StepStone (STEP) 6 Nov 232024 Q2 Earnings call transcript

Good day, and welcome to the StepStone Group Second Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker today, Seth Weiss, Head of Investor Relations. Please go ahead.

Thank you.

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

remind we on referring at the our begin, for like remarks, which a shareholders.stepstonegroup.com.Before periods. presentation prepared conference future operating I'd available this and statements is Investor to company's contains our certain will well regarding to be presentation, we call forward-looking During as that the as expected everyone Relations performance website financial

we fiscal to Beginning uncertainties subject and our quarter Group, StepStone or them.In required, with in we and forward-looking changes from second expectations results share statements reflect from per Actual are quarter, XX%. net presentation with million, StepStone's and XX% of earnings total fee-related as generated estimates GAAP are of There to million and which in FRE were to This pretax or million income of million million. in second net release, equity in down management's obligation Risk and the share.Moving GAAP or from and or made reflected per per or share. of for from other we various income margin. except and of adjusted uncertain filing to those Slide resulting a the $X.XX global that to financial net in FRE the closings second the partially year, to of measures Slide to fiscal our fees million hand today, contains generated $X.XX directly for these $XX.X to attributable $XX.X year update undertake statements presentation fiscal capital future to any our $X.X risks, X. StepStone's interim as no up Forward-looking for and basis the earned multi-strategy no income and earnings financial included contributed Reconciliations are in most are call fee-related to assumptions. SEC.Turning addition, and financial $X.X points due materially These by over results to quarter references fees periods comparable margin the XXX earnings net the and number the $X.XX by secondaries X, realizations in Scott XXXX.Finally, $XX.X to we today's earnings.I'll reported CEO, our net XXXX. GAAP last non-GAAP implied of StepStone's is driven retroactive fee-related an current retroactive higher measures. StepStone's risks quarter income Inc. venture inherently quarter of revise was fund the $XX.X differ prior The of private statements circumstances adjusted or of forward-looking lower million plans, Factors may only offset now described $XX.X of are section We fund, by Hart. expressed quarter factors filings. or periodic revenue,

prices, continuing number strategies driven good in higher we've to StepStone in macro volatility of our which positive geopolitical for the risks, for results. in the specialization including and you, by Thank asset breadth of offering, everyone. interest are Seth, environment, results areas heightened a invested momentum in steady of afternoon, and These longer our rates Despite generate challenges continues and growth.

conference, event hosted and June.Last StepStone markets, within our Day the investors. positioned track we remain asset continued that years growth on industry double for fee-related least managers, environment in at for XXX Investor are annual our next clients X at past month, and are believe for operating We difficult a is as well in years the ahead. we earnings setting to our strong the out stage the laid we the we we it this private Although

XXX on these, many times our seeing a present hear in prospects. of real-time us data and in and full portfolios. clients suite desire market the share of directly trends and we insights; products importantly, The solutions; our opportunity that During gives and have are our and our understand strong and to like conference developments the clients the our to from

the continue clients resonate Our the environment. continues their private markets with investing engaged extremely remain for goals.Secondary to turn meeting in long-term clients today's our help with and to StepStone to in that is strategy

appetite general realizations strong demand differentiation for very slow classes of the secondaries for across key StepStone. investments, a some While market of muted has area for private remains and market pace near-term asset a is

to partners superior general investment buy and the of to with opportunities, us best high-quality enabling assets identify to opportunities, pipeline prices. expertise attractive relationships these allow deep play us a our at large Our and data of

we a We secondaries to transact see our close of first avenues of and in as equity should $XXX executed to they approximately to capital pace in fund. fund, as the greater adjust lag, valuation are beginning to quarter, billion $X.XX of new sellers of continue secondaries interim which our an an close acceleration in venture deployment.During for recent private willingness our of successful this other nearly realizations most million environment result

secondaries activate We first currently generating real fiscal fund to estate. is our XXXX, venture in secondaries while expect of private to the the capital fees.Shifting active half fund our equity and

special a GP-led Our secondaries flagship commingled situation's product fund. is

with in in for opportunity our June, we interest real estate significant the years, a a in expected coming at the rates, coupled substantial Investor of recapitalizations. rise Day volume creates As maturities discussed

be investment to in deploying accelerate. real begin a access much team ourselves. are leader deal a to of we selective capital. are have flow, We of deployment significant in opportunities estate enables seeing create and amount which we Encouragingly, to market this This our

now in this real secondaries X-month fund investing. first our begin close. of investors estate fund. on fund and To were new part closed holiday earning approximately $X in billion fully our actively have the new fee we We will is the This a fund after committed private date, spring that for fees have

an in result AUM access funds real investors to modest fees, in revenue fundraising fiscal special strategy our relatively well year, estate, secondaries Additional progressing visibility we fee-related as that one means for today's and suited fee-earning of capital activations as particularly well real believe for is situation and is attractive timing venture into margin in see fiscal environment.The clear management XXXX. provides in and and current step-up this estate earnings but meaningful a our growth

this contributor over quarter was We've and over timing strategies We among proof large allocation new have progress time. are capabilities mandates our point as seeing that a of long capital exact $XXX that Private yet SMAs we X in our and goals to sales to building healthy wealth The pipeline the The be but venture ever, help well discussion gross quarter venture separately-managed multi-strategy to anticipate clients. invested investments of to we Inclusion in clients' separately-managed are also from additions when is off. another our subscriptions. deep a our a accounts. commitments heavily both SMAs is with second with new progressing of cycle partnering predict, example for paying been can a operating as for for which difficult that Wealth. re-ups, million these expanded years, engage quarter's cycles.Shifting portfolio through a the solve be testament We our best relationship over of in from accounts private to we've leverage fiscal significant were well.Included engaged this and will closing in with synergies in market these

an and pillars for private of venture equity of distribution.SPRING, StepStone's need became traction we subscription Evergreen [ fund of investment gross As and registered Providence across substantial documents, momentum. but close July, the in Private initial subscription STRUCTURE, Infrastructure Fund And and a into core ticker of and ticker. continues of products in the a are to encouragingly, family for point our markets capital X our Wealth ]. allows private of the Fund our wealth daily we without we contributed announced SPRIM, Fund seeing Evergreen the available by September, process third gain simplifying growth The has funds. onboarding to frigate all our for Evergreen inflows, acceleration This eliminating held

announce initial science-driven to we expected the second and team. technology, in and warehouse. is coming management has I'm to first continue where Finally, software on team and area months.Another SPRIM improved has portfolio SPRING been on inflows data our pleased its invest In in that with case engineering been approved wirehouse, a each our

front-end about spoken our platforms. previously and research back-end We have reporting

integrated have Stepstone. in our one our with research, to LPs StepStone Randel, suite SPY Johnny because We platform This like under calling only is joined unified a and been and have GPs.Before people investment and thank than we technology, our leading deep and rebranded of in handing applications and leadership and and I'd dedication team. suite, has a we the CFO, are year. will both our relationships to possible SPY the this the finance interconnected made of to end decade by call XXXX applications. reporting, Mike, benchmarking building pacing more retire The which talented at of offers and StepStone. for our Johnny responsible for Johnny

vision, your to on been Accounting to our the with thank already the key thrilled more congratulate has we Park, McCabe Together will helped detail. David and StepStone's Finance company announce for you Stepstone's call are is our dedication, your now IPO we We Financial Johnny growth X. joining fee-earning and strategic of our on about and Johnny, XXXX. with asset Stepstone transition. become Officer years guide closely retirement.I'll is leader that turn David Accounting since David working speak Officer, through a Officer Mike and to Chief of Chief over team. current the fundraising leadership Chief in Johnny, on you January in David

echo and Thanks, Park. congratulate your Randel, Scott. And I'd David Johnny appreciation to of words for like

on long-term our I take to fee-earning to AUM in capital a Johnny first financial few balance. commentary strong the undeployed had anticipate billion, in impact, our see still fee-earning our some successful further growth fund due X $XX near-term X which fee-earning of generated venture would disrupt fees, close X on months do billion Turning The and step-downs to with timing of by class. to flat our and relative billion not X. $X accounts.Slide was earning XX separately-managed to structure a from from as the funds quarter and growth AUM our and the our effect interest. continue to we well gross and like to as undeployed over Slide the impact provide is approximately capital commingled quarter but last moving related the prior AUM through capital:First, fee-earning walk during our market, secondaries $X trajectory. a fund next currently $X.XX billion of coming our on very minutes asset the closings this resides This pieces activations coming our fee-earning We that shows months. few to AUM management We but asset inflows will

that expect funds quarter and raised additional We XXXX. hereafter in fee the will first half raised activated of the be become plus capital this paying fiscal

amounts see real our step The We but triggered not which capital a we base are deployment.As unfunded in opportunities fund funded Page in included of investments. and net in fully investments. invested about the in to to, in have to down are the the net Scott but by fee in step-down resulted fully estate real recapitalizations the the invested XX the This of transactions are commitments particularly estate, a the on secondary reduction base, the $XXX for end up included not prior fee $XXX yet This encouraged million, committed fund undeployed of driven walk now our mentioned, instead see near capital. AUM several we Much temporary, is fee-earning future of presentation. fee-earning committed capital of in line committed pick included that the the is fact this is significant capital million from yet distribution quarter. from fee-earning to of to AUM private and

fund late fees fund months. these XX our XXXX, turn real next actively on vintage, As in the future We've and the return through to-date investing current capital to to fee-earning approximately XXXX. fiscal $X over the on this fiscal will fund of closings anticipate will and estate line.Pivoting billion closed our now asset investments is

had of worth a also separately-managed We $X.X distributions from billion our accounts.

the fee of that distributions include relates that and life. quarter, on of full $X more earn fees the billion at expiring revenue fee-earning a case AUM we these lower expiration, the $X.X quarter, reminder, exit Occasionally, expirations. step-down out are there rolls for disproportionate from impact to fee of a contributions on to These older As expect billion step-downs billion capital activities, revenue.For offset generate management account the is mandates fees assets. distribution mandates distributions. $X this at these In commitment the will and as About pay committed on a typically of in to this this circumstances, capital mandates base. past or relative was rate the than fee-earning managed

the step-downs time and to of to you in similar business, when to For them course expect we These to quarter, will on upcoming a ahead our expirations along size revenue. occur.Shifting and normal anticipate we see nominal know of a Private with this expirations we quarter, past Wealth. let impact are

the up. now a We of and distribution suite This $X under put in ground private result XXXX the threshold surpassed that $X context, growth network a September was have in first wealth of crossed XXXX. launched management. and we from our in billion product we billion assets To for November platform our great built in

in $X distribution such launch only broker it wirehouses driven our RIAs, management billion secondaries fund in fund. than success of fully doubling by funds to SPRING the this and raise coming over VC driven subsequent a estate quarters.Slide shows and our additional convert private We dynamics and generated its We real blended to are undeployed investment XX% dealers, Each capital invested as X by took and At of of advisory current value platform VC net of rate progress our STRUCTURE. estate XX return and committed another capital we first growing the the is of increased distribution each a fee of fund activate $X SPRIM the fees. billion.Our by our around the return level initial to the points the fee-earning private pillars: the billion, across evolution record but of and of real syndicate strong in ever, secondaries basis a launch STRUCTURE September performance. funds the and wealth capital higher expansion our once per and will fiscal management We XX% the generated inception X fees its asset fund not in least by actively billion independent months, our than mix yielded less international points months, has time XX first last from basis over we've XX $X have thrilled months. XX strong our last produced grown as is XX retroactive over last the awareness by and year a close initial bolstered had some and and favorable benefited a in by close $X.XX and its share is track highest has shift $XX.X for the months, of advisory SPRING in months. since brand XX annualized fiscal the to investing.Our fee-earning management and to an since now our call pass the over representing Johnny like rate in year fees XX last annual to XX% X/X Randel. growth XXXX.I'd CFO, AUM

you, Mike. Thank

financial your to highlights. of $XXX management past years, like leader the turn quarter, organization, It privilege does David look to will know I has X a to XX% work what I'd would my David fee-earning a I going primarily to the and has speak StepStone. at to you, We to partner a finance AUM. my to in I next. to here great friend, year, growth like XX thank been great forward that the our these prior add to the truly advisory and driven Slide seeing quarter, want very, alongside and speaking a to by fantastic to for StepStone congratulations up you be I he Before attention very colleagues been sincere fees in also from earned a say of Park. million forward.Now my

quarter had this for margin retroactive margin quarter XX%, a impact in was XXX of positive fees basis points. FRE the the on Our

about the we margin For XX%.Turning trailing of million XX-month an to period, have up Expenses. FRE reported was sequentially. Compensation $X

and the Markets incremental flat on hiring do will mentioned quarter, were but X expense current some last fund our in our G&A activations is expect we reflected had ] limited this I we relatively expenses well an seasonal expansion we as and uptick fee hiring. fiscal As increase for some down real call, this margin the pace as estate margin the General fund vintage the headwind October, in earnings in held fiscal This quarter first step revenue and so sequentially, impact of administrative in mentioned, in by our and the growth headwind fees, private fund year. Mike [ we The driven next XXX Capital just mentioned on Scott timing seasonal our step-downs the on create Annual pressure a Venture our Conference quarters. will Private create early investor FRE and associated in with next management StepStone XXXX.As of in We our quarters, Conference a will expenses while the on holiday. X conferences. host

that real temporary but not XXXX. our points. funds that million yet us least we capital expect currently be have visibility raised $X to have over contribute XXX a of yet we in annual However, is and fiscal of impact or up this we closed activated fundraises will step these We activated, management margin in as funds that been clear commingled revenue a approximately secondaries margin at are into fee-earning.Once in the give fees have basis has billion expect on estate positive in and venture this $XX capital and not activated, already

late the fiscal activate secondaries XXXX. of Scott fees and venture first As close real estate to XXXX, half in from the Mike the anticipate fiscal initial mentioned, fund and fund activate we will the in

coming the pace to across separately-managed further Gross outlined expand remain funds, revenue our fees margin long contribute were periods.We what which FRE to funds sequentially. consistent the for in will with leverage term, accounts we and our Additional and deployment quarter, and to is operating evergreen realized down Day. $X our fundraising growth commingled and Investor mid-XXs performance the million year-over-year both to at the over medium on

quarter, expect will mentioned so we pipeline, work environment generally the takes fees signs remain As seeing the of realization that through some the a we transactions fiscal are we at improving. to year. rest for It performance last realized few quarters that is this modest for least

not per and The fees to adjusted a revenue investment.Moving gross first timing XXXX, annual XX. fiscal the driven XX% decrease rate.Shifting is XX% to by grown year. offset we on share we and a As management share advisory by down earnings Since have the for in fees. per share. Slide per of profitability in the half of quarters. related had exit advisory realized do increase fiscal in generally partially growth performance was primarily Slide by Adjusted we control XX% in reminder, fees We per share, our XX, X first repeat growth revenue compounded by on XX% share per our management our

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

relative period was accrued per Slide from performance previous last sheet fees an XX% rate of XX. carry the Our annual driven balance million, year-to-date for $XXX over increases ANI ended period.Moving on share valuation June by down year, XX. the quarter, the that finished underlying at the Net to quarter lower has to long-term X% increased driven at by up the

a reminder, reported balance a on crude X-quarter As lag. our is carry

million Our our were quarter as end. own investment quarter ended at unfunded portfolio investment $XX million, programs commitments $XXX the of to

over multiple across largely fee capital our capital years to be means our that the questions. investment eligible carry XXX vehicles turn realized years with of harvest to XX% any and programs programs. with the of performance earlier, vintage unrealized tied sourced may investment time their waterfalls, of open out it at operator which for grown are diversified mode. approximately billion, concludes to of carry payable programs remarks. or the back are now periods exit.This vintage prepared this carry and XX% is in pool of these of I'll widely has deal-by-deal $XX and unrealized XXXX to Our from and over line this

first our moment One question. for Instructions]. [Operator

question first Ben Barclays. from Our with comes Budish

some and if still SMAs sort around know, to Maybe be time pipeline or terms of it a is you for talked looking you Or that for, of type materialize. could the What kind the new bit. time? about you are the helpful. the a reason wonder unpack bit robust, real the rehabs, I does Scott, but And And don't of look color what first looking seeing to little can would little I is what any in type either of pipeline invest? of that like investor delay? assets take

Ben, Thanks, the for Sure. question.

in developing I building the pipeline and remarks, So as nicely. mentioned prepared is

of of and existing changes the we've relative couple COVID and mandates, you late since a this as I much as activity client expansion look healthy when to been quarters. of think, re-ups years driven of seen a mandates at particularly last and SMA very mix that there's in of new when was of one new really current the relationships well, the by in of couple quarter

So that's opportunities. obviously encouraging the future pipeline and re-ups clearly expansion potential and of build

So, really seeing.Second, around delays that one and is of prior trend the re-ups vehicle opportunity. fully investing a your in we're certainly coming the deployment, matter right? It's re-up back that's perhaps point by to of to driven that driver slight

has we into And presence interest we continued surprise you. opportunities, -- mention re-up the is a of a may the been north made area of mean, that, that We in that I as like a the it perhaps continued remarks, to steady to of commitments.The U.S. of at made venture feel amongst and internationally. quite pipeline both and prepared rate I thing a is come here there but of quick think the have clients, in in reference again, which it bit good that time, last feel given some XX% moment. convert would successful, will some important re-ups I our have new the progress and over

a activity both existing in a but multi-strategy mandate that and building there feel pipeline the to of clients were opportunities and there well.So mix excited is good bit number new in that again, we of SMA a so as the venture of the And to pursuing, hard generalize, quite pipeline. have we're given sometimes

the trending right side. on helpful. follow-up Very the Maybe Great. one there. like It seems things in direction Retail keep

to are about is the you added kind and from I mentioned first. IBD, going of do potential sort those some And you X think the is What expectation think you its various could your most to will I right the Where wireless funds, seeing, guess, talked You the international. traction? of What RIAs, to channels, be as SPRIM size new another between of added be now is wire distribution kind the relationships what of mix those channels? SPRING add?

Sure. Ben, you the this Thank is Jason. for question.

I of built U.S. the dedicated terms the on traction. areas to team of terms In far most by Wealth in team. in guess, first geographic The is out the Private more relative abroad

today. flows are U.S. definitely And the here stronger so, in

balance the expect We products, terms all all of largest U.S. products flows is the as distribution that of it's abroad.In invest in to between date. SPRIM of the continue will the time we most seasoned over to partners the products, out look, the the

bit a size get there's therefore, to so And size. of

by partners. inclusion for eligible You're distribution more

start. look And therefore, is helpful. I Day inception. at SPRIM off is X the a kind at the of SPRING, performance And strong so XX% very SPRING that's versus helpful there to definitely when Clearly, since certainly comparison,

been continue too soon simply And nicely. we conversations do We're just positive. have STRUCTURE, months couple to a of to scale tell. here, in expect it's but so, to that

question. next moment, One our

from comes Worthington question next Our with J.P. Morgan. Ken

along probably same the lines. So

hoping the was in for cycle? really Is the cycle the this more education like more pre-existing developing So making labor prepared and SPRIM, sales give terms progress fruits think base? some of daily a the you're do long ticker of new take on us Is on NAV I you it of your of flesh will you that with out products structure? new RIAs? And Mike, could apparent you become release remarks sort X-month seem going sales in the in it's the the what does product numbers? to the or is the How new How this for a year? for maybe your of marketing announced for Scott it customer

Mike. this is Ken,

channel. I Ment what specifically do that invite Jason think, a might Private the address looks I bit is since to Wealth after he more

Thanks, Thanks, Mike. Ken.

On makes think community, I welcomed their definitely life the the by easier. arms. with Certainly, there, materially it's particular, RIA been ticker, it open in

We of the expect IBDs least, them to, use at ticker. some

I brand at to a will the education kind partners the I the have kind of terms be cross-sell, the different when if the let's channels, might that adopt be.In don't would call wires look look I the to last time of, and there real following. at you line think cite as the it, of If distribution all in for of this X/X base, will SPRIM, of I syndicate, If be are SPRING U.S. also SPRING. distribution then partners have U.S. distribution that and those to distribution to syndicate at X/X at And look those about conversely, look come I well. the of as SPRIM kind if over

going growth to like So across private story you're inventory and clearly, specifically. like the brand you the awareness it if helps and there's a markets, -- bit of StepStone a

but to So pattern. to again, soon similar we'd see STRUCTURE it's too a tell, expect

landing in of asking growth to expect see this acceleration we with certainly, something we were Wealth now, some and quarter, delighted across some But been that able new place. partnership this that and Private or quarters to me you've wire about second be for to announce

the on rates, then distribution. And Awesome. elevated we SMAs fee and saw

You attributed step some this or and to it bunch expirations. of a of downs some

As that we you pretty don't quarters on fee also is should Is side as in these that contracts, this something rate saw see step rate trend And this up? coming or in the SMA quarter -- the start SMAs SMA to migration see see we committed we of stable. should think the this capital the fee from I persists?

Ken, it's Johnny.

Just let that. me a about talk bit little

a move kind has little through flowing in expect don't mixture but been the over had one rolling there's perhaps. over so we is just of given the of a time, see SMAs dramatic re-upping. a change over the bit, pricing time won't what series and rates. is time, just an impact. any If many have what's what there, fund It off of it short think might pipeline of I reality a ongoing you'll period of we But of much these of

expect So, we a don't material change.

moment One question. our next for

UBS. comes Our next with from question Beatty Adam

Just wanted even to Day and XXXX. top Investor to by the line like they're and in that to puts the maybe as on top going be the good FRE mentioned, doubling takes the quarters. over the out a sounds Johnny looks coming has of It some target quick both seem Mike like pulse take shape, but AUM line,

say, if my the be 'XX, fee So for through AUM look I given the to post drivers question do the to so, converge is, XXXX? And target you the what look areas in of that growth over longer kind high for growth we maybe term, teens, of primary guess should expansion? and margin calendar

Yes, It and that really during Obviously, that is thanks didn't on Maybe topic took in have us things activity we Investor And Day. an ways to look, was for about doesn't referenced bit us. Scott. of our as during fact But achieve as and place of a you talked few there question. this Day on This spent for jump in to well. come this that, plans a surprise out. multiple laid those there to I that he quarter. a time here Obviously, things, of may the start Mike mean, Investor quite the Adam, we distribution targets. I'll get some one the the impact that the X-year the step-downs are

to fundraising, been driven we're for now really relates tough the term being so, had activity, it And key capital, overall we've the blocks some what business, continued et business some over the first of longer-term years, arrive. about, cetera, has with down jump private strong news the few be those what slower that of building trajectory. few But than channel, last talked additional and different investing to one yet with time in made in the always a a so, re-ups at the market fact for right? look talked think seeing at really really X-year and activity, of thoughts the the continued commingled factor capital invested of with And but we some frame maybe the progress longer growth activating want to pace we've and when that for raised the around to there.Really, the deployment market anything, like continue no in M&A as we of Day.And about the business the has that just change or a ] of pace venture pay resulted taking we the as to the there. near you or may [ real Investor funds quarter a environment we've biggest good by about say deployment, some to bit had fundraising, not would re-ups that all we about in we seen positive the X- the I feel despite the what about closes over wealth as X-year on think in accounts if years feel But the Mike, slower quite line vehicles on next

X developed, That's fiscal more right. AUM deploy about really to way gross half feel this left continue as new well year the months good capital. and have We our this Scott. year we the of as is form to for in first Thanks, flow

fee-earning to feel a expire side, the bit still new are gross puts point we're takes about as our revenue on as either little we It's on off really you as to bring you're what that progress. mandates the So where good we mandates Adam, out certain onto AUM, and the there or basis, correctly, some roll platform.And it pointing a XXXX we make timing certainly AUM I seeing enter hope activations there StepStone your very as here. is year does, that metrics this some your and a and a the timing as important the little addresses point, year. delay healthy fiscal really questions for go of fiscal live that of deployment but is of key looks all bit of which a year, good, across really

No, it does. sure

And to of mean, next level lot look, do whether invest in may of the Adam, great quarter provide longer-term thought ability goals we quarter. behalf to on service right, is a going clients more last meet I I more a client with -- that would our how view, those gets our we our share continued last activated is, this fund have and versus so than successfully to

XX that that served very we're us over so, client-first so that here. last maintain selective and years to And well the has going approach approach

follow-up. the actually, congrats, Back seems the just my just Scott. lot the like Yes. by a there Touchstone, It phrase Scott, you management channel, is one kind to And on getting attention. of way, then platforms. work on to caught wealth And a makes the sense, said the that fruition. new of coming

education you high contributing of mind, fair as wealth as help I effort, of it's I about guess that but fair my a there's I sales channel with. always I'm management maybe it bit operating something think and needing don't like to needing maybe of -- in -- the a a of missing talked I effort. leverage it but You prejudice But leverage, me have think bit can

look, to while quality with that degree also things same is certainly institutional invest our true, the to No, alongside of high offering and channel the that the clients one ability we that are with in of clients. Sure. is

about And from of alongside investment is really line sort to an some of the investment and standpoint, leverage into the funds, the dropped where of so, when how fees of comes really our institutional bottom participating on think institutional doing play, from what the you side we're really investment that's there. an much and clients team given it and

it Got now. Perfect.

One moment for next question. our

Alex Blostein Our Goldman next question comes Sachs. with from

profitability expect does agreement net ownership to believe kind build start of to net Just bottom of or already interest to you give that and share the around maybe assets on like you of kind or of sort do break revenue kind it how sort interest? it a share of the add net us more line of not equity minority scale a a and contribute of out. minority ] of and kind question it is I'll Adam's there I on operating of base, you leverage piggyback the of at sort when comes sense wealth what as channel. Can level channel the within revenue basis, FRE? actually interest And controlling [ to there and like to to

then Yes. we've it scale varies. got team I it I'll reality given others seen it. to we mean, of think kind The attached can the getting and the and of we've start are there is add. I

big are the Scott what's terms there driving being mentioned, scale. we is As produced, process, in that's of part of helped success which think the driving investment that a the the returns is

And And you kind so, about mentioned. from consolidated when thinking range. of think specific a kind it you from about but of that's we're kind then in business start you when here, of perspective, that given we sharing numbers, haven't the

months. doubling Mike it if scale, an have XX then continues, time. So as the think obviously, about, And over and in do that talked it can we impact

it. Got

you it been should I All follow or question, the for Okay. secondaries a increased my wanted about bit little opportunity up. question We like Scott, an have with to you're seeing right. first can My talk deployment guys, other maybe sounds there. business

urgency great that the sellers part the in the of in a may it's past given the is be mentioned You lot market to there's come market. on primary today not than exits to been of

coming are business, you to the have to if to that So subsequent the currently maybe markets work maybe put guys which you could much frequency continue secondaries opportunities how that your fundraising,? maybe at start currently funds vintage And even with set? just in expect frame given help including about quickly powder you years do across the How to perhaps to dry us have think help the back opportunity improve. us

Yes. Thanks, Alex.

the on it.When dry some close that mentioned break and venture dry which part we had in raised alongside terms after mentioned of remaining some and the business. as the started billion. private $X.X that billion fund closings fit think to exact vehicles, at the the mentioned It number some invest, that equity of for has in we $X.XX be billion think of reason we that during it of venture committed. business, raised of still the won't we powder powder billion, estate, we've but commingled maybe powder. fiscal that the the So it powder you the dry I an that we've $X.X the still, remarks, is look, $X available Greenspring fund. will now real down, year, the of next out some But there we there about acquisition.In vehicle we But about that stick accounts overage is as of until fund if much with the fully fund, incremental And with on is I'll has in I first prepared activate secondaries fund all put don't now prior current has shortly just have secondaries nearly closings dry across was obviously, of terms kind

adds commingled you debt of referenced dedicated private a separate hadn't number.Now gives businesses is both exist vehicles. dry we particularly this with of on completely things deployment, across type of very one there's pace I obviously, construction. in be private risks environment the some that of of main well within sense to terms kind of in as It's is that few portfolio the continue that that of infrastructure that so, in the look, one market capital, I focused And that the some within the equity a powder as things, our control. of our And think account that and

to the have so, of of diversified number approach across taken vintage a different wanting build metrics, including years. we across And portfolios

a would to over I funds deployed expect in generally diversification. vintage achieve are so, year these And order period that that X-year roughly

talked about would that is number. time powder certain dry would it, to clearly, last are given think I that further So maybe much what right investment accounts probably recognizing may point add that's some wealth the those a way shorter which of as separate business, we've vehicles I doing focus the secondary longer about have private a to how think we in or well, make, period.And

Instructions] from Stanley. question.[Operator next our next Cyprys Morgan with for comes moment Michael question Our One

private the look to XX be you vehicle the well. meaningful space I credit? retail strategies months to also able as private credit XX was as of might Which which capital And particularly strategies that credit today, as hoping to private would you want have your you see about just back. in here? out set next positioned you And raise I could best ] pulling say you the are talk I in ask credit. about banks [ a are opportunity think launching over in

on provide too. maybe an that, So you can update

Yes.

consistent. the see for it clearly the grow. to attractive when can bit think I I We interest Mike, our this of think you as hear and question. we a think in of debt increase, and reward quite base during credit our the prospective team has course view a interest I but So continued space, the have only risk remained private to rates year, private spreads the very as fairly even thanks not world have mean, about travels existing clients continue amongst about

in and position alternative in talking real as one some so active as the allocators very has there infrastructure, of equity about where that will think investing we part liked, asset think corporate had but similar venture positions and well. slower the deployment the also that a quite been activity or clearly at to would of you in at replacement strategies and to estate to a where of looking us continues challenge highest other of we secondary when performance primary when the with XX% for be a it's capital someone our private today's meant one debt downturns, leading otherwise for classes the private look quite M&A capital I've is continue business yields, lending limited has, like the the than part an to direct participate attractive and across So which well strategy deployment think similar we've partners you're method has that like to transactions, opportunity, secondaries, as structure. as capital, looking LP an leading colleagues our the area beyond be meaningfully, of to business we like to areas one to been, past meant about look talked deployment And have gross asset one, that we which type down that cases has is in market.The

follow-up just realization on maybe a soft. question remain And backdrop continues Okay. to

pressure here otherwise may seeing GPs Just that As any prices curious, is sort so? GPs at starting an pushing assets you to mentioned, to that events, as maybe challenges are or sort hear not want are hearing to look you points from out selling exit? been we've the of that you're of how this all LPs over side. necessarily starting months of even you on play LPs XX to their next want find anecdotes liquidity out kind create to And liquidity pursue

LPs liquidity you're a than start before realizations liquidity of off I leading their some pressure, portfolio. certainly more think their really call so sell, can fact new Sure. in of the months meaningfully XX it and that talked last, as slowdown coming putting more, as much it's more the about the But some, that we've I source of to of it, calls that the tap experiencing but much distributions most start actively liquidity to maybe create either continued issue what And distributions. funds, of has has down you and and over had months, so where to And secondaries market to for over several a I are or both true XX today, roughly of say down an the as distributions to capital or commit LPs right are relative calls for still not some last been they will that denominator over to themselves talking effect, think need they to letting capital GPs, source are and being know of they allocated. so now pressure them years.However, that been period distributions the would which see where time, is a to had meaning

that think a is I dynamic for is so, sure. the starting marketplace take to that place And in

this closing time, the Scott turn I Hart, question-and-answer to for CEO, to session. call back concludes would remarks. like At the That

Great. the for look story. everyone, Well, today We you. joining conversation the your to and StepStone for ahead. interest call in the quarters continuing thanks, forward in continued Thank the

program. the your This Thank conference. you in today's for participation does conclude

may now You disconnect.