Earnings call transcript Q1 2024

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Operator

Good afternoon ladies and gentlemen and welcome to StepStone's Fiscal First Quarter 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Seth Weiss, StepStone's Head of Investor Relations. ahead. go Please

Seth Weiss

Thank you.

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

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

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

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

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

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

income first to financial our million. reported net results $XX.X StepStone of to $XX.X we Turning Beginning Group was for quarter attributable slide of XXXX. GAAP million. three, the Inc. with fiscal GAAP income net

from adjusted FRE in of fund, of interim FRE resulting revenue million generated PE earnings, to earnings quarter basis from and We contributed $X.X $XX.X four. reflected pre-tax fund, secondaries we prior net slide to and fund, capital $X.X fee-related quarter income. global our our total our and of retroactive XX%. to and points infrastructure margin XXX up to an million, year Moving million fee-related co-invest closings margin, multi-strategy which the venture The generated fees XX%

million $X.X that points FRE million fee-related quarter to the net of earnings of margin. to fiscal adjusted This and basis contributed retroactive first in fees XXX to pre-tax revenue, compares XXXX $X.X and income,

Excluding the grown XX%. fee-related of and quarter the we in by fees this retroactive impact prior would quarter, year's have earnings both

Finally, earned This from driven realizations or $XX.X by fiscal in year, $X.XX the and down quarter net adjusted or $X.XX $XX.X earnings. net we million quarter share. of income is offset per the lower million per primarily for share in partially higher fee-related first by last

Scott now I'll CEO Hart. call to hand the over StepStone's

Scott Hart

Thank you, Seth and everyone. afternoon good

year, a in markets industry. fee-related broader progression challenging we the consistent environment despite Over generated growth for management, fee-earning assets strong the under have asset of last driven private management by earnings, the and

The comprehensive strength set StepStone breadth to to proactively our invest enables allowing cycles. a our operate of to clients, them solutions economic platform of across and

to listen approach and backdrops. this we continue as adapt expect client-first in needs path growth to historic we and has strong evolving our market clients' Our resulted along across

Looking our clients making remain capital commitments. environment, at in today's patient

particularly among However, equity the improving. in appears to since strength technology. is dropped markets the strengthening and partners the and up be broader XX% XX% our sentiment Public indices to clients with are market

more particularly has some activity help would Investment fees, portfolios. we fundraising realizations LPs only Increased IPO investments shoots private realized and spur but new green those remain as modest, for performance but to mature lead back with seeing capital are stronger markets M&A. is would not transactions that recycled into with recent returned

years delivering than with path June, teams private taken earnings investors, for out we in leading at position and a our and founding and the deliberate data fee-related steps ago five technology build StepStone to double that classes capabilities individual more set solutions. strategies, asset Day solutions competitive institutional XX and across Investor our platforms the construct to market have and we years. advantages fastest-growing provide Since all the our major in leading private next in ourselves market At establish geographies, over least distinct

the drivers already both clients, geographies, namely our wealth we are and deepening and market such, operating private institutional As within penetration of funds in re-ups, growth believe co-mingled place, across continued managed success across account leverage.

contributing factor centers A in confidence to major long-term our of diversity this our achieving the around offerings. growth

which of particularly that on any scope environments wide one are Our to excited. focus I'd of avenues we capabilities that have concentrated a different myriad of a these for in area. we and like market we ensures about are solutions few not

today's flow cash the attracted appreciating as seasoned is liquidity. same the secondaries, in calls a this on a strong as warrants favorable that strategy time, their with Investors given and asset. spoken is with portfolio recent resonating the a it are in to risk adoption comes to we've about secondaries Beginning discussion At how that LPs strong remains and are or profile environment. harvest of supply investors increasing and from returns while GPs generate continued investing and mechanism returns,

alike, which from monitoring of GPs on the LPs to is trusted StepStone on over advising our partner over comes on given our managers. advantage a and capitalize data or assets of data positioned market XX,XXX and As to and relationships managing this breadth well billion $XXX

fund first where We equity in a market capital working our venture we estate our with in close. fund private are and secondaries towards fund, market we are are special currently situations with secondaries our secondaries real now

also the further accounts offer managed classes across opportunities expansion. all product asset and see secondaries in for We

in seasoning. are to market classes relatively primary but secondary accelerate markets asset credit classes as meaningfully still are private are those portfolios and have the reached mass new, critical a these infrastructure asset LP's starting in The in and

As private be meaningful secondary to in leader in markets. credit, infrastructure a the player a developing positioned provider is these and largest StepStone in solutions

opportunities the landscape, we geographic continue find to worldwide. to Shifting

the capital. strong a deepening which the to have countries, We XX in presence with pools global internationally grow in with emerging offices give footprint us

be closed multi-strategy managed and has mandates class. competitive which We quarter. are several half over a to that growing this as our breadth made were gross proven we North of multi-asset in of also account inflows up our America advantage The offering on

Wealth Finally avenue an growth. Private to continues extremely be for exciting

the to XXXX, $XX million averaging a million average a inflows months are compares for We last over for first of of month seven year. $XX which calendar

month In was our new fact, best ever million of $XXX in inflows subscriptions. with July over

When increasing we designed private help to Wealth investors' challenges accessibility platform, to the did Private private clear core with aim specifically was investing. we our SPRIM it market markets the with fund of our markets. established private Evergreen individual associated

for relatively minimums, XXXX For calls. suitable low example, investment SPRIM reporting doesn't for tax require investors, and accredited has allows capital is

a step a markets multi-asset than net StepStone to a making rather can daily, fund. we significant now NAV class month daily to Last subscribe reduce value took among daily for Investors for friction, a private monthly asset basis. SPRIM first publishing platforms introduce a another by just investor on the

eligible simplifying process National and enabling the for Securities now is documents the investment Additionally, for ticker without a subscription the Clearing platform investor financial SPRIM mutual onboarding for Corporation via and the for funds, adviser. need

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

Mike McCabe

Scott. Thanks

We from Turning inflows $X billion last $XX generated during gross coming AUM funds accounts. the our managed $XX billion to XX billion coming commingled and of our slide X. from months with

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

from million $XXX the we grew billion assets separately remainder by from managed with fee-earning quarter, the funds commingled accounts. coming $X approximately For and

strong from total infrastructure where Private co-investment we under commingled with generate Wealth billion. quarter's fund fund came $X.X our management our multi-strategy platform primarily fund, inflows PE and to continue growth secondaries of fund venture our This assets our global

annualized Our at since to generating off investment XXXX. venture private equity inception investors strong very Private Wealth continues accredited Evergreen return of in growth products fund return performance strong our SPRIM be XX% a its markets our for SPRING, our to evergreen and XX% our since launch a with November fund and

by investors for been SEC raised declared an StepStone in effective latest assets. current by global STRUCTURE income private internal Wealth investment and of to fund, capital infrastructure a STRUCTURE our having long-term Private accredited private offering fund or access July. portfolio is investors infrastructure seeking is perpetually fund appreciation the

expect an closing later this We initial year.

by of us billion, our billion on balance $X approximately capitalize attractive a to also investment more to We fee-earning increased capital opportunities. $XX than positioning well undeployed

advisory for We in XX XXXX. produced last year the growth management an XX evolution over XXXX. over our rate representing fiscal generated months, advisory the since management share the blended per than $X.XX of over slightly points basis fiscal annual a Slide last X XX% fees We XX fee management and shows months, rate higher over of fees. of

the before dividend Johnny, quarterly Now call turning I to $X.XX from $X.XX announce per over am to raising are pleased to that share our share. per we

our a model, distributions capital-efficient earnings approach and quarterly we bifurcate performance based be As related a earnings. a to primarily By on we between a would that shareholders, be fee-related while sheet. our annually maintaining recurring dividend dividend updated shareholder our and will to supplemental matching our to November on dividend distributions reminder, maximize based can business paid balance approach last that our dividend primarily

As set per last and therefore total prior than to adjusted a dividends had related net reminder, on those we shift share $X.XX quarterly rather of income year's this fee in dividends earnings. based approach

healthy able change in this pleased past midyear out supplemental pay a with are $X.XX we We even that the were dividend June to approach.

distribution time by earnings. noncontrolling is on quarterly fee after for related fee primarily payout and majority interest. dividend This This the are related based quarter's first earnings the funded marks $X.XX vast adjusting we our of our taxes setting

on last had dividend year FRE. increase a similar high-teens based a dividend dividends this quarterly we comparison have would percentage For our quarterly represented approach those and in adopted

that future quarterly we year's our FRE. grow expect We as increase will dividends

CFO, now I'd call over like to Randel. pass Johnny to the our

Johnny Randel

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

advisory fees as AUM as and activated revenue The prior quarter. driven funds we For were the earned in continued $XXX year well that XX% growth management comingled the year, million, increase last from fundraising from up across the structures. deployment quarter, over and is commercial of fee-earning by

in of an had of on impact margin quarter. FRE margin FRE fees basis Retroactive XX% a XXX generated the quarter this the for positive We points.

impact our margin year-over-year and the for up points up was Excluding reflected hiring activity. retro compensation points limited basis XXX Cash quarter relatively the basis XX sequentially. from fees,

quarter in compensation pick expect We some hiring. expense incremental from next up

G&A VC which largely included previous investor by We travel our events. G&A conference. a in expenses and driven will from saw the annual vary to related quarter-to-quarter decline quarter,

realized the we the the Gross incentive consistent have which is seen transactions quarter, muted and in of for but year-over-year $XX generally performance level with million were both market. fees and sequentially down

generally to signs takes As of few for so will quarters. Scott is modest It a next through quarters improving. environment transactions the remain realized seeing several work the performance are that we some expect mentioned, the pipeline, fees we realization that

generally on reminder, exit do control a of we the As timing not our investments.

adjusted Slide to prior Since in growth by XX% XX. performance revenue management revenue fiscal the of XX% the year, annual fees per share. share gross per compounded in share advisory grown offset an XX% rate. and per was Adjusted which by XXXX, result realized to decrease we is share, relative down Moving per have fiscal fees XX%

profitability and growth Shifting to fees. XX, increase The on driven was XX% in year-over-year. grew earnings we advisory Slide management our by fee-related per by share primarily

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

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

Moving increases XXst. on to ended underlying for driven million, XX. finished March $XXX valuation Slide the balance from quarter accrued the Net X% period previous up sheet carry quarter, at the the by

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

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

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

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

Operator

first line Your gentlemen, comes of now question you. conduct and Ben the [Operator Budish Barclays. Thank Ladies from session. we from question-and-answer Instructions] the will

is now open. Your line

Ben Budish

thanks and Scott, question. evening, taking for good bit you about could talk Hi, a I was wondering the little if more secondaries.

a remind Can right lot for how I right there's do and you momentum you or GPs it have you curious you that market number LPs like sounds the of funds the there. can now go? know see desire it a opportunity us big years? where to of now. the the next in of is scaling based Just that on over several do you transact, just and think How

Scott Hart

a opportunity the is topic the And, in Thanks real secondaries Sure. equity, and we've the obviously, venture, expansion estate of but asset that quarters, also to for only been last the opportunity private it the really as not relates infrastructure exists secondaries the question. about the across as Ben over this talking well us credit it classes. for as as of private number

We asset classes but haven't number, secondaries within is importance. of of certainly increasing total AUM an exact disclosed the each

was you When equity, at private fund. vehicle of the billion previous a our sort look secondary flagship fund $X.X

fund to fund secondaries being with have venture estate as in capital with prior well. the largest continue billion you as special We approximately fund, $X.X our mentioned the situations, secondaries and market real

that well think think particularly to remarks, and our important for business part we relationships again, both increasingly So, I positioned one we in during capitalize an to market our us the and the prepared the continue are I mentioned that on. as of with LPs, and GPs given positioning

top think here, was a still the has sellers. the of bid-ask a half slightly to what's disconnect exists in deal there's and versus spreads buyers what Clearly, between some about year, if active We've the the obviously, in has year for relative time but that you talked of bit activity funnel, hitting down last about of first the been probably of period quite closed. between which

think I that's closing.

transact part more stabilizing and we've of year, stabilization private market. a is in with this the even to equity, think some the confidence which really valuation secondary ourselves like and valuations of bit in seen particularly in I a across give to QX will venture extent what this space buyers QX

Ben Budish

wondering Great. Maybe question. but LPs effect. math ago follow-up happening the on really kind maybe the six returned. That’s It based kind shifted of waiting in to be issue has was take having or similar, your to a like It are get investors there? you from it public effect last extent over waiting be they're just about or still time capital story nine for sort with your GPs for bit of of what like many What the sit little to it's the months, bit so an kind what are somewhat to and trouble, in was helpful. seat, sort high-level a seems But is little many of months to confidence? sort returned sounds thoughts one since more a the their around markets still denominator portfolios. in more rise middle story maybe capital of just like does the of LPs, the of the denominator of were

Scott Hart

in slowdown then XXXX. that the the realization up in fact the market That's, rapid contributing was the the certainly over-allocated second takes Yes. the held and denominator, to of years, LPs rise investment public this the has just the the being the several markets starting also in half a public half fact particularly It's also actually a valuations of good and the over we've to really off. But compared that it during private reasonably talked pace last first wasn't past market well the pressure that in question. numerator year, about activity but the some

those still issues And exist. numerator, the impacting all so

would the the pressure I completely that that the markets of say. woods. public some It doesn't off. LPs recovery of take the are out in mean

would when reason the remarks the being markets pressure it and immediately off. I they're we public budgets. bit slamming their think don't in didn't our just again, of the budgets But I prepared way an And of takes patient. LPs brakes. see resetting used same once reverse a part when the declined for say, Well, we that we again, term or in on is of see the that is. the think immediate public the in markets recover LPs that goes resetting that

Ben Budish

very much it, taking Got for helpful. questions. Thanks the so

Operator

Worthington next from question from comes Your the Ken of line JPMorgan.

line is open Your now

Ken Worthington

Thanks afternoon. taking good Hi, questions. for the

pare I'm it for the you going I'm up the and about up, follow sure so to to screw tell remarks I'll SPRIM in question. First, prepared where Scott, I'm talked and this and back wrong I'll

documents daily signed. ticker be you with need a I to subscription it has said NAV doesn't Now has think registered NSCC,

me are here end the wrong, what guess So correct what for I investors? after then I'm two, one, implications here the one, I'm well is, are as sort implications what wirehouse as broadening for this end really of not. out like regional the where me. could seems And distribution? build this distribution be but deal. and flesh a RIA Maybe it's of help It out for big But

Scott Hart

I'm on during prepared question Thanks, there. bit more going Ken. on And remarks to Jason, commented ask the detail specific while to I in your comment actually a

Jason Ment

Sure. Thanks, Ken Scott. and

an the paperwork that's deal or ease-of-use on fund, that's it think a perspective is an using our like using From buys credit we IBD RIA from literally big approved a custodian short perspective. any ticker, answer. required So, it's not a mutual the just and investor screen the

of in for discretionary ease with into by each accounts And of built their clients, of allows client them a -- to down matter go book RIAs entire buy the fund So the their buy agreements of it use instead down minutes, kind individual is out subscription to through profound. that all. it having have

improved. of really the going we're So, to and it's ease if a use lot --

that what managing our That to access investors could And that it accredited when for accessing, was investor single have had in the we importantly, we've with to ticket capital private to subscription XX- been easy a US-based and eliminate And to a investors. swath with fill could XX-page for that or now been wide calls, not able of dealing out goal have think it's SPRIM, provide was overcome start compliance tax K-Xs. been But the about that the and markets. hurdles schedule to either. agreement,

Ken Worthington

Are I'm to where of works today the the think is timing it's you no the kind said now point to missed already like that again, is NAV right live. the subscription I before. element I timing? races, so next then What this this is months? daily the six already And or its documents we sure, way off is Okay. What kind over of the in something here?

Jason Ment

Yeah.

middle went of the it to that it is So wherever using has month. works the way, ticker. for approve live are the And process custodying you last custodian

so you them on a continuing through way a that working get to are working lot way know as out of So our we're there -- site got custodians and We've custodians through site. the effort. our on far there couple

And those that there we'll groups is self-custody and a use then those who and to have separate third-party take-up what custodian, there. are from apart see the

expect the So anytime to we is away to perspective. of suitability the a expect for from that belts we use don't swath, their that ticker suspenders and fund. will be for subscription certain will agreement a the accessing always soon agreement the going ensure there But want to clients for choice do subscription be large a and groups method

Ken Worthington

you about helpful. one it it's all there? one, maybe wirehouses more sort the this and for but or your maybe wants helpful RIAs side I of other one does for of of be regionals that's sort last build-out Then the feels the the and where one may subscription. wirehouses assume, helpful talked How kind better impact on like this the than it's

sort distribution So, any channels? difference between of

Jason Ment

Yeah.

this a all. The but a IBDs higher RIAs distribution I think percentage be difference between of some probably will think using not the the there channels. this, We IBDs wires. is or at definitely than the will the use

Some may abbreviated an use also process. documentation

benefit. of sub for that perspective. we terms from holdout the instead of wires complete suitability the there's to And benefit wanting the ticker a doc not will with but expect the process some traditional sticking last be use So in the

Ken Worthington

Okay. Thanks.

Jason Ment

like terms the playing this in amongst of bit players bit. scale the a of of the a think So equalizing field capital

Ken Worthington

much. very you Thank Great.

Operator

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

now open. line Your is

Adam Beatty

deployment. have ask down quarter. the good may there. Great deployment backlog Thank capital afternoon. level edged which sort particular may you, wanted a I Looks that backlog in and have to nicely for the bit just have of that -- undeployed like is about to in of little up ticking of

would in wondering just the current and deployment period? of seeing whether fund shorten deployment or mix you're terms So, the about environment either and undeployed the lengthen what Thanks. capital something in that profile there's

Scott Hart

Sure. Thanks Adam.

talked So about five-year be to fee-earning always type undeployed we've period. capital is likely of three over to deployed a

the that responsibly have case. think gives to still the think cycles us market given throughout I flexibility And of that deploy remains I range we deal flow invest enough here. time responsibly that type and

to I here. a the on slowed right pick deployment quarter fact think are up quarters in bit this that the over has not but few you only last

I which down haven't don't to marketplace given say, any as on down major extent has And what of broken precisely think our would that invested some gone accounts comes the capital, more on in we come pay that to broadly. surprise will while of a what actually it's about the where a comment of secondary towards more what's between heavily much is made a funnel strategies weighted some bit the is bit our hitting earlier and there's of closing. top versus co-investment the I like I difference probably

I We the seen the significantly to think And of nice in pace be activity up up. certainly pick going a top hitting of funnel and year-over-year. driver year of that's have second a deployment to starting investment this the uptick pretty quarter

we've are deal So late. on calls of the to cautiously in talked last few that but the we continue pickup given be seen as we've optimistic flow patient, about

Adam Beatty

sense. of channel really along then daily that. many for turning just interesting back Got with And Thanks for SPRIM NAV it. lot and come on that a the detail, features Scott. the the makes of wealth the That to

So, I think that's really there. a something breakthrough of

information effective And or that retail considering channel. has or of the you gaps just other advantage daily deploying given a of but also of retail how kind might conceptual monitoring the One those resources components product, Thanks. distribution breaks StepStone NAV the be is of education real-time that know availability. deploying data will But of in obviously, one as which you the information and fill of of major wondering process there. the into forms wealth understanding into

Jason Ment

Jason. I this think – is Yes,

to them SPRIM They've in we that's try with in currently. and just you're they but technology development SPRING partner with to to we strategically papers development right that's transparency meet and the where try and the available partner access also clear, the terms to firms to wealth that, an the as to like try put not to materials addition work in each to daily that it's access the But fulsome a addition got be ticker management of that on we In a portfolio and to we well more solutions are. them partner of may differing educational data with if seek helpful. needs research out way our them have

So I us think market that's manager, do solutions away unlike from not I we of helpful quite technology and they're well. as but a think on things monoline can – like well have data available resonated and that a perspective lot that doing a we only the in be

Scott Hart

actually The partnerships, at a always I towards very annual our types that would our communication of side a relationships where we've hosting the even far relationships institutional sessions. in earlier where Academy stretch on transfer add session only with this once the clients, just clients meeting. that knowledge this we're for some institutional We education close StepStone close private think is our training checking year on year an clients. first for and I very the of had thing launched us, have equity approach the in We're given not with side to is not our we

roll looking broadly well. more so ways as And that now private to out wealth for to the space

Adam Beatty

Yes.

great. guys. there. That's Thank over cross So you, there's potential

Operator

comes the Goldman Alex Your Blostein line from Sachs. question of from next

open. now is line Your

Alex Blostein

Hey, guys.

questions the of wealth maybe channel. Just more around couple a on building

were think that $XXX you I have is you sales pickup a doing. nice July mentioned million, running at guys which where gross been from about in

So other higher intermediary? to just expansion structure platforms, recently folks what has if ability entail about direct plans obviously the or or as existing words, offset sales of Thanks. it be with of in kind new you need able you're same-store would would to and through on into think that you incremental Fidelity that still sort the clients that other providers? the additional Schwab So financial still advisers the new for buy it's again is platforms can And this of distribution, in would spend the been a the up source seeing? new from or buy books to also the minute that

Jason Ment

Thanks, Alex.

couple a things. of So

the mostly In come RIA post-period drove at ticker terms some platform on we are flows saw starting the we on IBDs We SPRIM. think deeper that the from what I those channel. these we've sure also and flows stride. the uptick, of and into into but where wires ramp-up hit of the we been the come that therefore play things increased But saw saw phase saw it's kind for to been in it book

pretty So it was a both broad-based and up tick across SPRIM SPRING.

So really that. happy to see

in And you the will the platforms. direct-to-consumer of other well things channels terms like terms self-directed ticker of this channels do different of We mentioned kind then we to access, as mean that in what in agree. kind IRAs of buy allow could of fund folks think direct variety more into as the on including a

Alex Blostein

it. the structure economics. ago, the got of correctly Got terms where maybe I some recall restructured a channel, just the guys two have Great. it in if team of of And the then or wealth quarter you

maybe line that of the the channel, So in of terms incremental what ultimately be drops will a to quick to down management fees shareholders? reminder through just the the coming StepStone bottom

Jason Ment

if So expenses and going Group XX-XX roughly private XX% top management funding XX% to team. fee fees, StepStone you in those then a there's line the the of wealth take with split the

Alex Blostein

Got it. Great.

you. Okay. Thank

Operator

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

open. now is line Your

Michael Cyprys

talk getting you credit. ask can a was your credit of I you the place the able to might hopefully, XX could to accelerate in the attention wanted the and are of And next some take It's quarter. I lot given be over sector. the some the about that evening. initiatives contributed about you in about Hey, of steps private good you have private marketplace growth how challenges franchise of what just to hoping in banking talk to the months. some

Scott Hart

Mike question. for the Thanks Sure.

talk faster-growing asset to I the contributor quarter, only the XX and an you not hear about happens all-weather about enhance Look classes think either quite in is and talk we months the particularly for beyond things think diversify fact returns. you a to that, time last really your one team but channels when sourcing of view strategy when been the your as private debt the from you this there us. to opportunities debt a platform of bit what time and/or allocation and our has private over meaningful the to one as direct are lending, us core

back at and a an but things to credits, returns the debt, looking do also that estate at sourcing distressed of things. opportunities couple one infrastructure think only diversify the opportunistic looking opportunity to the has of is happened not and by be also opportunity here. regional whether want there enhance will of really We crisis on down I those the an and to road real more expect potentially corporate banking and

has here, of garnered or performance and COVID, of we've XX, has But the amongst attention battle-tested just of where protection sort attention think in as LPs. of been whether just last on downturn given this core through well double-digit think has itself been sort focused more and as downside gross the matured sort a direct asset rates I class tech-driven months the over low And and bit really also the that seeing really a the being yields. more the lot rise allocation lending asset recent of XX has strong the base proven it GFC, lot was seen has a I

risk-reward so as eyes our the LPs of attractiveness and And of up our the strategy. to and opened the clients really the attractive it's

area from that seen that a out co-invest or of an opportunities have the form be In additional opportunity. real a team of the buying even over capitalizing are That's business need built going terms been in decline banks, sizable GPs, steps private in of of look, activity deal more I the some traditional loans secondaries think, I XX with there secondaries. growing But by the be and volumes equity driven It's taken opportunities and think we've secondaries to today. the that to meaningful co-investment sizable the platform. months either portfolio on LP we've last been and or

some of be avenues to the going are going those here. growth think I forward so And

Michael Cyprys

question Great. And then just on a retail. follow-up

funds. each you so those on in far us do wires the And are three on distribution their mentioned where How two months? you see on? where are of that each funds -- just how think update them that billion platforms? phase across each getting of XX expect of you on many are in be or $X.X many Can I to or

Jason Ment

The a what a handful we XX-plus IBDs. this a one on a is adopting RIAs Mike. we are on bit earlier see RIA actually is fund SPRIM, in than saw generally is IBDs expect what SPRING first second a in Thanks platforms, which to XX-plus would at wire. family. with bit family point, of and SPRIM over XXX fund SPRING and IBDs The Sure. after

that's So been positive.

SPRING Conversations initial very continuing an on and are wire SPRIM wires and trending for for additional positive.

distribution is different which So is the look got U.S. not building with each syndicate nice but out fund as U.S. which underway the family well the fourth wealth is a pipeline of here by platforms. can't we we've that forget non-U.S. well a for important number outside just the very pillar, and way, that in

Michael Cyprys

could Great. sneak I one final just Thanks one here. that. If for in

versus volatility perhaps of the marketplace to of just Just some for you smoother about innovation of bit you terms some on How customer? less of tackle just had marketplace? or in sort to brought why products the a of in more NAV. cons thought that and couple daily to ride you the a there that hurdles of of you years when sort now pros the on Can a ago? And talk about had the the these bring little that

Jason Ment

think be Scott so, in the amount data initial able one order to linchpins on solution platform. a is the through tremendous that Look We like to Sure. deliver the of of flowing mentioned this.

modeling be into this. that and is second the data our implement just up finally, to science reporting on homegrown to this. we've with spy come The system and and able team the data last team and our were process that actually really got that for all monitoring able our of across to technology of tremendous software the analytics around in team integrating all piece investing then of our how And is to the reporting implement

a of something deliver this lot all everybody vendors of all think administrators groups the took so are side able like So high, It meaningful to legwork I be for way. a to And the in hurdles with on been far on with from experience, this. feedback et to the fantastic terms like get has cetera of the in user auditors of the the our channels.

Michael Cyprys

Great. that. for Thanks

Jason Ment

just to it's point. this easy. time long not Like to now? Why get taken It's a

Michael Cyprys

you. Thank Super.

Operator

of from from Dunn Evercore question next ISI. the comes Your John line

open. now is line Your

John Dunn

guys thank Hi, you. and

any the of gross about that there? then in US. talked quarters? half from geographies coming kind us remind Can You stuff how to maybe compares past there Was of kind overseas? the And idiosyncratic you inflows strongest of

Scott Hart

breakdown. Sure. our roughly outside the remainder typically prior always when to business the US. US comparison the just the that I look exact as advisory overall been to has quarters, the fees, and mean, management in haven't broken the of and But of at we you the in geographic out the it breakdown XX% and relates

to from look above-average coming by things And And of North so closed you can number get the is one America. that accounts a we separate the combination was an that of being quarter. a sense contribution during that driven

of And that that that geographic balanced the during various know geographies. beyond from separate as funds timing a our quarter-to-quarter. other can as closing closed closings a from during well standpoint of say quarter vary have across of the I contributions Happen different as few to the some quarter. the sizable fairly on co-mingled you accounts would had

without significant leave outside there's getting I'd of probably highlight sure a that the So that. would US been not geography contributor the but maybe single it more I'm specific than more broadly would most there. we have Europe

John Dunn

about we demand far seeing on Got strategies least your you you demand? where where talk to you as think estate? you. And real just maybe are touch the and are for real estate as Can most the

Scott Hart

news Jeff coming Day, during spent think Jeff Head Yeah. not time our deal seeing Well, investment most of is for and he has a couple still Day demand quite will Real has subdued us strategy it's where are ago. opportunity the is secondaries volumes activated today. environment. flagship talking the is positioned months that in Estate refinancing the investment about the of activity bit somewhat real situations a been for just It well demand coming look that of is thinks talked wave that we as And a estate for is yet there during we're our Giller, the of Investor as our that very today. I strategy. our ultimately catalyze strategy Investor That think special good about that

say we're most demand the area the So estate that's significant that seeing side. real the I'd on

John Dunn

Thanks very much.

Operator

no are questions will continue. further hand There Scott I to at over Please time. now this Hart.

Scott Hart

time look and everyone We your updating quarters. forward today. Great. very you for Thanks much. in future attention Well, to thanks

Operator

your conference call. Ladies you and participation. for gentlemen, this today's Thank concludes

You may now disconnect.

StepStone (STEP) 3 Aug 232024 Q1 Earnings call transcript