StepStone Group Q1 2026 Earnings Report

StepStone Group EPS Results

• Actual EPS: $0.40
• Consensus EPS: $0.42
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: $0.48

StepStone Group Revenue Results

• Actual Revenue: $237.47 million
• Expected Revenue: $238.99 million
• Beat/Miss: Missed by -$1.53 million
• YoY Revenue Growth: +95.40%

StepStone Group Announcement Details

• Quarter: Q1 2026
• Date: 8/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 5:00PM ET

StepStone Group (NASDAQ:STEP) is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, 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, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit 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. 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.

StepStone Group Q1 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: GAAP net loss of $38 million, or $0.49 per share, was reported for Q1, reflecting lower performance‐related and retroactive fees.
• Positive Sentiment: Fee related earnings rose 13% year over year to $81 million with a 38% FRE margin, and core FRE excluding retro fees grew to $79 million.
• Positive Sentiment: The firm added $8.7 billion of gross AUM and $6 billion of net fee‐earning assets, lifting total AUM to $127 billion—a 5% sequential increase and $27 billion growth over 12 months.
• Positive Sentiment: The private wealth platform surpassed $10 billion in AUM with over $1 billion of subscriptions this quarter and now partners with more than 550 distributors.
• Positive Sentiment: A new framework agreement with FTSE Russell will develop private asset indices, initially generating licensing revenue with potential for long‐term strategic asset management offerings.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Fiscal Q1 StepStone Group Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone.

[Operator]

You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Seth Weiss, Head of Investor Relations. Please go ahead.

[Seth Weiss, MD - Corporate IR at StepStone]

Thank you, and good evening. Joining me on today's call are Scott Hart, Chief Executive Officer Jason Ment, President and Co Chief Operating Officer Mike McCabe, Head of Strategy and David Park, Chief Financial Officer. During our prepared remarks, we will be referring to a presentation, which is available on our Investor Relations website at shareholders.stepsonegroup.com. Before we begin, I'd like to remind everyone that this conference call as well as the presentation contains certain forward looking statements regarding the company's expected operating and financial performance for future periods. Forward looking statements reflect management's current plans, estimates and expectations and are inherently uncertain and are subject to various risks, uncertainties and assumptions.

[Seth Weiss, MD - Corporate IR at StepStone]

Actual results for future periods may differ materially from those expressed or implied by these forward looking statements due to changes in circumstances or a number of risks or other factors that are described in the Risk Factors section of Septun's periodic filings. These forward looking statements are made only as of today, and except as required, we undertake no obligation to update or revise any of them. Today's presentation contains references to non GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, our presentation and our filings with the SEC. Turning to our financial results for the 2026.

[Seth Weiss, MD - Corporate IR at StepStone]

Beginning with Slide three, we reported a GAAP net loss attributable to StepStone Group Incorporated of $38,000,000 or $0.49 per share. Moving to Slide five, we generated fee related earnings of $81,000,000 up 13% from the prior year quarter, and we generated an FRE margin of 38. The quarter reflected retroactive fees from our special situation real estate secondaries fund and from our infrastructure secondaries fund. Retroactive fees contributed $2,900,000 to fee revenues, which compared to retroactive fees of $19,100,000 in the first quarter of the prior fiscal year. We earned $48,500,000 in adjusted net income for the quarter or $0.40 per share.

[Seth Weiss, MD - Corporate IR at StepStone]

This is down from $57,200,000 or $0.48 per share in the first quarter of the last fiscal year, driven by lower performance related earnings, lower retroactive fees, but offset by higher core fee related earnings, which represent FRE excluding the impact of retroactive fees. I'll now hand the call over to Scott.

[Scott Hart, CEO at StepStone]

Thanks, Seth. We kicked off our fiscal year with strong financial results and continued fundraising momentum. This comes despite a volatile market backdrop to start the quarter. Through it all, our LPs remain committed to the private markets and look for a trusted partner to navigate the evolving landscape. Capital market conditions have improved over the last several months with deal activity picking up, and our pipeline of investment opportunities appears healthy across strategies and asset classes.

[Scott Hart, CEO at StepStone]

Reflecting on our first quarter results, total gross AUM additions were $8,700,000,000 driven by strong inflows in managed accounts and balanced contributions across commingled funds in all asset classes. In private wealth, we generated another quarter of more than $1,000,000,000 in subscriptions. Market volatility surrounding tariff developments had a slight impact on industry wide private wealth subscriptions in April, but our flows quickly snapped back in May and June. We increased fearing AUM by $6,000,000,000 during the quarter, representing 5% sequential growth, bringing our balance to over $127,000,000,000 Over the past twelve months, we have grown fearing AUM by $27,000,000,000 driven by robust fundraising and deployment. Excluding retroactive fees, we generated strong fee related earnings of $79,000,000 and an FRE margin of 37%.

[Scott Hart, CEO at StepStone]

On a reported basis, we generated FRE of $81,000,000 Retro fees moderated from previous levels, as we largely wrapped up our real estate and PE secondary funds in the last fiscal year. Performance fees were relatively light this quarter, due in part to the timing of transaction closes, but we have visibility for stronger performance fees in the second fiscal quarter, and we see capital market trend to support it for performance fees going forward. David will speak to the realization environment in more detail. Finally, in June, we were excited to announce a framework agreement with FTSE Russell to jointly develop private asset indices, data, and analytics products. Private market benchmarks have historically suffered from incomplete, out of date, and non standard performance measures.

[Scott Hart, CEO at StepStone]

Our clients are seeking reliable means to monitor performance, manage risk, and make informed decisions. This collaboration aims to enhance transparency and benchmarking capabilities in private markets. It envisions enabling asset owners to benchmark private market portfolios within a total portfolio framework. We're still in the early stages of product development, so we expect the near term earning contributions to be modest, with revenue driven largely by licensing fees as the indices are distributed. However, we see a long term potential for asset management offerings that reference these investable indices, servicing institutional and private wealth investors alike.

[Scott Hart, CEO at StepStone]

We believe private asset indices can play a critical role in evolving areas like model portfolios and private wealth and target date funds in retirement. Additionally, we believe this partnership will add to our brand equity. The forthcoming indices are expected to bring visibility to the StepStone name and help validate StepStone as a leader in private market solutions. With that, I'll turn the call over to Mike.

[Michael McCabe, Head - Strategy at StepStone]

Thanks Scott. Turning to Slide eight, we generated over $27,000,000,000 of gross AUM inflows over the last twelve months. Approximately $18,000,000,000 of these inflows came from separately managed accounts and over $9,000,000,000 came from our commingled funds. During the quarter, we generated nearly $9,000,000,000 of gross additions including $6,500,000,000 of managed account AUM inflows and over $2,000,000,000 of commingled fund inflows. Notable commingled fund additions included more than $400,000,000 in our corporate direct lending funds, about $200,000,000 in our infrastructure secondaries fund, a $100,000,000 final cleanup close at our special situations real estate secondaries fund, and more than $400,000,000 in the first close of our multi strategy global venture capital fund.

[Michael McCabe, Head - Strategy at StepStone]

We activated this global VC fund in July, so those dollars which are in our undeployed capital balance as of the first quarter will move into fee earning capital in our second quarter. We are in market with our private equity co investment fund and we anticipate a first close at our second fiscal quarter. Turning to our evergreen fund platform, we generated nearly $1,200,000,000 of subscriptions in our private wealth suite of offerings, growing the platform to nearly $10,000,000,000 as of the June. We are thrilled to have officially crossed the $10,000,000,000 threshold in July. Additionally, we have grown our evergreen non traded BDC S Cred to greater than a billion dollars in net assets.

[Michael McCabe, Head - Strategy at StepStone]

We have expanded our private wealth platform to over 550 individual distribution partners. And among our partners that have been with us on the platform for at least a year, 50% are selling more than one evergreen product. Slide nine shows our fee earning AUM by structure and asset class. For the quarter, we increased fee earning assets by $6,000,000,000 Our undeployed fee earning capital or UFEC grew by over $4,000,000,000 from the last quarter to nearly 29,000,000,000 driven primarily by strong managed account fundraising. The combination of fee earning assets plus UFEC grew to $156,000,000,000 which is up $10,000,000,000 sequentially and is up $28,000,000,000 from a year ago.

[Michael McCabe, Head - Strategy at StepStone]

This translates to a healthy 20 annual organic growth rate since fiscal twenty twenty one. Slide 10 shows our evolution of fee revenues. We generated a blended management fee rate of 64 basis points over the last twelve months, down slightly from the 65 basis points in fiscal twenty twenty five driven by the moderation in retroactive fees. Finally, I am pleased to announce that we are raising our quarterly dividend by 17% from $0.24 per share to $0.28 per share, reflecting strong and sustainable growth in our fee related earnings. I'll now turn the call over to David to speak to our financial highlights.

[David Park, CFO at StepStone]

Thanks, Mike. Turning to Slide 12, we earned fee revenues of $213,000,000 up 19% from the prior year quarter. We achieved this increase despite significantly lower retroactive fees in the current year period of $3,000,000 versus $19,000,000 in the prior year quarter. Excluding retroactive fees, fee revenues grew 32% year over year. The increase was driven by growth in fee earning AUM across commercial structures, a higher blended average fee rate and strong advisory fees.

[David Park, CFO at StepStone]

Fee related earnings were $81,000,000 up 13% from a year ago. FRE margin was 38% for the quarter. Normalizing for retroactive fees, FRE was up 45% year over year and core FRE margin was 37%, expanding by more than 300 basis points from a year ago. Shifting to expenses, adjusted cash based compensation was $96,000,000 This is up from last quarter's $86,000,000 The increase reflected the impact of our annual merit increase, which took effect on April 1, headcount growth and unfavorable FX due to the weakening of the U. S.

[David Park, CFO at StepStone]

Dollar. As we mentioned on the last call, the prior quarter's compensation expense included a favorable adjustment to the bonus accrual. The cash compensation ratio adjusted for retroactive fees was 46%, consistent with the expectations we set out on our last earnings call. This is a fair cash compensation ratio to model going forward, understanding that there may be variability quarter to quarter. Adjusted equity based compensation was $4,000,000 up $1,000,000 relative to the prior quarter.

[David Park, CFO at StepStone]

The increase primarily reflects the layering of a full year cycle of RSU vesting from when we first started to issue annual equity incentive awards in 2021. General and administrative expenses were $31,000,000 up $5,000,000 from the prior year quarter, but down slightly sequentially. Gross realized performance fees were $25,000,000 for the quarter and $13,000,000 net of related compensation expense. This included realizations from the pipeline of deals announced in late twenty twenty four and early twenty twenty five, which we had mentioned on the last call. Several of those transactions also closed in July, which generated nearly $35,000,000 of gross realized performance fees since the end of the quarter.

[David Park, CFO at StepStone]

While the timing of performance fees is difficult to predict, the pipeline of transactions that will generate future performance fees continues to grow and the market environment for deal making has appeared to recover from the tariff related pause in April. Adjusted net income per share was $0.40 down from last quarter and last year as higher core FRE was offset by lower retroactive fees and lower performance related earnings. Moving to key items on the balance sheet on Slide 13. Net accrued carry finished the quarter at $783,000,000 up 6% from last quarter. Our net accrued carry is relatively mature.

[David Park, CFO at StepStone]

Approximately 75% are tied to programs that are older than five years, which means that these programs are ready to harvest. Our own investment portfolio ended the quarter at 300,000,000 This concludes our prepared remarks. I'll now turn it back over to the operator to open the line for any questions.

[Operator]

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star, 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star, 11 again. Please stand by.

[Operator]

Our first question comes from Ben Budish from Barclays. Please go ahead.

[Ben Budish, Director at Barclays]

Hi, good evening and thank you for taking the question. I'm wondering if you could talk a little bit more about the index opportunity, the partnership with FTSE Russell. Scott, I know you mentioned in your prepared remarks, it will take some time for this to have a more meaningful impact. But what are sort of the next steps? Are you onboarding clients that want to use your benchmarks?

[Ben Budish, Director at Barclays]

What are the things we should look for in the interim before there's maybe a more meaningful P and L impact to know that you're sort of on the right track?

[Michael McCabe, Head - Strategy at StepStone]

Okay, great, Ben. This is Mike McCabe here. Thanks for the question. And yeah, we were really excited to announce a framework that we signed with FTSE Russell back in June, which is really gonna be the beginning of a launch of a series of indices that will track the private markets across a number of different asset classes. And what's unique about the indices that we're developing with Putsi Russell is that there'll be daily indices in addition to the quarterly lagged indices that many are used to seeing.

[Michael McCabe, Head - Strategy at StepStone]

I think what you'll see is later this year will be the launch of the first of a series of these indices that will be distributed across the FTSE Russell and Stepstone client base. And the revenue opportunity there initially will be simply the licensing revenue associated with the distribution of these indices. We expect it to be fairly modest at the beginning, but as the adoption rates grow we expect it to grow as well in addition to developing other indices that go beyond maybe the first two asset classes we'll focus on might be private equity and infrastructure and then we'll go from there. I think longer term it's reasonable to expect that as these indices become market leading and the adoption rates pick up, that there could very well be some asset management solutions that we will develop that reference these indexes as well. But I hope that answers your question Ben.

[Ben Budish, Director at Barclays]

Yeah, that was great. That's all for me. Thank you very much.

[Michael McCabe, Head - Strategy at StepStone]

Thanks.

[Operator]

Thank you. Our next question comes from Kenneth Worthington from JPMorgan. Please go ahead.

[Ken Worthington, Financial Analyst at JP Morgan]

Hi, good afternoon. Thanks for taking the questions. First, Evergreen Products doing great. I would say Spring has been the monster here. I sort of get it.

[Ken Worthington, Financial Analyst at JP Morgan]

But maybe talk about the appetite here for venture and growth and how and maybe why this product is doing so particularly well. And then maybe Credex seems to be finding its footing. So maybe next talk about that and then I'll wrap everything into the same question. Talk about the product roadmap. Where are you seeing appetite now for the wealth channel?

[Ken Worthington, Financial Analyst at JP Morgan]

Where is this driving you to look next in terms of product development?

[Jason Ment, President & Co-COO at StepStone]

Thanks, Ken. This is Jason. Starting with Spring. First off, I'd say this is a one of one product. And so for those in the wealth channel looking for diversified exposure to venture growth, Spring is the answer in the marketplace.

[Jason Ment, President & Co-COO at StepStone]

The reputation of our venture and growth team, dating back both on the StepStone side and preexisting through the Greenspring acquisition, is a market leading franchise that's been active in the wealth channel with closed end drawdown funds for quite some time. So we're a familiar name, particularly in this space. And I think that is a good reason why you're seeing the activity, particularly as overall, there's a lot of attention on the innovation economy, over time, whether that be AI today or, other areas within the software space in prior periods. So I think that it's a pretty easy explanation as to why spring has been such an attractive opportunity, not just with distribution partners directly, but also for inclusion in model portfolios. Credex, if we look at the day zero comparison in terms of the organic raise there as opposed to the one secondary acquisition we did earlier in the year.

[Jason Ment, President & Co-COO at StepStone]

The organic rates actually is tracking kind of right on top of the organic rates that we saw in the early days of S Prime and Structs and Spring. So we're happy with what's going on there. And the syndicate is building month by month fairly well. At this point, it's on just about 50 platforms today. So I think it is, it's not kind of outperforming what we saw with the prior funds and maybe we would have hoped for that, but it is building.

[Jason Ment, President & Co-COO at StepStone]

Obviously the credit landscape is a bit more competitive. We do think that the multi manager platform and approach that we've got is differentiated relative to the direct lender BDCs. And we are confident that we'll find shelf space as things go on. In terms of the product roadmap, we do have a fund that is in registration now. It's not yet effective, so I won't go into too much detail, but it is we're looking at more of a pure play within the private equity arena.

[Jason Ment, President & Co-COO at StepStone]

And in terms of where we see activity from or interest from, from the wealth channel overall, we believe that the suite that we've got of different products is generally responsive to the needs that we're hearing today. And we have focused a lot on ensuring that the packaging is more finely tuned. And so that's why you will have seen that we lifted the accredited investor status, meaning remove the accredited investor requirements from S Prime earlier this year and Structs earlier this year as well to allow for easier inclusion and models as well as easier execution within the Wealth channel.

[Ken Worthington, Financial Analyst at JP Morgan]

Great. Thank you very much.

[Operator]

Thank you. Our next question comes from Alex Blostein from Goldman Sachs. Go ahead.

[Alex Blostein, Managing Director at Goldman Sachs]

Hey, good evening as well. Thanks for the question. A couple of follow ups related to Cath's question around wealth, a bit more, I guess, financially oriented. The platform is scaling really nicely, so maybe just a quick update. How much in profitability, net of non controlling interests, does the wealth franchise contribute to StepStone right now?

[Alex Blostein, Managing Director at Goldman Sachs]

And as you sort of think about sort of the P and L and maybe geography of some of the things, fee related performance revenues from some of these vehicles are likely going to become a bit more needle moving as the asset base gets bigger. Can you help us maybe understand how much that contributes today at sort of current performance, current run rate and whether or not you would consider reclassifying that like some of the others done in the space? Thanks.

[David Park, CFO at StepStone]

Hey, this is David. Thanks for the question. So right now in our press release, we do disclose the NCI impact of private wealth. So I think it's on page 11 or 12 of the press release. So it is contributing meaningfully.

[David Park, CFO at StepStone]

And if you recall, the private wealth business, all the rep 100% of the revenues, half of it goes to the business for StepStone, half of it stays with the private wealth business. You can track the assets, calculate the fee rates, you can estimate what the revenues are. But again, this has been a very profitable business as it continues to scale. Today, private wealth represents nearly 8% of our total fee earning AUM. So as you can imagine going forward, you'd expect it to continue to scale, have margin expansion and contribute more meaningfully to the bottom line.

[Alex Blostein, Managing Director at Goldman Sachs]

Right. And just the fee related performance revenue dynamic, like whether or not you guys would consider moving it around?

[David Park, CFO at StepStone]

Yeah, so right now, we embed the fee related, guess, fee earning AUM within the asset classes. We don't have any plans to separate that out at this time.

[Scott Hart, CEO at StepStone]

And sorry, I think this is Alex you're referring to some of the incentive fees as well coming off the funds. So as a bit of a reminder here on several of our vehicles including S Prime and Structs, we're not charging performance fees today. We've obviously talked in great detail about, for example, spring, which crystallizes some of the incentive fees, David remind me which December. In December. Think we, current plan is to continue to report that in a similar fashion to what we have done to date.

[Alex Blostein, Managing Director at Goldman Sachs]

Got it. Great. All right. Thanks so much.

[Operator]

Thank you. Our next question comes from Mike Cyprys from Morgan Stanley. Please go ahead.

[Michael Cyprys, Managing Director at Morgan Stanley]

Great. Thank you. Good afternoon. Just a question on retirement space with the executive order today that helps clear the path for alts to be included in the four zero one space. Seems like we may need some rulemaking perhaps to address some legal liability concerns here that plan sponsors have.

[Michael Cyprys, Managing Director at Morgan Stanley]

Just curious your thoughts around this, how you see this all playing out, timeframe here. It seems like target date might be the most obvious entry point. Curious your views around that, what strategies might make the most sense, to what extent partnerships be helpful here, how you're thinking about that and evaluating potential for partnerships.

[Jason Ment, President & Co-COO at StepStone]

Thanks, Mike. This is Jason. We were very happy to see the EO issue today. And yes, obviously expect that to lead to rulemaking. And hopefully that will help to clarify the administration's position on fiduciary duties within the original landscape.

[Jason Ment, President & Co-COO at StepStone]

I do wanna call out and thank our partner, Bob Long, the head of public policy committee for DeCalta, the trade association, advocating for DC and, to adopt all and, and the the great work that DeCalta did to help educate the administration on this topic. So we're very happy to see it come into frame. In terms of the timeframe for adoption, this is going to take time for it to be meaningful. That said, just in the anticipation of activity of the administration, conversations have been much warmer, I would say over the last four or five, six months than they were the year prior or prior to that. This is a space that we've been active in and paying attention to and having conversations and education about going on nearly ten years now.

[Jason Ment, President & Co-COO at StepStone]

And so we're certainly patient and doing the work required. In terms of where we expect to see activity, I think it'll be multifaceted. Certainly custom target date makes a bunch of sense. And I think that there are also other glide path structures where we'll see it come into frame as opposed to thinking that we're gonna see it as a menu item in the core lineup within a four zero one ks plan. And then finally, you asked about partnerships.

[Jason Ment, President & Co-COO at StepStone]

There are a number of different players and types of players in the retirement space. And we certainly would anticipate having to and desiring to partner with different members of the ecosystem in order to bring products to market. And those conversations have been going on for for some time.

[Michael Cyprys, Managing Director at Morgan Stanley]

Great. That's helpful. One just quick follow-up there. Just curious if you think existing target date funds and assets could be reallocated into alts in like one full swoop? Or do you think it's really more about go forward new flows into the retirement space?

[Jason Ment, President & Co-COO at StepStone]

Yeah. I think I think when you look at, flagship target based funds within the different providers, you have to look at them kind of fund by fund to see what, the eligible investments are. And I think the different shops that that sponsor those funds probably have differing views as to whether they need to issue a new series, and and move clients over or whether they, can fit it within, the existing product lineup. So I think you'll see a mix of both there.

[Michael Cyprys, Managing Director at Morgan Stanley]

Great. Thanks so much.

[Operator]

Thank you. Our next question comes from Ben Budish from Barclays. Please go ahead.

[Ben Budish, Director at Barclays]

Hi, thanks for taking my follow-up. I wanted to just ask more technical detail on your fee earning AUM disclosure and management fees. Can you please explain some of the recent FX benefit? Are there any dynamics where fee earning AUM benefits from FX but management fees do not? Just curious what's I mean, clearly, there's been some weakening of the dollar lately, but where are you seeing that benefit?

[Ben Budish, Director at Barclays]

And does it flow into management fees in the same way it does fee earning AUM? Thanks.

[David Park, CFO at StepStone]

Hey, Ben, this is David. Thanks for the question. Yes, we do have some FX exposure on fee earning AUM. We include that in the details in the market value and FX line. This quarter was about $800,000,000 benefit to fee earning AUM.

[David Park, CFO at StepStone]

And we do naturally have an impact on management fees as well. Most of our transactions are in U. S. Dollar, but when you look at across currencies, the FX does impact our revenues as also our expenses. If you look at this quarter, the movement in the FX rates cost about a $2,000,000 benefit to management fees this quarter.

[David Park, CFO at StepStone]

This was offset by slightly more than $2,000,000 in expenses. So our currencies are our P and L is naturally hedged, if you say. So the net impact effort was actually like $2,000 unfavorable.

[Ben Budish, Director at Barclays]

Got it. Very helpful. Thank you.

[Operator]

Thank you. Our next question comes from John Dunn from Evercore ISI. Please go ahead. John, are you there?

[John Dunn, Analyst at Evercore]

Yes, thank you. I was wondering, could you give us an update on the kind of geographical mix of fundraising and then the same question for the four different strategy areas?

[Scott Hart, CEO at StepStone]

Sure, thanks John for the question. So, from a geographic standpoint, you will recall that the business is a very global one today that continues to be the case. If I look at where we had particular success in the most recent quarter, I think the two geographies that really stood out for us would have been Australia and The Middle East. The balance across other geographies was pretty consistent with history. If you look at it slightly longer term time period, because things clearly bounce around from quarter to quarter over the last twelve months, I would have just added to those two geographies and would have mentioned Australia, Middle East and Asia as being strong drivers there.

[Scott Hart, CEO at StepStone]

Now clearly, given the strength of our private wealth business, which today is pretty heavily weighted towards The US, that's where much of our private wealth flows are coming from at the moment. If we look across asset class, and again, try to treat it similar, look at the current quarter and then look over the last twelve months. During the most recent quarter, the key drivers of, call it AUM additions, as well as fear earning AUM growth would have been private credit and infrastructure. You'll recall, real estate had just come off very successful fundraise for our flagship special situation secondaries fund there. So, in the current quarter a bit more muted there.

[Scott Hart, CEO at StepStone]

And again, if I look over the last twelve months, very balanced across all four asset classes with all four contributing meaningfully and growing nicely year over year here.

[John Dunn, Analyst at Evercore]

Got it. And maybe could we just get your comment on your outlook for capital markets activity in the '25 and into '26 and just your expectations for improved private equity demand?

[Scott Hart, CEO at StepStone]

Sure.

[Scott Hart, CEO at StepStone]

Look, I think what I would say is that either it's probably a point in time earlier this year, sort of pre liberation day where we would have thought that our activity levels would have probably outpaced 2024, which actually did turn out to be a fairly active year for us. It was our most active year investing across secondaries, across asset classes. It was probably our second most active year in private equity co investments. Things have clearly moderated somewhat, although we're seeing them pick back up again. And now I would tell you that our investment pace looks to be generally in line with last year as opposed to outpacing it.

[Scott Hart, CEO at StepStone]

Similarly, if I think about not just new investment activity, but realization activity, You heard us mention in the comments, the prepared remarks that obviously from a timing standpoint, we saw some things slip from this most recent quarter into next quarter. That's why we called out some of the realizations we've already seen come through there. We are seeing good activity on the potential exit front, but also seeing that sellers are trying to maintain discipline and not willing to sell at any price. And so, we're still seeing many situations where a GP runs an exit process and if they can't get the valuation they're looking for, they will elect to hold and continue to grow those assets. We're seeing similar trends with sellers in the secondaries market.

[Scott Hart, CEO at StepStone]

And so, I think we expect to see a recovery in activity levels, but still question marks as to whether we really see kind of breakout level of activity.

[John Dunn, Analyst at Evercore]

Thank you for the color.

[Operator]

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Scott for closing remarks.

[Scott Hart, CEO at StepStone]

Great, we just wanted to thank everyone for your time and interest in StepStone. And we hope everyone has a great rest of summer and look forward to connecting again next quarter. Thank you.

[Operator]

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

Participants

Executives

• Scott Hart, CEO
• Michael McCabe, Head - Strategy
• David Park, CFO
• Jason Ment, President & Co-COO

Analysts

• Seth Weiss, MD - Corporate IR at StepStone
• Ben Budish, Director at Barclays
• Ken Worthington, Financial Analyst at JP Morgan
• Alex Blostein, Managing Director at Goldman Sachs
• Michael Cyprys, Managing Director at Morgan Stanley
• John Dunn, Analyst at Evercore