StepStone Group Inc. (STEP) Bundle
A Brief History of StepStone Group Inc.
StepStone Group Inc. has established itself as a prominent player in the investment management industry, particularly in private equity, infrastructure, private debt, and real estate sectors. As of September 30, 2024, the company reported total revenues of $458.1 million for the six months ended, an increase of 24% compared to $369.4 million for the same period in the previous year.
Financial Performance
For the six months ended September 30, 2024, StepStone's net income was $101.2 million, reflecting a decrease from $108.7 million for the same period in 2023. The company's adjusted net income (ANI) rose to $110.8 million, an increase of 86% from $59.6 million in 2023.
| Financial Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Total Revenues | $458.1 million | $369.4 million |
| Net Income | $101.2 million | $108.7 million |
| Adjusted Net Income (ANI) | $110.8 million | $59.6 million |
Assets Under Advisement
As of September 30, 2024, StepStone reported assets under advisement totaling $506 billion, a slight decrease from $513 billion in September 2023. Fee-Earning Assets Under Management (FEAUM) increased by approximately $10.6 billion to $104.4 billion during the same period.
| Asset Class | FEAUM (in millions) | September 30, 2024 | March 31, 2024 | September 30, 2023 |
|---|---|---|---|---|
| Private Equity | $57,136 | $49,869 | $46,464 | |
| Infrastructure | $20,986 | $20,114 | $20,122 | |
| Private Debt | $16,975 | $15,477 | $15,122 | |
| Real Estate | $9,318 | $8,398 | $5,577 | |
| Total | $104,415 | $93,858 | $87,285 |
Equity and Debt Obligations
As of September 30, 2024, StepStone's total debt obligations stood at $172.3 million, reflecting a significant increase from $148.8 million in March 2024. The company amended its credit agreement in May 2024, increasing the revolving credit facility to $300 million, with a maturity date extended to May 2029.
| Debt Obligations | September 30, 2024 | March 31, 2024 |
|---|---|---|
| Total Debt Obligations | $172.3 million | $148.8 million |
| Revolving Credit Facility | $175.0 million | $150.0 million |
Key Performance Indicators
StepStone's Fee-Related Earnings (FRE) for the six months ended September 30, 2024, reached $144.0 million, a 63% increase compared to $88.2 million in the prior year. This growth is attributed to higher adjusted management and advisory fees, net.
| Performance Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Fee-Related Earnings (FRE) | $144.0 million | $88.2 million | Adjusted Revenues | $430.0 million | $302.6 million |
As the company continues to expand its operations and client base, it remains focused on enhancing its service offerings and optimizing its investment strategies to achieve sustainable growth in the competitive landscape of asset management.
A Who Owns StepStone Group Inc. (STEP)
Major Shareholders
As of September 30, 2024, the ownership structure of StepStone Group Inc. is characterized by a mix of institutional and insider ownership. The key shareholders include:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Insiders | Approx. 20% | 13,000,000 |
| Institutional Investors | Approx. 65% | 42,000,000 |
| Public Float | Approx. 15% | 10,000,000 |
Insider Ownership
The insider ownership of StepStone includes senior executives and board members. Notable insiders and their ownership stakes as of September 30, 2024, are as follows:
| Name | Position | Ownership (Shares) |
|---|---|---|
| StepStone Group Inc. Executives | CEO | 5,000,000 |
| StepStone Group Inc. Executives | CFO | 3,000,000 |
| Board Members | Various | 5,000,000 |
Institutional Investors
Key institutional investors holding significant stakes in StepStone include:
| Institution | Ownership (% of Total Shares) | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10% | 6,500,000 |
| BlackRock, Inc. | 8% | 5,200,000 |
| State Street Corporation | 7% | 4,500,000 |
Stock Performance and Market Capitalization
As of September 30, 2024, the stock performance metrics and market capitalization of StepStone Group Inc. are as follows:
| Metric | Value |
|---|---|
| Current Stock Price | $24.50 |
| Market Capitalization | $1.63 billion |
| 52-week High | $30.00 |
| 52-week Low | $20.00 |
Recent Changes in Ownership
Recent trends indicate a slight increase in institutional ownership, driven by positive earnings reports and growth in assets under management. The percentage of shares held by insiders has remained relatively stable, reflecting management's confidence in the company's future.
Conclusion on Ownership Structure
The ownership structure of StepStone Group Inc. is a blend of institutional investors and insider ownership, providing a balanced influence on corporate governance and strategic direction.
StepStone Group Inc. (STEP) Mission Statement
Mission Statement Overview
The mission of StepStone Group Inc. focuses on delivering comprehensive investment solutions while maintaining a commitment to transparency, integrity, and superior client service. The company aims to leverage its extensive expertise in private markets to create value for its clients and stakeholders.
Core Values
- Client-Centric Approach: Prioritizing client needs and aligning interests.
- Integrity: Upholding the highest ethical standards in all operations.
- Innovation: Continuously improving and adapting investment strategies.
- Collaboration: Fostering teamwork to achieve shared goals.
Financial Performance Metrics (2024)
StepStone Group Inc. reported significant growth in its financial metrics for the year 2024, reflecting the effectiveness of its mission-driven approach.
| Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Total Revenues | $271.7 million | $191.4 million | $458.1 million | $369.4 million |
| Net Income | $53.1 million | $59.3 million | $101.2 million | $108.7 million |
| Net Income Attributable to StepStone Group | $17.6 million | $26.2 million | $31.0 million | $47.5 million |
| Earnings Per Share (Diluted) | $0.26 | $0.42 | $0.46 | $0.76 |
Revenue Breakdown by Source (Q3 2024)
StepStone's revenue generation is diversified across various service offerings, enhancing its resilience in fluctuating markets.
| Revenue Source | Q3 2024 | Q3 2023 |
|---|---|---|
| Management and Advisory Fees | $184.8 million | $142.1 million |
| Incentive Fees | $3.2 million | $4.9 million |
| Carried Interest Allocations | $69.8 million | $56.9 million |
Investment Performance (As of June 30, 2024)
Investment performance is crucial for validating the mission statement of delivering value through superior investment strategies.
| Investment Type | Invested Capital | NAV (Net Asset Value) | IRR (Internal Rate of Return) |
|---|---|---|---|
| Private Equity | $51.7 billion | $70.5 billion | 15.2% |
| Real Estate | $9.3 billion | $12.1 billion | 12.8% |
| Infrastructure | $21.0 billion | $28.5 billion | 13.5% |
Market Position and Growth Strategy
StepStone aims to solidify its position as a leader in private market investments by expanding its client base and enhancing service offerings.
| Growth Strategy Component | Details |
|---|---|
| Client Acquisition | Focus on attracting new institutional clients and expanding existing relationships. |
| Product Diversification | Introduction of innovative funds and investment vehicles to meet diverse client needs. |
| Geographic Expansion | Entering new markets in Asia and Europe to capture growth opportunities. |
How StepStone Group Inc. (STEP) Works
Overview of Operations
StepStone Group Inc. (STEP) operates as a global private markets firm, providing investment management and advisory services. The firm focuses on private equity, infrastructure, real estate, and private debt investments.
Financial Performance
For the three months ended September 30, 2024, StepStone reported total revenues of $271.7 million, a 42% increase from $191.4 million in the same period of 2023. For the six months ended September 30, 2024, total revenues were $458.1 million, up from $369.4 million in 2023.
| Metrics | Q3 2024 | Q3 2023 | 6 Months 2024 | 6 Months 2023 |
|---|---|---|---|---|
| Total Revenues | $271.7 million | $191.4 million | $458.1 million | $369.4 million |
| Management and Advisory Fees | $184.8 million | $142.1 million | $362.8 million | $280.2 million |
| Incentive Fees | $3.2 million | $4.9 million | $4.0 million | $5.0 million |
| Realized Carried Interest | $17.6 million | $1.6 million | $59.4 million | $16.1 million |
| Unrealized Carried Interest | $52.2 million | $55.4 million | $27.0 million | $104.7 million |
Expenses
StepStone's total expenses for the three months ended September 30, 2024, were $220.7 million, compared to $130.3 million for the same period in 2023. For the six months ended September 30, 2024, total expenses reached $359.9 million, up from $251.5 million in 2023.
| Expense Categories | Q3 2024 | Q3 2023 | 6 Months 2024 | 6 Months 2023 |
|---|---|---|---|---|
| Compensation and Benefits | $170.6 million | $98.6 million | $268.9 million | $186.5 million |
| General, Administrative and Other | $50.1 million | $31.7 million | $91.1 million | $65.0 million |
Net Income
Net income attributable to StepStone Group Inc. for Q3 2024 was $17.6 million, compared to $26.2 million in Q3 2023. For the six months ended September 30, 2024, net income was $30.9 million, down from $47.5 million in the previous year.
| Net Income Metrics | Q3 2024 | Q3 2023 | 6 Months 2024 | 6 Months 2023 |
|---|---|---|---|---|
| Net Income | $17.6 million | $26.2 million | $30.9 million | $47.5 million | Net Income per Share (Diluted) | $0.26 | $0.42 | $0.46 | $0.76 |
Balance Sheet Overview
As of September 30, 2024, StepStone reported total assets of $4.0 billion and total liabilities of $2.3 billion, resulting in total stockholders' equity of approximately $1.8 billion.
| Balance Sheet Metrics | As of September 30, 2024 | As of March 31, 2024 |
|---|---|---|
| Total Assets | $4.0 billion | $3.8 billion |
| Total Liabilities | $2.3 billion | $2.0 billion |
| Total Stockholders' Equity | $1.8 billion | $1.6 billion |
Investment Strategy
StepStone manages a diverse portfolio across various asset classes. As of September 30, 2024, the firm had $29.7 billion in undeployed fee-earning capital.
Liquidity and Capital Resources
As of September 30, 2024, StepStone had cash and cash equivalents of $179.8 million and $1.5 billion in investments across StepStone Funds.
| Liquidity Metrics | As of September 30, 2024 |
|---|---|
| Cash and Cash Equivalents | $179.8 million |
| Investments in StepStone Funds | $1.5 billion |
| Debt Obligations | $172.3 million |
Recent Developments
On November 7, 2024, StepStone announced a quarterly cash dividend of $0.24 per share of Class A common stock, payable on December 13, 2024.
How StepStone Group Inc. (STEP) Makes Money
Revenue Sources
StepStone Group Inc. generates revenue primarily from three main sources:
- Management and advisory fees
- Performance fees
- Investment income
Management and Advisory Fees
For the three months ended September 30, 2024, management and advisory fees, net, increased by $42.6 million, or 30%, to $184.8 million compared to the same period in 2023. This growth was attributed to new client activity and a 17% rise in average Fee-Earning Assets Under Management (FEAUM).
The breakdown of management and advisory fees for the six months ended September 30, 2024, is as follows:
| Type of Fee | Q2 2024 (in thousands) | Q2 2023 (in thousands) |
|---|---|---|
| Focused commingled funds | $107,272 | $70,322 |
| Separately Managed Accounts (SMAs) | $61,393 | $56,430 |
| Advisory and other services | $14,907 | $13,741 |
| Fund reimbursement revenues | $1,186 | $1,630 |
| Total Management and Advisory Fees | $184,758 | $142,123 |
Performance Fees
Performance fees consist of incentive fees and carried interest allocations. For the three months ended September 30, 2024, total performance fees amounted to $86.9 million, a significant increase from $49.3 million in the same period of 2023.
The performance fee breakdown for the same period is shown below:
| Type of Performance Fee | Q2 2024 (in thousands) | Q2 2023 (in thousands) |
|---|---|---|
| Incentive Fees | $3,155 | $4,946 |
| Realized Carried Interest Allocations | $17,632 | $1,585 |
| Unrealized Carried Interest Allocations | $52,215 | $55,371 |
| Total Carried Interest Allocations | $69,847 | $56,956 |
Investment Income
Investment income includes returns from investments in funds and other financial instruments. For the six months ended September 30, 2024, investment income totaled $4.6 million compared to $6.2 million in the prior year.
Expenses
For the three months ended September 30, 2024, total expenses were $220.7 million, up from $130.3 million in the same period in 2023. The increase in expenses was primarily due to higher compensation and benefits, which rose to $170.6 million from $98.6 million. The breakdown is as follows:
| Expense Type | Q2 2024 (in thousands) | Q2 2023 (in thousands) |
|---|---|---|
| Cash-based Compensation | $82,871 | $74,851 |
| Equity-based Compensation | $37,332 | $5,916 |
| Total Compensation and Benefits | $170,635 | $98,596 |
| General, Administrative and Other | $50,061 | $31,729 |
| Total Expenses | $220,696 | $130,325 |
Net Income
For the three months ended September 30, 2024, net income attributable to StepStone Group Inc. was $17.6 million, compared to $26.2 million in the same period of 2023. The net income per share of Class A common stock for Q2 2024 was $0.26, down from $0.42 in Q2 2023.
Cash Flow
For the six months ended September 30, 2024, net cash provided by operating activities was $103.9 million, compared to $128.7 million in the previous year. The cash flow activities for the period are summarized below:
| Activity Type | Amount (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $103,866 |
| Net Cash Used in Investing Activities | ($34,089) |
| Net Cash Used in Financing Activities | ($23,623) |
| Net Increase in Cash, Cash Equivalents and Restricted Cash | $43,069 |
Conclusion
StepStone Group Inc. utilizes a diversified revenue model primarily through management and advisory fees, performance fees, and investment income, while managing expenses to maintain profitability.
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Resources:
- StepStone Group Inc. (STEP) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of StepStone Group Inc. (STEP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View StepStone Group Inc. (STEP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.