StepStone Group Inc. (STEP) Stock Analysis and Metrics

StepStone

NASDAQ: STEP

$42.62 ▲ +2.03 (+5.00%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap3.23 Bn

P/E-5.62

Div. Yield0.03

Total Debt (Qtr)270.25 Mn

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About

StepStone Group is a global private markets investment firm that provides customized investment solutions, advisory services, and data analytics to institutional and private wealth clients. The firm operates across private equity, infrastructure, private debt, and real estate asset classes, building portfolios that combine primary fund investments, secondary purchases, and direct coinvestments. As of March 31, 2025, StepStone Group was responsible for approximately $709 billion of total capital, including $189 billion of assets under management and $520 billion of assets under advisement, and maintained offices in 28 cities across 16 countries on five continents.

StepStone Group generates revenue mainly from management and advisory fees charged on assets under management and assets under advisement, as well as performance fees linked to investment returns. The firm offers separately managed accounts, focused commingled funds, advisory and data services, and portfolio analytics and reporting, earning fees based on asset levels, service scope, and fund profitability. For the fiscal year ended March 31, 2025, management and advisory fees totaled $767 million, reflecting a 27% compound annual growth rate since 2020, while accrued carried interest represented a potential future performance fee pool of approximately $1.5 billion.

The company operates through the following segments:

• Separately Managed Accounts: This segment offers customized investment vehicles for single clients, combining primary, secondary and coinvestment strategies across private equity, infrastructure, private debt and real estate, and accounted for $115 billion of AUM as of March 31, 2025. The firm had 348 bespoke SMAs and focused commingled funds in total, with SMAs representing a significant portion of that number.

• Focused Commingled Funds: This segment pools capital from multiple clients to invest in private equity, infrastructure, private debt and real estate opportunities through dedicated funds that follow specific investment strategies, and represented $59 billion of AUM as of March 31, 2025.

• Advisory and Data Services: This segment provides recurring portfolio construction support, due diligence, investment advice, consulting on pacing and policy, and licensed access to the firm’s proprietary data and technology platforms, with advisory relationships accounting for $520 billion of AUA and $15 billion of AUM as of March 31, 2025.

• Portfolio Analytics and Reporting: This segment delivers customized performance reporting, compliance and tax analytics, and benchmarking tools powered by the SPI Reporting platform, having serviced nearly $780 billion of client commitments as of March 31, 2025.

StepStone Group holds a leading position in the private markets industry, distinguished by its global operating platform, deep proprietary data analytics, and ability to deliver full service, customized solutions across multiple asset classes. The firm competes with large diversified asset managers, commercial banks, broker dealers, insurance companies, and specialized private markets boutiques, while its competitive advantages stem from a 20 plus year average partner experience, a network of 108 partners, extensive local teams in 28 cities, and a track record of outperforming benchmark indices across its investment strategies.

StepStone Group’s client base includes some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds, insurance companies, prominent endowments, foundations, family offices, and private wealth clients such as high net worth and mass affluent individuals. More than half of the firm’s management and advisory fees are generated from clients outside the United States, reflecting its global reach, and the advisory client retention rate has remained approximately 95% since inception.

Investment Thesis

▲ Bull case

StepStone Group is positioned to capitalize on the accelerating adoption of private markets within defined contribution (DC) plans, a structural shift that remains underappreciated by the market. The Department of Labor’s process-based safe harbor proposal, which StepStone helped shape through industry advocacy, provides a clear pathway for private markets inclusion in 401(k)s without favoring specific asset classes. This regulatory tailwind, combined with the hiring of a dedicated head of defined contribution solutions, positions StepStone to become a leading solutions provider in a market projected to grow substantially as retirement plan sponsors seek to enhance long-term participant outcomes. Early traction with target date managers, DC aggregators, and record keepers indicates a multifaceted go-to-market strategy that leverages StepStone’s deep relationships in the wealth channel and its ability to customize offerings. Unlike transient product launches, this initiative taps into a multi-decade secular trend where defined contribution plans represent over $10 trillion in assets, and even a small allocation shift toward private markets could generate meaningful, sustainable fee-related earnings growth. The company’s existing private wealth platform, already approaching $18 billion in assets, provides a proven foundation for scaling these DC solutions, with minimal incremental cost structure as highlighted by management’s emphasis on accretive revenue from data monetization partnerships.
The undeployed fee earning capital (UFEC) balance of $40 billion represents a concealed catalyst for future fee related earnings expansion that is not being adequately valued by investors. While UFEC is often viewed as idle capital, StepStone’s disciplined activation timeline—targeting deployment over a 3- to 5-year horizon—aligns with historical pacing of roughly $8 billion per year, suggesting a predictable and scalable conversion to fee earning assets. Notably, over $6 billion of the UFEC balance is subject to near-term activation upon fund launch, including the private equity co-investment fund (over $1 billion), the flagship private equity secondaries fund, and the GP-led secondaries fund (collectively $2.5 billion in UFEC as of March 31). As these funds activate and begin charging management fees, the resulting increase in fee earning assets will directly drive fee related earnings growth, supported by the company’s consistent 40% FRE margin and operating leverage. This conversion is further reinforced by the activation of the infrastructure co-investment fund (over $1 billion) and the continued scaling of evergreen vehicles like CredX and StepX, which are following the proven ramp trajectory of S Prime US. The market’s focus on current quarterly results overlooks this embedded, multi-year growth engine that is already funded and progressing according to plan.
StepStone’s data and technology monetization initiatives, particularly the partnerships with PitchBook, FTSE Russell, and Kroll, are poised to become a durable, high-margin revenue stream that is currently underestimated due to their early-stage status. Although near-term contributions are described as modest, the absence of material incremental expenses means any revenue generated will flow directly to the bottom line as accretive to fee related earnings margin. The long-term vision extends beyond benchmarking tools to the creation of investable indices and licensed data products, with StepStone explicitly acknowledging the potential for customized, client-specific indices and broader licensing opportunities as adoption of daily-priced indices reaches critical mass. This leverages StepStone’s unique proprietary data from its spy research and reporting platform, combined with industry-leading partnerships, to create a defensible advantage in private markets transparency—a growing need among LPs, GPs, and service providers. Unlike cyclical fundraising or performance fees, this recurring, subscription-based revenue model offers visibility and scalability, with the potential to evolve into an AUM-linked business model over time, further diversifying revenue streams and enhancing predictability.

StepStone Group is positioned to capitalize on the accelerating adoption of private markets within defined contribution (DC) plans, a structural shift that remains underappreciated by the market. The Department of Labor’s process-based safe harbor proposal, which StepStone helped shape through industry advocacy, provides a clear pathway for private markets inclusion in 401(k)s without favoring specific asset classes. This regulatory tailwind, combined with the hiring of a dedicated head of defined contribution solutions, positions StepStone to become a leading solutions provider in a market projected to grow substantially as retirement plan sponsors seek to enhance long-term participant outcomes. Early traction with target date managers, DC aggregators, and record keepers indicates a multifaceted go-to-market strategy that leverages StepStone’s deep relationships in the wealth channel and its ability to customize offerings. Unlike transient product launches, this initiative taps into a multi-decade secular trend where defined contribution plans represent over $10 trillion in assets, and even a small allocation shift toward private markets could generate meaningful, sustainable fee-related earnings growth. The company’s existing private wealth platform, already approaching $18 billion in assets, provides a proven foundation for scaling these DC solutions, with minimal incremental cost structure as highlighted by management’s emphasis on accretive revenue from data monetization partnerships.
The undeployed fee earning capital (UFEC) balance of $40 billion represents a concealed catalyst for future fee related earnings expansion that is not being adequately valued by investors. While UFEC is often viewed as idle capital, StepStone’s disciplined activation timeline—targeting deployment over a 3- to 5-year horizon—aligns with historical pacing of roughly $8 billion per year, suggesting a predictable and scalable conversion to fee earning assets. Notably, over $6 billion of the UFEC balance is subject to near-term activation upon fund launch, including the private equity co-investment fund (over $1 billion), the flagship private equity secondaries fund, and the GP-led secondaries fund (collectively $2.5 billion in UFEC as of March 31). As these funds activate and begin charging management fees, the resulting increase in fee earning assets will directly drive fee related earnings growth, supported by the company’s consistent 40% FRE margin and operating leverage. This conversion is further reinforced by the activation of the infrastructure co-investment fund (over $1 billion) and the continued scaling of evergreen vehicles like CredX and StepX, which are following the proven ramp trajectory of S Prime US. The market’s focus on current quarterly results overlooks this embedded, multi-year growth engine that is already funded and progressing according to plan.
StepStone’s data and technology monetization initiatives, particularly the partnerships with PitchBook, FTSE Russell, and Kroll, are poised to become a durable, high-margin revenue stream that is currently underestimated due to their early-stage status. Although near-term contributions are described as modest, the absence of material incremental expenses means any revenue generated will flow directly to the bottom line as accretive to fee related earnings margin. The long-term vision extends beyond benchmarking tools to the creation of investable indices and licensed data products, with StepStone explicitly acknowledging the potential for customized, client-specific indices and broader licensing opportunities as adoption of daily-priced indices reaches critical mass. This leverages StepStone’s unique proprietary data from its spy research and reporting platform, combined with industry-leading partnerships, to create a defensible advantage in private markets transparency—a growing need among LPs, GPs, and service providers. Unlike cyclical fundraising or performance fees, this recurring, subscription-based revenue model offers visibility and scalability, with the potential to evolve into an AUM-linked business model over time, further diversifying revenue streams and enhancing predictability.

▼ Bear case

StepStone Group’s reliance on retroactive fees to bolster reported fee related earnings growth masks underlying volatility in its core revenue base, presenting a risk the market may be underestimating. While core fee related earnings grew 28% year-over-year in Q4 FY26 after excluding retroactive fees, the retroactive fee contribution declined sharply from $15.7 million in the prior year quarter to just $4.4 million, indicating that a significant portion of the reported 12% FRE growth was driven by non-recurring items. This volatility in retroactive fees—tied to the timing of fund closes and LP accounting adjustments—creates inconsistency in quarterly results and complicates forward-looking projections. The company’s own guidance on fee rate evolution acknowledges downward pressure from structural changes, such as the revised fee structure for its flagship PE secondaries fund, which will initially reduce the blended commingled fund fee rate by 3 to 4 basis points. Although management argues that private wealth fund growth will offset this, the shift toward lower-fee-evergreen structures and the potential for fee compression in competitive secondary and credit markets could erode pricing power over time, particularly if AUM growth slows or mix shifts unfavorably.
The company’s substantial net accrued carry balance of $936 million, while often viewed as a future profit source, carries significant execution risk due to its dependence on an uncertain exit environment, a factor StepStone itself acknowledged as tempered by geopolitical shocks, AI disruption, and Middle East tensions. With approximately 60% of net accrued carry tied to programs older than five years—positioned for harvest—realizations remain well below historic levels when measured as a percentage of net asset value, despite improvement in dollar terms. The lack of control over exit timing, combined with the dependence on M&A activity and IPO windows, introduces material variability into performance related earnings, which declined year-over-year in adjusted net income. Although StepStone emphasizes secondary investments as a liquidity tool, the durability of cash flows from evergreen secondary vehicles like S Prime and Spring is not guaranteed under prolonged redemption pressure, and the company’s liquidity management framework—relying on diversification, cash flow predictability, and credit facilities—may be tested if redemptions exceed 5% sustained over 12 months or more, a scenario not fully stress-tested in current disclosures.
StepStone’s expansion into defined contribution (DC) plans, while promising, faces substantial adoption barriers that could delay or limit revenue realization, a risk not fully addressed in management’s optimistic commentary. Although the Department of Labor’s process-based safe harbor proposal is viewed favorably, it remains a proposal—not final regulation—and could be altered, delayed, or withdrawn under changing political administrations. Even if adopted, plan sponsor acceptance is far from guaranteed, as evidenced by the need for extensive education and comfort-building efforts, which StepStone itself acknowledges will vary significantly across channels. Target date managers may adopt private markets exposure through off-the-shelf series, but the go-to-market burden still falls on them, and StepStone’s influence is indirect. Record keepers and DC aggregators present additional layers of complexity, with legacy system constraints and fiduciary concerns potentially slowing integration. The company’s long history in the wealth channel does not automatically translate to success in the institutional DC space, where decision-making involves multiple stakeholders, stringent governance, and a preference for proven, low-turnover strategies—qualities that newer private markets offerings may struggle to demonstrate without a longer track record. Until plan sponsors commit capital, the opportunity remains speculative, and investments in headcount and product development could yield suboptimal returns if adoption lags.

StepStone Group’s reliance on retroactive fees to bolster reported fee related earnings growth masks underlying volatility in its core revenue base, presenting a risk the market may be underestimating. While core fee related earnings grew 28% year-over-year in Q4 FY26 after excluding retroactive fees, the retroactive fee contribution declined sharply from $15.7 million in the prior year quarter to just $4.4 million, indicating that a significant portion of the reported 12% FRE growth was driven by non-recurring items. This volatility in retroactive fees—tied to the timing of fund closes and LP accounting adjustments—creates inconsistency in quarterly results and complicates forward-looking projections. The company’s own guidance on fee rate evolution acknowledges downward pressure from structural changes, such as the revised fee structure for its flagship PE secondaries fund, which will initially reduce the blended commingled fund fee rate by 3 to 4 basis points. Although management argues that private wealth fund growth will offset this, the shift toward lower-fee-evergreen structures and the potential for fee compression in competitive secondary and credit markets could erode pricing power over time, particularly if AUM growth slows or mix shifts unfavorably.
The company’s substantial net accrued carry balance of $936 million, while often viewed as a future profit source, carries significant execution risk due to its dependence on an uncertain exit environment, a factor StepStone itself acknowledged as tempered by geopolitical shocks, AI disruption, and Middle East tensions. With approximately 60% of net accrued carry tied to programs older than five years—positioned for harvest—realizations remain well below historic levels when measured as a percentage of net asset value, despite improvement in dollar terms. The lack of control over exit timing, combined with the dependence on M&A activity and IPO windows, introduces material variability into performance related earnings, which declined year-over-year in adjusted net income. Although StepStone emphasizes secondary investments as a liquidity tool, the durability of cash flows from evergreen secondary vehicles like S Prime and Spring is not guaranteed under prolonged redemption pressure, and the company’s liquidity management framework—relying on diversification, cash flow predictability, and credit facilities—may be tested if redemptions exceed 5% sustained over 12 months or more, a scenario not fully stress-tested in current disclosures.
StepStone’s expansion into defined contribution (DC) plans, while promising, faces substantial adoption barriers that could delay or limit revenue realization, a risk not fully addressed in management’s optimistic commentary. Although the Department of Labor’s process-based safe harbor proposal is viewed favorably, it remains a proposal—not final regulation—and could be altered, delayed, or withdrawn under changing political administrations. Even if adopted, plan sponsor acceptance is far from guaranteed, as evidenced by the need for extensive education and comfort-building efforts, which StepStone itself acknowledges will vary significantly across channels. Target date managers may adopt private markets exposure through off-the-shelf series, but the go-to-market burden still falls on them, and StepStone’s influence is indirect. Record keepers and DC aggregators present additional layers of complexity, with legacy system constraints and fiduciary concerns potentially slowing integration. The company’s long history in the wealth channel does not automatically translate to success in the institutional DC space, where decision-making involves multiple stakeholders, stringent governance, and a preference for proven, low-turnover strategies—qualities that newer private markets offerings may struggle to demonstrate without a longer track record. Until plan sponsors commit capital, the opportunity remains speculative, and investments in headcount and product development could yield suboptimal returns if adoption lags.

Geographical Breakdown of Revenue (2025)

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Investment Thesis

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer Comparison

Research Tools

Developers

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Investment Thesis

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer Comparison

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