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1. Company Snapshot

1.a. Company Description

StepStone Group Inc.is an investment firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments.For direct investment, it seeks to invest in venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, and buyout investments in mature and middle market companies.


It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, consumer staples, financials, telecommunication services, energy, infrastructure, real estate, and real asset.The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region.It typically invests between $15 million and $200 million in firms with enterprise value between $150 million and $25000 million.


The firm invests between 5% and 40% in emerging markets.For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds.It considers investments in both domestic and international funds.


It also seeks to make co-investments and follow-on investments and considers partial interests in funds.StepStone Group Inc.was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia, and Asia.

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1.b. Last Insights on STEP

StepStone Group Inc.'s recent performance was positively driven by its strong Q2 earnings report, with earnings of $0.54 per share beating the Zacks Consensus Estimate of $0.49 per share. The company's revenue also surpassed expectations. Additionally, institutional investors have shown confidence in the stock, with Ethic Inc. and Sumitomo Mitsui Trust Group Inc. increasing their holdings. The company's solid results and growth prospects have likely contributed to its recent performance.

1.c. Company Highlights

2. StepStone's Strong Q2 Earnings Driven by Record Private Wealth Subscriptions

StepStone reported a strong second quarter with fee revenues reaching $217 million, up 17% from the prior year quarter, and 27% year-over-year excluding retroactive fees. The company's earnings per share (EPS) came in at $0.54, beating estimates of $0.49. The robust financial performance was driven by record subscriptions within the Private Wealth platform, generating $2.4 billion of new subscriptions. As David Park, CFO, highlighted, the company's ability to deliver strong investment performance and value-added services continues to drive growth.

Publication Date: Nov -11

📋 Highlights
  • Private Wealth Subscriptions Record:: StepStone generated $2.4 billion in new subscriptions for its Private Wealth platform, a record and nearly double the previous quarter's highest result.
  • Fee Revenue Growth:: Fee revenues reached $217 million, reflecting a 17% YoY increase, with a 27% growth when excluding retroactive fees.
  • Gross AUM Additions:: The firm added $29 billion in gross AUM over 12 months, with $18 billion from separately managed accounts and $11 billion from commingled funds.
  • STPEX Launch Momentum:: The newly launched STPEX product saw $750 million in subscriptions during its first 30 days, driven by demand for PE-exclusive exposure.
  • Private Wealth Expansion:: The platform grew to $12 billion in AUM, supported by 650 distribution partners, with 50% of partners offering multiple Evergreen products.

Private Wealth Platform Growth

The Private Wealth platform has grown to $12 billion as of the end of the quarter, with 50% of distribution partners selling more than one Evergreen product. The company has expanded its Private Wealth platform to approximately 650 individual distribution partners. Jason Ment, President and Co-Chief Operating Officer, noted that the company is well-positioned to continue broadening and deepening distribution, with a focus on cross-selling to existing partners.

Valuation and Growth Expectations

With analysts estimating next year's revenue growth at 18.4%, the company's valuation multiples appear reasonable. The current Price-to-Sales (P/S) Ratio is 5.69, and the Price-to-Book (P/B) Ratio is 31.42. These metrics suggest that while the company's growth prospects are promising, its valuation is already pricing in a significant level of success.

New Product Developments and Partnerships

The company has launched new products, including STPEX, which saw $750 million in subscriptions in its first month. Jason Ment discussed the potential for the partnership with Aviva in the U.K. market, highlighting a significant opportunity in the retirement channel, although material flows are not expected this calendar year. The company is also exploring other geographies where private markets can be included in defined contribution spaces.

Operational Efficiency and Investment

David Park addressed the increase in G&A expenses, citing travel, IT, and general operating costs. The company will continue to invest in infrastructure and costs related to growth, including the upcoming StepStone 360 conference. This investment is expected to support the company's long-term growth prospects.

3. NewsRoom

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Willow Wealth Expands Private Markets Platform With Launch of Evergreen Funds From Carlyle, Goldman Sachs Asset Management, and StepStone

Dec -04

Source: businesswire.com

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StepStone Group Appoints Lindsay Creedon as Head of Private Equity

Dec -03

Source: globenewswire.com

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Creative Planning Acquires 3,524 Shares of StepStone Group Inc. $STEP

Nov -26

Source: defenseworld.net

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Creative Planning Increases Holdings in StepStone Group Inc. $STEP

Nov -26

Source: defenseworld.net

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Commonwealth of Pennsylvania Public School Empls Retrmt SYS Buys 1,150 Shares of StepStone Group Inc. $STEP

Nov -24

Source: defenseworld.net

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StepStone Group Opens Office in Madrid, Ninth in Europe

Nov -17

Source: globenewswire.com

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StepStone Private Wealth Solutions Launches StepStone Private Equity Strategies Fund

Nov -13

Source: globenewswire.com

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StepStone Group Inc. (STEP) Q2 2026 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.10%)

6. Segments

Private Markets Solutions

Expected Growth: 10.1%

StepStone Group's Private Markets Solutions growth is driven by increasing demand for alternative investments, expansion into new markets, and strategic partnerships. The 10.1% growth rate is also attributed to the firm's expertise in customized portfolio construction, robust risk management, and strong relationships with institutional investors.

7. Detailed Products

Private Equity

StepStone Group Inc. provides private equity solutions to investors, offering a range of strategies and investment vehicles to access private markets.

Infrastructure

StepStone Group Inc. offers infrastructure investment solutions, focusing on energy, transportation, and social infrastructure assets.

Real Assets

StepStone Group Inc. provides real assets investment solutions, including real estate, agriculture, and timberland investments.

Real Estate

StepStone Group Inc. offers real estate investment solutions, including core, value-add, and opportunistic strategies.

Secondaries

StepStone Group Inc. provides secondaries investment solutions, enabling investors to buy and sell existing private equity investments.

Co-Investments

StepStone Group Inc. offers co-investment opportunities, allowing investors to invest alongside private equity firms in specific deals.

8. StepStone Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for StepStone Group Inc. is medium, as there are some alternative products and services available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for StepStone Group Inc. is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for StepStone Group Inc. is medium, as the company has some dependence on its suppliers, but it also has some bargaining power due to its size and scale.

Threat Of New Entrants

The threat of new entrants for StepStone Group Inc. is high, as the industry is attractive and there are low barriers to entry, making it easy for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry for StepStone Group Inc. is high, as the industry is highly competitive and there are many players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.60%
Debt Cost 4.05%
Equity Weight 66.40%
Equity Cost 10.03%
WACC 8.02%
Leverage 50.60%

11. Quality Control: StepStone Group Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Invesco

A-Score: 6.3/10

Value: 7.4

Growth: 2.9

Quality: 7.2

Yield: 7.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

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Franklin Resources

A-Score: 5.9/10

Value: 5.1

Growth: 3.4

Quality: 4.3

Yield: 8.0

Momentum: 6.5

Volatility: 8.0

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Affiliated Managers Group

A-Score: 5.7/10

Value: 5.8

Growth: 5.6

Quality: 6.8

Yield: 0.0

Momentum: 7.5

Volatility: 8.7

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Hamilton Lane

A-Score: 4.9/10

Value: 2.6

Growth: 6.1

Quality: 8.4

Yield: 4.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

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TPG

A-Score: 4.3/10

Value: 1.3

Growth: 1.6

Quality: 6.0

Yield: 7.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

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StepStone Group

A-Score: 4.1/10

Value: 4.4

Growth: 2.0

Quality: 2.6

Yield: 4.0

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

62.85$

Current Price

62.85$

Potential

-0.00%

Expected Cash-Flows