Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| We believe that the transaction agreements we’ve entered into achieve all of this and more while benefiting all stakeholders |
| As a reminder, we expect our FRE margins will continue to expand from a combination of operating leverage and strategic cost-saving opportunities |
| We delivered solid performance in our fiscal third quarter, generating robust earnings, fundraising and asset growth, setting StepStone up for continued success in 2024 and beyond |
| Is very well positioned for the current environment and we're in market with other key strategies like our multi-strategy growth equity fund, our inaugural infrastructure co-investment fund, as well as our corporate direct lending fund |
| We continue to raise for our special situation real estate secondaries fund, which has good momentum |
| This quarter represents the fruition of many of those conversations and reflects the strength of our client relationships, many of which we've cultivated over decades |
| We continue to have a strong pipeline for fundraising across both new and existing clients |
| Additionally, because of our strong retention rate, which is greater than 90%, our separately managed account relationships are extremely sticky and provide meaningful revenue visibility |
| We continue to see strong momentum in our evergreen private wealth products, where we raised over $300 million of subscriptions for the quarter and over $1 billion in subscriptions for the last 12 months |
| First, we increased our undeployed fee-earning capital or UFEC, to over $21 billion, our highest level ever, which points to the future earnings power of StepStone |
| We believe that the combination of bespoke separately managed accounts, commingled funds, and our growing suite of private wealth offerings drives a sustainable pace of growth that will allow us to achieve the goal we set out at last June's Investor Day of doubling fee-related earnings by fiscal 2028 |
| The strength of our platform creates a powerful flywheel, which helps propel StepStone forward |
| I think one, just thinking about what we think was a very successful quarter from a fundraising standpoint across our SMAs, that, as Mike touched on, was largely driven by strong re-up activity across our client base, as well as some new client additions as well |
| To that end, I'm thrilled to highlight StepStone's recent recognition from pensions and investments as one of the best places to work in money management |
| So as you think about where we are going to have competitive edge in the private – sorry, in the private wealth channels, the credit fund that we are bringing is a multi-manager vehicle, and that compares very favorably in our mind relative to the single manager vehicles, the private BDCs and the like that are out there |
| And there is also a benefit from being able to scale deployment with an open architecture model |
| But we feel we have largely invested in the platform across the organization and expect to see a margin expansion through a combination of operating leverage, as well as some other efficiencies that we think we can capture across the organization |
| We're quite excited about it as are our teams here |
| Over the long-term period, adjusted revenue per share was up 20% |
| This increase comes from a strong SMA fundraising, particularly re-ups alongside some of our longstanding relationships |
| The structure will continue to incentivize our asset class teams to drive growth in their businesses, while improving StepStone's ability to participate in that growth |
| This is up from $31.2 million or $0.27 per share, in the third fiscal quarter of last year, driven by higher fee-related earnings and higher net performance fees |
| And so really our view there is we've come up with a structure that will continue to incentivize those teams to grow their businesses over time and to the extent they are able to or successful in doing that, they will benefit from that performance |
| We had a record-breaking quarter on two important operating metrics |
| We generated an FRE margin of 33% for the quarter, up 250 basis points sequentially and consistent with the prior year period |
| Yeah, we're very excited about this as we announced that our IPO and our Investor Day in June of last year, this was a priority |
| While most of the net growth came from our commingled funds, we had positive gross contributions in both commingled funds and separately managed accounts |
| We have made a concerted effort to develop a strong, distinct and unified culture at StepStone by embracing our diversity in both backgrounds and capabilities |
| Fee-related earnings were about $50.7 million for the quarter, up 19% from a year ago |
| In private credit, there is a performance benefit through diversification, through number of loans and number of managers, and we've got white paper research out there on that point |
| Statement |
|---|
| But again, over time, we do expect FRE margins to trend down over time |
| Year-to-date ANI per share is down relative to last year driven by lower performance fees, but has increased at an annual rate of 24% over the long-term period |
| As a result, the rate of growth of income attributable to NCI should begin to slow and eventually go away as we accumulate full ownership |
| Gross realized performance fees per share were down 56% for the year-to-date period and up 11% over the long-term period |
| And we did have some favorability this quarter |
| But we do expect this ratio to trend down gradually over time |
| Moving to expenses, total cash and equity-based compensation expense was $74 million, down $1 million from the prior quarter |
| However, as managed accounts largely pay fees on deployment rather than commitments, the contribution to fee-earning AUM and fee-related earnings tends to be steadier |
| Turning to our financial results for the third quarter of fiscal 2024, beginning with slide three, we reported a GAAP net loss of $23.4 million |
| This is consistent with the expectation we set out on our previous earnings call and represents a relatively low fee-paying mandate |
Please consider a small donation if you think this website provides you with relevant information