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What changed in StepStone Group Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of StepStone Group Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+616 added−589 removedSource: 10-K (2025-05-23) vs 10-K (2024-05-24)

Top changes in StepStone Group Inc.'s 2025 10-K

616 paragraphs added · 589 removed · 479 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

101 edited+13 added−34 removed103 unchanged
Biggest changeThe sponsorship program pairs promising mid-level employees, including female and diverse professionals, with one of the firm’s partners, who serves as a sponsor, as well as an executive coach, and is intended to support participants in advancing their professional development and leadership skills. • Partnerships and Outreach – In addition to promoting diversity and inclusion through our own events, such as hosting events encouraging undergraduate female students to pursue careers in finance, we sponsor and partner with several organizations dedicated to making financial services more diverse and inclusive.
Biggest changeWe offer our team members the benefit of a collegial, intellectually challenging environment where they are empowered to exercise their creativity. 27 Table of Contents As an example, our sponsorship program seeks to identify high-potential employees in mid-level roles, and partners them with one of the firm’s partners, who serves as a sponsor, as well as an executive coach, and is intended to support participants in advancing their professional development and leadership skills.
The Investment Advisers Act imposes substantive regulation on virtually every aspect of our business and our client relationships. Applicable requirements relate to, among other things, fiduciary duties to clients, engaging in transactions with clients, maintaining an effective compliance program, performance fees, solicitation arrangements, allocation of investments, conflicts of interest, marketing, recordkeeping, reporting and disclosure.
The Investment Advisers Act imposes substantive regulation on virtually every aspect of our business and our client relationships. Applicable requirements relate to, among other things, fiduciary duties to clients, engaging in transactions with clients, maintaining an effective compliance program, performance fees, solicitation arrangements, marketing materials and marketing, allocation of investments, conflicts of interest, recordkeeping, reporting and disclosure.
Fund managers’ information is entered into SPI Reporting, our proprietary, web-based application and database for private market portfolio analytics and reporting. Data are reconciled daily to ensure data integrity and that pertinent details are entered correctly. In order to be included in SPI Reporting, a fund manager must send us sufficient materials, including specific data fields required by us.
Fund managers’ information is entered into SPI Reporting, our proprietary, web-based application and database for private market portfolio analytics and reporting. Data are reconciled daily to help ensure data integrity and that pertinent details are entered correctly. In order to be included in SPI Reporting, a fund manager must send us sufficient materials, including specific data fields required by us.
Secondaries Secondaries refer to investments in existing private markets funds or companies through the acquisition of an existing interest by one investor from another in a negotiated transaction. In so doing, the buyer will agree to take on future funding obligations in exchange for future returns and distributions.
Secondaries Secondaries refer to investments in existing private markets funds, companies, or assets through the acquisition of an existing interest by one investor from another in a negotiated transaction. In so doing, the buyer will agree to take on future funding obligations in exchange for future returns and distributions.
This performance is due, in part, to: (1) the lack of a centralized market, (2) imperfect information among buyers and sellers, (3) wide bid spreads, (4) shorter holding periods, (5) fee mitigation and (6) transactions priced at a discount to fair value.
This performance is due, in part, to: (1) the lack of a centralized market, (2) imperfect information among buyers and sellers, (3) wide bid spreads, (4) shorter holding periods, (5) fee mitigation and (6) transactions often priced at a discount to fair value.
Pursue Accretive Transactions to Complement Our Platform We may complement our strong organic growth with selective strategic and tactical acquisitions. We intend to remain highly disciplined in our development strategy to ensure that we are allocating management time and our capital in the most productive areas to fuel growth.
Pursue Accretive Transactions to Complement Our Platform We may complement our strong organic growth with selective strategic and tactical acquisitions. We intend to remain highly disciplined in our development strategy to help ensure that we are allocating management time and our capital in the most productive areas to fuel growth.
There have also been significant legislative developments affecting the private equity industry in Europe and there continues to be discussion regarding enhancing governmental scrutiny and/or increasing regulation of the private equity industry. 28 Table of Contents Human Capital Our People and Culture Our Core Values and Beliefs include “People Matter” and “Empowered Team.” We recognize our people are our biggest asset and their enthusiasm, hard work and dedication make everything that we do possible.
There have also been significant legislative developments affecting the private equity industry in Europe and there continues to be discussion regarding enhancing governmental scrutiny and/or increasing regulation of the private equity industry. 26 Table of Contents Human Capital Our People and Culture Our core values and beliefs include “People Matter” and “Empowered Team.” We recognize our people are our biggest asset and their enthusiasm, hard work and dedication make everything that we do possible.
During the last three years ended December 31, 2023, we allocated an average of $70 billion annually in capital to private markets on behalf of our clients, excluding legacy funds, feeder funds and research-only, non-advisory services. We have a flexible business model whereby many of our clients engage us for solutions across multiple asset classes and investment strategies.
During the last three years ended December 31, 2024, we allocated an average of $70 billion annually in capital to private markets on behalf of our clients, excluding legacy funds, feeder funds and research-only, non-advisory services. We have a flexible business model whereby many of our clients engage us for solutions across multiple asset classes and investment strategies.
Failure to comply with the requirements of the Investment Advisers Act or the rules and regulations promulgated by the SEC could have a material adverse effect on our business.
Failure to comply with the requirements of the Investment Advisers Act or the rules and regulations promulgated by the SEC thereunder could have a material adverse effect on our business.
As part of our vendor due diligence process, we have added specific climate-related queries to help us understand and evaluate vendor environmental efforts, such as whether they measure their carbon footprint and have initiatives in place to minimize or offset emissions; and • Prioritizing selection of highly rated Leadership in Energy and Environmental Design (LEED) or comparable standard in leasing office space.
As part of our vendor due diligence process, we have added specific climate-related queries to help us understand and evaluate vendor environmental efforts, such as whether they measure their carbon footprint and have initiatives in place to minimize or offset emissions; and • Prioritizing selection of highly rated Leadership in Energy and Environmental Design (“LEED”) or comparable standard in leasing office space.
If for any reason these rules were to become inapplicable, we could become subject to regulatory action or third-party claims that could have a material adverse effect on our business. 26 Table of Contents Foreign Regulation We provide investment advisory and other services and raise funds in a number of countries and jurisdictions outside the United States.
If for any reason these rules were to become inapplicable, we could become subject to regulatory action or third-party claims that could have a material adverse effect on our business. 25 Table of Contents Foreign Regulation We provide investment advisory and other services and raise funds in a number of countries and jurisdictions outside the United States.
Regulation (EU) 2022/2554 on digital operational resilience for the financial sector (‘’DORA”) establishes a harmonized and comprehensive digital operational resilience framework across the whole EU financial sector by requiring a wide range of financial entities, including asset managers and investment firms, to manage their information and communication technology (“ICT”) risks in a robust and effective way through internal governance, control and risk frameworks.
Regulation (EU) 2022/2554 on digital operational resilience for the financial sector (“DORA”) establishes a harmonized and comprehensive digital operational resilience framework across the whole EU financial sector by requiring a wide range of financial entities, including asset managers and investment firms, to manage their information and communication technology (“ICT”) risks in a robust and effective way through internal governance, control and risk frameworks.
We refer to these provisions as “clawbacks.” Advisory and Data Services Depending on the mandate, advisory and data services may include one or more of the following for our clients: (i) recurring support of portfolio construction and design; (ii) discrete or project-based due diligence, advice, and investment recommendations; (iii) detailed review of existing private markets investments, including portfolio-level repositioning recommendations where appropriate; (iv) consulting on investment pacing, policies, strategic plans, and asset allocation to investment boards and committees; and (v) licensed access to our proprietary data and technology platforms, including SPI Research and our other proprietary tools.
We refer to these provisions as “clawbacks.” 22 Table of Contents Advisory and Data Services Depending on the mandate, advisory and data services may include one or more of the following for our clients: (i) recurring support of portfolio construction and design; (ii) discrete or project-based due diligence, advice, and investment recommendations; (iii) detailed review of existing private markets investments, including portfolio-level repositioning recommendations where appropriate; (iv) consulting on investment pacing, policies, strategic plans, and asset allocation to investment boards and committees; and (v) licensed access to our proprietary data and technology platforms, including SPI Research and our other proprietary tools.
We believe our value proposition as a full-service firm also helps us strengthen and grow our client relationships. As of March 31, 2024, 35% of our advisory clients also had an AUM relationship with us, and we advised or managed assets in more than one asset class for 34% of our clients, supporting our total capital responsibility growth.
We believe our value proposition as a full-service firm also helps us strengthen and grow our client relationships. As of March 31, 2025, 34% of our advisory clients also had an AUM relationship with us, and we advised or managed assets in more than one asset class for 35% of our clients, supporting our total capital responsibility growth.
You can access our filings with the SEC by visiting www.sec.gov or our website https://shareholders.stepstonegroup.com/shareholder-relations. The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC. 30 Table of Contents
You can access our filings with the SEC by visiting www.sec.gov or our website https://shareholders.stepstonegroup.com/shareholder-relations. The information on our website is not, and shall not be deemed to be, a part of this annual report on Form 10-K or incorporated into any other filings we make with the SEC. 28 Table of Contents
Historically, we have competed principally on the basis of the factors listed below: • global access to private markets investment opportunities through our size, scale, reputation and strong relationships with fund managers; • brand recognition and reputation within the investing community; • performance of investment strategies; • quality of service and duration of client relationships; • data and analytics capabilities; • ability to customize product offerings to client specifications; • transparent organizational structure; • ability to provide cost effective and comprehensive range of services and products; and • clients’ perceptions of our independence and the alignment of our interests with theirs created through our investment in our own products.
Historically, we have competed principally on the basis of the factors listed below: • global access to private markets investment opportunities through our size, scale, reputation and strong relationships with fund managers; • brand recognition and reputation within the investing community; • performance of investment strategies; • quality of service and duration of client relationships; • data and analytics capabilities; 23 Table of Contents • ability to customize product offerings to client specifications; • transparent organizational structure; • ability to provide cost effective and comprehensive range of services and products; and • clients’ perceptions of our independence and the alignment of our interests with theirs created through our investment in our own products.
The team of professionals dedicated to SPAR is organized by sector and geography to ensure deep coverage of all private markets, facilitating detailed investment review and analysis services by private markets specialists. Once an investment has been made, our SPAR team provides active, ongoing analytical review for portfolio risk management for our clients.
The team of professionals dedicated to SPAR is organized by sector and geography to promote deep coverage of all private markets, facilitating detailed investment review and analysis services by private markets specialists. Once an investment has been made, our SPAR team provides active, ongoing analytical review for portfolio risk management for our clients.
When NAV data is not available by the business day occurring on or after 115 days following December 31, 2023, such NAVs are adjusted for cash activity following the last available reported NAV. (1) Allocation of AUM by asset class is presented by underlying investment asset classification.
When NAV data is not available by the business day occurring on or after 115 days following December 31, 2024, such NAVs are adjusted for cash activity following the last available reported NAV. (1) Allocation of AUM by asset class is presented by underlying investment asset classification.
Each of our offices follows a local staffing model, with local professionals who possess valuable insights, language proficiency and client relationships specific to that market. As of March 31, 2024, approximately 45% of our investment professionals were based outside the United States.
Each of our offices follows a local staffing model, with local professionals who possess valuable insights, language proficiency and client relationships specific to that market. As of March 31, 2025, approximately 45% of our investment professionals were based outside the United States.
Today, we have investment and implementation professionals in 27 cities across 16 countries on five continents. Our offices are staffed by investment professionals who bring valuable regional insights and language proficiency to enhance existing client relationships and build new client relationships.
Today, we have investment and implementation professionals in 28 cities across 16 countries on five continents. Our offices are staffed by investment professionals who bring valuable regional insights and language proficiency to enhance existing client relationships and build new client relationships.
With offices in 27 cities across 16 countries on five continents, we have built a global operating platform, organically and via acquisition, with strong local teams that possess valuable regional insights and deep-rooted relationships.
With offices in 28 cities across 16 countries on five continents, we have built a global operating platform, organically and via acquisition, with strong local teams that possess valuable regional insights and deep-rooted relationships.
Data presented as of March 31, 2024. AUM/AUA reflects final data for the prior period (December 31, 2023), adjusted for net new client account activity through March 31, 2024. Does not include post-period investment valuation or cash activity.
Data presented as of March 31, 2025. AUM/AUA reflects final data for the prior period (December 31, 2024), adjusted for net new client account activity through March 31, 2025. Does not include post-period investment valuation or cash activity.
At the same time, we believe we have been successful in expanding relationships with our clients, often expanding from advisory relationships to discretionary asset management relationships. Approximately 35% of our clients engage us for both asset management and advisory services.
At the same time, we believe we have been successful in expanding relationships with our clients, often expanding from advisory relationships to discretionary asset management relationships. Approximately 34% of our clients engage us for both asset management and advisory services.
Strong Investment Performance Track Record Our track record is a key point of differentiation to our clients. As shown below, we have outperformed the MSCI ACWI Index, the benchmark index used for comparison across all of our investment strategies on an inception-to-date basis as of December 31, 2023. See “Part II, Item 7.
Strong Investment Performance Track Record We believe our track record is a key point of differentiation to our clients. As shown below, we have outperformed the MSCI ACWI Index, the benchmark index used for comparison across all of our investment strategies on an inception-to-date basis as of December 31, 2024. See “Part II, Item 7.
We evaluate the level of commitment, accountability and leadership engagement across the fund manager. We seek to understand how aligned their ESG processes are to established frameworks and how specific material risks and opportunities are considered including climate and modern slavery (e.g., forced labor, child labor, and human trafficking). Further, we evaluate their ESG monitoring and reporting systems.
We evaluate the level of commitment, accountability and leadership engagement across the fund manager. We seek to understand how aligned their RI processes are to established external frameworks and how specific material risks and opportunities are considered, including climate and modern slavery (e.g., forced labor, child labor, and human trafficking). Further, we evaluate their RI monitoring and reporting systems.
Net asset value (“NAV”) data for underlying investments is as of December 31, 2023, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2023.
Net asset value (“NAV”) data for underlying investments is as of December 31, 2024, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2024.
As of March 31, 2024, nearly half of our employees have equity interests in us in the form of direct equity interests and/or restricted stock units under our 2020 Long-Term Incentive Plan (“LTIP”), and more than 200 employees are eligible to participate in our carried interest allocations in one or more of the asset classes. 13 Table of Contents Strategic Priorities We aim to leverage our core principles and values that have guided us since inception to continue to grow our business, using the following key strategies: Continue to Grow with Existing Clients Expand existing client mandates .
As of March 31, 2025, nearly two-thirds of our employees have equity interests in us in the form of direct equity interests and/or restricted stock units under our 2020 Long-Term Incentive Plan (“LTIP”), and more than 200 employees are eligible to participate in our carried interest allocations in one or more of the asset classes. 13 Table of Contents Strategic Priorities We aim to leverage our core principles and values that have guided us since inception to continue to grow our business, using the following key strategies: Continue to Grow with Existing Clients Expand existing client mandates .
We use several tools to complete the latter, including information from the manager and company, along with SASB materiality standards, and for specific sectors information from GRESB. Post investment, we monitor the co-investment’s performance focusing on material financial and ESG factors.
We use several tools to complete the latter, including information from the manager and company, along with industry-specific SASB materiality standards, and for specific sectors information from GRESB. Post investment, we monitor the co-investment’s performance focusing on material financial and RI factors.
In many instances, existing clients have increased allocations to additional asset classes and commercial structures and deployed capital across our asset management and advisory services businesses. Our dedicated in-house business development, marketing and client relations teams, comprising approximately 130 professionals in offices across 13 countries, maintain an active and transparent dialogue with our diverse and global client base.
In many instances, existing clients have increased allocations to additional asset classes and commercial structures and deployed capital across our asset management and advisory services businesses. Our dedicated in-house business development, marketing and client relations teams, comprising approximately 200 professionals in offices across 15 countries, maintain an active and transparent dialogue with our diverse and global client base.
As of March 31, 2024, we had $22.6 billion of capital not yet deployed across our various investment vehicles, which we expect to generate management fees when invested or activated. Add New Clients Globally Over the past decade, we have invested in and grown both our in-house and third-party distribution networks.
As of March 31, 2025, we had $24.6 billion of capital not yet deployed across our various investment vehicles, which we expect to generate management fees when invested or activated. Add New Clients Globally Over the past decade, we have invested in and grown both our in-house and third-party distribution networks.
We also have a number of additional proprietary tools that we use and license in service of our clients, including our SPI Pacing tool that enables clients to forecast liquidity needs, our daily valuation engine that facilitates asset management solutions offering periodic subscription or liquidity (such as the mass affluent and defined contribution plan markets), ESG reporting dashboards that allow our clients to monitor their portfolio against these non-financial metrics, and a secondary pricing engine that drives operating leverage in our evaluation of larger and more complex transactions.
We also have a number of additional proprietary tools that we use and license in service of our clients, including our SPI Pacing tool that enables clients to forecast liquidity needs, our daily valuation engine that facilitates asset management solutions offering periodic subscription or liquidity (such as the mass affluent and defined contribution plan markets), sustainability reporting dashboards that allow our clients, if they so desire, to monitor their portfolio against these non-financial metrics, and a secondary pricing engine that drives operating leverage in our evaluation of larger and more complex transactions.
Co-investments Co-investments involve directly acquiring an interest in an operating company, project or property alongside an investment by a fund manager or direct investor that leads the transaction. We participate in co-investments across each of our asset classes.
Co-investments Co-investments involve directly acquiring an equity interest or a debt instrument of an operating company, project or property alongside an investment by a fund manager or direct investor that leads the transaction. We participate in co-investments across each of our asset classes.
Our platform leverages our deep expertise across private equity, infrastructure, private debt and real estate to develop and distribute innovative products for individual investors, integrating primaries, secondaries and co-investments to create customized product solutions for the private wealth sector.
Our platform leverages our deep expertise across private equity (including venture capital), infrastructure, private debt and real estate to develop and distribute innovative products for individual investors, integrating primaries, secondaries and co-investments to create customized product solutions for the private wealth sector.
Based on this analysis, we have funded several sustainable development projects to offset our carbon emissions and achieve carbon neutral status within our operations; • Implementing tailored carbon reduction initiatives across our global offices, including recycling protocols, transitioning to electronic tablets during meetings and encouraging a “paperless” approach where practicable.
Based on this analysis, we have funded several sustainable development projects to offset our carbon emissions and achieve carbon neutral status within our operations; 19 Table of Contents • Implementing tailored carbon reduction initiatives across our global offices, including recycling protocols, transitioning to electronic tablets during meetings and encouraging a “paperless” approach where practicable.
Underlying investments in portfolio investments generally have a three to six year range of duration for private equity, with potentially shorter periods for private debt or real estate, and longer for infrastructure. Typically, fund managers will not launch new funds more frequently than every two to four years.
Underlying portfolio investments generally have a three to six year range of duration for private equity, with potentially shorter periods for private debt or value-add and opportunistic real estate, and longer for infrastructure. Typically, fund managers will not launch new funds more frequently than every two to four years.
We have had a high level of success in retaining our advisory clients with an over 90% retention rate since inception. Highly predictable with strong visibility into near-term growth Our SMAs and focused commingled funds typically have an eight to 18-year maturity at inception, including extensions.
We have had a high level of success in retaining our advisory clients with an approximately 95% retention rate since inception. Highly predictable with strong visibility into near-term growth Our SMAs and focused commingled funds typically have an eight to 18-year maturity at inception, including extensions.
Our focused commingled funds invest across a variety of private market strategies, which enables our clients to efficiently participate in these specialized strategies for which they otherwise may not be able to access due to the high minimum investment requirements. Focused commingled funds represented $49 billion of our AUM as of March 31, 2024.
Our focused commingled funds invest across a variety of private market strategies, which enables our clients to efficiently participate in these specialized strategies for which they otherwise may not be able to access due to the high minimum investment requirements. Focused commingled funds represented $59 billion of our AUM as of March 31, 2025.
We believe the stability of our client base, reflecting in part the longer tenor of our SMAs and focused commingled funds, reflects the strength of the long-term client relationships we have developed. We have also had a high level of success in retaining our advisory clients with an over 90% retention rate since inception.
We believe the stability of our client base, reflecting in part the longer tenor of our SMAs and focused commingled funds, reflects the strength of the long-term client relationships we have developed. We have also had a high level of success in retaining our advisory clients with an approximately 95% retention rate since inception.
Our solutions include: • SMAs spanning multiple asset classes and strategies for defined contribution plans with long-term investment objectives; • private wealth solutions for registered investment advisors, independent broker dealers and wirehouses in the United States and wealth managers internationally; • registered funds available to mass affluent and accredited investors in the United States; and • global distribution of our institutional funds to family office investors and high-net-worth investors.
Our solutions include: • SMAs spanning multiple asset classes and strategies for defined contribution plans with long-term investment objectives; • private wealth solutions for registered investment advisors, independent broker dealers and wirehouses in the United States and wealth managers internationally; • registered funds available to mass affluent individual investors in the United States; and 20 Table of Contents • global distribution of our institutional funds to family office investors and high-net-worth investors.
We have developed an investment platform, StepStone Private Wealth LLC (“SPW”), designed to expand access to the private markets for accredited investors. Leverage Our Scale to Enhance Operating Margins Since inception we have made significant investments in our platform infrastructure through building out our investment and implementation teams across geographies and asset classes and developing technology-enabled solutions.
StepStone Private Wealth LLC (“SPW”) is designed to expand access to the private markets for individual investors. Leverage Our Scale to Enhance Operating Margins Since inception we have made significant investments in our platform infrastructure through building out our investment and implementation teams across geographies and asset classes and developing technology-enabled solutions.
SMAs and directly-managed assets represented approximately $94 billion of our AUM as of March 31, 2024. Focused Commingled Funds We organize and manage commingled funds that invest in primary, secondary and co-investment funds managed by third-party managers focused in our areas of expertise.
SMAs and directly-managed assets represented approximately $115 billion of our AUM as of March 31, 2025. Focused Commingled Funds We organize and manage commingled funds that invest in primary, secondary and co-investment funds managed by third-party managers focused in our areas of expertise.
See “Risk Factors—Risks Related to Our Business— Our ability to retain our senior leadership team and attract additional qualified professionals is critical to our success .” 24 Table of Contents Regulatory Environment Our business is subject to extensive federal and state regulation in the United States.
See “Risk Factors—Risks Related to Our Business— Our ability to retain our senior leadership team and attract additional qualified professionals is critical to our success .” Regulatory Environment Our business is subject to extensive federal and state regulation in the United States.
Secondaries With respect to secondary transactions, we utilize primary ESG assessments along with an evaluation of the ESG risk and opportunities of the key, value-driving assets. Due diligence timelines are often compressed for secondary transactions.
Secondaries With respect to secondary transactions, we utilize primary RI assessments where available, along with an evaluation of the RI risk and opportunities of the key, value-driving assets. Due diligence timelines are often compressed for secondary transactions.
Our focus on offering full-service, customized solutions to our clients is reflected in our business composition. As of March 31, 2024, we had 314 bespoke SMAs and focused commingled funds.
Our focus on offering full-service, customized solutions to our clients is reflected in our business composition. As of March 31, 2025, we had 348 bespoke SMAs and focused commingled funds.
Where relevant, for impact strategies, we layer on an additional layer of due diligence focused on the quality of the fund manager's impact practices. 18 Table of Contents Co-investments With respect to our co-investments, we complete an ESG assessment at both the manager and asset level.
Where relevant, for impact strategies, we layer on an additional layer of due diligence focused on the quality of the fund manager’s impact practices. Co-investments With respect to our co-investments, we complete an RI assessment at both the manager and asset level.
This further expands our investment opportunities and differentiates us from other co-investors, thereby leading to future opportunities with fund managers. 16 Table of Contents Our co-investment program benefits from the access to fund managers we have through our scale and the approximately 5,300 meetings and calls that we conduct with fund managers on an annual basis.
This further expands our investment opportunities and differentiates us from other co-investors, thereby leading to future opportunities with fund managers. Our co-investment program benefits from the access to fund managers we have through our scale and the approximately 5,600 meetings and calls that we conduct with fund managers on an annual basis.
Mandates for SPAR services typically include licensed access to SPI Reporting, our proprietary web-based performance monitoring and reporting solution. SPI Reporting allows our clients to customize performance measurement and benchmarking according to their unique specifications. Our advisory relationships comprised $521 billion of our AUA and $14 billion of our AUM as of March 31, 2024.
Mandates for SPAR services typically include licensed access to SPI Reporting, our proprietary web-based performance monitoring and reporting solution. SPI Reporting allows our clients to customize performance measurement and benchmarking according to their unique specifications. Our advisory relationships comprised $520 billion of our AUA and $15 billion of our AUM as of March 31, 2025.
As of March 31, 2024, we had $22.6 billion of committed but undeployed fee-earning capital, which we expect to generate management fees when deployed or activated. Diverse As of March 31, 2024, we had approximately 425 revenue-generating asset management and advisory programs and therefore are not dependent upon or concentrated in any single investment vehicle or client.
As of March 31, 2025, we had $24.6 billion of committed but undeployed fee-earning capital, which we expect to generate management fees when deployed or activated. Diverse As of March 31, 2025, we had 460 revenue-generating asset management and advisory programs and therefore are not dependent upon or concentrated in any single investment vehicle or client.
SMAs, including directly managed assets, comprised $94 billion of our AUM as of March 31, 2024. • Focused commingled funds . Owned by multiple clients, our focused commingled funds deploy capital in specific asset classes with defined investment strategies. Focused commingled funds comprised $49 billion of our AUM as of March 31, 2024. • Advisory and data services .
SMAs, including directly managed assets, comprised $115 billion of our AUM as of March 31, 2025. • Focused commingled funds . Owned by multiple clients, our focused commingled funds deploy capital in specific asset classes with defined investment strategies. Focused commingled funds comprised $59 billion of our AUM as of March 31, 2025. • Advisory and data services .
Advisory relationships comprised $521 billion of our AUA and $14 billion of our AUM as of March 31, 2024. 9 Table of Contents • Portfolio analytics and reporting . We provide clients with tailored reporting packages, including customized performance benchmarks as well as associated compliance, administrative and tax capabilities.
Advisory relationships comprised $520 billion of our AUA and $15 billion of our AUM as of March 31, 2025. 9 Table of Contents • Portfolio analytics and reporting . We provide clients with tailored reporting packages, including customized performance benchmarks as well as associated compliance, administrative and tax capabilities.
These portfolios utilize several types of synergistic investment strategies with third-party fund managers, including commitments to funds (“primaries”), acquiring stakes in existing funds on the secondary market (“secondaries”) and investing directly into companies (“co-investments”). As of March 31, 2024, we were responsible for $678 billion of total capital, including $157 billion of AUM and $521 billion of AUA.
These portfolios utilize several types of synergistic investment strategies with third-party fund managers, including commitments to funds (“primaries”), acquiring stakes in existing funds on the secondary market (“secondaries”) and investing directly into companies (“co-investments”). As of March 31, 2025, we were responsible for approximately $709 billion of total capital, including $189 billion of AUM and $520 billion of AUA.
Upside from performance fees As of March 31, 2024, we had over 200 investment programs with the potential to earn performance fees, consisting of over $75 billion in committed capital. As of March 31, 2024, our accrued carried interest allocations balance, which we view as a backlog of future carried interest allocation revenue, was $1,354 million.
Upside from performance fees As of March 31, 2025, we had over 225 investment programs with the potential to earn performance fees, consisting of over $95 billion in committed capital. As of March 31, 2025, our accrued carried interest allocations balance, which we view as a backlog of future carried interest allocation revenue, was $1,496 million.
These benefits accrue to our clients and to us. • Our large and experienced team . Since our inception, we have focused on recruiting and retaining the best talent. As of March 31, 2024, 100 partners led the firm, with an average of over 20 years of investment or industry experience.
These benefits accrue to our clients and to us. • Our large and experienced team . Since our inception, we have focused on recruiting and retaining the best talent. As of April 1, 2025, 108 partners led the firm, with an average of over 20 years of investment or industry experience.
Our data are organized around our proprietary software systems: • SPI Research monitors investment opportunities and is used by our investment professionals as an investment decision making tool. As of March 31, 2024, SPI Research contained information on approximately 18,000 fund managers, 46,000 funds, 105,000 companies, and 227,000 investments .
Our data are organized around our proprietary software systems: • SPI Research monitors investment opportunities and is used by our investment professionals as an investment decision making tool. As of March 31, 2025, SPI Research contained information on approximately 18,000 fund managers, 49,000 funds, 122,000 companies, and 273,000 investments .
Our advisory and data services clients are generally charged annual fixed fees, which vary depending on the services we provide and the volume of capital deployed.
Our advisory and data services clients are generally charged annual fixed fees, which vary depending on the services we provide and the volume of capital deployed. We generally do not earn incentive fees on advisory contracts.
In addition, the SEC and FinCEN have recently jointly proposed a new rule that will require investment advisers to adopt formal anti-money laundering and customer identification programs.
In addition, the SEC and FinCEN have recently jointly adopted a new rule that will require investment advisers to adopt formal anti-money laundering and customer identification programs by the end of 2025.
Because secondary investments are generally made when a primary investment fund is three to seven years into its life, these investments are viewed as more mature. Secondaries have historically generated a high risk-adjusted internal rate of return (“IRR”) relative to other strategies in the private equity market.
Because secondary investments are generally made when an investment is several years into its life, these investments are viewed as more mature. Secondaries have historically generated a high risk-adjusted internal rate of return (“IRR”) relative to other strategies in the private markets.
For the year ended March 31, 2024, no single client contributed more than 6% of our total management and advisory fees, and our top 10 clients, which comprise over 55 separate mandates and commitments to commingled funds, contributed approximately 23% of our total management and advisory fees.
For the year ended March 31, 2025, no single client contributed more than 5% of our total management and advisory fees, and our top 10 clients, which comprise over 60 separate mandates and commitments to commingled funds, contributed approximately 20% of our total management and advisory fees.
As of March 31, 2024, we had 990 total employees, including 335 investment professionals and 655 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities. We believe our scale and position in private markets provide us a distinct competitive advantage with our clients and fund managers.
As of March 31, 2025, we had approximately 1,130 total employees, including over 375 investment professionals and approximately 750 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities. We believe our scale and position in private markets provide us a distinct competitive advantage with our clients and fund managers.
As of March 31, 2024, we had 990 employees globally, including 335 investment professionals and 655 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities. We consider our relationship with our employees to be good and have not experienced interruptions of operations due to labor disagreements.
As of March 31, 2025, we had approximately 1,130 employees globally, including over 375 investment professionals and approximately 750 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities. We consider our relationship with our employees to be good and have not experienced interruptions of operations due to labor disagreements.
Approximately 74% of current accrued carried interest allocations is from StepStone Fund vintages of 2018 or prior.
Approximately 75% of current accrued carried interest allocations is from StepStone Fund vintages of 2019 or prior.
During the year ended March 31, 2024, nearly two-thirds of our management and advisory fees came from clients based outside of the United States, reflecting the strength and breadth of our relationships within the global investor community.
During the year ended March 31, 2025, more than half of our management and advisory fees came from clients based outside of the United States, reflecting the strength and breadth of our relationships within the global investor community.
The EU published AIFMD II in the Official Journal of the European Union on March 26, 2024. AIFMD II entered into force on April 15, 2024 and member states will have two years after publication to implement the rules into national law. Our EU-based subsidiary, StepStone Group Europe Alternative Investments Limited (“SGEAIL”), engages in regulated activities within the EU.
AIFMD II entered into force in the EU on April 15, 2024 and member states have two years to implement the rules into national law. Our EU-based subsidiary, StepStone Group Europe Alternative Investments Limited (“SGEAIL”), engages in regulated activities within the EU.
As part of our responsible investment journey, we: • Became a signatory to the United Nations Principles for Responsible Investment (“UNPRI”) in 2013; • Adopted a Responsible Investment policy in 2014, which is reviewed annually; • Became a formal supporter of the Task Force on Climate-Related Financial Disclosures (“TCFD”); • Became a member of the Sustainability Accounting Standards Board (“SASB”) and created asset class responsible investment workgroups in 2019; • Became a member of the GRESB and a founding signatory to the ILPA Diversity in Action initiative in 2020; • Implemented standalone policies for climate and stewardship in 2022, reflecting TCFD-aligned climate considerations within our investment process and our approach to corporate sustainability, as well as our continued emphasis on stewardship practices in our investments; • Became a founding financial services member supporting Ownership Works in 2022, a consortium of organizations dedicated to promoting employee ownership programs; and • Became a signatory to the UK Stewardship Code in 2023.
As part of our RI journey, we: • Became a signatory to the United Nations Principles for Responsible Investment (“UNPRI”) in 2013; • Adopted a Responsible Investment policy in 2014, which is reviewed annually; • Became a member of the Sustainability Accounting Standards Board (“SASB”) and enhanced our governance framework by creating asset class RI workgroups in 2019; • Became a member of the GRESB and a founding signatory to the Institutional Limited Partners Association (“ILPA”) Diversity in Action initiative in 2020; • Implemented a standalone climate policy and incorporated Task Force on Climate Related Financial Disclosures (“TCFD”) aligned climate considerations within our investment process and our approach to corporate sustainability reporting in 2022; • Became a founding financial services member supporting Ownership Works in 2022, a consortium of organizations dedicated to promoting employee ownership programs; and • Implemented a standalone stewardship policy in 2022 reflecting our continued emphasis on stewardship practices in our investments.
During the year ended March 31, 2024, we reviewed over 3,900 investment opportunities and conducted approximately 5,300 meetings with fund managers across multiple geographies and all four asset classes.
During the year ended March 31, 2025, we reviewed over 4,000 investment opportunities and conducted approximately 5,600 meetings with fund managers across multiple geographies and all four asset classes.
While we exercise broad discretion over the day-to-day management of our investment companies and business development companies, each of our investment companies and business development companies is also subject to oversight and management by a board of directors, a majority of whom are not “interested persons” as defined under the Investment Company Act.
While we exercise broad discretion over the day-to-day management of our Registered Funds, each of them is also subject to significant oversight by a board of trustees, a majority of whom are not “interested persons” as defined under the Investment Company Act.
Users also have the ability to edit, run and export various portfolio analytics, including analyzing various return and preference metrics commonly used in the investment industry, such as return J-Curve, cash flow activity over time, multi-period internal rates of return and time-weighted rate of return.
Users also have the ability to edit, run and export various portfolio analytics, including analyzing various return and preference metrics commonly used in the investment industry, such as return J-Curve, cash flow activity over time, multi-period internal rates of return and time-weighted rate of return. 17 Table of Contents Investment Risk Management We have an investment risk management function overseen by our Head of Research and Portfolio Management and our Head of Risk.
However, certain U.S. funds we manage on our private wealth platform are registered investment companies or business development companies under the Investment Company Act. The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies and business development companies.
However, certain U.S. funds we manage on our private wealth platform are registered investment companies or business development companies under the Investment Company Act (the “Registered Funds”). The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of the Registered Funds, including, among other things, their capital structure, investments and transactions.
For the year ended March 31, 2024, approximately 51% of our management and advisory fees were generated from focused commingled funds, 38% from SMAs, 10% from advisory, data and administrative services and 1% from fund reimbursement revenues.
For the year ended March 31, 2025, approximately 57% of our management and advisory fees were generated from focused commingled funds, 33% from SMAs, 9% from advisory and data services and 1% from fund reimbursement revenues.
The European Commission is introducing a package of legislative proposals to reform the EU anti-money laundering and counter-terrorist financing regime. The proposals, amongst others, clarify rules relating to internal policies and procedures, introduce more granular client due diligence requirements, clarify reliance on outsourcing and harmonize suspicious activity reporting.
The European Commission has passed a package of legislative proposals reforming the EU anti-money laundering and counter-terrorist financing regime, which amongst others, clarifies rules relating to internal policies and procedures, introduces more granular client due diligence requirements, clarifies reliance on outsourcing and harmonizes suspicious activity reporting.
We believe our revenue model has the following important attributes: Sustainable and recurring management and advisory fees Our management and advisory fees grew from $191 million in fiscal 2019 to $585 million in fiscal 2024, representing a 25% compounded annual growth rate.
We believe our revenue model has the following important attributes: Sustainable and recurring management and advisory fees Our management and advisory fees grew from $235 million in fiscal 2020 to $767 million in fiscal 2025, representing a 27% compounded annual growth rate.
In addition, the SEC has recently adopted amendments to Regulation S-P (the privacy regulations applicable to financial institutions, including investment advisers) that will expand the scope of the regulation and mandate notification to clients and customers in the event of privacy breaches.
In May 2024, the SEC adopted amendments to Regulation S-P (the privacy regulations applicable to financial institutions, including investment advisers) that will expand the scope of the regulation and mandate notification to clients and customers in the event of privacy breaches. The SEC has also adopted disclosure rules related to cybersecurity applicable to public companies.
We believe investors are reducing the number of fund managers they invest with, increasingly allocating capital to fund managers that have expertise across a wide range of asset classes within private markets. 10 Table of Contents PRIVATE EQUITY REAL ESTATE $82B (1) $50B $270B $16B (1) $8B $168B AUM FEAUM AUA AUM FEAUM AUA 155+ 60 Investment professionals Investment professionals INFRASTRUCTURE PRIVATE DEBT $30B (1) $20B $60B $28B (1) $15B $22B AUM FEAUM AUA AUM FEAUM AUA 65+ 45+ Investment professionals Investment professionals _____________________________ Note: Amounts may not sum to total due to rounding.
We believe investors are reducing the number of fund managers they invest with, increasingly allocating capital to fund managers that have expertise across a wide range of asset classes within private markets. 10 Table of Contents PRIVATE EQUITY REAL ESTATE $96B (1) $65B $263B $19B (1) $13B $168B AUM FEAUM AUA AUM FEAUM AUA 175 65+ Investment professionals Investment professionals INFRASTRUCTURE PRIVATE DEBT $37B (1) $24B $69B $37B (1) $20B $20B AUM FEAUM AUA AUM FEAUM AUA 70+ 60+ Investment professionals Investment professionals _____________________________ Note: Amounts may not sum to total due to rounding.
In addition, from time to time, we host internal and external networking and educational events in various jurisdictions, in support of DEI. • Parental Leave and Benefits – We provide benefits such as paid parental leave, parental leave coaching for managers and employees, paying for travel for newborns and caretakers when the employee has business required travel, paid shipping of breast milk, and wellness rooms for new parents at our offices.
We provide benefits such as paid parental leave, parental leave coaching for managers and employees, paying for travel for newborns and caretakers when the employee has business required travel, paid shipping of breast milk, and wellness rooms for new parents at our offices.
If all of these rules are adopted in substantially the form in which they have been proposed, this will result in a significant increase in the compliance risks and regulatory burden of operating our business. 25 Table of Contents Our SMAs and the majority of our focused commingled funds are not registered under the Investment Company Act because we only form SMAs for, and offer interests in our focused commingled funds to, persons who we reasonably believe to be “qualified purchasers” as defined in the Investment Company Act.
Bringing our firm into compliance with these new rules (and any others adopted by the SEC), could result in a significant increase in the compliance risks and regulatory burden of operating our business. 24 Table of Contents Our SMAs and the majority of our focused commingled funds are not registered under the Investment Company Act because we only form SMAs for, and offer interests in our focused commingled funds to, persons who we reasonably believe to be “qualified purchasers” as defined in the Investment Company Act.
Additionally, each quarter, the applicable investment adviser, as the valuation designee, will provide the audit committee of each of our investment companies and business development companies with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its fair value process.
Further, boards’ audit committees are responsible for overseeing the valuation process for each of our Registered Funds and the applicable investment adviser for each of our Registered Funds is required to provide the audit committee with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its valuation process.
As of March 31, 2024, 100 partners led the firm, with an average of over 20 years of investment or industry experience.
As of April 1, 2025, 108 partners led the firm, with an average of over 20 years of investment or industry experience.
Given its scale, expertise, and relationships, we have preferred access to top-tier fund managers and proprietary opportunities, including co-investments and secondaries. 21 Table of Contents Fees and Other Key Contractual Terms Separately Managed Accounts The scope of our separate account services and degree of client involvement varies by relationship and policy guidelines, but we typically direct or have substantial participation in the negotiation of account terms, investment policy and strategic planning, pacing and ongoing monitoring and reporting activities.
Fees and Other Key Contractual Terms Separately Managed Accounts The scope of our separate account services and degree of client involvement varies by relationship and policy guidelines, but we typically direct or have substantial participation in the negotiation of account terms, investment policy and strategic planning, pacing and ongoing monitoring and reporting activities.
The responsibilities of each board include, among other things, approving our advisory contract with our investment company or business development company, approving certain service providers and monitoring transactions involving affiliates, and approving certain co-investment transactions.
The responsibilities of each board include, among other things, approving our advisory contracts with our Registered Funds on an annual basis, approving certain other service providers, monitoring transactions involving affiliates, and approving certain co-investment transactions.
Mandates for portfolio analytics and reporting services typically include licensed access to our proprietary performance monitoring software, SPI Reporting. We provided portfolio analytics and reporting on over $685 billion of client commitments as of March 31, 2024, inclusive of our total capital responsibility, previously exited investments and investments of former clients.
Mandates for portfolio analytics and reporting services typically include licensed access to our proprietary performance monitoring software, SPI Reporting. We provided portfolio analytics and reporting on nearly $780 billion of client commitments through SPI Reporting as of March 31, 2025.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA “Sunset” is triggered upon the earliest to occur of the following: (i) Monte Brem, Scott Hart, Jason Ment, Jose Fernandez, Johnny Randel, Michael McCabe, Mark Maruszewski, Thomas Keck, Thomas Bradley, David Jeffrey and Darren Friedman (including their respective family trusts and any other permitted transferees, the “Sunset Holders”) collectively cease to maintain direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock); (ii) the Sunset Holders cease collectively to maintain direct or indirect beneficial ownership of an aggregate of at least 25% of the aggregate voting power of our outstanding Class A common stock and Class B common stock, before giving effect to a Sunset; and (iii) September 18, 2025.
Biggest changeUnder these rules, a listed company of which more than 50% of the voting power with respect to the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our board of directors consist of independent directors, (ii) director nominees be selected or recommended to the board entirely by independent directors and (iii) the compensation committee be composed entirely of independent directors. 61 Table of Contents A “Sunset” is triggered upon the earliest to occur of the following: (i) Monte Brem, Scott Hart, Jason Ment, Jose Fernandez, Johnny Randel, Michael McCabe, Mark Maruszewski, Thomas Keck, Thomas Bradley, David Jeffrey and Darren Friedman (including their respective family trusts and any other permitted transferees, the “Sunset Holders”) collectively cease to maintain direct or indirect beneficial ownership of at least 10% of the outstanding shares of Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock); (ii) the Sunset Holders cease collectively to maintain direct or indirect beneficial ownership of an aggregate of at least 25% of the aggregate voting power of our outstanding Class A common stock and Class B common stock, before giving effect to a Sunset; and (iii) September 18, 2025.
Our amended and restated certificate of incorporation and bylaws include provisions that: • provide that vacancies on our board of directors shall be filled only by a majority of directors then in office, even though less than a quorum, or by a sole remaining director; 70 Table of Contents • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms, subject to a specified Sunset; • provide that our directors can be removed (i) for cause only as long as our board of directors is classified and (ii) following such time as our board of directors is no longer classified, with or without cause, but only upon the affirmative vote of holders of at least 66 2⁄3% of the voting power of the outstanding shares of our capital stock entitled to vote generally in the election of directors; • provide that any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders; • specify that special meetings of our stockholders can be called only by our board of directors or the chairman of our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock; and • reflect two classes of common stock, with Class B common stock having five votes per share and Class A common stock having one vote per share, until a Sunset becomes effective, as discussed above.
Our amended and restated certificate of incorporation and bylaws include provisions that: 69 Table of Contents • provide that vacancies on our board of directors shall be filled only by a majority of directors then in office, even though less than a quorum, or by a sole remaining director; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms, subject to a specified Sunset; • provide that our directors can be removed (i) for cause only as long as our board of directors is classified and (ii) following such time as our board of directors is no longer classified, with or without cause, but only upon the affirmative vote of holders of at least 66 2⁄3% of the voting power of the outstanding shares of our capital stock entitled to vote generally in the election of directors; • provide that any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting of such stockholders; • specify that special meetings of our stockholders can be called only by our board of directors or the chairman of our board of directors; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock; and • reflect two classes of common stock, with Class B common stock having five votes per share and Class A common stock having one vote per share, until a Sunset becomes effective, as discussed above.
For example: 46 Table of Contents • Ownership of infrastructure assets may also present additional risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental, worker, public health and safety or other applicable laws or government actions, which may have a material adverse effect on the operations, financial condition and liquidity of particular assets and ultimately affect investment returns. • Infrastructure asset investments may face construction and development risks including, without limitation: (i) labor disputes, shortages of material and skilled labor, or work stoppages; (ii) slower than projected construction progress and the unavailability or late delivery of necessary equipment; (iii) less than optimal coordination with public utilities in the relocation of their facilities; (iv) climate change, adverse weather conditions and unexpected construction conditions; (v) accidents or the breakdown or failure of construction equipment or processes; (vi) political or local opposition; (vii) failure to obtain regulatory approvals or permits; and (viii) catastrophic events, such as explosions, fires, war, terrorist activities, natural disasters and other similar events.
For example: 44 Table of Contents • Ownership of infrastructure assets may also present additional risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental, worker, public health and safety or other applicable laws or government actions, which may have a material adverse effect on the operations, financial condition and liquidity of particular assets and ultimately affect investment returns. • Infrastructure asset investments may face construction and development risks including, without limitation: (i) labor disputes, shortages of material and skilled labor, or work stoppages; (ii) slower than projected construction progress and the unavailability or late delivery of necessary equipment; (iii) less than optimal coordination with public utilities in the relocation of their facilities; (iv) climate change, adverse weather conditions and unexpected construction conditions; (v) accidents or the breakdown or failure of construction equipment or processes; (vi) political or local opposition; (vii) failure to obtain regulatory approvals or permits; and (viii) catastrophic events, such as explosions, fires, war, terrorist activities, natural disasters and other similar events.
In November 2023, the UK Financial Conduct Authority published final rules on its Sustainable Disclosure Requirements (“SDR”), introducing new rules and guidance for asset managers to make mandatory disclosures at both the manager and product levels, which aim to address potential greenwashing risks through the introduction of sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing, as well as through the introduction of disclosures consistent with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”).
In November 2023, the UK Financial Conduct Authority (“FCA”) published final rules on its Sustainable Disclosure Requirements (“SDR”), introducing new rules and guidance for asset managers to make mandatory disclosures at both the manager and product levels, which aim to address potential greenwashing risks through the introduction of sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing, as well as through the introduction of disclosures consistent with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”).
However, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that the Sunset Holders, their affiliates and their respective successors (other than the Company or any of our subsidiaries), as well as their direct and indirect transferees, will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions. 71 Table of Contents Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and the federal district courts as the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with us or our directors, officers or other employees.
However, our amended and restated certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that the Sunset Holders, their affiliates and their respective successors (other than the Company or any of our subsidiaries), as well as their direct and indirect transferees, will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions. 70 Table of Contents Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and the federal district courts as the exclusive forum for Securities Act claims, which could limit our stockholders’ ability to obtain what such stockholders believe to be a favorable judicial forum for disputes with us or our directors, officers or other employees.
The extent and impact of any sanctions imposed in connection with geopolitical conflicts may also cause additional financial market volatility and impact the global economy. Volatility and disruption in the equity and credit markets can adversely affect the portfolio companies in which private markets funds invest and adversely affect the investment performance of the StepStone Funds and advisory accounts.
Additionally, volatility and disruption in the equity and credit markets can adversely affect the portfolio companies in which private markets funds invest and adversely affect the investment performance of the StepStone Funds and advisory accounts. The extent and impact of any sanctions imposed in connection with geopolitical conflicts may also cause additional financial market volatility and impact the global economy.
Accordingly, to the extent that SSG is disallowed a deduction for its distributive share of compensation expense under Section 162(m) of the Code, it may result in additional U.S. federal income tax liability for SSG and/or reduce cash available for distribution to SSG’s stockholders or for the payment of other expenses and obligations of SSG. 66 Table of Contents If StepStone Group Inc. were deemed an “investment company” under the Investment Company Act of 1940 as a result of its ownership of the Partnership or the General Partner, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
Accordingly, to the extent that SSG is disallowed a deduction for its distributive share of compensation expense under Section 162(m) of the Code, it may result in additional U.S. federal income tax liability for SSG and/or reduce cash available for distribution to SSG’s stockholders or for the payment of other expenses and obligations of SSG. 65 Table of Contents If StepStone Group Inc. were deemed an “investment company” under the Investment Company Act of 1940 as a result of its ownership of the Partnership or the General Partner, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
In addition, our efforts to retain or attract qualified investment professionals may result in significant additional expenses. We may enter into new lines of business, which may result in additional risks and uncertainties in our business. We currently generate substantially all of our revenue from asset management and advisory services.
In addition, our efforts to retain or attract qualified investment or operational professionals may result in significant additional expenses. We may enter into new lines of business, which may result in additional risks and uncertainties in our business. We currently generate substantially all of our revenue from asset management and advisory services.
The information systems of government agencies have previously been compromised and we believe they continue to be targets for cyber-criminals. Third-party service providers and their vendors are also susceptible to cyber and security threats.
The information systems of government agencies have previously been compromised and we believe they continue to be targets for cyber-criminals. Third-party service providers and their vendors are also susceptible to cyber and security threats and incidents.
As a result of the voting power held by those Class B stockholders who are party to the Stockholders’ Agreement, we qualify as a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market.
As a result of the voting power held by those Class B stockholders who are party to the Stockholders’ Agreement, we currently qualify as a “controlled company” within the meaning of the corporate governance standards of the Nasdaq Global Select Market.
We will not be reimbursed if the actual benefits ultimately realized by us are less than were projected in the computation of the early termination payment. 64 Table of Contents Payments under each Tax Receivable Agreement will be based on the tax reporting positions that we will determine and the IRS or another tax authority may challenge all or part of the tax basis increases or the inheritance of tax attributes from the Blocker Companies, as well as other related tax positions we take, and a court could sustain such challenge.
We will not be reimbursed if the actual benefits ultimately realized by us are less than were projected in the computation of the early termination payment. 63 Table of Contents Payments under each Tax Receivable Agreement will be based on the tax reporting positions that we will determine and the IRS or another tax authority may challenge all or part of the tax basis increases or the inheritance of tax attributes from the Blocker Companies, as well as other related tax positions we take, and a court could sustain such challenge.
The historical investment performance of our funds should not be considered indicative of the future investment performance of these funds or of any future funds we may invest, in part because: • market conditions and investment opportunities may be significantly less favorable than in the past; 31 Table of Contents • the performance of our funds is largely based on the NAV of the funds’ investments, including unrealized gains, which may never be realized; • our newly established funds may generate lower investment returns during the period that they initially deploy their capital; • changes in the global tax and regulatory environment may affect both the investment preferences of our clients and the financing strategies employed by businesses in which particular funds invest, which may reduce the overall capital available for investment and the availability of suitable investments, thereby reducing our investment returns in the future; • competition for investment opportunities, resulting from the increasing amount of capital invested in private markets alternatives, may increase the cost and reduce the availability of suitable investments, thereby reducing our investment returns in the future; and • the industries and businesses in which particular funds invest will vary.
The historical investment performance of our funds should not be considered indicative of the future investment performance of these funds or of any future funds we may invest, in part because: • market conditions and investment opportunities may be significantly less favorable than in the past; • the performance of our funds is largely based on the NAV of the funds’ investments, including unrealized gains, which may never be realized; • our newly established funds may generate lower investment returns during the period that they initially deploy their capital; • changes in the global tax and regulatory environment may affect both the investment preferences of our clients and the financing strategies employed by businesses in which particular funds invest, which may reduce the overall capital available for investment and the availability of suitable investments, thereby reducing our investment returns in the future; • competition for investment opportunities, resulting from the increasing amount of capital invested in private markets alternatives, may increase the cost and reduce the availability of suitable investments, thereby reducing our investment returns in the future; and • the industries and businesses in which particular funds invest will vary.
Infrastructure investments may involve the subcontracting of design and construction activities in respect of projects, and as a result the investments we make on behalf of clients or we recommend to our clients are subject to the risks that contractual provisions passing liabilities to a subcontractor could be ineffective, the subcontractor fails to perform services which it has agreed to perform and the subcontractor becomes insolvent. 47 Table of Contents Infrastructure investments often involve an ongoing commitment to municipal, state, federal or foreign government or regulatory agencies.
Infrastructure investments may involve the subcontracting of design and construction activities in respect of projects, and as a result the investments we make on behalf of clients or we recommend to our clients are subject to the risks that contractual provisions passing liabilities to a subcontractor could be ineffective, the subcontractor fails to perform services which it has agreed to perform and the subcontractor becomes insolvent. 45 Table of Contents Infrastructure investments often involve an ongoing commitment to municipal, state, federal or foreign government or regulatory agencies.
Our non-U.S. operations carry special financial and business risks, which include: fluctuations in foreign currency exchange rates that could adversely affect our results; unexpected changes in trading policies, regulatory and licensing requirements, tariffs and other barriers; local labor conditions, protections and regulations; adverse consequences or restrictions on the repatriation of earnings; potentially adverse tax consequences, such as trapped foreign losses or excise taxes (or other similar taxes); less stable political and economic environments; terrorism, political hostilities, war, outbreak of disease and other civil disturbances or other catastrophic events that reduce business activity; cultural and language barriers and the need to adopt different business practices in different geographic areas; and difficulty collecting fees and, if necessary, enforcing judgments. 44 Table of Contents As part of our day-to-day operations outside the United States, we are required to create compensation programs, employment policies, privacy policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries.
Our non-U.S. operations carry special financial and business risks, which include: fluctuations in foreign currency exchange rates that could adversely affect our results; unexpected changes in trading policies, regulatory and licensing requirements, trade policies and other barriers; local labor conditions, protections and regulations; adverse consequences or restrictions on the repatriation of earnings; potentially adverse tax consequences, such as trapped foreign losses or excise taxes (or other similar taxes); less stable political and economic environments; terrorism, political hostilities, war, outbreak of disease and other civil disturbances or other catastrophic events that reduce business activity; cultural and language barriers and the need to adopt different business practices in different geographic areas; and difficulty collecting fees and, if necessary, enforcing judgments. 42 Table of Contents As part of our day-to-day operations outside the United States, we are required to create compensation programs, employment policies, privacy policies, compliance policies and procedures and other administrative programs that comply with the laws of multiple countries.
In addition, the structuring of future transactions and investments may take into consideration the partners’ tax considerations even where no similar benefit would accrue to us. 68 Table of Contents We rely on our equity ownership, governance rights and other contractual arrangements to control certain of our consolidated subsidiaries that are not wholly-owned, which may provide us less effective operational control than wholly owning such subsidiaries.
In addition, the structuring of future transactions and investments may take into consideration the partners’ tax considerations even where no similar benefit would accrue to us. 67 Table of Contents We rely on our equity ownership, governance rights and other contractual arrangements to control certain of our consolidated subsidiaries that are not wholly-owned, which may provide us less effective operational control than wholly owning such subsidiaries.
See “—Recent and continuing higher interest rates or prospective decreases in the availability of credit may adversely affect the ability of the StepStone Funds to achieve attractive rates of return, particularly because certain funds and portfolio companies depend on leverage for a return on investment.” 37 Table of Contents The portfolio companies in which private markets funds have invested or may invest will sometimes involve a high degree of business and financial risk.
See “—Recent and continuing higher interest rates or prospective decreases in the availability of credit may adversely affect the ability of the StepStone Funds to achieve attractive rates of return, particularly because certain funds and portfolio companies depend on leverage for a return on investment.” 35 Table of Contents The portfolio companies in which private markets funds have invested or may invest will sometimes involve a high degree of business and financial risk.
Poor implementation of new technologies, including artificial intelligence, by us or our third-party service providers, could subject us to additional risks we do not understand or cannot adequately mitigate, which could have an impact on our results of operations and financial condition. 43 Table of Contents Employee misconduct could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
Poor implementation of new technologies, including artificial intelligence, by us or our third-party service providers, could subject us to additional risks we do not understand or cannot adequately mitigate, which could have an impact on our results of operations and financial condition. 41 Table of Contents Employee misconduct could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
Furthermore, a StepStone Fund could be unable to call capital from the investors until it sets up a new deposit account at a different institution, which could be a time-consuming process and could be prohibited under the fund’s then-existing credit facilities. 38 Table of Contents Ordinarily, assets held by a regulated financial institution are insured up to stated balance amounts—the U.S.
Furthermore, a StepStone Fund could be unable to call capital from the investors until it sets up a new deposit account at a different institution, which could be a time-consuming process and could be prohibited under the fund’s then-existing credit facilities. 36 Table of Contents Ordinarily, assets held by a regulated financial institution are insured up to stated balance amounts—the U.S.
We cannot assure you that we will successfully identify, negotiate, complete or integrate such transactions, or that any completed transactions will produce favorable financial results. 48 Table of Contents Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk.
We cannot assure you that we will successfully identify, negotiate, complete or integrate such transactions, or that any completed transactions will produce favorable financial results. 46 Table of Contents Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk.
The termination of such relationships by a critical mass of such fund managers and sponsors or the imposition of widespread restrictions on our ability to use the data we obtain for our reporting and monitoring services could adversely affect our business, financial condition and results of operations. 40 Table of Contents We and our clients depend on the reliability of our proprietary data and technology platforms and other data processing systems.
The termination of such relationships by a critical mass of such fund managers and sponsors or the imposition of widespread restrictions on our ability to use the data we obtain for our reporting and monitoring services could adversely affect our business, financial condition and results of operations. 38 Table of Contents We and our clients depend on the reliability of our proprietary data and technology platforms and other data processing systems.
If any of the foregoing were to occur, the values the investments we have made on behalf of clients or we recommend to our clients could decrease and our financial condition, results of operations and cash flow could suffer as a result. 39 Table of Contents Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks.
If any of the foregoing were to occur, the values the investments we have made on behalf of clients or we recommend to our clients could decrease and our financial condition, results of operations and cash flow could suffer as a result. 37 Table of Contents Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks.
If fund investors subject to such legislation viewed our funds or ESG practices as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, even though such view or perception may not be accurate, we may not be able to maintain or increase the size of our funds or raise sufficient capital for new funds, which may adversely affect our revenues.
If fund investors subject to such legislation viewed our funds or sustainability practices as being in contradiction of such “anti-ESG” policies, legislation or legal opinions, even though such view or perception may not be accurate, we may not be able to maintain or increase the size of our funds or raise sufficient capital for new funds, which may adversely affect our revenues.
In addition, Class B, Class C and Class D limited partners in the Partnership would benefit from any value attributable to such accumulated cash balances as a result of their ownership of Class A common stock following an exchange of their units for Class A common stock. 69 Table of Contents The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
In addition, Class B, Class C and Class D limited partners in the Partnership would benefit from any value attributable to such accumulated cash balances as a result of their ownership of Class A common stock following an exchange of their units for Class A common stock. 68 Table of Contents The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
Fee reductions on existing or future new business could have a material adverse effect on our profit margins and results of operations. 36 Table of Contents We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements of our funds.
Fee reductions on existing or future new business could have a material adverse effect on our profit margins and results of operations. 34 Table of Contents We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements of our funds.
We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law. We have paid quarterly cash dividends consistently since the fourth quarter of fiscal 2021and have occasionally declared special dividends.
We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law. We have paid quarterly cash dividends consistently since the fourth quarter of fiscal 2021and have occasionally declared supplemental dividends.
For example, the European Commission has adopted regulations as part of a package of legislative measures arising from its Action Plan on Sustainable Finance, which include, without limitation: (a) The Disclosure Regulation EU 2019/2088 regarding the introduction of transparency and disclosure obligations for investors, funds and asset managers in relation to ESG factors, which took effect beginning on March 10, 2021 and (b) The Taxonomy Regulation EU 2020/852 regarding the introduction of EU-wide taxonomy of environmentally sustainable activities, which entered into force on July 12, 2020.
For example, the European Commission has adopted regulations as part of a package of legislative measures arising from its Action Plan on Sustainable Finance, which include, without limitation: (a) The Disclosure Regulation EU 2019/2088 regarding the introduction of transparency and disclosure obligations for investors, funds and asset managers in relation to sustainability, which took effect beginning on March 10, 2021 and (b) The Taxonomy Regulation EU 2020/852 regarding the introduction of EU-wide taxonomy of environmentally sustainable activities, which entered into force on July 12, 2020.
We may also need to expend additional resources to adapt our cybersecurity program to the evolving security landscape and to investigate and remediate vulnerabilities or other identified risks. 42 Table of Contents We are subject to numerous laws, regulations, and contractual obligations designed to protect our regulated data, and that of our customers.
We may also need to expend additional resources to adapt our cybersecurity program to the evolving security landscape and to investigate and remediate vulnerabilities or other identified risks. 40 Table of Contents We are subject to numerous laws, regulations, and contractual obligations designed to protect our regulated data, and that of our customers.
These risks could adversely affect the investment performance of the StepStone Funds and advisory accounts, which would adversely affect our business, financial condition and results of operations. 45 Table of Contents Revenues from our real estate asset class are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.
These risks could adversely affect the investment performance of the StepStone Funds and advisory accounts, which would adversely affect our business, financial condition and results of operations. 43 Table of Contents Revenues from our real estate asset class are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate.
While we have developed and implemented policies and procedures designed to ensure strict compliance by us and our personnel with the FCPA and other anti-corruption, sanctions and export control laws in jurisdictions in which we operate, such policies and procedures may not be effective in all instances to prevent violations.
While we have developed and implemented policies and procedures designed to promote strict compliance by us and our personnel with the FCPA and other anti-corruption, sanctions and export control laws in jurisdictions in which we operate, such policies and procedures may not be effective in all instances to prevent violations.
In addition, we believe StepStone Group Inc. is not an investment company under section 3(b)(1) of the Investment Company Act because it is primarily engaged in a non-investment company business. 67 Table of Contents The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies.
In addition, we believe StepStone Group Inc. is not an investment company under section 3(b)(1) of the Investment Company Act because it is primarily engaged in a non-investment company business. 66 Table of Contents The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies.
Holders of Class B units or newly-created Class D units include non-U.S. holders. The partners holding Class B units or newly-created Class D units in the Partnership generally will be entitled to exchange such Class B units or newly-created Class D units for shares of Class A common stock on a one-for-one basis or, at our election, for cash.
Holders of Class B or Class D units include non-U.S. holders. The partners holding Class B or Class D units in the Partnership generally will be entitled to exchange such Class B or Class D units for shares of Class A common stock on a one-for-one basis or, at our election, for cash.
The availability of investment opportunities will be subject to market conditions and other factors outside of our control and the control of the fund managers with which we invest. Markets in the last two years experienced meaningful headwinds, including increasing borrowing costs.
The availability of investment opportunities will be subject to market conditions and other factors outside of our control and the control of the fund managers with which we invest. Markets in the last few years experienced meaningful headwinds, including increasing borrowing costs.
Certain U.S. funds we offer to private wealth investors are registered investment companies or business development companies under the Investment Company Act and we expect that additional funds we offer will also be registered investment companies or business development companies under the Investment Company Act or applicable laws in other jurisdictions.
Certain U.S. funds we offer to private wealth investors are registered investment companies or business development companies under the Investment Company Act (the “Registered Funds”) and we expect that additional funds we offer will also be Registered Funds under the Investment Company Act or applicable laws in other jurisdictions.
If the amount of tax distributions to be made exceeds the amount of funds available for distribution, SSG shall receive the full amount of its tax distribution before the other partners receive any distribution and the balance, if any, of funds available for distribution shall be distributed to the other partners pro rata in accordance with their assumed tax liabilities.
If the amount of tax distributions to be made exceeds the amount of funds available for distribution, SSG will receive the full amount of its tax distribution before the other partners receive any distribution and the balance, if any, of funds available for distribution will be distributed to the other partners pro rata in accordance with their assumed tax liabilities.
The historical investment returns of the StepStone Funds and advisory accounts have benefited from investment opportunities and general market conditions, including favorable borrowing conditions in the debt markets during such historical periods, and we cannot assure you that the StepStone Funds, advisory accounts or the underlying funds in which we invest will be able to avail themselves of comparable opportunities and conditions, particularly in light of recent higher interest rates and other market conditions.
The historical investment returns of the StepStone Funds and advisory accounts have benefited from investment opportunities and general market conditions, including favorable borrowing conditions in the debt markets during such historical periods, and we cannot assure you that the StepStone Funds, advisory accounts or the underlying funds in which we invest will be able to avail themselves of comparable opportunities and conditions, particularly in light of recent higher interest rates, changes in governmental policies, and other market conditions.
Conversely, certain investors have raised concerns as to whether the incorporation of ESG factors in the investment and portfolio management process may be inconsistent with the fiduciary duty to maximize returns for investors. Anti-ESG sentiment has gained momentum across the United States, with several states having enacted or proposed “anti-ESG” policies, legislation or issued related legal opinions.
Conversely, certain investors have raised concerns as to whether the incorporation of sustainability-related factors in the investment and portfolio management process may be inconsistent with the fiduciary duty to maximize returns for investors. Anti-“ESG” sentiment has gained momentum across the United States, with several states having enacted or proposed “anti-ESG” policies, legislation or issued related legal opinions.
Any acquisitions or investments made by us also could harm our results of operations, including as a result of significant write-offs or the incurrence of debt and contingent liabilities. In addition, if we choose to issue equity to fund an acquisition, our stockholders may experience dilution. Current or future indebtedness may expose us to substantial risks.
Any acquisitions or investments made by us also could harm our results of operations, including as a result of significant write-offs or the incurrence of debt and contingent liabilities. In addition, if we choose to issue equity to fund an acquisition, our stockholders may experience dilution. 48 Table of Contents Current or future indebtedness may expose us to substantial risks.
The global financial markets and business climate have recently deteriorated and may continue to deteriorate, including due to continued rising interest rates, ongoing high inflation, reduced availability of credit, recession risk, regional and international bank failures, changes in laws and regulation, terrorism or political uncertainty, war (including the ongoing Russia-Ukraine and Middle East conflicts), and potential recession.
The global financial markets and business climate have recently deteriorated and may continue to deteriorate, including due to continued rising interest rates, ongoing high inflation, reduced availability of credit, regional and international bank failures, changes in laws and regulation, trade policies, terrorism or political uncertainty, war (including the ongoing Russia-Ukraine and Middle East conflicts), and potential recession.
Borrowings under the Credit Agreement, or any future debt we undertake, will expose us to the typical risks associated with the use of leverage. Significant future borrowings could make it more difficult for us to withstand adverse economic conditions or business plan variances, to take advantage of new business opportunities, or to make necessary capital expenditures.
Borrowings under the Credit Agreement and the Senior Notes, or any future debt we undertake, will expose us to the typical risks associated with the use of leverage. Significant future borrowings could make it more difficult for us to withstand adverse economic conditions or business plan variances, to take advantage of new business opportunities, or to make necessary capital expenditures.
In addition, the SEC has recently proposed new rules on the use of artificial intelligence by investment advisers that could add to the compliance risks and burdens of using this technology. We may also be exposed to competitive risks related to the adoption and application of new technologies by established market participants or new entrants.
In addition, the SEC has proposed new rules on the use of artificial intelligence by investment advisers that, if enacted, could add to the compliance risks and burdens of using this technology. We may also be exposed to competitive risks related to the adoption and application of new technologies by established market participants or new entrants.
Such volatility could adversely affect the business of StepStone and the StepStone Funds and the portfolio companies in which they invest, all of which could have material and adverse effect on our performance. We operate in a heavily regulated industry and any failure to comply with the government regulations to which we are subject could adversely affect us.
Such volatility could adversely affect the business of StepStone and the StepStone Funds and the portfolio companies in which they invest, all of which could have material and adverse effect on our performance. 51 Table of Contents We operate in a heavily regulated industry and any failure to comply with the government regulations to which we are subject could adversely affect us.
Such events could damage our business relationships and adversely affect our business, financial condition and results of operations. 41 Table of Contents Cybersecurity risks and cybersecurity incidents could adversely affect our business by causing a disruption to our operations, which could adversely affect our financial condition and results of operations.
Such events could damage our business relationships and adversely affect our business, financial condition and results of operations. 39 Table of Contents Cybersecurity risks and cybersecurity incidents could adversely affect our business by causing a disruption to our operations, which could adversely affect our financial condition and results of operations.
The governing agreements of many of the StepStone Funds provide that, subject to certain conditions, third-party clients in those funds have the right to remove us as the general partner of the relevant fund or terminate the fund, including in certain cases without cause by a simple majority vote.
The governing agreements of many of the StepStone Funds provide that, subject to certain conditions, third-party clients in those funds have the right to remove us as the general partner of the relevant fund or terminate the 30 Table of Contents fund, including in certain cases without cause by a simple majority vote.
See “—Evolving laws and government regulations could adversely affect us.” 52 Table of Contents A major public health crisis, such as COVID-19 pandemic or a similar pandemic, could again severely disrupt the global financial markets and business climate and adversely affect our business, financial condition and results of operations.
See “—Evolving laws and government regulations could adversely affect us.” A major public health crisis, such as COVID-19 pandemic or a similar pandemic, could again severely disrupt the global financial markets and business climate and adversely affect our business, financial condition and results of operations.
As a result, in certain circumstances, payments could be made under the Tax Receivable Agreements in excess of our ultimate cash tax savings. 63 Table of Contents In certain circumstances, payments under each Tax Receivable Agreement may be accelerated and/or significantly exceed the actual tax benefits, if any, that SSG actually realizes.
As a result, in certain circumstances, payments could be made under the Tax Receivable Agreements in excess of our ultimate cash tax savings. In certain circumstances, payments under each Tax Receivable Agreement may be accelerated and/or significantly exceed the actual tax benefits, if any, that SSG actually realizes.
We may choose to manage these excess distributions through a number of different approaches, including through the payment of dividends to our Class A common stockholders or by applying them to other corporate purposes. 65 Table of Contents We may be required to fund withholding tax upon certain exchanges of Class B units or newly-created Class D units into shares of Class A common stock by non-U.S. holders.
We may choose to manage these excess distributions through a number of different approaches, including through the payment of dividends to our Class A common stockholders or by applying them to other corporate purposes. 64 Table of Contents We may be required to fund withholding tax upon certain exchanges of Class B or Class D units into shares of Class A common stock by non-U.S. holders.
Any interruption or deterioration in the performance of these government agencies or third-party service providers, failures of their information systems and technology or cyber and security breaches could put our sensitive information at risk or result in the shutdown of a service provider, and indemnification by, or insurance coverage of, such service providers may not be sufficient to cover any damage or loss, which could impair the quality of the funds’ operations and harm our reputation, thereby adversely affecting our business, financial condition and results of operations.
Any interruption or deterioration in the performance of these government agencies or third-party service providers, intentional or unintentional information security incidents caused by their personnel, failures of their information systems and technology or cyber and security breaches could put our sensitive information at risk or result in the shutdown of a service provider, and indemnification by, or insurance coverage of, such service providers may not be sufficient to cover any damage or loss, which could impair the quality of the funds’ operations and harm our reputation, thereby adversely affecting our business, financial condition and results of operations.
See “Business—Regulatory Environment.” To the extent that the Partnership is a “fiduciary” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), with respect to benefit plan clients, it is subject to ERISA, and to regulations promulgated thereunder.
See “Business—Regulatory Environment.” 52 Table of Contents To the extent that the Partnership is a “fiduciary” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), with respect to benefit plan clients, it is subject to ERISA, and to regulations promulgated thereunder.
If we experience a change of control (as defined under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”) or as otherwise set forth in the partnership agreements of our funds), continuation of the investment management agreements of our 32 Table of Contents funds would be subject to client consent.
If we experience a change of control (as defined under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”) or as otherwise set forth in the partnership agreements of our funds), continuation of the investment management agreements of our funds would be subject to client consent.
In addition, if we fail to comply with any of the regulations that we are subject to, we could be subject to enforcement actions, which may materially and adversely affect our business, financial condition and results of operations. Evolving laws and government regulations could adversely affect us.
In addition, if we fail to comply with any of the regulations that we are subject to, we could be subject to enforcement actions, which may materially and adversely affect our business, financial condition and results of operations. 53 Table of Contents Evolving laws and government regulations could adversely affect us.
Governmental actions related to the imposition of tariffs or other trade barriers or changes to international trade agreements or policies could increase costs, decrease margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the revenues and profitability of companies whose businesses rely on goods imported from outside of the United States.
Governmental actions related to the imposition of tariffs, sanctions or other trade barriers or changes to international trade agreements or policies, such as USMCA, could increase costs, decrease margins, reduce the competitiveness of products and services offered by current and future portfolio companies and adversely affect the revenues and profitability of companies whose businesses rely on goods imported from outside of the United States.
Policy changes and regulatory reform by the U.S. federal government may create regulatory uncertainty for our funds’ portfolio companies and our investment strategies and adversely affect the profitability of the StepStone Funds’ portfolio companies. 55 Table of Contents Ongoing political developments could adversely impact our investment management and investment advisory businesses.
Policy changes and regulatory reform by the U.S. federal government may create regulatory uncertainty for our funds’ portfolio companies and our investment strategies and adversely affect the profitability of the StepStone Funds’ portfolio companies. Ongoing political developments could adversely impact our investment management and investment advisory businesses.
In addition, our funds’ cash held with a custodian or counterparty generally will not be segregated from the custodian’s or counterparty’s own cash, and our funds may therefore rank as unsecured creditors in relation thereto. Risks Related to Our Industry The investment management and investment advisory business is intensely competitive.
In addition, our funds’ cash held with a custodian or counterparty generally will not be segregated from the custodian’s or counterparty’s own cash, and our funds may therefore rank as unsecured creditors in relation thereto. 49 Table of Contents Risks Related to Our Industry The investment management and investment advisory business is intensely competitive.
This obligation is known as a “clawback” or contingent repayment obligation. Our carried interest is generally determined at the end of the period on a hypothetical liquidation basis. As of March 31, 2024, if the funds were liquidated at their fair values, no material amounts would have been subject to contingent repayment.
This obligation is known as a “clawback” or contingent repayment obligation. Our carried interest is generally determined at the end of the period on a hypothetical liquidation basis. As of March 31, 2025, if the funds were liquidated at their fair values, no material amounts would have been subject to contingent repayment by us.
Each of these factors could, in turn, have a material adverse effect on our business, financial condition and results of operations. Our failure to appropriately manage conflicts of interest could damage our reputation and adversely affect our business.
Each of these factors could, in turn, have a material adverse effect on our business, financial condition and results of operations. 31 Table of Contents Our failure to appropriately manage conflicts of interest could damage our reputation and adversely affect our business.
In addition, institutional clients may decide to not commit capital to future fundraises as a result of their assessment of our approach to and consideration of the ESG cost of investments made by us.
In addition, institutional clients may decide to not commit capital to future fundraises as a result of their assessment of our approach to and consideration of the sustainability-related cost of investments made by us.
In addition, the use of ESG metrics in the investment process could be subjective and they are not subject to uniform standards, and, as such, there is no guarantee that we will be able to accurately assess and measure the ESG risks and ESG compliance of its investments and potential investments.
In addition, the use of sustainability and corporate responsibility metrics in the investment process could be subjective and they are not subject to uniform standards, and, as such, there is no guarantee that we will be able to accurately assess and measure the sustainability and corporate responsibility risks and compliance of its investments and potential investments.
From time to time, we lose clients as a result of the sale or merger of a client, a change in a client’s senior management, competition from other financial institutions and other factors. Moreover, a number of our contracts with state government-sponsored clients are secured through such government’s request for proposal (“RFP”) process and are subject to periodic renewal.
From time to time, we lose clients as a result of the sale or merger of a client, a change in a client’s senior management, competition from other financial institutions and other factors. Moreover, a number of our contracts with state government-sponsored clients are secured through such government’s RFP process and are subject to periodic renewal.
Given increased U.S. and European legal and regulatory focus on ESG matters, failure to comply with applicable legal and regulatory changes may attract increased regulatory scrutiny of our business, and could result in fines and/or other sanctions being levied against us.
Given increased U.S. and European legal and regulatory focus on sustainability and corporate responsibility matters, failure to comply with applicable legal and regulatory changes may attract increased regulatory scrutiny of our business, and could result in fines and/or other sanctions being levied against us.
For instance, in fiscal 2023, we recorded a $122.3 million loss on unrealized carried interest allocations (net of the reversal of realized carried interest allocations) with respect to our historic operations, as well as a $452.2 million loss on Legacy Greenspring carried interest allocations.
For instance, in fiscal 2023, we recorded a $122 million loss on unrealized carried interest allocations (net of the reversal of realized carried interest allocations) with respect to our historic operations, as well as a $452 million loss on Legacy Greenspring carried interest allocations. In fiscal 2024, we recorded a $75 million loss on Legacy Greenspring carried interest allocations.
ESG-based exclusionary criteria could result in a StepStone Fund foregoing opportunities to make certain investments when it might otherwise be advantageous to do so, and/or selling certain investments due to their ESG characteristics when it might be disadvantageous to do so.
Sustainability-based exclusionary criteria could result in a StepStone Fund foregoing opportunities to make certain investments when it might otherwise be advantageous to do so, and/or selling certain investments due to their sustainability and corporate responsibility characteristics when it might be disadvantageous to do so.
Because members of our senior leadership team hold their economic interest through other entities, conflicts of interest may arise between them and the holders of our Class A common stock or with us. The Sunset Holders, who are members of our senior leadership team, beneficially owned approximately 30.6% of the outstanding Partnership units as of March 31, 2024.
Because members of our senior leadership team hold their economic interest through other entities, conflicts of interest may arise between them and the holders of our Class A common stock or with us. The Sunset Holders, who are members of our senior leadership team, beneficially owned approximately 27.1% of the outstanding Partnership units as of March 31, 2025.
Our ability to manage our exposure to market conditions is limited. Market deterioration could cause us, the StepStone Funds we manage or the funds in which they invest to experience reduced liquidity, earnings and cash flow, recognize impairment charges, or face challenges in raising additional capital, obtaining investment financing and making investments on attractive terms.
Market deterioration could cause us, the StepStone Funds we manage or the funds in which they invest to experience reduced liquidity, earnings and cash flow, recognize impairment charges, or face challenges in raising additional capital, obtaining investment financing and making investments on attractive terms.
Devoting additional resources to ESG matters could increase the amount of expenses we or our investments are required to bear. For example, collecting, measuring, and reporting ESG 61 Table of Contents information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks.
Devoting additional resources to sustainability and corporate responsibility matters could increase the amount of expenses we or our investments are required to bear. For example, collecting, measuring, and reporting sustainability and corporate responsibility information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks.
We may in the future continue to pay cash dividends to our stockholders, but our board of directors may, in its discretion, decrease the level of dividends or discontinue the payment of dividends entirely.
Therefore, while we may in the future continue to pay dividends to our stockholders, our board of directors may, in its discretion, decrease the level of dividends or discontinue the payment of dividends entirely.
After a “Sunset” becomes effective, the Class B common stock will have one vote per share instead of five votes per share, and the Stockholders Agreement will expire, meaning that the Class B stockholders will no longer have the right to control the appointment of directors or to direct the vote on all matters that are submitted to our stockholders for a vote.
After a “Sunset” becomes effective (which the Company currently anticipates will occur on September 18, 2025), the Class B common stock will have one vote per share instead of five votes per share, and the Stockholders Agreement will expire, meaning that the Class B stockholders will no longer have the right to control the appointment of directors or to direct the vote on all matters that are submitted to our stockholders for a vote.
A “covered employee” means any employee of the taxpayer if the employee (a) is the principal executive officer (“PEO”) or principal financial officer (“PFO”) of the taxpayer at any time during the taxable year, or was an individual acting in such a capacity, (b) was among the three highest compensated officers for the taxable year (other than the PEO and PFO) required to be disclosed in the proxy statement, or (c) was a covered employee of the taxpayer (or any predecessor) for any preceding taxable year beginning after December 31, 2016.
A “covered employee” means any employee of the taxpayer if the employee (a) is the principal executive officer (“PEO”) or principal financial officer (“PFO”) of the taxpayer at any time during the taxable year, or was an individual acting in such a capacity, (b) was among the three highest compensated officers for the taxable year (other than the PEO and PFO) required to be disclosed in the proxy statement, (c) was among the five next highest compensated employees for the taxable year beginning with taxable years beginning after December 31, 2026, or (d) was a covered employee of the taxpayer (or any predecessor) for any preceding taxable year beginning after December 31, 2016 (other than as a result of clause (c) above).
The failure to accurately predict the possible outcome of policy changes and regulatory reform could have a material adverse effect on the returns generated from our funds’ investments and our revenues. In recent years, the United States has imposed tariffs on various products imported into the United States.
The failure to accurately predict the possible outcome of policy changes and regulatory reform could have a material adverse effect on the returns generated from our funds’ investments and our revenues. 54 Table of Contents Recently, the United States has imposed tariffs on various products imported into the United States.
Any determination that we have violated the FCPA or other applicable anti-corruption, sanctions or export control laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of client confidence, any one of which could adversely affect our business prospects, financial condition and results of operations. 58 Table of Contents Regulation of investment advisers outside the United States could adversely affect our ability to operate our business.
Any determination that we have violated the FCPA or other applicable anti-corruption, sanctions or export control laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of client confidence, any one of which could adversely affect our business prospects, financial condition and results of operations.
In recent years, certain institutional clients have placed increasing importance on ESG implications of investments made by private equity and other funds to which they commit capital.
In recent years, certain investors have placed increasing importance on sustainability implications of investments made by private equity and other funds to which they commit capital.
Legal and regulatory developments, including increasing levels of regulation by the SEC and other regulatory authorities outside of the United States, also contribute to the increasing level of our expenses.
Legal and regulatory developments, including increasing levels of regulation outside of the United States, also contribute to the increasing level of our expenses.
While we strive to implement ESG practices, there can be no assurance that we will be able to identify all ESG issues or will be able to successfully implement our ESG policies.
While we strive to implement sustainability practices, there can be no assurance that we will be able to identify all sustainability and corporate responsibility issues or will be able to successfully implement our sustainability and corporate responsibility policies.
In addition, the historical and potential future investment returns of the StepStone Funds are not linked to returns on our Class A common stock. Positive performance of the StepStone Funds or the investments that we recommend to our advisory clients will not necessarily result in positive returns on an investment in our Class A common stock.
Positive performance of the StepStone Funds or the investments that we recommend to our advisory clients will not necessarily result in positive returns on an investment in our Class A common stock.
The terms of the contracts with these third-party service providers are often customized and complex, and many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight.
The terms of the contracts with these third-party service providers are often customized and complex, and many of these arrangements occur in markets or relate to products that are not subject to regulatory oversight. We may be unsuccessful in seeking reimbursement or indemnification from these third-party service providers.
At times, clients have conditioned future capital commitments on the taking or refraining from taking of such actions. Clients’ increased focus and activism related to ESG and similar matters may constrain our investment opportunities.
At times, clients have conditioned future capital commitments on the taking or refraining from taking of such actions. Such clients’ focus and activism related to sustainability and similar matters may constrain investment opportunities we evaluate for them.
We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our stockholders, and increase the complexity, burden and cost of tax compliance.
We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our stockholders, and increase the complexity, burden and cost of tax compliance. 55 Table of Contents Our businesses are subject to income taxation in the United States, as well as in many tax jurisdictions throughout the world.
We expect to be required to devote increasing levels of funding and resources to comply with evolving cybersecurity regulations, including the new SEC rules applicable to public companies as well as those expected to be promulgated by the SEC with respect to investment advisers, and to continue to monitor and enhance our information security procedures and controls.
We devote significant levels of funding and resources to comply with evolving cybersecurity regulations, including the SEC rules applicable to public companies as well as those proposed by the SEC with respect to investment advisers, and to monitor and enhance our information security procedures and controls.
For example, inflation in the U.S. could remain high or increase, and heightened competition for workers, supply chain issues and rising energy and commodity prices have contributed to increasing wages and other inputs, which may put pressure on the profit margins of portfolio companies within our private market funds.
For example, while inflation in the U.S. has stabilized, it remains higher than pandemic levels and could increase. In addition, heightened competition for workers, supply chain issues and rising energy and commodity prices have contributed to increasing wages and other inputs, which may put pressure on the profit margins of portfolio companies within our private market funds.
A failure to comply with the obligations imposed by the Investment Advisers Act, including recordkeeping, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, could result in investigations, sanctions and reputational damage, and could materially and adversely affect our business, financial condition, results of operations and business reputation.
A failure to comply with the obligations imposed by the Investment Advisers Act could result in investigations, sanctions and reputational damage, and could materially and adversely affect our business, financial condition, results of operations and business reputation.
In addition, we depend on third parties to assist us in complying with regulatory obligations with respect to such registered funds and business development companies.
In addition, we depend on third parties to assist us in complying with regulatory obligations with respect to our Registered Funds.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo date, we have not identified any risks from cybersecurity threats, including as a result of previous cybersecurity incidents, that we believe have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations, or financial condition, but we face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to have such an effect.
Biggest changeTo date, based on information available as of the date of this annual report, we have not identified any risks from cybersecurity threats, including as a result of previous cybersecurity incidents, that we believe have materially affected, or are reasonably likely to materially affect, us, including our business strategy, results of operations, or financial condition, but we face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to have such an effect and there can be no assurance that we will not be subject to future cybersecurity attacks, threats or incidents that may materially affect our business strategy, results of operations or financial condition.
At the management level, the Head of IT, who has extensive cybersecurity knowledge and skills gained from over 20 years of work experience at the Company and elsewhere, heads the team responsible for implementing, monitoring and maintaining cybersecurity and data protection practices and reports directly to the President and Co-Chief Operating Officer.
At the management level, the CISO, who has extensive cybersecurity knowledge and skills gained from over 20 years of work experience at the Company and elsewhere, heads the team responsible for implementing, monitoring and maintaining cybersecurity and data protection practices and reports directly to the President and Co-Chief Operating Officer.
Management We have a cybersecurity working group composed of members of the Information Technology (including Information Security), Legal and Compliance departments, including the Head of IT, Chief Legal Officer, Chief Compliance Officer, and a number of their respective team members.
Management We have a cybersecurity working group composed of members of the Information Technology (including Information Security), Legal and Compliance departments, including the CISO, Chief Technology Officer, Chief Legal Officer, Chief Compliance Officer, and a number of their respective team members.
The Head of IT also periodically presents to the board of directors and audit committee, including to describe our information security infrastructure and improvements made, and to report on any significant developments.
The CISO also periodically presents to the board of directors and audit committee, including to describe our information security infrastructure and improvements made, and to report on any significant developments.
The Head of IT receives reports on cybersecurity threats from his team and external service providers on an ongoing basis and, in conjunction with management, reviews risk management measures implemented by us to identify and mitigate data protection and cybersecurity risks.
The CISO receives reports on cybersecurity threats from his team and external service providers on an ongoing basis and, in conjunction with management, reviews risk management measures implemented by us to identify and mitigate data protection and cybersecurity risks.
The Head of IT works closely with our Legal and Compliance departments to oversee compliance with legal, regulatory and contractual security requirements and to develop reports and presentations to the board of directors and its audit committee.
The CISO works closely with our Legal and Compliance departments to oversee compliance with legal, regulatory and contractual security requirements and to develop reports and presentations to the board of directors and its audit committee.
The Head of IT is responsible for providing training to employees in respect of information security. 73 Table of Contents Risk Management and Strategy We take a multifaceted approach to managing risk from cybersecurity threats. Our cybersecurity program leverages people, processes, and technology to identify and respond to cybersecurity threats in a timely manner.
The CISO is responsible for providing training to employees in respect of information security. 72 Table of Contents Risk Management and Strategy We take a multifaceted approach to managing risk from cybersecurity threats. Our cybersecurity program leverages people, processes, and technology to identify and respond to cybersecurity threats in a timely manner.
As part of such reviews, the board of directors and audit committee receive reports and presentations from those responsible for overseeing our cybersecurity risk management, including the Managing Director, Head of Information Technology (“Head of IT”) and our Legal team, which may address a wide range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to our peers, industry 72 Table of Contents participants, service providers and other third parties.
As part of such reviews, the board of directors and audit committee receive reports and presentations from those responsible for overseeing our cybersecurity risk management, including the Partner, Chief Information Security Officer & Head of Information Technology (“CISO”) and our Legal team, which may address a wide range of topics including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to 71 Table of Contents our peers, industry participants, service providers and other third parties.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease space for our offices located in Baltimore, Beijing, Charlotte, Chicago, Cleveland, Dallas, Dublin, Frankfurt, La Jolla, London, Luxembourg, Mexico City, Miami, Orlando, Palo Alto, Perth, Rome, San Francisco, Santiago, São Paulo, Seoul, Singapore, Sydney, Tokyo, Toronto and Zurich. We do not own any real property.
Biggest changeWe also lease space for our offices located in Baltimore, Beijing, Charlotte, Chicago, Cleveland, Dallas, Dublin, Frankfurt, Jeonju, La Jolla, London, Luxembourg, Mexico City, Milan, Orlando, Palo Alto, Perth, Rome, San Francisco, Santiago, São Paulo, Seoul, Singapore, Sydney, Tokyo, Toronto and Zurich. We do not own any real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. In the normal course of business, we may be subject to various legal, judicial and administrative proceedings. See note 16 to our consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. 74 Table of Contents Item 4. Mine Safety Disclosures. Not applicable. 75 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings. In the normal course of business, we may be subject to various legal, judicial and administrative proceedings. See note 15 to our consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. 73 Table of Contents Item 4. Mine Safety Disclosures. Not applicable. 74 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSee “Risk Factors—Risks Related to Our Organizational Structure— We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.” 76 Table of Contents The following table presents information regarding quarterly dividends on Class A common shares for the periods indicated: Quarterly Fiscal Period 1 Dividend Payment Date Dividend Per Share of Class A Common Stock First quarter July 15, 2021 $ 0.07 Second quarter September 15, 2021 0.07 Third quarter December 15, 2021 0.15 Fourth quarter March 15, 2022 0.15 Total dividends paid in FY2022 $ 0.44 First quarter June 30, 2022 $ 0.20 Second quarter September 15, 2022 0.20 Third quarter December 15, 2022 0.20 Fourth quarter March 15, 2023 0.20 Total dividends paid in FY2023 $ 0.80 First quarter June 30, 2023 $ 0.20 Supplemental 2 June 30, 2023 0.25 Second quarter September 15, 2023 0.21 Third quarter December 15, 2023 0.21 Fourth quarter March 15, 2024 0.21 Total dividends paid in FY2024 $ 1.08 _______________________________ (1) Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.
Biggest changeSee “Risk Factors—Risks Related to Our Organizational Structure— We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.” 75 Table of Contents The following table presents information regarding quarterly dividends on Class A common shares for the periods indicated: Quarterly Fiscal Period 1 Dividend Payment Date Dividend Per Share of Class A Common Stock First quarter June 30, 2022 $ 0.20 Second quarter September 15, 2022 0.20 Third quarter December 15, 2022 0.20 Fourth quarter March 15, 2023 0.20 Total dividends paid in FY2023 $ 0.80 First quarter June 30, 2023 $ 0.20 Supplemental 2 June 30, 2023 0.25 Second quarter September 15, 2023 0.21 Third quarter December 15, 2023 0.21 Fourth quarter March 15, 2024 0.21 Total dividends paid in FY2024 $ 1.08 First quarter June 28, 2024 $ 0.21 Supplemental 2 June 28, 2024 0.15 Second quarter September 13, 2024 0.24 Third quarter December 13, 2024 0.24 Fourth quarter March 14, 2025 0.24 Total dividends paid in FY2025 $ 1.08 _______________________________ (1) Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.
To the extent that SSG does not distribute such excess cash as dividends on the Class A common stock or otherwise undertake such ameliorative actions and instead, for example, holds such cash balances, the limited partners of the Partnership (not including SSG) may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following an exchange of their Class B units or Class C units for shares of the Class A common stock, notwithstanding that such limited partners may previously have participated as holders of Class B units or Class C units in distributions by the Partnership that resulted in such excess cash balances at SSG.
To the extent that SSG does not distribute such excess cash as dividends on the Class A common stock or otherwise undertake such ameliorative actions and instead, for example, holds such cash balances, the limited partners of the Partnership (not including SSG) may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following an exchange of their Class B units, Class C units or Class D units for shares of the Class A common stock, notwithstanding that such limited partners may previously have participated as holders of Class B units, Class C units or Class D units in distributions by the Partnership that resulted in such excess cash balances at SSG.
To the extent that the tax distributions SSG receives exceed the amounts SSG actually is required to pay taxes and other expenses and make payments under the Tax Receivable Agreements (because of the lower tax rate applicable to SSG than the assumed tax rate on which such distributions are based or because a disproportionate share of the taxable income of the Partnership may be required to be allocated to partners in the Partnership other than SSG), our board of directors, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, including potentially causing SSG to contribute such excess cash (net of any operating expenses) to the Partnership.
To the extent that the tax distributions SSG receives exceed the amounts SSG requires to pay taxes and other expenses and make payments under the Tax Receivable Agreements (because of the lower tax rate applicable to SSG than the assumed tax rate on which such distributions are based or because a disproportionate share of the taxable income of the Partnership may be required to be allocated to partners in the Partnership other than SSG), our board of directors, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, including potentially causing SSG to contribute such excess cash (net of any operating expenses) to the Partnership.
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 78 Table of Contents The following graph depicts the total cumulative stockholder return on our common stock from September 16, 2020, the first day of trading of our Class A common stock on Nasdaq, through March 31, 2024, relative to the performance of the S&P 500 Index and the Dow Jones US Asset Managers Index.
Stock Performance Graph The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing. 77 Table of Contents The following graph depicts the total cumulative stockholder return on our common stock from September 16, 2020, the first day of trading of our Class A common stock on Nasdaq, through March 31, 2025, relative to the performance of the S&P 500 Index and the Dow Jones US Asset Managers Index.
Recent Sales of Unregistered Securities Except as previously disclosed in Current Reports on Form 8-K, no unregistered sales of the Company’s equity securities were made during the year ended March 31, 2024. Use of Proceeds Not applicable. Issuer Purchases of Equity Securities None.
Recent Sales of Unregistered Securities Except as previously disclosed in current reports on Form 8-K, no unregistered sales of the Company’s equity securities were made during the year ended March 31, 2025. Use of Proceeds Not applicable. Issuer Purchases of Equity Securities None.
If the amount of tax distributions to be made exceeds the amount of funds available for distribution, SSG shall receive the full amount of its tax distribution before the other partners receive any distribution and the balance, if any, of funds available for distribution shall be distributed to the other partners pro rata in accordance with their assumed tax liabilities.
If the amount of tax distributions to be made exceeds the amount of funds available for distribution, SSG will receive the full amount of its tax distribution before the other partners receive any distribution and the balance, if any, of funds available for distribution will be distributed to the other partners pro rata in accordance with their assumed tax liabilities.
Holders of our Class B common stock will not be entitled to dividends distributed by SSG, but will share in the distributions made by the Partnership on a pro rata basis through their concurrent ownership of Class B units of the Partnership.
Holders of our Class B common stock are not entitled to dividends distributed by SSG, but will share in the distributions made by the Partnership on a pro rata basis through their concurrent ownership of Class B units of the Partnership.
Holders of our Class B common stock will not be entitled to dividends distributed by the Company, but will share in the distributions made by the Partnership on a pro rata basis as further discussed below.
Holders of our Class B common stock are not entitled to dividends distributed by the Company, but will share in the distributions made by the Partnership on a pro rata basis as further discussed below.
In connection with deciding whether to pay any dividend to our Class A stockholders, the board of directors will take into account: • general economic and business conditions; • our financial condition and results of operations; • our available cash and current and anticipated cash needs; • our capital requirements; 77 Table of Contents • contractual, legal, tax and regulatory requirements, restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries (including the Partnership) to us; and • such other factors as our board of directors may deem relevant.
In connection with deciding whether to pay any dividend to our Class A stockholders, the board of directors takes into account: • general economic and business conditions; • our financial condition and results of operations; • our available cash and current and anticipated cash needs; 76 Table of Contents • our capital requirements; • contractual, legal, tax and regulatory requirements, restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries (including the Partnership) to us; and • such other factors as our board of directors may deem relevant.
The quarterly cash dividend and supplemental cash dividend relate to earnings in respect of our fourth fiscal quarter and full fiscal year 2024, respectively.
The quarterly cash dividend and supplemental cash dividend relate to earnings in respect of our fourth fiscal quarter and full fiscal year 2025, respectively.
Dividend Policy The declaration and payment of any dividends is subject to the approval of the board of directors of the Company, which may change our dividend policy at any time.
Dividends The declaration and payment of any dividends is subject to the approval of the board of directors of the Company, which may change our approach to dividends at any time.
September 16, 2020 March 31, 2021 March 31, 2022 March 31, 2023 March 31, 2024 StepStone Group Inc. $ 100.00 $ 141.36 $ 134.05 $ 101.29 $ 155.14 S&P 500 Index $ 100.00 $ 118.33 $ 136.80 $ 126.20 $ 163.89 Dow Jones US Asset Managers Index $ 100.00 $ 140.46 $ 153.12 $ 138.32 $ 182.85 Item 6. [Reserved] 79 Table of Contents
September 16, 2020 March 31, 2021 March 31, 2022 March 31, 2023 March 31, 2024 March 31, 2025 StepStone Group Inc. $ 100.00 $ 141.36 $ 134.05 $ 101.29 $ 155.14 $ 231.39 S&P 500 Index $ 100.00 $ 118.33 $ 136.80 $ 126.20 $ 163.89 $ 177.38 Dow Jones US Asset Managers Index $ 100.00 $ 140.46 $ 153.12 $ 138.32 $ 182.85 $ 206.80 Item 6. [Reserved] 78 Table of Contents
The declaration and payment of any other dividends by SSG will generally be at the sole discretion of its board of directors, which may change our dividend policy at any time.
The declaration and payment of any other dividends by SSG will generally be at the sole discretion of its board of directors, which may change our approach to dividends at any time.
(2) The supplemental cash dividend relates to earnings in respect of our full fiscal year 2023.
(2) The supplemental cash dividend relates to earnings in respect of our full fiscal years 2023 and 2024, respectively.
On May 23, 2024, we announced a quarterly cash dividend of $0.21 per share of Class A common stock and a supplemental cash dividend of $0.15 per share of Class A common stock, both payable on June 28, 2024 to holders of record at the close of business on June 14, 2024.
On May 22, 2025, we announced a quarterly cash dividend of $0.24 per share of Class A common stock and a supplemental cash dividend of $0.40 per share of Class A common stock, both payable on June 30, 2025 to holders of record at the close of business on June 13, 2025.
Holders of Record As of May 22, 2024, there was one stockholder of record of our Class A common stock and there were 58 stockholders of record of our Class B common stock.
Holders of Record As of May 21, 2025, there were three stockholders of record of our Class A common stock and there were 55 stockholders of record of our Class B common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

217 edited+80 added−47 removed194 unchanged
Biggest changeFinancing Activities Financing activities used $58.0 million, $108.0 million and $70.4 million for fiscal 2024, 2023 and 2022, respectively, and primarily consisted of the following: • sale of non-controlling interests of $3.0 million, $0 million and $0 million; • proceeds from capital contributions from non-controlling interests $0 million, $0.2 million and $0.1 million; • net borrowings on revolving credit facility (including payment of deferred financing costs) of $50.0 million, $35.0 million and $62.6 million; • purchase of non-controlling interests of $0 million, $0 million and $3.0 million; • payment of deferred offering costs of $0 million, $0 million and $1.7 million; • distributions to non-controlling interests of $97.3 million, $109.5 million and $107.5 million; • proceeds from capital contributions to legacy Greenspring entities of $12.5 million, $13.4 million and $15.1 million; • distributions to non-controlling interests in legacy Greenspring entities of $9.0 million, $11.1 million and $11.3 million; • dividends paid to common stockholders of $68.5 million, $50.0 million and $23.9 million; • payments for employee taxes related to the net settlement of RSUs of $0.7 million, $2.7 million and $0 million; • payments to related parties under the Tax Receivable Agreements of $10.3 million, $6.0 million and $0.8 million; and • contributions from redeemable non-controlling interests in Consolidated Funds of $62.3 million, $22.8 million and $0 million. 114 Table of Contents Revolving Credit Facility We are party to a credit agreement, as amended in April 2023, with various lenders (the “Credit Agreement”) that was arranged by JPMorgan Chase Bank, N.A., as administrative agent, and provides for a $225.0 million multicurrency Revolver with a five-year maturity.
Biggest changeFinancing Activities Financing activities provided (used) $87.5 million, $(58.0) million and $(108.0) million for fiscal 2025, 2024 and 2023, respectively, and primarily consisted of the following: • net borrowings (repayments) on revolving credit facility of $(50.0) million, $50.0 million and $35.0 million; • proceeds from issuance of notes payable of $175.0 million, $0 million and $0 million; • deferred financing costs of $5.4 million; $0 million and $0 million; • purchase of non-controlling interests of $5.4 million, $0 million and $0 million; • sale of non-controlling interests of $0 million, $3.0 million and $0 million; • redemption of redeemable non-controlling interests of $13.0 million, $0 million and $0 million; • proceeds from capital contributions from non-controlling interests $8.8 million, $43 thousand and $0.2 million; • distributions to non-controlling interests of $129.3 million, $97.3 million and $109.5 million; • proceeds from capital contributions to legacy Greenspring entities of $19.6 million, $12.5 million and $13.4 million; • distributions to non-controlling interests in legacy Greenspring entities of $32.0 million, $9.0 million and $11.1 million; • payments made for acquisition-related contingent consideration of $17.8 million, $0 million and $0 million; • dividends paid to common stockholders of $75.8 million, $68.5 million and $50.0 million; • payments for employee taxes related to the net settlement of RSUs of $1.5 million, $0.7 million and $2.7 million; 114 Table of Contents • proceeds from issuance of Class A common stock under ESPP of $2.5 million, $0 million and $0 million; • payments to related parties under the Tax Receivable Agreements of $9.8 million, $10.3 million and $6.0 million; • net repayments on fund credit facility of $40 thousand, $0 million and $0 million; • contributions from redeemable non-controlling interests in Consolidated Funds of $240.3 million, $62.3 million and $22.8 million; and • redemptions of redeemable non-controlling interests in Consolidated Funds of $18.7 million, $0 million and $0 million.
We generate revenues from management and advisory fees and performance fees earned pursuant to contractual arrangements with our funds and our clients. We also invest our own capital in the StepStone Funds we manage to align our interests with those of our clients.
We generate revenues from management and advisory fees and performance fees earned pursuant to contractual arrangements with the StepStone Funds and our clients. We also invest our own capital in the StepStone Funds we manage to align our interests with those of our clients.
A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us.
A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us.
Expenses Year Ended March 31, 2024 Compared to Year Ended March 31, 2023 Total expenses increased $606.9 million to $539.9 million for fiscal 2024 as compared to fiscal 2023.
Year Ended March 31, 2024 Compared to Year Ended March 31, 2023 Total expenses increased $606.9 million to $539.9 million for fiscal 2024 as compared to fiscal 2023.
Primaries management fee: 25 basis points of net invested capital for private equity, real estate and infrastructure; 25 basis points of net asset value for private debt; 75 basis points of committed capital for the StepStone VC Platform. ii.
Primaries management fee: 25 basis points of net invested capital for private equity, real estate and infrastructure; 25 basis points of net asset value for private debt; 75 basis points of committed capital for the StepStone VC Platform. ii.
Secondaries management fee: 125 basis points, 125 basis points and 95 basis points for private equity, real estate and infrastructure, respectively, of capital commitments in years 1 through 4 for management fees, charged quarterly.
Secondaries management fee: 125 basis points, 125 basis points and 95 basis points for private equity, real estate and infrastructure, respectively, of capital commitments in years 1 through 4 for management fees, charged quarterly.
Co-investments management fee: 100 basis points of net committed capital for private equity and real estate; 85 and 50 basis points for infrastructure co-investments and direct asset management investments, respectively, of net committed capital; 65 basis points of net asset value for private debt; 200 basis points of net invested capital for the StepStone VC Platform. iv.
Co-investments management fee: 100 basis points of net committed capital for private equity and real estate; 85 and 50 basis points for infrastructure co-investments and direct asset management investments, respectively, of net committed capital; 65 basis points of net asset value for private debt; 200 basis points of net invested capital for the StepStone VC Platform. iv.
Private equity secondaries and co-investments include 12.5% and 10.0% of paid and unrealized carry, respectively, with an 8.0% preferred return hurdle; infrastructure secondaries and co-investments include 10.0% of paid and unrealized carry, respectively, with an 8.0% preferred return hurdle; real estate secondaries and co-investments include 15.0% of paid and unrealized carry, with an 8.0% preferred return hurdle; private debt secondaries and co-investments include 10.0% of paid and unrealized carry, with a 5.0% preferred return hurdle; and the StepStone VC Platform primaries, secondaries and co-investments/directs include 5.0%, 5.0% and 20.0%, respectively, of paid and unrealized carry with no preferred return hurdle.
Private equity secondaries and co-investments include 12.5% and 10.0% of paid and unrealized carry, respectively, with an 8.0% preferred return hurdle; infrastructure secondaries and co-investments include 10.0% of paid and unrealized carry, respectively, with an 8.0% preferred return hurdle; real estate secondaries and co-investments include 15.0% of paid and unrealized carry, with an 8.0% preferred return hurdle; private debt secondaries and co-investments include 10.0% of paid and unrealized carry, with a 5.0% preferred return hurdle; and the StepStone VC Platform primaries, secondaries and co-investments/directs include 5.0%, 5.0% and 20.0%, respectively, of paid and unrealized carry with no preferred return hurdle.
A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us.
A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us.
A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us.
A corresponding number of shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and a corresponding number of Class A units of the Partnership were issued to us.
Incentive fees are generally calculated as a percentage of the profits (up to 15%) earned in respect of certain accounts, including certain permanent capital vehicles, for which we are the investment adviser, subject to the achievement of minimum return levels or performance benchmarks.
Incentive fees are generally calculated as a percentage of the profits (up to 15%) earned in respect of certain accounts, including certain permanent capital vehicles, for which we are the investment adviser, subject to the achievement of minimum return levels or performance benchmarks.
Incentive fees are a form of variable consideration and represent contractual fee arrangements in our contracts with our customers. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period.
Incentive fees are a form of variable consideration and represent contractual fee arrangements in our contracts with our customers. Incentive fees are typically subject to reversal until the end of a defined performance period, as these fees are affected by changes in the fair value of the assets under management or advisement over such performance period.
Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax.
Moreover, incentive fees that are received prior to the end of the defined performance period are typically subject to clawback, net of tax.
We recognize incentive fee revenue only when these amounts are realized and no longer subject to significant risk of reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization).
We recognize incentive fee revenue only when these amounts are realized and no longer subject to significant risk of reversal, which is typically at the end of a defined performance period and/or upon expiration of the associated clawback period (i.e., crystallization).
However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax-related portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt.
However, clawback terms for incentive fees received prior to crystallization only require the return of amounts on a net of tax basis. Accordingly, the tax-related portion of incentive fees received in advance of crystallization is not subject to clawback and is therefore recognized as revenue immediately upon receipt.
Legacy Greenspring carried interest allocations include the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest.
Legacy Greenspring carried interest allocations include the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest.
The legacy Greenspring general partner entities are entitled to a carried interest allocation (typically 5% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized.
The legacy Greenspring general partner entities are entitled to a carried interest allocation (typically 5% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized.
Accordingly, the amount recognized as carried interest allocation revenue reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period.
Accordingly, the amount recognized as carried interest allocation revenue reflects our share of the gains and losses of the associated fund’s underlying investments measured at their then-fair values, relative to the fair values as of the end of the prior period.
These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted-average cost of capital, exit multiples, or terminal growth rates.
These techniques may include a market approach, recent transaction price, net asset value approach, or discounted cash flows, and may use one or more significant unobservable inputs such as EBITDA, revenue multiples, discount rates, weighted-average cost of capital, exit multiples, or terminal growth rates.
Tax Receivable Agreements The Tax Receivable Agreements provide for payment by SSG to the Class B limited partners, Class C limited partners and pre-IPO institutional investors of the Partnership of 85% of the amount of the net cash tax savings, if any, that SSG realizes (or, under certain circumstances, is deemed to realize) as a result of increases in tax basis (and utilization of certain other tax benefits) resulting from (i) SSG’s acquisition of such partners’ and institutional investors’ Partnership units and (ii) in the case of the Exchanges Tax Receivable Agreement, any payments SSG makes under the Exchanges Tax Receivable Agreement (including tax benefits related to imputed interest).
Tax Receivable Agreements The Tax Receivable Agreements provide for payment by SSG to the Class B limited partners, Class C limited partners, Class D limited partners and pre-IPO institutional investors of the Partnership of 85% of the amount of the net cash tax savings, if any, that SSG realizes (or, under certain circumstances, is deemed to realize) as a result of increases in tax basis (and utilization of certain other tax benefits) resulting from (i) SSG’s acquisition of such partners’ and institutional investors’ Partnership units and (ii) in the case of the Exchanges Tax Receivable Agreement, any payments SSG makes under the Exchanges Tax Receivable Agreement (including tax benefits related to imputed interest).
Pursuant to the StepStone Limited Partnership Agreement, the Class B Exchange Agreement and Class C Exchange Agreement that SSG and the Partnership entered into with partners holding Class B units and Class C units of the Partnership, respectively, each Class B unit or Class C unit is exchangeable for one share of SSG’s Class A common stock or, at SSG’s election, for cash, subject to certain restrictions specified in the relevant exchange agreement.
Pursuant to the StepStone Limited Partnership Agreement, the Class B Exchange Agreement, the Class C Exchange Agreement and the Class D Exchange Agreement that SSG and the Partnership entered into with partners holding Class B units, Class C units and Class D units of the Partnership, respectively, each Class B unit, Class C unit or Class D unit is exchangeable for one share of SSG’s Class A common stock or, at SSG’s election, for cash, subject to certain restrictions specified in the relevant exchange agreement.
In addition, the Credit Agreement contains covenants that, among other things: limit our ability to incur indebtedness; create, incur or allow liens; transfer or dispose of assets; merge with other companies; make certain investments; pay dividends or make distributions; engage in new or different lines of business; and engage in transactions with affiliates.
In addition, the Credit Agreement contains covenants that, among other things: limit our ability to incur indebtedness; create, incur or allow liens; transfer or dispose of assets; merge with other companies; make certain investments; pay dividends or make distributions in certain circumstances; engage in new or different lines of business; and engage in certain transactions with affiliates.
SSG will retain the benefit of the remaining 15% of these net cash tax savings under both Tax Receivable Agreements. Capital Requirements of Regulated Entities We are required to maintain minimum net capital balances for regulatory purposes in the United States and certain non-U.S. jurisdictions in which we do business.
SSG will retain the benefit of the remaining 15% of these net cash tax savings under the Tax Receivable Agreements. Capital Requirements of Regulated Entities We are required to maintain minimum net capital balances for regulatory purposes in the United States and certain non-U.S. jurisdictions in which we do business.
The variability and availability of the observable inputs affected by the factors described above may result in transfers between Levels I, II, and III. We consider our cash, cash equivalents, restricted cash, fees and accounts receivable, accounts payable, investments, revolving credit facility, and contingent consideration balance to be financial instruments.
The variability and availability of the observable inputs affected by the factors described above may result in transfers between Levels I, II, and III. We consider our cash, cash equivalents, restricted cash, fees and accounts receivable, accounts payable, investments, notes payable, revolving credit facility, and contingent consideration balance to be financial instruments.
Excluding the reversal of $49.4 million, unrealized carried interest allocation revenues increased $298.6 million to $176.3 million for fiscal 2024 compared to fiscal 2023. The increase in unrealized carried interest allocations for fiscal 2024 primarily reflected a net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity funds.
Excluding the reversal of $49.4 million, unrealized carried interest allocation revenues increased $298.6 million to $176.3 million for fiscal 2024 as compared to fiscal 2023. The increase in unrealized carried interest allocations for fiscal 2024 primarily reflected a net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity funds.
Performance fee-related compensation expense increased $151.6 million to $112.4 million for fiscal 2024 as compared to fiscal 2023, primarily reflecting the increase in carried interest allocation revenue. Realized performance fee-related compensation decreased $42.2 million, or 53%, to $37.7 million for fiscal 2024 as compared to fiscal 2023, primarily reflecting lower realization activity.
Total performance fee-related compensation expense increased $151.6 million to $112.4 million for fiscal 2024 as compared to fiscal 2023, primarily reflecting the increase in carried interest allocation revenue. Realized performance fee-related compensation decreased $42.2 million, or 53%, to $37.7 million for fiscal 2024 as compared to fiscal 2023, primarily reflecting lower realization activity.
Multiple of Invested Capital is presented net of management fees, carried interest and expenses charged by underlying fund managers, as well as StepStone’s management fees, performance fees and expenses; • “IRR” refers to the annualized internal rate of return for all investments within the relevant investment strategy on an inception-to-date basis as of December 31, 2023 (except as noted otherwise below), based on contributions, distributions and unrealized value; • “Gross IRR” refers to IRR net of management fees, performance fees and expenses charged by the underlying fund managers, but gross of StepStone’s management fees, performance fees and expenses; • “Net IRR” refers to IRR net of fees and expenses charged by both the underlying fund managers and StepStone; • “MSCI ACWI Direct Alpha” refers to the MSCI All Country World Index, the benchmark index used for comparison below.
Multiple of Invested Capital is presented net of management fees, carried interest and expenses charged by underlying fund managers, as well as StepStone’s management fees, performance fees and expenses; • “IRR” refers to the annualized internal rate of return for all investments within the relevant investment strategy on an inception-to-date basis as of December 31, 2024 (except as noted otherwise below), based on contributions, distributions and unrealized value; • “Gross IRR” refers to IRR net of management fees, performance fees and expenses charged by the underlying fund managers, but gross of StepStone’s management fees, performance fees and expenses; • “Net IRR” refers to IRR net of fees and expenses charged by both the underlying fund managers and StepStone; • “MSCI ACWI Direct Alpha” refers to the MSCI All Country World Index, the benchmark index used for comparison below.
When a Class B unit or Class C unit is surrendered for exchange, it will not be available for reissuance. When a Class B unit is exchanged for a share of SSG’s Class A common stock, a corresponding share of SSG’s Class B common stock will automatically be redeemed by SSG at par value and canceled.
When a Class B unit, Class C unit or Class D unit is surrendered for exchange, it will not be available for reissuance. When a Class B unit is exchanged for a share of SSG’s Class A common stock, a corresponding share of SSG’s Class B common stock will automatically be redeemed by SSG at par value and canceled.
We recognize interest and penalties, if any, related to unrecognized tax benefits as interest expense and general, administrative and other expenses, respectively, in the consolidated statements of income. See note 11 to our consolidated financial statements for more information.
We recognize interest and penalties, if any, related to unrecognized tax benefits as interest expense and general, administrative and other expenses, respectively, in the consolidated statements of income (loss). See note 11 to our consolidated financial statements for more information.
The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) newly-created Class D equity interests in the Partnership with terms substantially similar to the Partnership’s existing Class C Units, in the case of SRE and SRA, or shares of Class A common stock, in the case of SPD, and (ii) cash (at our discretion for all exchanges except the initial exchange), in up to ten annual exchanges (or up to fifteen annual exchanges in certain circumstances in the case of the sellers of SRA equity interests).
The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) newly-created Class D equity interests (“Class D units”) in the Partnership with terms substantially similar to the Partnership’s existing Class C units, in the case of SRA and SRE, or shares of Class A common stock, in the case of SPD, and (ii) cash (at our discretion for all exchanges except the initial exchange), in up to ten annual exchanges (or up to fifteen annual exchanges in certain circumstances in the case of the sellers of SRA equity interests).
All of the carried interest allocations in respect of such legacy Greenspring funds are payable to employees who are considered affiliates to us and are therefore reflected as legacy Greenspring performance fee-related compensation in the consolidated statements of income . 89 Table of Contents We recognize revenue attributable to carried interest allocations from a StepStone Fund based on the amount that would be due to us pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date.
All of the carried interest allocations in respect of such legacy Greenspring funds are payable to employees who are considered affiliates to us and are therefore reflected as legacy Greenspring performance fee-related compensation in the consolidated statements of income . 88 Table of Contents We recognize revenue attributable to carried interest allocations from a StepStone Fund based on the amount that would be due to us pursuant to the fund’s governing documents, assuming the fund was liquidated based on the current fair value of its underlying investments as of that date.
The overall increase primarily reflected increases of $7.9 million due to a higher loss on change in fair value for contingent consideration obligation, $4.0 million in professional fees, $2.9 million in information and technology expenses, $2.9 million of travel and associated costs for investment evaluation and client service, $2.6 million due to a prior year gain within occupancy costs related to lease remeasurement adjustments due to a reduction in lease terms and $1.5 million in occupancy costs, partially offset by a decreases of $2.0 million in transaction costs and other general operating expenses.
The overall increase primarily reflected increases of $7.9 million due to a higher loss on change in fair value for contingent consideration obligation, $4.0 million in professional fees, $2.9 million in information and technology expenses, $2.9 million of travel and associated costs for investment evaluation and client service, $2.6 million due to a prior year gain within occupancy costs related to lease remeasurement adjustments due to a reduction in lease terms and $1.5 million in occupancy costs, partially offset by a decrease of $2.0 million in transaction costs and other general operating expenses.
Interest income consists of income earned on cash and cash equivalents, restricted cash, and amounts associated with the Consolidated Funds. Interest expense primarily consists of the interest expense on the Revolver, as well as the related amortization of deferred financing costs.
Interest income consists of income earned on cash and cash equivalents, restricted cash, and amounts associated with the Consolidated Funds. Interest expense primarily consists of the interest expense on the Revolver and the Notes, as well as the related amortization of deferred financing costs.
Redeemable non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss. 92 Table of Contents Key Operating Metrics We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business.
Redeemable non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss. 91 Table of Contents Key Operating Metrics We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business.
Other income (loss) includes foreign currency transaction gains and losses, non-operating activities, and amounts associated with the Consolidated Funds. 91 Table of Contents Income Tax Expense We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by the Partnership.
Other income (loss) includes foreign currency transaction gains and losses, non-operating activities, and amounts associated with the Consolidated Funds. 90 Table of Contents Income Tax Expense We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by the Partnership.
Each Transaction Agreement provides that beginning after the fifth annual exchange, future exchanges may be accelerated into one final exchange in certain circumstances.
Each Transaction Agreement also provides that beginning after the fifth annual exchange, future exchanges may be accelerated into one final exchange in certain circumstances.
Net Income (Loss) Attributable to Non-Controlling Interests in the Partnership Net income (loss) attributable to non-controlling interests in the Partnership represents the portion of net income or loss attributable to the interests held by the Class B and Class C unitholders of the Partnership.
Net Income (Loss) Attributable to Non-Controlling Interests in the Partnership Net income (loss) attributable to non-controlling interests in the Partnership represents the portion of net income or loss attributable to the interests held by the Class B, Class C and Class D unitholders of the Partnership.
We are a global firm and believe that our multi-asset class expertise, local knowledge, business relationships, proprietary data and technology, and presence are all critical to securing a competitive edge in the private markets. We deploy a local staffing model, operating from 27 cities across 16 countries on five continents.
We are a global firm and believe that our multi-asset class expertise, local knowledge, business relationships, proprietary data and technology, and presence are all critical to securing a competitive edge in the private markets. We deploy a local staffing model, operating from 28 cities across 16 countries on five continents.
AUM as of March 31, 2024 reflects final data for the prior period (December 31, 2023), adjusted for net new client account activity through March 31, 2024. NAV data for underlying investments is as of December 31, 2023, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2023.
AUM as of March 31, 2025 reflects final data for the prior period (December 31, 2024), adjusted for net new client account activity through March 31, 2025. NAV data for underlying investments is as of December 31, 2024, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2024.
AUA as of March 31, 2024 reflects final data for the prior period (December 31, 2023), adjusted for net new client account activity through March 31, 2024. NAV data for underlying investments is as of December 31, 2023, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2023.
AUA as of March 31, 2025 reflects final data for the prior period (December 31, 2024), adjusted for net new client account activity through March 31, 2025. NAV data for underlying investments is as of December 31, 2024, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2024.
(2) Reflects the add back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation. The table below shows a reconciliation of GAAP measures to additional non-GAAP measures. We use the non-GAAP measures presented below as components when calculating FRE and ANI.
(2) Reflects the add back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation. 105 Table of Contents The table below shows a reconciliation of GAAP measures to additional non-GAAP measures. We use the non-GAAP measures presented below as components when calculating FRE and ANI.
Because our board of directors may determine to pay or not pay dividends to our Class A stockholders, our Class A stockholders may not necessarily receive dividend distributions relating to our excess distributions, even if the Partnership makes excess distributions to us. 117 Table of Contents Tax Receivable Agreements We have entered into an Exchanges Tax Receivable Agreement with the Class B limited partners and Class C limited partners, and a Reorganization Tax Receivable Agreement with certain pre-IPO institutional investors (collectively, the “Tax Receivable Agreements”).
Because our board of directors may determine to pay or not pay dividends to our Class A stockholders, our Class A stockholders may not necessarily receive dividend distributions relating to our excess distributions, even if the Partnership makes excess distributions to us. 119 Table of Contents Tax Receivable Agreements We have entered into an Exchanges Tax Receivable Agreement with the Class B limited partners, Class C limited partners, and Class D limited partners and a Reorganization Tax Receivable Agreement with certain pre-IPO institutional investors (collectively, the “Tax Receivable Agreements”).
In this annual report references to “we,” “us,” “our,” “StepStone” and similar terms refer to SSG and its consolidated subsidiaries, including the Partnership. Unless otherwise indicated, references in this annual report to fiscal 2024, fiscal 2023 and fiscal 2022 are to our fiscal years ended March 31, 2024, 2023 and 2022, respectively.
In this annual report references to “we,” “us,” “our,” “StepStone” and similar terms refer to SSG and its consolidated subsidiaries, including the Partnership. Unless otherwise indicated, references in this annual report to fiscal 2025, fiscal 2024 and fiscal 2023 are to our fiscal years ended March 31, 2025, 2024 and 2023, respectively.
When NAV data is not available by the business day occurring on or after 115 days following December 31, 2023, such NAVs are adjusted for cash activity following the last available reported NAV. 93 Table of Contents Fee-Earning AUM FEAUM reflects the assets from which we earn management fee revenue (i.e., fee basis) and includes assets in our SMAs, focused commingled funds and assets held directly by our clients for which we have fiduciary oversight and are paid fees as the manager of the assets.
When NAV data is not available by the business day occurring on or after 115 days following December 31, 2024, such NAVs are adjusted for cash activity following the last available reported NAV. 92 Table of Contents Fee-Earning AUM FEAUM reflects the assets from which we earn management fee revenue (i.e., fee basis) and includes assets in our SMAs, focused commingled funds and assets held directly by our clients for which we have fiduciary oversight and are paid fees as the manager of the assets.
Private equity includes buyout, venture capital, growth equity, fund-of-funds, and energy focused strategies. StepStone’s venture capital and growth equity strategy is composed of a) venture capital and growth equity focused commingled funds and separately managed accounts (the “StepStone VC Platform”) and b) underlying venture capital and growth equity investments within StepStone’s broader private equity funds.
Private equity includes buyout, venture capital, growth equity, fund-of-funds, and energy focused strategies. StepStone’s venture capital and growth equity strategy is composed of a) venture capital and growth equity focused commingled funds and separately managed accounts (the “StepStone VC Platform”) and b) underlying venture capital and growth equity investments within StepStone’s broader private equity accounts (“StepStone PE Accounts”).
SSG will retain the benefit of the remaining 15% of these net cash tax savings under both Tax Receivable Agreements.
SSG will retain the benefit of the remaining 15% of these net cash tax savings under the Tax Receivable Agreements.
The data for these investments are generally presented from the inception date of each strategy and asset class through December 31, 2023 and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.
The data for these investments are generally presented from the inception date of each strategy and asset class through December 31, 2024 and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.
In addition, market dislocations, contractions or volatility could put pressure on our returns in the future which could in turn affect our fundraising abilities. 81 Table of Contents • Our ability to maintain our data advantage relative to competitors.
In addition, market dislocations, contractions or volatility could put pressure on our returns in the future which could in turn affect our fundraising abilities. 80 Table of Contents • Our ability to maintain our data advantage relative to competitors.
Net income (loss) attributable to SSG, as reported in the consolidated statements of income, is presented net of the portion of net income (loss) attributable to holders of non-controlling interests. Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees in those entities.
Net income (loss) attributable to SSG, as reported in the consolidated statements of income, is presented net of the portion of net income (loss) attributable to holders of non-controlling interests. Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees.
For investment returns where NAV data is not available by the business day occurring on or after 115 days following December 31, 2023, such NAVs are adjusted for cash activity following the last available reported NAV.
For investment returns where NAV data is not available by the business day occurring on or after 115 days following December 31, 2024, such NAVs are adjusted for cash activity following the last available reported NAV.
(6) In connection with the Greenspring acquisition, we, indirectly through our subsidiaries, became the sole and/or managing member of certain entities, each of which is the general partner of an investment fund (“legacy Greenspring general partner entities”).
(5) In connection with the Greenspring acquisition, we, indirectly through our subsidiaries, became the sole and/or managing member of certain entities, each of which is the general partner of an investment fund (“legacy Greenspring general partner entities”).
The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of Partnership units. See Tax Receivable Agreements below. 124 Table of Contents Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
The principal items giving rise to temporary differences are certain basis differences resulting from exchanges of Partnership units. See Tax Receivable Agreements below. Deferred tax assets are reduced by a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
FRE is a component of ANI and comprises adjusted management and advisory fees, net, less adjusted expenses which are operating expenses other than (a) performance fee-related compensation, (b) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (c) amortization of intangibles, (d) charges associated with acquisitions and corporate transactions, and (e) certain other items that we believe are not indicative of our core operating performance (as listed in the below table).
FRE is a component of ANI and comprises fee revenues less adjusted expenses which are operating expenses other than (a) performance fee-related compensation, (b) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (c) amortization of intangibles, (d) charges associated with acquisitions and corporate transactions, and (e) certain other items that we believe are not indicative of our core operating performance (as listed in the below table).
In connection with the Greenspring acquisition, the sellers receiving Class C units of the Partnership became parties to the Exchanges Tax Receivable Agreement and in connection with the closings under the Transaction Agreements for SRE and SRA, the sellers receiving Class D units of the Partnership will become parties to the Exchanges Tax Receivable Agreement.
In connection with the Greenspring acquisition, the sellers receiving Class C units of the Partnership became parties to the Exchanges Tax Receivable Agreement and in connection with the closings under the Transaction Agreements for SRA and SRE, the sellers receiving Class D units of the Partnership became parties to the Exchanges Tax Receivable Agreement.
(1) The partners of the Partnership other than StepStone Group Inc. are: • the General Partner, which holds a 100% general partner interest and no economic interests; • certain members of management, employee owners and outside investors, all of whom own Class B units and an equivalent number of shares of Class B common stock; • certain members of management and employees who own Class B2 units; and • certain employee owners who own Class C units.
(1) The partners of the Partnership other than StepStone Group Inc. are: • the General Partner, which holds a 100% general partner interest and no economic interests; • certain members of management, employee owners and outside investors, all of whom own Class B units and an equivalent number of shares of Class B common stock; • certain employee owners who own Class C units; and • certain employee owners who own Class D units.
When NAV data is not available by the business day occurring on or after 115 days following December 31, 2023, such NAVs are adjusted for cash activity following the last available reported NAV.
When NAV data is not available by the business day occurring on or after 115 days following December 31, 2024, such NAVs are adjusted for cash activity following the last available reported NAV.
The weighted-average management fee rate from SMAs was approximately 0.40% and 0.39% of average FEAUM in fiscal 2023 and 2024, respectively. • Management fees from focused commingled funds are generally based on a specified fee rate applied against client capital commitments during a defined investment or commitment period.
The weighted-average management fee rate from SMAs was approximately 0.39% of average FEAUM in fiscal 2024 and 2025, respectively. • Management fees from focused commingled funds are generally based on a specified fee rate applied against client capital commitments during a defined investment or commitment period.
The revenues earned by us as investment manager of the Consolidated Funds are eliminated in consolidation and generally have no direct effect on the net income attributable to SSG or to Stockholders' Equity. 120 Table of Contents Revenues We recognize revenue in accordance with ASC 606.
The revenues earned by us as investment manager of the Consolidated Funds are eliminated in consolidation and generally have no direct effect on the net income attributable to SSG or to Stockholders' Equity. Revenues We recognize revenue in accordance with ASC 606.
StepStone Performance Summary by Asset Class PRIVATE EQUITY REAL ESTATE INFRASTRUCTURE PRIVATE DEBT INVESTMENT STRATEGY (1,2,4) NET IRR (3) NET TVM (3) INVESTMENT STRATEGY (1,4,5) NET IRR (3) NET TVM (3) INVESTMENT STRATEGY (1,4,6) NET IRR (3) INVESTMENT STRATEGY (1,4,8) NET IRR (3) Primaries 15.5% 1.6x Core/Core+ fund investments 5.5% 1.3x Core/debt 7.3% Direct lending 7.3% Secondaries 16.5% 1.5x Value-add/opportunistic fund investments 8.9% 1.3x Core+/value-add - primary fund investments 10.8% Distressed debt 8.6% Co-investments (7) 16.6% 1.6x Real estate debt fund investments 5.5% 1.2x Core+/value-add - secondary fund investments 14.9% Other (9) 7.2% Value-add/opportunistic secondaries & co-investments 12.2% 1.2x Core+/value-add - co-investments 13.7% _______________________________ (1) Investment returns reflect NAV data for underlying investments as of December 31, 2023, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2023.
StepStone Performance Summary by Asset Class PRIVATE EQUITY REAL ESTATE INFRASTRUCTURE PRIVATE DEBT INVESTMENT STRATEGY (1,2,4) NET IRR (3) NET TVM (3) INVESTMENT STRATEGY (1,4,5) NET IRR (3) NET TVM (3) INVESTMENT STRATEGY (1,4,6) NET IRR (3) INVESTMENT STRATEGY (1,4,8) NET IRR (3) Primaries 14.5% 1.5x Core/Core+ fund investments 7.1% 1.4x Core/debt 7.1% Direct lending 7.7% Secondaries 15.1% 1.4x Value-add/opportunistic fund investments 8.3% 1.3x Core+/value-add - primary fund investments 10.9% Distressed debt 8.5% Co-investments (7) 15.5% 1.6x Real estate debt fund investments 5.4% 1.2x Core+/value-add - secondary fund investments 12.3% Other (9) 7.0% Value-add/opportunistic secondaries & co-investments 9.9% 1.2x Core+/value-add - co-investments 12.5% _______________________________ (1) Investment returns reflect NAV data for underlying investments as of December 31, 2024, as reported by underlying managers up to the business day occurring on or after 115 days following December 31, 2024.
The historical results of our investments are not indicative of future results to be expected of existing or new investment funds, and are not a proxy for the performance of our Class A common stock, including because: • market conditions and investment opportunities may differ from those in the past; • the performance of our funds is largely based on the NAV (as defined below) of the funds’ investments, including unrealized gains, which may never be realized; • newly-established funds may generate lower investment returns during the period that they initially deploy their capital; • changes in the global tax and regulatory environment may impact both the investment preferences of our clients and the financing strategies employed by businesses in which particular funds invest, which may reduce the overall capital available for investment and the availability of suitable investments, thereby reducing investment returns in the future; • competition for investment opportunities, resulting from the increasing amount of capital invested in private markets alternatives, may increase the cost and reduce the availability of suitable investments, thereby reducing investment returns in the future; and • the industries and businesses in which particular funds invest will vary. 108 Table of Contents Historical and future returns of investments included in our track record are not directly correlated to potential returns on our Class A common stock.
The historical results of our investments are not indicative of future results to be expected of existing or new investment funds, and are not a proxy for the performance of our Class A common stock, including because: • market conditions and investment opportunities may differ from those in the past; • the performance of our funds is largely based on the NAV (as defined below) of the funds’ investments, including unrealized gains, which may never be realized; • newly-established funds may generate lower investment returns during the period that they initially deploy their capital; • changes in the global tax and regulatory environment may impact both the investment preferences of our clients and the financing strategies employed by businesses in which particular funds invest, which may reduce the overall capital available for investment and the availability of suitable investments, thereby reducing investment returns in the future; • competition for investment opportunities, resulting from the increasing amount of capital invested in private markets alternatives, may increase the cost and reduce the availability of suitable investments, thereby reducing investment returns in the future; and • the industries and businesses in which particular funds invest will vary.
The Transaction Agreements provide a path to SSG and the Partnership owning all of the outstanding equity interests of the Asset Class Entities over a defined period of time.
The Transaction Agreements provide a path to the Partnership owning all of the outstanding equity interests of the Asset Class Entities over a defined period of time.
We may designate each borrowing as (i) in the case of any borrowing in U.S. dollars, a base rate loan or a Term SOFR rate loan, (ii) in the case of any borrowing denominated in Euros, a EURIBOR rate loan, (iii) in the case of any borrowing denominated in British Pounds Sterling, a Sterling Overnight Index Average (“SONIA”) loan, (iv) in the case of any borrowing denominated in Swiss Francs, a Swiss Average Rate Overnight (“SARON”) loan, and (v) in the case of any borrowing denominated in Australian dollars, an AUD rate loan.
We may designate each borrowing as (i) in the case of any borrowing in U.S. dollars, a base rate loan or a Term Secured Overnight Financing Rate (“SOFR”) rate loan, (ii) in the case of any borrowing denominated in Euros, a EURIBOR rate loan, (iii) in the case of any borrowing denominated in British Pounds Sterling, a Sterling Overnight Index Average (“SONIA”) loan, (iv) in the case of any borrowing denominated in Swiss Francs, a Swiss Average Rate Overnight (“SARON”) loan, and (v) in the case of any borrowing denominated in Australian dollars, an AUD rate loan.
Fee-Earning AUM Year Ended March 31, 2024 FEAUM increased $8.4 billion, or 10%, to $93.9 billion as of March 31, 2024 as compared to $85.4 billion as of March 31, 2023. Of the increase, $3.6 billion was from SMAs and $4.9 billion was from focused commingled funds.
Year Ended March 31, 2024 FEAUM increased $8.4 billion, or 10%, to $93.9 billion as of March 31, 2024 as compared to $85.4 billion as of March 31, 2023. Of the increase, $3.6 billion was from SMAs and $4.9 billion was from focused commingled funds.
Trends Affecting Our Business Our business is affected by a variety of factors, including conditions in the financial markets and economic and political conditions.
Trends Affecting Our Business Our business is affected by a variety of factors, including conditions in the financial markets, regulatory environment, and economic and political conditions.
The increase was primarily attributable to an increase in expenses related to liability classified awards in the current year period of $14.3 million as compared to the prior year period, as well as the full year impact of restricted stock units (“RSUs”) awarded to certain employees and directors in the prior year period and additional grants of RSUs granted in the current year period and no comparable expense for these grants in the prior year period.
The increase was primarily attributable to an increase in expenses related to liability classified awards in the current year period of $14.3 million as compared to the prior year period, as well as the full year impact of RSUs awarded to certain employees and directors in the prior year period and additional grants of RSUs granted in the current year period and no comparable expense for these grants in the prior year period.
On the same date, we also issued 109,919 shares of Class A common stock to certain limited partners of the Partnership in exchange for 109,919 Class C units in accordance with the elective exchange notices submitted pursuant to an agreement with the Class C limited partners (the “Class C Exchange Agreement”) to allow for exchange of Class C units of the Partnership to shares of our Class A common stock on a one-for-one basis, subject to certain restrictions.
On the same date, we also issued 71,766 shares of Class A common stock to certain limited partners of the Partnership in exchange for 71,766 Class C units of the Partnership in accordance with the elective exchange notices submitted pursuant to an agreement with the Class C limited partners (the “Class C Exchange Agreement”) to allow for exchange of Class C units of the Partnership to shares of our Class A common stock on a one-for-one basis, subject to certain restrictions.
Income Tax Expense Income tax expense primarily reflects U.S. federal and state income taxes on our share of taxable income generated by the Partnership, as well as local and foreign income taxes of certain of the Partnership’s subsidiaries. Our effective income tax rate was 14.1%, (9.2)%, and 5.5% for fiscal 2024, 2023 and 2022, respectively.
Income Tax Expense Income tax expense primarily reflects U.S. federal and state income taxes on our share of taxable income generated by the Partnership, as well as local and foreign income taxes of certain of the Partnership’s subsidiaries. Our effective income tax rate was 22.2%, 14.1%, and (9.2)% for fiscal 2025, 2024 and 2023, respectively.
(2) The supplemental cash dividend relates to earnings in respect of our full fiscal year 2023. We may pay additional dividends to holders of our Class A common stock in the future. The declaration and payment by us of any future dividends to Class A stockholders is at the sole discretion of our board of directors.
(2) The supplemental cash dividend relates to earnings in respect of our full fiscal years 2023 and 2024, respectively. We may pay additional dividends to holders of our Class A common stock in the future. The declaration and payment by us of any future dividends to Class A stockholders is at the sole discretion of our board of directors.
Revenues We generate revenues primarily from management and advisory fees, incentive fees and allocations of carried interest. 87 Table of Contents Management and Advisory Fees, Net Management and advisory fees, net, consist of fees received from managing SMAs and focused commingled funds, advisory, data and administrative services, and portfolio analytics and reporting.
Revenues We generate revenues primarily from management and advisory fees, incentive fees and allocations of carried interest. 86 Table of Contents Management and Advisory Fees, Net Management and advisory fees, net, consist of fees received from managing SMAs and focused commingled funds, advisory and data services, and portfolio analytics and reporting.
The quarterly cash dividend and supplemental cash dividend relate to earnings in respect of our fourth fiscal quarter and full fiscal year 2024, respectively.
The quarterly cash dividend and supplemental cash dividend relate to earnings in respect of our fourth fiscal quarter and full fiscal year 2025, respectively.
(4) Represents corporate income taxes at a blended statutory rate of 22.3%, 22.3% and 22.5% applied to pre-tax ANI for fiscal 2024, 2023 and 2022, respectively. The 22.3% rate for fiscal 2024 and fiscal 2023 is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 1.3%.
(4) Represents corporate income taxes at a blended statutory rate of 22.3% applied to pre-tax ANI for fiscal 2025, fiscal 2024, and fiscal 2023. The 22.3% rate is based on a federal statutory rate of 21.0% and a combined state, local and foreign rate net of federal benefits of 1.3%.
(2) Reflects equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary. 107 Table of Contents (3) Includes (income) expense related to transaction costs ($4.9 million in fiscal 2024, $6.9 million in fiscal 2023, and $14.2 million in fiscal 2022), lease remeasurement adjustments ($(0.1) million in fiscal 2024 and $(2.7) million in fiscal 2023), accelerated depreciation of leasehold improvements for changes in lease terms ($1.9 million in fiscal 2024 and $1.5 million in fiscal 2023), severance costs ($0.3 million in fiscal 2023 and $1.6 million in fiscal 2022), loss on change in fair value for contingent consideration obligation ($17.2 million in fiscal 2024, $9.4 million in fiscal 2023, and $9.6 million in fiscal 2022), compensation paid to certain employees as part of an acquisition earn-out ($2.2 million in fiscal 2024, $2.3 million in fiscal 2023, and $0.8 million in fiscal 2022), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters ($5.3 million in fiscal 2024), loss on sale of subsidiary ($0.8 million in fiscal 2024) and other non-core operating income and expenses.
(2) Reflects equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary. 107 Table of Contents (3) Includes (income) expense related to transaction costs ($1.0 million in fiscal 2025, $4.9 million in fiscal 2024, and $6.9 million in fiscal 2023), lease remeasurement adjustments ($(0.1) million in fiscal 2024 and $(2.7) million in fiscal 2023), accelerated depreciation of leasehold improvements for changes in lease terms ($1.9 million in fiscal 2024 and $1.5 million in fiscal 2023), severance costs ($0.3 million in fiscal 2023), loss on change in fair value for contingent consideration obligation ($16.1 million in fiscal 2025, $17.2 million in fiscal 2024, and $9.4 million in fiscal 2023), compensation paid to certain employees as part of an acquisition earn-out ($0.4 million in fiscal 2025, $2.2 million in fiscal 2024, and $2.3 million in fiscal 2023), loss associated with payment made in connection with a secondary transaction executed by one of our private wealth funds ($32.5 million in fiscal 2025), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters ($5.3 million in fiscal 2024), loss on sale of subsidiary ($0.8 million in fiscal 2024) and other non-core operating income and expenses.
See “Risk Factors—Risks Related to Our Organizational Structure— We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.” 116 Table of Contents The following table presents information regarding quarterly cash dividends on Class A common shares for the periods indicated: Quarterly Fiscal Period 1 Dividend Payment Date Dividend Per Share of Class A Common Stock First quarter July 15, 2021 $ 0.07 Second quarter September 15, 2021 0.07 Third quarter December 15, 2021 0.15 Fourth quarter March 15, 2022 0.15 Total dividends paid in FY2022 $ 0.44 First quarter June 30, 2022 $ 0.20 Second quarter September 15, 2022 0.20 Third quarter December 15, 2022 0.20 Fourth quarter March 15, 2023 0.20 Total dividends paid in FY2023 $ 0.80 First quarter June 30, 2023 $ 0.20 Supplemental 2 June 30, 2023 0.25 Second quarter September 15, 2023 0.21 Third quarter December 15, 2023 0.21 Fourth quarter March 15, 2024 0.21 Total dividends paid in FY2024 $ 1.08 _______________________________ (1) Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.
See “Risk Factors—Risks Related to Our Organizational Structure— We currently pay dividends to our stockholders, but our ability to do so is subject to the discretion of our board of directors and may be limited by our holding company structure and applicable provisions of Delaware law.” 118 Table of Contents The following table presents information regarding quarterly cash dividends on Class A common shares for the periods indicated: Quarterly Fiscal Period 1 Dividend Payment Date Dividend Per Share of Class A Common Stock First quarter June 30, 2022 $ 0.20 Second quarter September 15, 2022 0.20 Third quarter December 15, 2022 0.20 Fourth quarter March 15, 2023 0.20 Total dividends paid in FY2023 $ 0.80 First quarter June 30, 2023 $ 0.20 Supplemental 2 June 30, 2023 0.25 Second quarter September 15, 2023 0.21 Third quarter December 15, 2023 0.21 Fourth quarter March 15, 2024 0.21 Total dividends paid in FY2024 $ 1.08 First quarter June 28, 2024 $ 0.21 Supplemental 2 June 28, 2024 0.15 Second quarter September 13, 2024 0.24 Third quarter December 13, 2024 0.24 Fourth quarter March 14, 2025 0.24 Total dividends paid in FY2025 $ 1.08 _______________________________ (1) Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.
SMAs, including directly managed assets, comprised $94 billion of our AUM as of March 31, 2024. • Focused commingled funds. Owned by multiple clients, our focused commingled funds deploy capital in specific asset classes with defined investment strategies.
SMAs, including directly managed assets, comprised $115 billion of our AUM as of March 31, 2025. • Focused commingled funds. Owned by multiple clients, our focused commingled funds deploy capital in specific asset classes with defined investment strategies.
Equity Transactions In March 2024, we issued 1,283,584 shares of Class A common stock to certain limited partners of the Partnership in exchange for 1,283,584 Class B units in accordance with elective exchange notices submitted pursuant to an agreement with the Class B limited partners (the “Class B Exchange Agreement”) to allow for exchange of Class B units of the Partnership to shares of our Class A common stock on a one-for-one basis, subject to certain restrictions.
Equity Transactions In June 2024, we issued 1,731,807 shares of Class A common stock to certain limited partners of the Partnership in exchange for 1,731,807 Class B units of the Partnership in accordance with elective exchange notices submitted pursuant to an agreement with the Class B limited partners (the “Class B Exchange Agreement”) to allow for exchange of Class B units of the Partnership to shares of our Class A common stock on a one-for-one basis, subject to certain restrictions.
See notes 14 and 15 to our consolidated financial statements for more information. Recent Accounting Developments Information regarding recent accounting developments and their effects to us can be found in note 2 to our consolidated financial statements included in Part II, Item 8 of this annual report. 125 Table of Contents
See note 14 to our consolidated financial statements for more information. Recent Accounting Developments Information regarding recent accounting developments and their effects to us can be found in note 2 to our consolidated financial statements included in Part II, Item 8 of this annual report.
Taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse.
Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse.
Adjusted Weighted-Average Shares and Adjusted Net Income Per Share ANI per share measures our per-share earnings assuming all Class B units and Class C units in the Partnership were exchanged for Class A common stock in SSG, including the dilutive impact of outstanding equity-based awards. ANI per share is calculated as ANI divided by adjusted weighted-average shares outstanding.
Adjusted Weighted-Average Shares and Adjusted Net Income Per Share ANI per share measures our per-share earnings assuming all Class B units, Class C units and Class D units in the Partnership were exchanged for Class A common stock in SSG, including the dilutive impact of outstanding equity-based awards.
Undeployed Fee-Earning Capital As of March 31, 2024, we had $22.6 billion of undeployed fee-earning capital, which will generate management fee revenue once this capital is invested or activated. Non-GAAP Financial Measures Below is a description of our non-GAAP financial measures.
Undeployed Fee-Earning Capital As of March 31, 2025, we had $24.6 billion of undeployed fee-earning capital, which will generate management fee revenue once invested or activated. Non-GAAP Financial Measures Below is a description of our non-GAAP financial measures.
The weighted-average interest rate in effect for the Revolver as of March 31, 2024 was 7.42%. Borrowings under the Revolver may be repaid at any time during the term of the Credit Agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date.
The weighted-average interest rate in effect for the Revolver as of March 31, 2025 was 6.48%. Borrowings under the Revolver may be repaid at any time during the term of the Credit Agreement and, subject to certain terms and conditions, may be reborrowed prior to the maturity date.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on investments (excluding legacy Greenspring investments in funds and investments of Consolidated Funds) held as of March 31, 2024 and 2023, we estimate that a 10% decline in fair value of the investments in funds would result in a decrease in investment income of $13.5 million and $11.5 million, respectively.
Biggest changeBased on investments (excluding legacy Greenspring investments in funds and investments of Consolidated Funds) held as of March 31, 2025 and 2024, we estimate that a 10% decline in fair value of the investments in funds would result in a decrease in investment income of $18.4 million and $13.5 million, respectively. 129 Table of Contents Exchange Rate Risk Our business is affected by movements in the exchange rate between the U.S. dollar and non-U.S. dollar currencies in respect of revenues and expenses of our foreign offices that are denominated in non-U.S. dollar currencies and cash and other balances we hold in non-functional currencies.
We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 127 Table of Contents
We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 130 Table of Contents
Additionally, as a large percentage of our carried interest allocation revenues are paid to employees as carried interest-related compensation, the overall net impact to our income would be mitigated by lower compensation payments.
Additionally, as a large percentage of our carried interest allocation revenues is paid to employees as carried interest-related compensation, the overall net impact to our income would be mitigated by lower compensation payments.
Our management fee and advisory fee revenue is only marginally affected by changes in investment values because our management fees are generally based on commitments or net invested capital and our advisory fees are fixed. As of March 31, 2024 and 2023, NAV-based management fees represented approximately 9% and 7%, respectively, of total net management and advisory fees.
Our management fee and advisory fee revenue is only marginally affected by changes in investment values because our management fees are generally based on commitments or net invested capital and our advisory fees are fixed. As of March 31, 2025 and 2024, NAV-based management fees represented approximately 14% and 9%, respectively, of total net management and advisory fees.
The primary driver for the change in the contingent repayment between periods is due to additional carried interest allocation realizations in fiscal 2024 that are potentially subject to clawback. 126 Table of Contents • Investment income changes in relation to realized and unrealized gains and losses of the underlying investments in our funds in which we have a general partner commitment.
The primary driver for the change in the contingent repayment between periods is due to additional carried interest allocation realizations in fiscal 2025 that are potentially subject to clawback. • Investment income changes in relation to realized and unrealized gains and losses of the underlying investments in our funds in which we have a general partner commitment.
As of March 31, 2024 and 2023, we had $20.5 million and $18.1 million, respectively, of deferred incentive fee revenue recorded in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets. • We earn carried interest allocation revenue from certain of the StepStone Funds based on cumulative fund performance to date, subject to specified performance criteria.
As of March 31, 2025 and 2024, we had $22.3 million and $20.5 million, respectively, of deferred incentive fee revenue recorded in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets. • We earn carried interest allocation revenue from certain of the StepStone Funds based on cumulative fund performance to date, subject to specified performance criteria.
As of March 31, 2024 and 2023, the maximum amount of carried interest allocations (excluding legacy Greenspring carried interest allocations) subject to contingent repayment, net of tax, was an estimated $287.5 million and $264.1 million, respectively, assuming the fair value of all investments was zero, a possibility that we view as remote.
As of March 31, 2025 and 2024, the maximum amount of carried interest allocations (excluding legacy Greenspring carried interest allocations) subject to contingent repayment, net of tax, was an estimated $355.0 million and $287.5 million, respectively, assuming the fair value of all investments was zero, a possibility that we view as remote.
We estimate that a 10% decline in market values of the investments held in our funds as of March 31, 2024 and 2023 would result in an approximate decrease to annual management fees of $5.8 million and $3.4 million, respectively.
We estimate that a 10% decline in market values of the investments held in our funds as of March 31, 2025 and 2024 would result in an approximate decrease to annual management fees of $11.2 million and $5.8 million, respectively.
Based on the $144.1 million and $103.5 million of cash, cash equivalents and restricted cash (excluding Consolidated Funds) as of March 31, 2024 and 2023, respectively, we estimate that interest income would increase by $1.4 million and $1.0 million, respectively, on an annualized basis as a result of a 100 basis point increase in interest rates.
Based on the $245.3 million and $144.1 million of cash, cash equivalents and restricted cash (excluding Consolidated Funds) as of March 31, 2025 and 2024, respectively, we estimate that interest income would increase by $2.5 million and $1.4 million, respectively, on an annualized basis as a result of a 100 basis point increase in interest rates.
As of March 31, 2024 and 2023, we estimate that interest expense would increase by $1.5 million and $1.0 million, respectively, on an annualized basis as a result of a 100 basis point increase in interest rates.
The Revolver accrues interest at a variable rate, and the Notes accrue interest at a fixed rate of 5.52%. As of March 31, 2025 and 2024, we estimate that interest expense would increase by $2.8 million and $1.5 million, respectively, on an annualized basis as a result of a 100 basis point increase in interest rates.
Interest Rate Risk As of March 31, 2024 and 2023, we had $150.0 million and $100.0 million, respectively, in borrowings outstanding under our Revolver. The Revolver accrues interest at a variable rate.
Interest Rate Risk As of March 31, 2025, we had $175.0 million in borrowings outstanding under our Notes and $100.0 million amount outstanding under our Revolver. As of March 31, 2024, we had $150.0 million in borrowings outstanding under our Revolver and no amount outstanding under our Notes.
Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit markets or financial market dislocations.
Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit markets or financial market dislocations. 128 Table of Contents Market Risk Our predominant exposure to market risk is related to our role as general partner or investment manager for our focused commingled funds and SMAs and the sensitivities to movements in the fair value of their investments, which may adversely affect our performance fee revenues and investment income.
Removed
Market Risk Our predominant exposure to market risk is related to our role as general partner or investment manager for our focused commingled funds and SMAs and the sensitivities to movements in the fair value of their investments, which may adversely affect our performance fee revenues and investment income.
Removed
Exchange Rate Risk Our business is affected by movements in the exchange rate between the U.S. dollar and non-U.S. dollar currencies in respect of revenues and expenses of our foreign offices that are denominated in non-U.S. dollar currencies and cash and other balances we hold in non-functional currencies.

Other STEP 10-K year-over-year comparisons