StepStone Group (STEP) Morgan Stanley US Financials, Payments & CRE Conference 2024 summary

Business model and client solutions

• Acts as a solutions provider between asset owners and GPs, offering customized investment and advisory services across private equity, infrastructure, real estate, and private credit.

• Focuses on tailored separate accounts, commingled funds, evergreen products, and data solutions to meet diverse client needs.

• Maintains a listen-first culture, enabling high client retention and expansion into new asset classes.

• Serves a global client base, including sovereign wealth funds, pensions, endowments, and increasingly family offices and individuals.

• Geographic diversification is significant, with two-thirds of revenue from outside North America.

Growth strategy and financial performance

• Achieved over 20% growth in fee-related earnings and 100 basis points of margin expansion in the latest fiscal year.

• Targets to double fee-related earnings and reach mid-30% margins over five years, driven by managed accounts, new clients, commingled funds, and wealth management.

• 90% re-up rate with existing clients, with re-ups averaging a 30% increase in size, leading to a 120% net retention rate.

• $18 billion gross AUM inflows in the past year, split evenly between new and expanding existing clients.

Fundraising and market environment

• Fundraising backdrop has been challenging but is improving, especially in Asia, the Middle East, and parts of the US and Europe.

• Recent success includes closing a $3.3 billion venture capital secondaries fund, the largest of its kind.

• Fundraising market is bifurcated; strong demand for in-demand strategies and established track records.