StepStone (STEP) 8 Feb 242024 Q3 Earnings call transcript

Thank you for standing by, and welcome to StepStone's Fiscal Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded.I would now like to introduce your host for today, Mr. Seth Weiss, Head of Investor Relations. Please go ahead.

Thank you and good afternoon, all.

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

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

forward-looking forward-looking inherently that estimates for Forward-looking circumstances in risks, subject are Factors and management's implied factors differ uncertainties number statements current a statements those Risk or these various periods future reflect and risks described due plans, expectations to to from or results and the other are our or with materially uncertain except changes no and in of as SEC. may filings. Actual financial only assumptions. measures statements expressed are by included measures. to periodic made StepStone's non-GAAP update to our Reconciliations presentation obligation required, and of as of presentation contains or revise references in the GAAP directly These financial section release, filings comparable them.Today's are are most any and, earnings we to our today of undertake the

real net retroactive X, $XX.X to which Group and will in attributable GAAP XXXX, of million, debt the buy we In remarks.Turning addition to of Mike million. Coinvestment to was XX%. StepStone a from generated fees up results businesses X, reflected equity quarter, quarter third to an we GAAP infrastructure, margin will The in our net or an were Venture financial fiscal FRE Scott of results, $XX.X of and commentary contributed StepStone's private $XX.X we million StepStone's prior the share.Moving with $X.XX the Infrastructure closings StepStone XXXX. details interim fee-related $X.X quarter our agreement for we Fund, earnings noncontrolling financial of XX% of which quarter multistrategy filed per loss generated the resulting loss an and in year StepStone's Slide third fees from There fiscal Slide Incorporated reported million, beginning and of their over private XK Global total in under provide that revenue. Fund, Secondaries no retroactive the Capital time. Fund, interests estate to

the quarter in up a StepStone million, Finally, This $XX.X for hand net over of quarter, we fees.I'll fiscal earnings now share. net Scott CEO, $XX.X earned in and the the call year, $X.XX from third last driven million performance share, to higher per $X.XX is adjusted per fee-related by income or Hart. or higher

and robust and good fiscal growth, for performance StepStone fundraising afternoon up success continued We in setting everyone. quarter, earnings, Seth, you, our delivered Thank generating XXXX third solid in asset beyond. and

additional gross mentioned, to quarter. over excited Mike real also of Seth into our our the provide to we billion detail remaining infrastructure, and announce are that the were new entered we estate each in later in and I acquire with As the our $X debt in commitments comments.Beginning businesses years. stakes coming will results, private have agreements

many we've private of a last remain have specifically, markets fundraising that existing X slower challenging very strategies prospective more engage the who conditions capital to able of the constructive years and clients backdrop, StepStone with the is the more While market created to offer. and continued on

client strength represents of conversations and fruition of our reflects cultivated of decades. of the This quarter many over which many relationships, we've those the

separately result existing believe The in of we in multiperiod business clients.As in be continue the where our horizon. both quarter. managed We we strong dynamics this fundraising for we commented to raised past, particularly $X.X a evaluated accounts, billion pipeline across have should may and fundraising a over episodic have inflows, new

and fees tends managed contribution paid accounts than on commitments, AUM fee-earning to as the largely to rather earnings be fee-related deployment However, steadier.

managed Additionally, provide because is visibility.Shifting account commingled are raised meaningful of relationships billion our $XXX XX%, closed fund, separately greater on Equity gross in funds, our revenue of we approximately our million and extremely billion. retention rate, sticky strong to inflows which we Secondaries than generated $X We have Private to-date. $X.X where

and Equity our had our Global Fund, in multistrategy Fund. Real our Coinvestment Infrastructure multistrategy Capital our additional situation Venture also Fund, closes Secondaries Growth Estate We special Fund,

us earnings accounts, pace commingled Day via success.To Investor billion of our (sic) we of be to flywheel, will the the to achieve CREDX. to set the further our drives offerings STRUCT fiscal will thrilled investments specialty places the U.S. best to suite primarily secondaries. of out pensions are $X so StepStone wealth calling and of with our and sustainable growth ] of one a our we an as The momentum and believe see products, which our in allow enable platform Credit that months.We filing over allow StepStone private expand our recent in interval This creates focus U.S. and investable management. recent and by fund subscriptions lending Fund, what of private goal most fee-related subscriptions and strong credit XXXX. money but will Infrastructure strength that the separately work our Income The investors. continue all at powerful Fund, we a important fund to that where markets or ticker.We to forward, deploy funds direct quarter private StepStone's XX [ the SPRIM, for for will our wealth Private daily last recognition evergreen wealth We million is a subscriptions for in and over be I'm last doubling from CREDX to on raised highlight excited helps $XXX of private capital bespoke combination asset end, of are through and continues fund work Like STRUCTURE co-investments our growing people that June's for propel will diligently the managed platform

markets. asset with across capabilities multinational the private manager We are fast a growing

have made strong, backgrounds StepStone both a We culture by capabilities. and in distinct concerted embracing effort at unified to and our develop diversity a

Our to been class retain of businesses the are we our to purchase that attract, develop will dependent continue in entered announce the years. the coming over success interest have has teams, asset to turning ability each integration these and be our on agreements to talent.Now, into noncontrolling and to economic of thrilled we

were would has high this things to of that that in success.Since who each our well itself that years to we working infrastructure, they felt intended maximize estate, been experienced, result. classes incentivize building into IPO, our teams these to teams needed ago, were senior be us. X reminder, a equity its to couple were made expand in had strategic As combined build made attract decision entrepreneurial in of from we private a you private We critical of consistent XX built clear businesses have the StepStone our has their structure the a business has things:First, and this careers type of equity quality and ago real asset there success. And to a X when and years we time had ownership nearly offering telling behavior that large, debt been

vision, nature continue would a our to interests. complexity that a and that the equity XXX% estate time; real structure a long on transaction for day transaction. We The ensure the participate reduces trajectory while experience. decade, the their and accretive teams our to will creates partnership no their there to shared ahead.I'd infrastructure, their execute of driving private heads, nearly achieve of an be attribute disruption our done the drive have a noncontrolling the improving businesses has the of during transaction on will provide ensures asset exchange we an shareholders.We to to in team years. term and over believe closely detail, basis to been of outlined an to class Mike, in client our asset who worked more help transaction next agreements to growth.And phase teams the look debt in growth third, June, will James, that turn valuation more ownership StepStone's incentivize now behavior.Second, our in that to and be the alignment stakeholders. our its during StepStone's in like describe path scale, equity businesses this will we ability will over with on entered the benefiting speak last similar phase to years and asset been of of much first success in the Investor for we call business to our forward have always of we XX the and while continue improve that accretive and detail As the there buy classes The growth. these our the incredibly Jeff, growth class greater but over and all will the agreements and of mechanism, quality any our to that quarter incentive private all of which We've structure Mike each next into The as Marcel

Scott. Thanks,

over coming X during X. and $X accounts with structure We from coming shows our fee-earning by Turning XX asset Slide inflows commingled billion last funds.Slide gross AUM $XX $XX.X managed the of billion months to and from generated billion over separately class. AUM

For billion. by earning the $X.X grew we quarter, assets fee

with separately quarter from contributions within of This resulting the X of a contributions account, our billion of set fee-paying low previous our funds billion call and AUM and represents from on in the earning infrastructure-managed important our fee we our the experienced operating mandate.We commingled $X positive SMAs. offsetting managed had both growth including a in earnings metrics. expectation flat a growth is a had we came record-breaking accounts. We relatively large commingled most distribution on gross $X.X While AUM out approximately consistent gross distributions, net funds,

$XX of re-ups ever, highest a which strong alongside UFEC, the First, we from our relationships. billion, some long-standing level of our StepStone. increase power This increased future over fundraising, points to capital, comes fee-earning our or particularly SMA undeployed to earnings

real UFEC the billion of inflows billion secondaries the off be VC middle in activating come private billion commingled our $X.X activated in our in coming million this $XXX including holiday March.Second, $X.X of raised estate are approximately $XXX of includes and and million fund, quarter year beginning generated quarters, our fund, fee $XX secondaries over will over anticipate which at wealth that we platform. calendar we the on this Our funds will which already of

a a XX% also quarter, we our which on months, in of fees. benefit representing of in or XX run well launched Greenspring Solutions, third-party part CREDX, will fiscal for Office select filed recently to the for opportunities. We our fees quarter subsidiary STRUCT fund acquired GBOS. now includes as service advisory generated funds. produced higher a past GBOS acquisition venture administration from management fee and from with who from XXXX. will our sale saving branded later XXXX. of noncore last of expect reminder, a we to business, sold We funds, VC we one the our this margins our of basis XX over of fall, cost Viridis, our and FRE for GBOS grounds to the initiative We this the year We year as the an since expect this was the annual Back generated as such as the margin success, of Scott by our Greenspring discuss filed VC to strategic past of capital executed as last funds We team the expected third-party X, number credit the over basis and moment from our net run the will retroactive GBOS which $X mentioned, a year.Slide operating and continue fees. with fees.As to management management expand XX% points a platform David, but private XX I'll activate distribution XX buy-in the of outline partners, this benefit like The combination shows an operating evolution infrastructure over we leverage the an fiscal points. we Scott structure from $X.XX advisory our few model. to per the by timeline continue retroactive product points interests this mentioned of rate take XK the We and rate call with transaction I of blended this fee-related the agreement, last transaction FRE the to key million of We share the earnings On months, the along includes the full administrator feedback as annually.Before handing increase to benefited fund earlier. is consistent than would afternoon, rate growth a noncontrolling

of years. agreement teams grow ensure own we exchange thereby a their our a in StepStone of StepStone are systematic coming business deliberately portion with a alignment the XX% you aware, StepStone buy-ins incentivized for equity interests infrastructure, likely of these real estate smaller As of gradual to roughly and currently the We be over primary to this classes. structured The interest asset important debt equity, and remain classes.The consideration private our will owns not maintaining announced an in as XXX% buy today cash. does prewires the asset private that

real the for to of of owned by summer, this account The We remaining is approximately to if approximately the size first and and customary years, infrastructure, with closing after subsequent exchange X/XX the place to XX% equivalent exchange conditions, execute the will estate take to accelerate each business plan of the teams. X expected private subject year, buy-ins mutually full debt agreed. option

Scott basis, each accretive at with an As multiple. will the a prevailing occur step occurring to on in discount exchange each mentioned, buy

side-by-side NCI a Officer, accumulate XXXX. Chief we go like Officer growth Accounting should our to eventually pass the ownership.I'd result, as appointed Financial had pleasure full to with since of David? to the over now recently and We've Chief to Park. our slow working rate As of of attributable income David call the away as David begin

up year in turn million, and look increase in from structures, opportunity to year basis forward growth fee prior a work management generated with as the Mike, the earning $XXX quarter, quarter, up and investment XX% an million of the I'd The XX% having the highlights.For well We ago. of sequentially by XXX you, in like million as XX% commercial to XX $XX.X financial we up to to retroactive you advisory to for across Fee-related prior our with driven Thank period. quarter, fees I were the earned was year attention fees. all AUM community. to consistent $X.X the your of and earnings margin FRE the Slide quarter. from for speak points

Moving was ahead the cash connection cash to driven fourth equity-based bonus by to prior annual $X expense $XX million adjustments from compensation expenses. our quarter. The was decline our our in Total with and million, cycle.Looking quarter. fiscal primarily down to bonus accrual

savings. While XX, on the sale of GBOS, which closed December will result in compensation

expect fiscal StepStone were to increase expense January our XXX see in taking administrative conference. an up increases sequentially. We compensation General with markets to Included million, our this due million expenses $XX were quarter $X merit from in quarter expenses third effect overall private X. associated

annual million so last these fiscal in private remainder fees Spring, reminder, seasonally fees G&A tend second for of periods performance Capital $X from a and most incentive $XX We carry realizations the includes the $XX quarter, to of will in of be were incentive fees quarters quarter. million annually. Conference and month, year for expect a similar appreciation. reflect stronger The of $XX incentive fees be fees to of revenue million infrastructure equity for conferences. host and up from market fees. million the mandates.Our incentive our timing Venture for Unlike of our later recognition, million which due million positive with $XX expenses third in realized seasonally the expenses to fourth crystallize investment $XX Gross quarters prior of highest and carry, drive and level Annual period's this next quarter.As from tend This our our see to million third investor performance $XX fiscal realized the

Spring's as Given in third in our crystallization annual are quarter, that as these recognized fiscal periods. well other mandates

fees a ratio.Moving and to fees In and have over our terms to compensation equity period to XX% the XX% per a ratio, of tends wealth performance year-to-date were term the per fees XX% and management Gross higher the fee-related Adjusted revenue in decline share the share largely for XX share tied grew XXXX. private the have XX% fees. period. while and the fiscal year-to-date for performance period growth advisory payout as compensation long year-to-date down payout period over period flat funds term advisory management in realized per comp for performance up Slide funds related long was our to private roughly offset XX% since

XX%.Shifting fees. long per by growth by to we profitability Slide was XX, term the Over FRE in was primarily grew up advisory per adjusted revenue The share X in XX% our management share driven and period, quarters. first increase on

generated FRE driven key over the term carry have XX, Year-to-date a down per $XXX in over the by balance by ANI to longer share of Slide rate increased an last ago, up on share underlying we sheet XX% finished relative term, at Looking but period.Moving annual XX%. of annual rate fees, driven performance from valuation lower the items an the long has growth per to was million, quarter primarily on year X% appreciation. net at accrued year,

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

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

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

question Thank of JPMorgan. from [Operator Instructions] line you. Kenneth Our Worthington of first the comes

First, on the SMAs.

into $X.X of you $X.X billion into into fee-paying correctly, fundraising paying fee made think billion that you AUM. said AUM I heard time. I So eventually flow over commitments If would

of period is quarter So you billion AUM to expect into guess, place? fee-paying I that's over you over maybe what I AUM, time? the ended And start. migrate to $XX.X take that's that fee-paying how where first, big migration think, asset I in with SMAs, the guess, to SMA pool I total would like going

for Scott. Thanks, question. the Ken, Sure. is This

there, next in SMAs a we about the successful over in things that, by undeployed will largely $X.X So UFEC, of will over fee-earning billion accounts. that AUM fee-earning much the re-up that think the that, separate a a largely our really standpoint well base, of billion capital across about client It's fundraising of quarter as as referenced. new driven of in well some time. just was quarters.The thinking activate Mike strong the form capital Mike current additions, think, one, of of rest we very on, the couple as funds undeployed by couple I convert think fee-earning Of our how as $XX from what activity majority about into touched driven across commingled client was is as is

We've period, time talked the being our to but guidance deployed on deployment that in driven commingled deployed about commingled of think number, be over X consistent a funds the largely separate vehicles. how capital, funds and separate invested pay year tend sort As to There to committed. those it on reminder, be continues we'd consistent be to or that would pay a to always and about by tend accounts, in around X our accounts today. whereas some of

it made haven't in XK, is the so here. if through this apologize And Okay.

is [ Is quarter? this of on sort estate, Like, up? wrap of Is buyout? of and of that ] the year? is And happening What the X/XX So infra when does cadence XX% should we continuation that cadence buyout X/XX you of for the real a summer. it the credit, expect? what the the of goes it what said NCI every

Sure.

if be, be the So the one and over done agreed, a mutually be accelerate the to year remaining that per X/XX potential With the XX-year of There XX-year on after a period. will over to otherwise period. will but essentially years be over would continue exception, interest, years, next is cadence X done the which infrastructure buy-in X start. could

over wouldn't laid accelerate in in is any an So, yes, the with detail annual time that that'll agreements, Otherwise, XX But after base pointed time. have had you as basis which, detail the out, we to review potential case on out point all happen X to years. done at in years. transaction this being

Congrats Great. getting on done. Okay. that

comes Barclays. from Budish of next of line Our question the Ben

Maybe on us for That that -- Obviously, this be bit bit somewhat the of pieces. that first, cadence think, help thinking next, can about other just a what the for was should given I fee about sort the incentive little obviously you the there? basis, color were yearly quarter will was look kind a you a unpack should contingent maybe forward? more think like should we that on good contribution it just through little going versus of if SPRIM number be than we the can how But And probably of is helpful of sort a on bit contribution performance. of that? a what a you bit expecting. very quite was higher But dynamic? can most talk more a -- SPRIM the --

the Ben. for Thanks Yes, is question. David. This

sit tied that funds. Our fees private or incentive programs vehicles outside of generally our StepStone to are wealth either

second they annually really and tend to So crystallize in quarters. third really and fiscal our they're

of but was fee quarters, XX can and you of strongest. half But as imagine SPRIM should third quarter the growing again, some second should roughly typically grows, it, the you fiscal about typically think over in modest the as be you if the expect incentive And well. So third the next incentive million. fund quarter fees the couple the

the the companies are bigger tend all markets question, with of we look the And at vehicle, you concentrated who and helpful. SPRIM, bit versus first one retail I at other side strategic a of think, Okay, on market be to sort were one then public wires. to in with like sort broad, private more least the a maybe of

You RIA the do got competitiveness a maybe It strategy, differentiated some bit seems there market, different sort competitive maybe out you feeling have a thoughts of are distribution like at any environment the just are about with with some that the the same a just on less are But but of through fund? other for credit distribution options product is little but you've an a contested. how there channel, bit time, which in given the there already incumbents just private more offering? specifically,

Thanks, Ben. This is Jason.

like So with able out diversification, scale there as single you there.In of being paper multi-manager BDCs to there managers. competitive research that a to from think the in private And channels, very And and fund is credit mind loans private the that benefit manager are And about [ out is model. in of going through that where we deployment vehicles performance edge the and we ] we've the number our are a also bringing wealth to are got on through vehicle. relative private open white an have the that benefit a credit, is favorably number point. architecture there compares

play a specialty credit blend that to prevalent. opposed play CREDX think out there direct the so, one there What quite is there space. will single the got and we've in though is there as to terms specialty or manager, And of very multi direct fund. differentiate BDCs, credit, out few be There to pure a relative lending manager comps we lending we've that's of is done pure

it. Got Okay.

line comes question the Michael of from of Our Morgan Cyprys next Stanley.

the the That's to What sort talk to on buy-in the Maybe And cash and we with on NCI maybe expected what's Any a of there, mix lockups of to the how accretion? of expect stock just Great. valuation dynamics stock magnitude buy-in? great Congrats sort see? can see. of about could little particular you the you announcement. bit approached start portion?

Yes.

for So and This all, Mike of first then there. it as the part But McCabe there will Scott, touch question well. comment and thanks is congratulations. are off hand maybe teams We're about to I our of quite to Mike, start here. on as the a excited it

we and and deliver really that that an you shareholders our way have public accretive to we we're deliver to all way suggested the look, valuation So the what approach on able along transaction. the to

a trading a on structure firm are trading the to that the exactly big on just it that maybe part where will accretive StepStone there. clearly how is that's sliding the valuation be ought With of your of through as of in multiple, think to a locking it second discount it a scale talk an transaction.I'll at hand question at the Mike to depending but half you to time, through we

this. Yes, Okay. Scott, very Mike. thanks, we're Great. and Thanks, excited about

mechanism. our of and we IPO probably Investor Day our across we've As was platform And this announced at at it June footprint our sense priority. global in team reached stage with a year, this of last where a and scale made to proceed

discount.That's discount And mechanism question a year. be of that larger once trading the prevailing at, Scott it the NCI the scale multiple. to per mentioned. the a greater at And sliding works done Scott the the back to the be just will way StepStone's Ken's that at step of mentioned, earlier, As the buy-in done will multiple the the is then, cadence

transaction range and You time. at the anywhere detail, for more purpose into StepStone's up agreement but trading multiple to conjure of prevailing can this little of we're to the should go call, XX% between of on a expect discount where based XX% the be you the

any detail up after of that. In the follow with course, other Weiss transaction Seth I to granular and agreement, you terms into go document of the would encourage with aspects of

maybe stock that to part component. one touch And of sorry, question I just your cash and on skipped the over,

will consistent approach of somewhere IPO, XX% about year that in a the first in years, X/X remainder on that, form has which we've in allow the cash about XX% the X sell the Greenspring range, with cetera. think a to You the the team to used transfer should and over the be being restrictions been really, would stock, et there the sale,

March that just you could are quarter changes business, FRE the FRE believe see Nice other does then, margin. from And over into forward? margin question the also on XX% going well? a your that margin, just a some higher to do speak selling there above subs outlook on if think fund here. XX% operate quarter the quarterly can in buy-in, with made and the profile the off margin. to minority of as Into Maybe see we wonder admin Great. with over? follow we're given the Maybe changes you how up time, uplifts any for that I fiscal a as impact what the you 'XX, FRE the sort And basis the the the clearly of with just

again, expansion really the we've on investment to in platform invest. can across some maybe that across across the I'll in global detail leverage for such think we've the footprint invested key business one capture a there. see been as comment combination well prior But organization. Mike, a platform But we the and efficiencies growth we organization to and and private areas, and other we have well margin some in ask little expect the through wealth largely operating us our David our to a as as to feel of have over time, as bit other prioritized Technology example. So, investing as we talked, is

compensation Yes. favorability is this here, you and -- our some Thanks, we if the largest expense item, at have look David quarter. did line clearly

the is million. the over should and X, some this to movement equity range that layer as expect next fee we adjustment, you January on And about you largely took and -- on effect can quarter, see for years. trended couple at you low if way we trend this looking normalize do think should a roughly into comp, XX% you as look the time, comp the in rate of cash run increases the it's but over more on If I gradually down a maybe of think And time. bonus crow last there.Looking revenues, percentage over merit quarter, ratio to it $XX total get quarter you while

time. you're margins I to going fundraising. again, down the, trend commingled of due guess, do timing expect FRE is But Some be of over to time, to going over to movement we see

your on your of up follow there. part to second question maybe And

see expect basis, occurs a we it the report As about see I ties FRE an broadly again, the But to continue kick buy-in through leverage should as in to FRE. per we buy-ins broader on some these again, don't back add scale se. up so to as to expansion consolidated think operating over we margin comment organization, and expect time,

Our next from question Goldman comes of Sachs. Blostein Alexander

Does around follow compensation FRE you if at carry? FRE, all another just if or subs at work equity Just infra change existing in How transaction. clarify if earnings estate, that? all, StepStone? start all, how, compensation the Mike, will So doing or debt? the in would payout? for they you like the guys buying of and more the anything or getting real change, dynamics and would there? buying can up at the are folks Anything the you quick that carry And you

in But Sure. as is Maybe invite of first question maybe a the comments cash PRE. well layer all part yes, buy with and FRE start as the your few well. as to flows on I'll Scott

management as that flows mentioned, equity some with invite also, the fees.And Scott performance concerned, underlying far a was find the performance of buy-in as I'll term, so And a its over some should the of performance led longer to really that episodic interest well will Scott fees. buy-ins we in it's happen thesis But a and gradual alignment of to work, of thought. fees have So cadence the a that as fees that that how compensation period ebbs important maybe time, approach largely to given just the series be share we the as is teams of will behind of as what which cash. nature smooth taking out the to foster

Sure.

real as the example, change, treated, time. will that carry ownership will go XX% for to no how team, So the carry is over house. Obviously to change XX% the to to continue of

compensation, utilize from a consistent think ability structure we've one's really ] IPO. approach the the our I increasingly compensation biggest RSUs is component that the a stock standpoint taken as with across since the of change team StepStone, to [ and

particularly pull levers now or bonus, as RSUs. forward, well the we'll for between have And stock multiple carried interest team, so components going investment as base, to of

build paying And of how billion in strategies? help maybe those specifically, for seen be secondary you. in we've to of a dynamics? fees in the there much market the frame we yet given Can we capital talked business, relates recent should and that's of it not to relative question momentum us sitting Great. of it to sort is little continues quite the bit when many expect what of seems a second faster the past, deployment pace secondaries to you $XX My market active, I the reasons around got about.

Yeah.

of those about what will shortly, be on of venture holiday entirely capital which co question. thanks, the capital of situation not we which an exact we Again, our early think that you in what provided fee-earning So haven't today. some Capital are expect our component sometime Estate fund, special undeployed that is Fund. about undeployed of in secondary we will the investment undeployed well the But and billion here, never But strategy of of the funds is of secondaries Secondaries of estate year.As mean, rapid asset prior as March either breakout an of when as or and funds fee I completion real fee-earning to less relative strategies the middle fee-earning fund, meaningful about. our secondaries but the of primary would think activate expire a remains again, the by those this the either we've Fund driven calendar the by class. breakdown, deployment will that number. investment ever Alex, by Secondaries as be the It sort between Venture driven activation the you $X.X commingled will exact talked capital provided for I tell Real

Got That's color. you. helpful

from question UBS. of Beatty the next of Our line Adam comes

couple quick of term sort the the out NCI A process. of of long that structure see and kind questions on Great the to of culmination buy-in. laid

a in And that process? around timing is you the just different? there scenario? or years, that amount or great maybe So or color either would, completing contingencies around it an or sort if to after So, some with you like potential evaluation? around did you teams the and way, structure of details.And any just you something kind in extent have are also M&A wondering the be if it'd the the any to some Or whether fairly nothing look future, acceleration performance to would of also could all not of a X could, or be the clarification quick more accelerated get whether similar a

for Adam, Thanks, there. questions the Yes.

in time. performance-related there main the the the ultimately of part The over to will them is a component order, So maybe those which taking drive is it? businesses financial performance that of of businesses, value

from over is, successful question, grow And our doesn't incentivize businesses of up around we would were nothing relevant if X. the all there not so X of second to us structure point we the at acceleration, there XXX% in we've in view doing to a would asset in may was the that, class. will that It would really, they to XXX% performance.On to that anytime have you at time, in they're able have acceleration, complete time. but And result sense extent accelerate, equity the to your where be all to after owning the if the class will result those with continue their or that where it teams an asset own But to that come or buyout that point, the agree to agree mutually that we to mutually X-year in really, accelerate, benefit time.

a answer year put a an pause to that We'll also given I would multiple that in were to clarification on the do, your but M&A question a StepStone's and if note trade first XXx below also that want before think just strategic question, agreement help of the transaction that I'll And contingencies. contingency, StepStone's in clarify as exchange I or resume our an year. on here.From capacity perspective minor that anything capability contingency nature. of certainly this affect execute standpoint, on hopefully market. one I the changes following It in the to is M&A then don't to in doesn't

that there's we've to amount a revolver involved that in by this covered cash transaction, easily very place. of As currently mentioned, is small XX% we in XX% have our

to the capital present have flexibility and we themselves. a feel on the to continue march structure should forward opportunities front we So strategic

vintages then at kind you're for the also current to X, which LPs commingled That's great. the what for you've in got moment. level around coming be maybe take might high outlook plan and fundraise And the of there on and coming just get year a of hearing kind a up just quickly fundraise, what wanted the or from new

the like I with, in certainly the Sure. hitting the the denominator hearing as example, mean, moving effect. it what we XXXX terms at I from imagine about XXX much for mean, direction. in is can feels for the we're not time LPs today, are right of sentiment moment, first talking S&P you

meaning not the quarter, as but private today, past are referenced effect transact views We the portfolios deployment, we sense of views we over-allocated in their some some still that closings target and been strong the have lead does allocations.But are [ with certainly valuations numerator that investors still commit talking that LPs and about markets, in only willing the the public the of are to fundraising that the slowdown the ] this distributions outlook of on moment. we've more rapid that relative the performance have on and and markets and in the interest the sort rates of current some to as momentum of at during well beneficiary the recovery

about referenced, fundraising as well we for Coinvestment Fund. stands Lending strategies $X for positioned the current And Venture Direct environment. about our We're billion, equity Secondaries we multistrategy Capital and the stands those which, in in our we wrap -- well of late market. special situation of our a key with in we have And the like think fund, up fund, as for strategies this our number we're our Fund, do other now now the and growth and in commingled should our first so, half continue billion. raise which to at the but Secondaries at in $X.X late inaugural has fundraise, Fund, about Secondaries key Fund is Estate market to moment, have Private stages continue Real good at market of as what will very Corporate and Similarly, as Equity our funds calendar momentum, year.We Infrastructure funds

right strategies, from the commingled market opportunity each a private of standpoint for -- raving So continue obviously in forward also wealth our here. now. We'll lots of to be going the across

Perfect. Appreciate it.

at I'm you. to questions further this no Thank like remarks. turn showing Scott Hart time. the over closing back to call any for I'd

to look us joining continued today. quarter. forward for We everyone, and we with Thank StepStone, and appreciate interest questions thanks, in next speaking Well, the you. Great. the you

and conclude you all this gentlemen, participating. does Thank today's Ladies conference. you. for Thank

Have disconnect. day. may great now You a