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STEP StepStone

StepStone Group is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. The Company partner with its clients to develop and build private markets portfolios designed to meet their specific objectives across private equity, infrastructure, private debt and real estate asset classes.

Company profile

Ticker
STEP
Exchange
Employees
Incorporated
Location
Fiscal year end
Industry (SIC)
SEC CIK
Subsidiaries
SRA Capital (Canada) LTD. • StepStone Conversus LLC • StepStone Europe Limited • StepStone GC Manager, L.P. • StepStone Gestão de Recursos Ltda. • StepStone Group (CHINA) Limited • StepStone Group (HK) Limited • StepStone Group Europe • StepStone Group Holdings LLC • StepStone Group LP ...

STEP stock data

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Calendar

12 Aug 21
16 Oct 21
31 Mar 22
Quarter (USD)
Jun 21 Mar 21 Dec 20 Sep 20
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD)
Mar 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS

Financial data from StepStone earnings reports.

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
8 Oct 21 Johnny D Randel Class A Common Stock Sell Dispose S No Yes 40.5 2,305 93.35K 31,300
7 Oct 21 Johnny D Randel Class A Common Stock Sell Dispose S No Yes 41.31 20,185 833.84K 33,605
6 Oct 21 Johnny D Randel Class A Common Stock Sell Dispose S No Yes 40.96 16,002 655.44K 53,790
5 Oct 21 Johnny D Randel Class A Common Stock Sell Dispose S No Yes 41.41 13,903 575.72K 69,792
4 Oct 21 Johnny D Randel Class A Common Stock Sell Dispose S No Yes 41.85 7,193 301.03K 83,695
1 Oct 21 Johnny D Randel Class A Common Stock Sell Dispose S No Yes 41.75 15,412 643.45K 90,888
30 Sep 21 Johnny D Randel Class B Common Stock Sale back to company Dispose D No No 0.001 75,000 75 1,259,626
30 Sep 21 Johnny D Randel Class A Common Stock Conversion Acquire C No No 0 75,000 0 106,300
30 Sep 21 Johnny D Randel Class B Units Class A Common Stock Conversion Dispose C No No 0 75,000 0 1,259,626
30 Sep 21 Michael I McCabe Class B Common Stock Sale back to company Dispose D Yes No 0.001 100,000 100 1,520,000

Data for the last complete 13F reporting period. To see the most recent changes to ownership, click the ownership history button above.

13F holders
Current Prev Q Change
Total holders 104 87 +19.5%
Opened positions 30 21 +42.9%
Closed positions 13 12 +8.3%
Increased positions 48 43 +11.6%
Reduced positions 18 19 -5.3%
13F shares
Current Prev Q Change
Total value 1.61B 1.59B +1.4%
Total shares 46.81M 45.23M +3.5%
Total puts 0 24.4K EXIT
Total calls 41.1K 50K -17.8%
Total put/call ratio 0.5
Largest owners
Shares Value Change
Argonaut Private Equity, L.L.C. 4.99M $160.28M 0.0%
TROW T. Rowe Price 4.66M $160.25M +1.6%
FMR 4.5M $154.87M -30.1%
Wasatch Advisors 4.23M $145.52M +12.4%
FHI Federated Hermes 3.4M $117.05M -5.3%
Vanguard 3.38M $116.43M +10.2%
JPM JPMorgan Chase & Co. 3.13M $107.71M +16.5%
Fred Alger Management 2.74M $94.35M +14.1%
BLK Blackrock 2.27M $78.03M +18.4%
Alger Associates 1.99M $79.34M 0.0%
Largest transactions
Shares Bought/sold Change
FMR 4.5M -1.94M -30.1%
Inherent 976.45K +945.2K +3024.6%
Wellington Management 1.52M +557.94K +57.8%
Wasatch Advisors 4.23M +465.52K +12.4%
JPM JPMorgan Chase & Co. 3.13M +443.36K +16.5%
Millennium Management 52.07K -434.28K -89.3%
BLK Blackrock 2.27M +353.11K +18.4%
STT State Street 667.28K +340.07K +103.9%
Fred Alger Management 2.74M +337.89K +14.1%
Vanguard 3.38M +313.52K +10.2%

Financial report summary

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Competition
DHI
Risks
  • The success of our business depends on the identification and availability of suitable investment opportunities for our clients.
  • If the investments we make on behalf of the StepStone Funds or recommend to clients perform poorly, we may suffer a decline in our investment management revenue and earnings, and our ability to raise capital for future StepStone Funds may be materially and adversely affected.
  • Continued positive performance of investments we make on behalf of clients or we recommend to our clients is not assured and may not result in positive performance of an investment in our Class A common stock.
  • Competition for access to investment funds and other investments we make for our clients is intense.
  • Third-party clients in many StepStone Funds have the right to remove us as the general partner of the relevant fund and to terminate the investment period under certain circumstances, leading to a decrease in our revenues, which could be substantial. In addition, the investment management agreements related to our SMAs and advisory accounts may permit the client to terminate our management of such accounts on short notice.
  • Our ability to retain our senior leadership team and attract additional qualified investment professionals is critical to our success.
  • Our failure to appropriately manage conflicts of interest could damage our reputation and adversely affect our business.
  • We have obligations to clients and other third parties that may conflict with stockholders’ interests.
  • Dependence on leverage by certain funds and portfolio companies subjects us to volatility and contractions in the debt financing markets and could adversely affect the ability of the StepStone Funds to achieve attractive rates of return on those investments.
  • Clients in the StepStone Funds with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested, which could adversely affect a fund’s operations and performance.
  • Our failure to comply with investment guidelines set by our clients could result in damage awards against us or a reduction in AUM, either of which would cause our earnings to decline and adversely affect our business.
  • Valuation methodologies for certain assets in the StepStone Funds can be significantly subjective, and the values of assets established pursuant to such methodologies may never be realized, which could result in significant losses for the StepStone Funds.
  • We may not be able to maintain our desired fee structure as a result of industry pressure from private markets clients to reduce fees, which could have a material adverse effect on our profit margins and results of operations.
  • We may need to pay “clawback” or “contingent repayment” obligations if and when they are triggered under the governing agreements of our funds.
  • Our investment management activities may involve investments in relatively high-risk, illiquid assets, and we may lose, or our clients may lose, some or all of the amounts invested in these activities or fail to realize any profits from these activities for a considerable period of time.
  • The StepStone Funds may face risks relating to undiversified investments.
  • The StepStone Funds make investments in funds and companies that we do not control.
  • Our risk management strategies and procedures may leave us exposed to unidentified or unanticipated risks.
  • The due diligence process that we undertake in connection with investments may not reveal all facts that may be relevant in connection with an investment.
  • Restrictions on our ability to collect and analyze data regarding our clients’ investments could adversely affect our business.
  • We and our clients depend on the reliability of our proprietary data and technology platforms and other data processing systems. Failures or interruptions of these services may disrupt our business, damage our reputation, limit our growth and adversely affect our business and results of operations.
  • A compromise or corruption of our systems containing confidential information could damage our business relationships and adversely affect our business, financial condition and operating results.
  • Cybersecurity risks could adversely affect our business by causing a disruption to our operations, which could adversely affect our financial condition and operating results.
  • Employee misconduct could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
  • We may face damage to our professional reputation if our services are not regarded as satisfactory or for other reasons and may face legal liability to our clients and third parties under securities or other laws and regulations.
  • Our non-U.S. operations are subject to certain risks, which may adversely affect our business, financial condition and results of operations.
  • Investments of the StepStone Funds in certain jurisdictions may be subject to heightened risks relative to investments in other jurisdictions, which may adversely affect our business, financial condition and results of operations.
  • 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.
  • The investments we make on behalf of clients or we recommend to our clients in infrastructure assets may expose us to increased risks and liabilities.
  • The substantial growth of our business in recent years may be difficult to sustain, as it may place significant demands on our resources and employees and may increase our expenses.
  • We may enter into new lines of business, which may result in additional risks and uncertainties in our business.
  • We may acquire additional businesses or assets or form joint ventures.
  • Future indebtedness may expose us to substantial risks.
  • We are subject to risks in using custodians, counterparties, administrators and other agents.
  • The investment management and investment advisory business is intensely competitive.
  • Difficult or volatile market conditions can adversely affect our business by reducing the market value of the assets we manage or causing our SMA clients to reduce their investments in private markets.
  • The COVID-19 pandemic has severely disrupted the global financial markets and business climate and may adversely affect our business, financial condition and results of operations.
  • 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.
  • Evolving laws and government regulations could adversely affect us.
  • Future changes to tax laws or our effective tax rate could materially adversely affect our company and reduce net returns to our stockholders.
  • We may be required to pay additional taxes under the Centralized Partnership Audit Regime.
  • Federal, state and foreign anti-corruption and sanctions laws create the potential for significant liabilities and penalties and reputational harm.
  • Regulation of investment advisers outside the United States could adversely affect our ability to operate our business.
  • The exit of the UK from the EU (Brexit) could adversely affect our business and our operations.
  • We are subject to increasing scrutiny from institutional clients with respect to ESG costs of investments made by the StepStone Funds, which may constrain investment opportunities for our funds and adversely affect our ability to raise capital from such clients.
  • We are a “controlled company” within the meaning of the Nasdaq Global Select Market listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
  • Our internal controls over financial reporting do not currently meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting could have a material adverse effect on our business and the price of our Class A common stock.
  • Reduced reporting and disclosure requirements applicable to us as an emerging growth company could make our Class A common stock less attractive to investors.
  • SSG depends on distributions from the Partnership to pay any dividends, if declared, taxes and other expenses, including payments under the Tax Receivable Agreements.
  • The IRS might challenge the tax basis step-ups and other tax benefits we receive in connection with our IPO and the related transactions and in connection with additional acquisitions of Partnership units.
  • 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.
  • In certain circumstances, the Partnership will be required to make distributions to us and the existing partners of the Partnership, and the distributions that the Partnership will be required to make may be substantial.
  • We may be required to fund withholding tax upon certain exchanges of Class B units into shares of Class A common stock by non-U.S. holders.
  • We may have tax and other liabilities attributable to our pre-IPO investors as a result of certain reorganization transactions.
  • Pursuant to recently enacted regulations issued under Section 162(m) of the Code, SSG may not be permitted to deduct its distributive share of compensation expense to the extent that the compensation was paid by the Partnership to certain of SSG’s covered employees, potentially resulting in additional U.S. federal income tax liability for SSG and reducing cash available for distribution to SSG’s stockholders and/or for the payment of other expenses and obligations of SSG.
  • 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.
  • A change of control of our company, including the effect of a “Sunset,” could result in an assignment of our investment advisory agreements.
  • 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.
  • 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.
  • The disparity in the voting rights among the classes of our common stock and inability of the holders of our Class A common stock to influence decisions submitted to a vote of our stockholders may have an adverse effect on the price of our Class A common stock.
  • The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
  • We may 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.
  • The market price of our Class A common stock may be volatile, which could cause the value of stockholders’ investments to decline.
  • Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and may adversely affect the market price of our Class A common stock.
  • 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.
Management Discussion
  • Total revenues increased $341.1 million, or 76%, to $787.7 million for fiscal 2021 as compared to fiscal 2020, due to higher carried interest allocation, net management and advisory fees and incentive fees.
  • Net management and advisory fees increased $50.3 million, or 21%, to $285.5 million for fiscal 2021 as compared to fiscal 2020. This increase was driven by new client activity and a 26% growth in FEAUM across the platform, including retroactive fees of $9.0 million from StepStone Real Estate Partners IV (“SREP IV”), which had its final close in September 2020. The increases were partially offset by a $1.5 million decline in revenues associated with liquidating portfolios for which StepStone serves as the replacement manager. For new investors, fees relating to periods prior to the closing date are considered retroactive.
  • Incentive fees increased $2.1 million, or 61%, to $5.5 million for fiscal 2021 as compared to fiscal 2020, reflecting higher realization activity.
Content analysis
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