managed

and secondaries multi-strategy undeployed quarter, point, venture capital plus driven $XX this committed capital activations at managed capital our fee-earning funds, To global previous of separately stands the in from accounts. by PE deployment down of billion,

We and undeployed the vintages. have disciplined best powder comes dry spoken in markets built-in capital. past delivered investments opportunity Selective the more highly visible performing historically is the Even from of that benefit and have down to important returns. drive the in presents that about growth

this to for today’s Our dry us powder, including clients. $XX positions capitalize our on well environment billion, extremely

XXXX. Slide XX X of rate the management which comingled We venture advisory $X representing shows a of than our growth share fee generated an in higher fees. and advisory management from We annual rate contribution toward of the fees our since years months, a last mix over the well is evolution basis due generated shift XX to points, per platform. prior capital of expanded blended over XX% funds and management

growth have to which distribute net manner, to produced in us adjusted our shareholders. an extremely of income should the allow this capital-efficient majority vast We

aligning our to As our our capital we distribution on we business approach last are earnings discussed model. call,

generally augmented approval. payouts to our dividend dividend that subject Our earnings, by performance-based include an a will quarterly to fee-related recurring annual tied is realized supplemental tied earnings to Board

quarters three fiscal plan our the an our dividend per represents of declared pay of fee-related common fiscal nearly We communicate our at first which we dividends, to XXX% XXXX, aggregate share have earnings of our For to conclusion year. supplemental and of shareholders. $X.XX in available

call the Johnny turn to to Randall. our like CFO, I’d over that, with And

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

the any year. of comingled quarter, percentage Profitability quarter’s the retroactive For in of now assets, year very not in current retroactive comparisons advisory margin of are in in consistent including our of growth earned benefited down management remains same fees driven was so ago the an We up we have XX%. activations the by prior quarter, with we FRE margins $XXX and ago year point. year fees strength in as of quarter strong basis. the fee-earning Greenspring quarterly by from funds the last approximately the from in X the full million, revenue The quarter, on whereas quarter. did XX%, a XX% results, maintained continued receive We but fees the margin the year-over-year

with $X expenses, associated annual funds comingled increased activation to levels X, We year-end was down two up realized the communicated. with were realized which headcount, virtually. partially million modest in base conference, sequentially, versus our year expect remain we and this performance person conferences also the periods related timing payments step realizations and million compensation incentive the expectations January the in incentive Shifting of in next Conference, our of fee fees prior as compensation holding to bonus previous accruals. quarter. sequentially consistent up previously performance held we expenses With changes a G&A by anticipate we near-term. Private the have to XXX effective by for increased the quarter, driven that Markets Investor $XX StepStone the after moderated, driven expense Gross

a XX. growth to revenue a offset Moving and share in three XX% management Slide per in per We the fees. advisory had for XX% per by the decrease is quarters fees, first performance flat share of year. share Adjusted

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

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

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

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

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

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

portfolio increase the own Our prior with investment from million, quarter into the a ended SPRING. $XXX by driven the investment seed at quarter

quarter $XX investment to Unfunded were commitments as million our end. programs of

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

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

your question you. comes Please first Ken with from Thank Instructions] with Worthington proceed Our JPMorgan. question. [Operator

the mentioned you question. Hi, SMA distributions, good you taking for elevated afternoon. Maybe as and Thanks were distribution. lot quarter, on into goes for that first they the a mentioned,

the visibility And things as be think distributions sticks driving about should was you talk anything XXXX other on XXXX, what this elevated calendar you expirations – the that outlook we for that about of? that bit aware and up we Thank have little can you. So for a quarter?

Sure. the Thanks, for question. Ken,

step-down of below with existing as in you The billion drivers. a through So as have be in business fee was continue some that accounts. and drivers expirations number what had just distribution might would level in remarks, this our ways. of rate the variety highlight different with from an had those that something that activity of would associated exception fee specifically a And I say between well those most Mike most – prepared a we across pretty about of it. work infrastructure mentioned we that well higher a expiration account, in line as different to been client he heard realization, of the the those quarter with different $X drove average fee there, have did the of standpoint normal rates of running We a

throughout there. of accounts life to is to time the pay, that example, time, from vehicle that’s something the committed going that on particularly capital So for happen may with

Great. classes, of Thank then a clients, by by you. geography. got diversity you’ve asset across lot just multiple your client, sentiment scale your by And

love infra particularly altering see their real credit. asset investors to your allocation equity, terms So hear we’d you and between private how in of insights, estate,

credit I has concern allocations, – So definitely seeing allocations is think universally increased to we’ve real heard we’re but there about estate.

that So you any color you. Thank have? might

think want may well. Yes, here as start jump But sure. to right. and I I’ll others you’re in

we’ve think activities would because we day hard got both that our clients with continues asset out the into that in decreasing that a we I the be within where of pretty as say slightly their working for as are act sentiment because out are or different may interesting on private increasing because fundraising of I in basis. across not an GP position client there in LP day XXXX, classes generalize perspective, LPs a to But only market. maintaining number the and there, balanced, amongst allocations. allocations coming well as slightly to cases frankly, be Look, some similar have today flat every our

made are is I an think sentiment the coming understanding they be on. down miss today is allocations immediately that commitments years out LPs your and that therefore, amongst that ultimately impact that is don’t And the vintage going there to here. these the to want years understanding are drawn that will or over not are

concentrated been fair be whereas course it of last of throughout that year, a few the still I half activity. expect of the years, will first more And activity the balanced in much the has so year. over the that amount of I see some of

other that activity. like half first into where sense or so you in there is today, areas not it’s that drive a shift seeing some probably of be asset a rushing within I highlight would in close much of but operate, the may of And of class interest urgency asset to that we across final think of the I asset interest we credit, large, in say funds is the at where classes a right the look, think you’re lack class. may see that I interest less

across four secondaries And think of for remarks, each talking obviously that, area about of quite that an seeing the example, prepared our time I bit we spent so interest a in is asset classes. we’re

Great. Thank you.

proceed Our next Adam from with Beatty your comes with UBS. question. question Please

I sectors. of out good of hone private – But okay, you, to of out debt there, you at that terms in secondary there primary in I you in type and sort around mean, just I Scott, capital the at on available is may mentioned – wanted smaller detail say, a in might companies great you. ready, appreciate being all there afternoon. world firms capital both terms a where kind in the is Thank venture be guess, there formed And especially and time the kind just capital available kind as time? bit the acknowledgment, you’re others this well may at of of and discount. formation, and seeing of an of what different a that, this more? be vintages Thank I little cost some

growth shift profitably. looking where and at that this there to just all think there parts towards need But mentality I whether able cost be And more you’ve is mean, question from portfolio you’re yes, I a reference. within I sustainable seen to grow the think probably you recognition a Venture, a at the is to clearly a Sure. that few there. company level

can venture there quarterly, it at actually portfolio the think opportunities. look XXXX of the the see XXXX. fundraising trend. clearly, I you in slowdown, throughout you’ve when fairly that at it if been they while a in course look the against But up year. has seeing one And you company But seen fundraising stack And market. you you’re well figures, at level, So comes the with slowdown the also –

amount is the an class asset is either companies drive of a to clearly There reopens exited. last to years market the in over much one. And the several be grown a is likely secondary a runway for the be the venture path extended ground going of tremendous There investors be larger NAV to today. be has before some or liquidity to IPO we going there. market those can therefore, think So

of the one we certainly that’s opportunities to. think I point So

you number of I a think over other of new years. funds created see the managers one the is last and tremendous number

concentration I and in seen about haves think we be top the is to and talk there differential and really, between the not. you’ve going in a your of have of prior a bit some dislocations, something it’s managers

is this think you be those market going in on I to managers. top where a focus really

Mike or look commingled kind I the I Thank looks what tick types. asset great. you just details, you. I the really be just mentioned of different that? ask if And And among – But a funds, it a Thank mix That’s for that. the the I like between Scott. up there at have was within rate major may of about classes to as fee all shift that Excellent. kind of driving might something – want different vehicle aspects I about mean, the there mix don’t in other been know think

getting existing combination coming those combination is new at that activated commingled It with rate. Johnny. new the this than of take are of the funds portfolio. rates is that. full Yes, on just a higher I’ll a funds But

among total it a and commingled for rate. just classes asset So fee is between mix the and SMAs

maturity of in of new well stage as And it kind like fees? on sounds turning terms

That’s activate correct. did the we of a the mentioned prepared couple in as I mean funds quarter. during remarks, we

impact. And so retro then has very fees, terms of that a quarter clean no level, So in fee right. an

Johnny. Thank it. Yes, exactly no, you, right. appreciate No, that’s I

from next your question. with proceed Barclays. with Budish question Please Our Ben comes

RIAs more to is market wondering, that go more there. It of so like I strong taking bit a I guess, wanted retail tend optimism versus growth the through little fragmented. lot maybe sounds market to you kind little a Thanks a one, piece. around to about the question. for much bit continued and everyone. If two-part Hi, ask was I wires a of question.

engagement could approach which a easier group. easy seen increase I So just several Can great. handle it’s or of about redemptions, us just your large any into of to liquidity structured redemptions REITs particular, a as in gotten curious adviser bit talk same large quite been you real sort the then And – a to set the you given kind very But bank not is up along past little walking education, to education all and in how haven’t you of kind has as lines, as meaningful requirements? is potential speaking remind over think we’ve liquidity? handle the months. like a fund non-traded to how SPRIM not in

Ben, is questions. Thanks the Hi, Jason. this for

do But and couple overlap. them allocating go-to-market well. with we’ve with with country the education and advisers day to component, in clients made you of you’re in it our be as groups some with is much field about around clients allocating potentially CapEx take need invite a there offices, the right with got in or why assisting XXX last different a time financial locations that’s wealth We you a with lot we’ve support, education conduct different in of shared their over you really as the terms to able if in collateral XX we’ve preparing that’s We the the and platforms periodically of team diligence the half events. of with see to about as the network come with think well. more and couple by the that of years, teach-in out And out is sessions got vendiagram full a there well that as conducting fragmented. the partners, RIAs, distribution In in that be directly building SPRING, a advisers, and conducting the their private sales with those SPRIM,

into So future. well for a channel continue reality educating lot it’s the folks to multipronged it’s going a sure. is, long It’s of time, not event. a approach for a this the have on and been one-time But

always is we’ve quarterly for of second terms but the structured SPRIM, that In on kind tender. an quarter to from tendered less, a the a redemptions, per of the each question There perspective quarter. generate with we on portfolio cap asset do amount to X% We tender, full the that’s liquidity. sufficient elect

order that credit SPRIM have with fund well that a fund can actually assist U.S. tendering one facility we’ve that active now. as only liquidity And in the in necessary. as the got only – SPRIM is with the to we We tap if that’s

I of still other that thing soft in is period. the The is lock would the remind capital majority that you

some So of now. tendering kind structural there against still – some right is protection

focus As it relates that the different per quarter it’s given per tender, a an from X% would opposed to SPRING, as one I asset difference perspective. tender cite X.X% the quarter is to

a that’s step in next in color remarks that you little more Okay, great. expecting could your more up a Thanks more so much. mentioned you expense was coming from? if us quantify perhaps and G&A If that bit I could maybe where get were give wondering quarter. bit one and you perhaps, I for Johnny a prepared on

Yes.

– line, calendar than given comp year. a it’s the on clarify, more G&A our line on cycle is the to comp Just just the

new begins. January accrual in comp be line. new it’s accruals the base, So bonus X, will It

if So, on we I base. I quarterly guess the plus but about adjustment and I don’t staff. normal beyond look terms first It same. fourth change increase between by quarterly something quarter, a new hires in of is some – the quarter the would be you back increase increase year that percentage ago guess the the the at have driven know a percentage, driven by guidance

Okay. That’s helpful. very much. so Thanks

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

you. Thank Great. Good afternoon.

building out active been over years the guys platform. quite you So, have global a diversified

spending or that are have be M&A time you X that today, how think next sense guess to as strategies, meaningfully geographies, make I today you years. on like to also to ones versus as more look the you scaled? out the that the guess active over on could look channels, years? over on the could what see I years quite would you much years, you recent And business you been platform XX So, added at

Yes.

on So, the then to rehash start Mike the some some I briefly of kind on wealth our space years, private the or maybe and the it I that to won’t hand will in terms touch But coming of white areas of of to focus expect channel. grow over M&A. we

I and parts spent but about as not that launch with channel focus. progress area a in may think That to prove of quarters. now an successful of will be clearly, our clearly business. time and bit prior helpful of SPRIM, we continue to SPRING make that on But think other how in only quite us we

within other I fall think given that asset classes. the we the any of see opportunity probably

not secondaries market it’s under yet what ground XX% classes, relative look estate back like it’s at asset at over the to of again, equity, operate, depending you that think today any years to the private how several market and of something you across the you we the so on probably and private asset in sources of private current fundraising value I net when today, good look come resulting evolved the example last to And but is each classes asset within NAV where the to look where pretty has a XX%. closer when at, infrastructure, probably the credit secondaries falls asset real classes those in

asset a it’s room think one example. And for I the of So, is to again, market as secondaries lot mature, classes asset follow of generalist there the similarities. we in other have But been a suit. I ways, sort think those non-private how equity there might had look It evolving, be specialization in class at I see time, initially of are transition specialty develop you terms more we infrastructure amongst of number where number managers as of transition funds think energy over you see already for areas. entirety whether within funds it’s And specialized presents different to number energy example. the as grow, in funds do operating it to But in have started the space, across for a of us you or opportunities mandates, of even specializing today. more which the the

just don’t to well. think is comment it we turn see of within on opportunities biggest classes. of M&A as I Mike question our your that’s So, where about But probably why the asset to I some each

deep are as point, really to And something Thanks around see track know, we currently most our accelerate or perhaps don’t looking we that integrating billion large senior study and adding are recent AUM and rather record, of case you a track our strategically, $XX teams think we a have and for record. Scott. capital the I with a XX-year had base that acquisition augment existing working think something And doing, world. And how the was we Greenspring, of doing. doing augmented example are good that anything accelerated ourselves we acquiring a we growth currently of it team a either with are venture to to transaction we I

to Greenspring, looking to that we has So, look as pretty for. point would got case study to what at we a are good

were I well we remain environment, culturally, that I would fit large ‘XX active think bring we could think rolling strategically, in And ‘XX have slowdown synergies years, we pretty are pretty don’t see the we and expect or might pretty to or good across But It’s ‘XX, still going remain form, present we a I soft, see being reputation themselves activity and engaged. drive and open year. and the will to much able you some teams. activity know, there busy move see senior a not of if something but as into have starting opportunistic. board. say some remain M&A engaged. would it’s as current up on pretty be asset we remain and market you experienced for growth early out any this like classes. terms perhaps ‘XX in to would that stated we interesting a significant ‘XX of saw and that’s we ‘XX, the industry on, opportunities in But goal and

continues at bit that. a sequentially for on question to FRE little here, Thanks And take follow-up the Great. a just least margin, higher XX%.

you are that about margin expansion What have that be would that? the previously? you What expanding the spoken for would I So, guess about scope take what’s margin to thinking hit it timeframe? How the mid-XXs opportunity? into

been of we the It’s top you growing it through When Mike. either combination through really, basis FRE years a through the able or a economies, was mid-XXs the ago, organic of margin. growth expand Thanks – have have margins we points scale Yes. took been by couple great. line And were growth company to public we and line. while XXX in M&A, inorganic been bottom our

So, we feel very growth our and both good about the combination margins. of to our ability expand

when it see felt and we have mid-XXs. to we margin to stated comfortably medium long-term, track. medium public, the we would we a continue as that Scott, we a feel the as we economies we in and in that balance to up strategic the we low-XXs, some concerned, hope growth had think will term. year long-term. good remain I over globally, time would company and see the we grow at and continue And on a continue in and to longer managing we target that and far to the We investing between ourselves And for and expansion I the firm simultaneously. for about guided doing finishing our medium took are over this the make growth profitability scale don’t as we on everyone you focused are timeline. And build Jason business stated

the appreciate but we had the So, have question, way with things and as hoped. are we we grown thrilled

be business? be XX your years higher. were just longer if we that where out there seem or meaningfully appropriate? And don’t follow-up at term X on I know, If guess out could just I to I could point, peers What’s maybe look if margin to some there longer that term, you years, for look

could you maybe I a in what’s lower high to as continue guess business, But margins. I at imagine of remind different time, profile same results in of us little terms the that peers you has bit scale incremental your pretty help margin the business grow relative a different profile? that and So, to retail

out. help to So, could flesh of that maybe you Thank you. kind

Sure.

our I has right, don’t you But to have are margins unchanged our our specific But been. outlook any target what of continue see timeframe. think in or we there, there and I outlook guidance on a improve. think remains terms I we an think the are opportunities

the of we think comment, on how in the growth look seniority private that earlier growth profitability. between estate, the that’s we you benefited back But are teams growth across have and about the And size balance the as comes and Mike, that areas that of taken, I we again, from. seeing advance well. the Mike, have made those the And and you a we that of approach in to out it, fundraises real asset it even when built team, debt of built And wealth now and just at benefiting true we each that have private have business sort touched the in you and terms the are tried the infrastructure, classes. of from

down it So, future be. team come sizable I drive growth to does we investments what think our think the to opportunities will in

Thank Great. you.

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

you Hi. your bit appreciate and on Good bit makes around was hoping why wouldn’t already, demand was discussion taking question. the the side quite but and of build side the I of secondary I Scott, the and part seems a some equation allocations little private it afternoon or the out, carve of about fact in on as could do growing? kind impact bit sort Thanks the on denominator ones and we more secondaries of same think allocation a both as that for a fundraising might of supply of plugging it the people of their side. be GP to comment everybody. the we side little primary therefore, hoping way challenging the of sort the LP the clearly talked could effects sense, be do that there a set equity the well, opportunity people right, that are despite equation

Yes.

So, look, question. a fair it’s

things but a LPs that just been think there, in ahead. practice have I an years. the into but because I fund, earlier in made real. of their to is from and more steady have our it sure thing this to LP, buyout the have our And market to our the shifting shifting is when talked I maintain longer are there attractive year have fundraising. they that a holding an focused vanilla setting allocation, are interest have that’s as a out time we their rolling this effect the them Obviously, away and to reset make to doesn’t comments to secondaries that doing some the last otherwise have them clients the made for view be there about want I reduced year than is perhaps what year other exposure see New think has an vintage of the with there led strategy but may do again, strategy we about, I our to the early GP But cases, Year both is, budgets. We been amount terms time working as in think and the established who with that you where invest. anything you taking these as tremendous as they within to many is but in about effect, time, why some secondaries just tends denominator also – or earlier might with new allocations I comments budgets, late that And traffic denominator in certainly the mentioned expected.

looking budgets So, may probably an of think fact fair shipped issues. seeing year. terms are effect allocation it’s this around opportunity, funds to I we and I that allocate those question think a some But are within have secondaries in denominator it’s the that to clearly

the a as At am been the as of across something is I extensively? around service, more struggling holistically. kind overall have the but there since to data. both so kind an of and of you data are it Interesting. about company on volatility, things. of there bundle sure know the opportunity time think I allocating time you My GP not went extensive pieces Is as they you public highlighting portfolio better? provide Thanks. allocations, white an about well of overall to think much who their question Yes. it, monetize opportunity really set data the side usually sort Thanks. side more for of That’s to really it but you second all you market the part was for of just you guys label have to, increased

Yes, Alex.

So, on monetize the team the science around asset but to management been team wealth solutions creating of the built for exist the in-house has it. data and input I overlaying have data we that think able we have been input that and don’t and where technology technology data solutions

the great efficiently. with So, kind of with of I before manage the And of science the wealth those it’s investors. much return data where have the given up able to examples as in team products us more that being SPRIM coupled coupled SPRING help the technology, example data, and shows the for

thing capital-type with doing are semi-liquid institutional the permanent vehicles We for same investors.

in doing liability that are for data we – utilizing ways and we the helping forecast are asset matching insurance other We with to are helping like. where and investors

easiest the monetizing to path seen have we where that’s think I scale So, at today.

much. so Thanks it. Got

Dunn Please with question. John from comes question proceed next Evercore. your Our with

preferences within have And any the about I guys. any different demand a differentiation differences you Hi regionally? question geographies. seeing different geographies? in in that, the overall between Are

versus we into seeing just maturity pensions terms some it’s coming pools by of geography the a or international still capital be function of are been online of that and allocation. documented biggest differences in may public referenced portfolios their sort building of well that of again, ways, think of where, many are U.S. targeted I either the in

have I on So, are there today probably see. that’s quick and think calls our quite even fund the to think But clients, difference amongst active out some pension point new we opportunities. at U.S. I public I that are biggest been that again, looking prior

the at has pockets various on the XX spending world But question. with Latin the different quite a America, seeing over struggle as been of we around time whether world have months, XX East, generalize the last So, to interest reopened, months of certainly, and Asia, that’s I the bit Middle in road why times etcetera.

are In interest of terms point terms region in of major any where where no, by lies, of wouldn’t areas the in interest difference to of differences today. the terms I

in versus those the experience difference the has Asia and Got expansion quick one Any about it. there a U.S.? your on of just And the and in expectations in talked differences retail work how then any Australia. operated platform you

just John, off a You bit question? at repeat can end there little the for me. the tailed you

Europe U.S.? expectations in in your do way Expanding Australia, you versus differences platform the sure. are those seen there? what any in the what the and retail markets work have Yes, And expect you

you. Thank

So, a IBD slightly bit Europe that, right, although kind the a couple doesn’t and they to bank look markets that in there the structured of bold bracket market-to-market the differently, are function. of as how be driven, really are platforms. like players have who wires terms of are the major It private more well. of tends versions

a Asia, a larger the of type a lot of not institutions, RIA mix. little independent and market bit then Australia,

wealth that by private private probably perspective, say. to be little or from team biggest how That to of the we the the less prosecute difference, number private just due I of cover be markets. on in active expect density bit players would in active to a with terms markets are would we a get probably can the a go-to-market those that In markets smaller

very Makes much. sense. Thanks

would now I Hart time. for this like comments. to at turn to floor back Scott questions further no the are over closing There

and I again quarter. just the want next you. time to to look continued thank We call you interest everyone join forward appreciate to for the our taking today. speaking Thank with

teleconference. today’s concludes This

you for this at lines your your participation. disconnect may You time. Thank