StepStone Group Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
STEP$47.45+10.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001796022-24-000063
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001796022-24-000088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 278 previous paragraphs and 321 current paragraphs.
197 unchanged; 76 reworded; 35 added; 5 removed; 0 previous and 13 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
In September 2024, we conducted an underwritten public offering of 4,099,997 shares of Class A common stock (the “September 2024 Offering”) at a public offering price of $50.00 per share. We used all of the net proceeds from the offering, after underwriting discounts and commissions and expenses, to purchase (i) 300,000 shares of our Class A common stock from certain selling stockholders, (ii) 3,094,981 Class B units of the Partnership from certain holders thereof, including certain of our directors and executive officers, and (iii) 705,016 Class C units of the Partnership from certain holders thereof. 3,094,981 shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and 3,799,997 Class A units of the Partnership were issued to us.
Current report
Also in September 2024, we issued 312,112 shares of Class A common stock to certain limited partners of the Partnership in exchange for 312,112 Class B units of the Partnership pursuant to the Class B Exchange Agreement. 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. On the same date, we also issued 34,027 shares of Class A common stock to certain limited partners of the Partnership in exchange for 34,027 Class C units of the Partnership pursuant to the Class C Exchange Agreement. A corresponding number of Class A units of the Partnership were issued to us.
Current report
Debt Transactions
Current report
On October 22, 2024, we issued $175.0 million aggregate principal amount of 5.52% Series A senior notes due October 22, 2029 (the “Notes”), pursuant to a note purchase agreement, dated as of October 22, 2024 (the “Note Purchase Agreement”), by the Partnership and accepted and agreed to by the purchasers party thereto in a private placement exempt from registration under the Securities Act.
Current report
We intend to use the net proceeds from the issue and sale of the Notes for general corporate purposes, including to make investments, repay existing debt and make distributions.
Current report
Interest on the Notes will be payable semi-annually in arrears on April 22 and October 22 of each year, commencing on April 22, 2025. Interest on the Notes will accrue from and including October 22, 2024. The Notes will mature on October 22, 2029. We may, at our option, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding at a redemption price equal to 100% of the principal amount thereof plus any applicable “make-whole amount” and accrued and unpaid interest to the redemption date, provided that, so long as no default or event of default shall have occurred and be continuing, no make-whole amount shall be due if the Notes are paid on or after April 22, 2029.
Current report
Incentive fees decreased $1.8 million, or 36%, to $3.2 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 due to lower realization activity.
Current report
Total revenues increased $88.6 million, or 24%, to $458.1 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The overall increase was driven by higher management and advisory fees, net, and positive legacy Greenspring carried interest allocations in the current period as compared to a reversal in the prior year period, partially offset by a decrease in carried interest allocations and lower incentive fees, in each case, as described below.
Current report
Incentive fees decreased $1.0 million, or 19%, to $4.0 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023 due to lower realization activity.
Current report
Total expenses increased $90.4 million, or 69%, to $220.7 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The overall increase resulted from increases in equity-based compensation, legacy Greenspring performance fee-related compensation, general, administrative, and other expenses, cash-based compensation, and performance fee-related compensation, in each case, as described below.
Current report
Cash-based compensation increased $16.2 million, or 11%, to $161.1 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, due to increased staffing and compensation levels. Our average headcount was 6% higher in the current year period as compared to the prior year period.
Current report
Performance fee-related compensation expense decreased $17.3 million, or 27%, to $46.4 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily reflecting the decrease in carried interest allocation revenue. Realized performance fee-related compensation increased $18.8 million, or 174%, to $29.6 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily reflecting higher realization activity.
Current report
Legacy Greenspring performance fee-related compensation expense increased $41.4 million to $4.8 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The six months ended September 30, 2024 reflect gross realized performance fee-related compensation expense of $18.6 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(13.7) million. The six months ended September 30, 2023 reflect gross realized performance fee-related compensation expense of $25.9 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(62.5) million.
Current report
General, administrative and other expenses increased $26.1 million, or 40%, to $91.1 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The overall increase primarily reflected increases of $18.0 million due to loss on change in fair value for contingent consideration obligation as compared to gain on change in fair value for contingent consideration obligation in the prior period, $3.0 million in travel and associated costs for investment evaluation and client service, $2.2 million in professional fees, $1.5 million in marketing expenses, and $1.0 million in human resources and recruiting expenses, partially offset by decreases of $1.3 million in accelerated depreciation for leasehold improvements due to a reduction in lease terms in the prior year and $1.0 million in insurance costs and other general operating expenses.
Current report
Investment income decreased $1.5 million, or 25%, to $4.6 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily reflecting overall changes in the valuations of the underlying investments in the StepStone Funds.
Current report
Legacy Greenspring investment loss decreased $1.5 million, or 23%, to $5.3 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The six months ended September 30, 2024 reflected gross realized investment income of $2.9 million and unrealized investment loss, net of the reversal of realized investment income, of $8.1 million. The six months ended September 30, 2023 reflected gross realized investment income of $4.1 million and unrealized investment loss, net of the reversal of realized investment income, of $11.0 million.
Current report
Investment income of Consolidated Funds increased $4.7 million, or 42%, to $15.8 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds.
Current report
Income tax expense decreased $4.8 million, or 29%, to $11.5 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The decrease in income tax expense was primarily due to lower pre-tax income and an increased tax benefit from the vesting of RSUs for the six months ended September 30, 2024 compared to the six months ended September 30, 2023.
Current report
Six Months Ended September 30, 2024
Current report
Adjusted revenues increased $59.0 million, or 39%, to $208.8 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily reflecting increases in adjusted management and advisory fees, net, and realized carried interest allocation revenues.
Current report
•distributions to non-controlling interests of $78.4 million and $58.9 million;
Current report
•sale of non-controlling interests of $0 million and $3.0 million;
Current report
•distributions to non-controlling interests in legacy Greenspring entities of $9.7 million and $6.2 million;
Current report
•payments for employee taxes related to the net settlement of RSUs of $1.1 million and $0.6 million;
Current report
•proceeds from issuance of Class A common stock under ESPP of $1.1 million and $0 million;
Current report
Debt Transactions
Current report
On October 22, 2024, we issued $175.0 million aggregate principal amount of our 5.52% Series A senior notes due October 22, 2029 (the “Notes”), pursuant to a note purchase agreement, dated as of October 22, 2024 (the “Note Purchase Agreement”), by the Partnership and accepted and agreed to by the purchasers party thereto in a private placement exempt from registration under the Securities Act.
Current report
We intend to use the net proceeds from the issue and sale of the Notes for general corporate purposes, including to make investments, repay existing debt and make distributions.
Current report
Interest on the Notes will be payable semi-annually in arrears on April 22 and October 22 of each year, commencing on April 22, 2025. Interest on the Notes will accrue from and including October 22, 2024. The Notes will mature on October 22, 2029. We may, at our option, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding at a redemption price equal to 100% of the principal amount thereof plus any applicable “make-whole amount” and accrued and unpaid interest to the redemption date, provided that, so long as no default or event of default shall have occurred and be continuing, no make-whole amount shall be due if the Notes are paid on or after April 22, 2029.
Current report
In September 2024, we conducted an underwritten public offering of 4,099,997 shares of Class A common stock (the “September 2024 Offering”) at a public offering price of $50.00 per share. We used all of the net proceeds from the offering, after underwriting discounts and commissions and expenses, to purchase (i) 300,000 shares of our Class A common stock from certain selling stockholders, (ii) 3,094,981 Class B units of the Partnership from certain holders thereof, including certain of our directors and executive officers, and (iii) 705,016 Class C units of the Partnership from certain holders thereof. 3,094,981 shares of Class B common stock were automatically redeemed at par value and canceled in connection with such exchange and 3,799,997 Class A units of the Partnership were issued to us.
Current report
Also in September 2024, we issued 312,112 shares of Class A common stock to certain limited partners of the Partnership in exchange for 312,112 Class B units of the Partnership pursuant to the Class B Exchange Agreement. 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. We also issued 34,027 shares of Class A common stock to certain limited partners of the Partnership in exchange for 34,027 Class C units of the Partnership pursuant to the Class C Exchange Agreement and a corresponding number of Class A units of the partnership were issued to us.
Current report
Contingent Earn-out Payment
Current report
In connection with the Greenspring acquisition, the transaction agreement provides for the payment of an earn-out of up to $75.0 million payable in calendar year 2025, subject to the achievement of certain management fee revenue targets for calendar year 2024. As of September 30, 2024, the fair value of the contingent earn-out liability was $67.1 million. We expect to make payment of the contingent earn-out prior to the end of fiscal 2025. See note 6 to our condensed consolidated financial statements included elsewhere in this quarterly report for more information on the contingent consideration obligation.
Current report
Option Agreement Payment
Current report
In November 2022, we entered into arrangements with the SPW management team (the “Private Wealth Transaction”) under which certain members of the SPW team received a profits interest in SPW and concurrently entered into an option agreement which provides that (i) we have the right to acquire the profits interest at the end of any fiscal quarter after June 30, 2027 in exchange for payment of a call price and (ii) the SPW management team, through an entity named CH Equity Partners, LLC, has the right to put the profits interest to us on June 30, 2026 or at the end of any fiscal quarter thereafter, in exchange for payment of a put price. The applicable call or put price is, in certain circumstances, subject to an earn-out or earn-down. The call or put price will be payable in cash unless we elect to pay up to 75% of the consideration in units of the Partnership, each to be exchangeable into shares of our Class A common stock, and, in either case, rights under one or more tax receivable agreements. As of September 30, 2024, based on the fair value of the liability classified awards, the estimated minimum and maximum amount of cash that would be potentially payable under the Private Wealth Transaction was $17.7 million and $70.8 million, respectively.
Removed paragraphs (5)
Previous report
The portion of the equity interests to be acquired in each annual exchange is set forth in an exchange schedule attached to each Transaction Agreement and is approximately 5% of each Asset Class Entity on each contemplated annual exchange date. The amount of consideration to be delivered will be calculated using exchange ratios determined each year based on a formula establishing an assumed value of each Asset Class Entity based on its estimated adjusted net income, relative to an adjusted trading multiple for our Class A common stock relative to our estimated adjusted net income. The Transaction Agreement specifies a minimum adjusted trading multiple for the exchange to take place, in which case if not met the exchange would be skipped and combined in a subsequent year if and when the minimum adjusted trading multiple was met. For all of the exchanges after the initial exchange, the settlement by cash or equity is at our discretion.
Previous report
Pursuant to each Transaction Agreement, and subject to receipt of required regulatory and other approvals, the consideration for the first exchange was calculated using a reference date of April 1, 2024 (the “Initial Reference Date”) and the first exchange was consummated promptly following the Initial Reference Date upon the satisfaction or waiver of the conditions set forth in such Transaction Agreement applicable to the first exchange, including publication of our audited financial statements for the fiscal year ended March 31, 2024. The Transaction Agreements also provide for up to nine subsequent annual exchanges (or up to 14 subsequent exchanges in certain circumstances in the case of SRA), in each case with a calculation reference date of April 1 and consummation promptly following satisfaction or waiver of the conditions set forth in such Transaction Agreement, including delivery of our audited financial statements. Each Transaction Agreement provides that beginning after the fifth annual exchange, future exchanges may be accelerated into one final exchange in certain circumstances.
Previous report
Incentive fees were $0.8 million for the three months ended June 30, 2024 as compared to six thousand dollars for the three months ended June 30, 2023, reflecting positive investment performance and higher realization activity.
Previous report
•distributions to non-controlling interests of $30.1 million and $25.7 million;
Previous report
•distributions to non-controlling interests in legacy Greenspring entities of $5.4 million and $0.5 million;
Reworded paragraphs (76)
Previous wording
We are a global private markets investment firm focused on providing customized investment solutions and advisory and data services to our clients. Our clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients, which include high-net-worth and mass affluent individuals. We partner with our clients to develop and build private markets portfolios designed to meet their specific objectives across the private equity, infrastructure, private debt and real estate asset classes. 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 June 30, 2024, we were responsible for approximately $701 billion of total capital, including $169 billion of AUM and $531 billion of AUA.
Current wording
We are a global private markets investment firm focused on providing customized investment solutions and advisory and data services to our clients. Our clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients, which include high-net-worth and mass affluent individuals. We partner with our clients to develop and build private markets portfolios designed to meet their specific objectives across the private equity, infrastructure, private debt and real estate asset classes. 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 September 30, 2024, we were responsible for approximately $682 billion of total capital, including $176 billion of AUM and $506 billion of AUA.
Previous wording
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. 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. Since our inception in 2007, we have invested and continue to invest heavily in our platforms to drive growth and expand our investment solutions capabilities and service offerings, including through opportunistic transactions that have helped accelerate the growth of our team and capabilities. As of June 30, 2024, we had approximately 1,010 total employees, including 340 investment professionals and approximately 670 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.
Current wording
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 26 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. Since our inception in 2007, we have invested and continue to invest heavily in our platforms to drive growth and expand our investment solutions capabilities and service offerings, including through opportunistic transactions that have helped accelerate the growth of our team and capabilities. As of September 30, 2024, we had approximately 1,050 total employees, including approximately 360 investment professionals and approximately 690 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.
Previous wording
•Separately managed accounts (“SMAs”). Owned by one client and managed according to their specific preferences, SMAs integrate a combination of primaries, secondaries and co-investments across one or more asset classes. SMAs are meant to address clients’ specific portfolio objectives with respect to return, risk tolerance, diversification and liquidity. SMAs, including directly managed assets, comprised $103 billion of our AUM as of June 30, 2024.
Current wording
•Separately managed accounts (“SMAs”). Owned by one client and managed according to their specific preferences, SMAs integrate a combination of primaries, secondaries and co-investments across one or more asset classes. SMAs are meant to address clients’ specific portfolio objectives with respect to return, risk tolerance, diversification and liquidity. SMAs, including directly managed assets, comprised $107 billion of our AUM as of September 30, 2024.
Previous wording
•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 $52 billion of our AUM as of June 30, 2024.
Current wording
•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 $54 billion of our AUM as of September 30, 2024.
Previous wording
•Advisory and data services. These services 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 StepStone Private Markets Intelligence (“SPI”) Research and our other proprietary tools. Advisory relationships comprised$531 billion of our AUA and $15 billion of our AUM as of June 30, 2024.
Current wording
•Advisory and data services. These services 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 StepStone Private Markets Intelligence (“SPI”) Research and our other proprietary tools. Advisory relationships comprised$506 billion of our AUA and $15 billion of our AUM as of September 30, 2024.
Previous wording
•Portfolio analytics and reporting. We provide clients with tailored reporting packages, including customized performance benchmarks as well as associated compliance, administrative and tax capabilities. Mandates for portfolio analytics and reporting services typically include licensed access to our proprietary performance monitoring software, SPI Reporting. SPI Reporting tracked detailed information on over $710 billion of client commitments as of June 30, 2024, inclusive of our total capital responsibility, previously exited investments and investments of former clients.
Current wording
•Portfolio analytics and reporting. We provide clients with tailored reporting packages, including customized performance benchmarks as well as associated compliance, administrative and tax capabilities. Mandates for portfolio analytics and reporting services typically include licensed access to our proprietary performance monitoring software, SPI Reporting. SPI Reporting tracked detailed information on over $730 billion of client commitments as of September 30, 2024, inclusive of our total capital responsibility, previously exited investments and investments of former clients.
Previous wording
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. Through these investments, we earn a pro-rata share of the results of such funds and may also be entitled to an allocation of performance-based fees from the limited partners in the StepStone Funds, commonly referred to as carried interest.
Current wording
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. Through these investments, we earn a pro-rata share of the results of such funds and may also be entitled to an allocation of performance-based fees from the limited partners in the StepStone Funds, commonly referred to as carried interest.
Previous wording
In the first half of 2024, signs of easing inflation coupled with the expansion of economic activity at a sustained pace and low unemployment rates contributed to positive returns in most financial markets despite inflation remaining elevated with a sustained period of higher interest rates.
Current wording
In 2024, signs of easing inflation coupled with the expansion of economic activity at a sustained pace and low unemployment rates contributed to positive returns in most financial markets despite inflation remaining elevated. In September 2024, the Federal Reserve announced the decision to lower the target range for the federal funds rate by 0.50% to a range of 4.75% to 5.00% in response to positive trends in economic data, including a measure of inflation.
Previous wording
We are continuing to closely monitor developments related to inflation, higher interest rates, potential regulatory developments as a result of U.S. elections, banking system volatility, geopolitical tension, unrest or conflicts, including in Russia, Ukraine, and the Middle East, and assess the impact on financial markets and on our business. Our results and the overall industry results have been and may continue to be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which have resulted in, and may continue to result in, delayed or decreased management fees. Further, fund managers have been unable or less able to exit existing investments profitably. Such conditions have resulted in, and may continue to result in, delayed or decreased performance fee revenues. It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy and our condensed consolidated financial statements. See “Risk Factors—Risks Related to Our Industry—Difficult or volatile market and political conditions can adversely affect our business by reducing the market value of the assets we manage, causing our clients to reduce their investments in private markets, reducing the number of high-quality investment managers with whom we may invest, and reducing the ability of our funds to raise or deploy capital” and “Risk Factors—Banking system volatility may adversely affect the results and financial condition of the StepStone Funds or StepStone generally” included in our annual report on Form 10-K for the fiscal year ended March 31, 2024.
Current wording
We are continuing to closely monitor developments related to inflation, decreasing but still higher interest rates, potential regulatory and governmental policy developments as a result of U.S. elections, banking system volatility, geopolitical tension, unrest or conflicts, including in Russia, Ukraine, and the Middle East, and assess the impact on financial markets and on our business. Our results and the overall industry results have been and may continue to be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which have resulted in, and may continue to result in, delayed or decreased management fees. Further, fund managers have been unable or less able to exit existing investments profitably. Such conditions have resulted in, and may continue to result in, delayed or decreased performance fee revenues. It is currently not possible to predict the ultimate effects of these events on the financial markets, overall economy and our condensed consolidated financial statements. See “Risk Factors—Risks Related to Our Industry—Difficult or volatile market and political conditions can adversely affect our business by reducing the market value of the assets we manage, causing our clients to reduce their investments in private markets, reducing the number of high-quality investment managers with whom we may invest, and reducing the ability of our funds to raise or deploy capital” and “Risk Factors—Banking system volatility may adversely affect the results and financial condition of the StepStone Funds or StepStone generally” included in our annual report on Form 10-K for the fiscal year ended March 31, 2024.
Previous wording
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 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. 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. 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 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. A corresponding number of Class A units of the Partnership were issued to us.
Current wording
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. 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. 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. A corresponding number of Class A units of the Partnership were issued to us.
Previous wording
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. As of June 30, 2024 the Sunset Holders collectively maintained direct or indirect beneficial ownership of approximately 30.4% of the Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock) and approximately 57.1% of the aggregate voting power of our outstanding Class A common stock and Class B common stock.
Current wording
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. As of September 30, 2024 the Sunset Holders collectively maintained direct or indirect beneficial ownership of approximately 28.4% of the Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock) and approximately 56.5% of the aggregate voting power of our outstanding Class A common stock and Class B common stock.
Previous wording
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. Management fees include income-based incentive fees, which are predictable and recurring in nature and paid quarterly based on net investment income of certain funds that are regulated as a business development company (“BDC”). Capital gains-based incentive fees from BDC funds are recognized as performance fees. There have been no capital-gains based incentive fees recognized to date.
Current wording
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. Management fees include income-based incentive fees, which are predictable and recurring in nature and paid quarterly based on net investment income of certain funds.
Previous wording
•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. Thereafter, management fees are typically calculated based on a contractual rate applied against net invested capital, or a stepped-down fee rate applied against the initial commitment. The weighted-average management fee rate from focused commingled funds was approximately 0.84% and 0.99% of average FEAUM for the twelve months ended June 30, 2023 and 2024, respectively, and primarily reflected the timing of new funds, and shifts in asset class mix.
Current wording
•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. Thereafter, management fees are typically calculated based on a contractual rate applied against net invested capital, or a stepped-down fee rate applied against the initial commitment. The weighted-average management fee rate from focused commingled funds was approximately 0.88% and 1.03% of average FEAUM for the twelve months ended September 30, 2023 and 2024, respectively, and primarily reflected the timing of new funds, and shifts in asset class mix.
Previous wording
•The weighted-average management fee rate across SMAs and focused commingled funds was approximately 0.55% and 0.61% of average FEAUM for the twelve months ended June 30, 2023 and 2024, respectively, and primarily reflected the timing of new funds and shifts in mix between SMAs and focused commingled funds.
Current wording
•The weighted-average management fee rate across SMAs and focused commingled funds was approximately 0.57% and 0.63% of average FEAUM for the twelve months ended September 30, 2023 and 2024, respectively, and primarily reflected the timing of new funds and shifts in mix between SMAs and focused commingled funds.
Previous wording
•Fee revenues from advisory, StepStone Portfolio Analytics & Reporting (“SPAR”), SPI Research or administrative services are generally annual fixed fees, which vary based on the scope of services we provide. We also provide certain project-based or event-driven advisory services. The fees for these services are negotiated and typically paid upon successful delivery of services or on the execution of the event-driven service. Because advisory fees are negotiated and typically paid upon successful delivery of services or on the execution of the event-driven service, advisory fees do not necessarily correlate with the total size of our AUA.
Current wording
•Fee revenues from advisory, StepStone Portfolio Analytics & Reporting (“SPAR”) and SPI Research are generally annual fixed fees, which vary based on the scope of services we provide. We also provide certain project-based or event-driven advisory services. The fees for these services are negotiated and typically paid upon successful delivery of services or on the execution of the event-driven service. Because advisory fees are negotiated and typically paid upon successful delivery of services or on the execution of the event-driven service, advisory fees do not necessarily correlate with the total size of our AUA.
Previous wording
We earn two types of performance fee revenues: incentive fees and carried interest allocations, as described below. As of June 30, 2024, we had over $80 billion of performance fee-eligible capital (excluding certain legacy Greenspring funds) across over 200 programs.
Current wording
We earn two types of performance fee revenues: incentive fees and carried interest allocations, as described below. As of September 30, 2024, we had over $85 billion of performance fee-eligible capital (excluding certain legacy Greenspring funds) across over 200 programs.
Previous wording
Equity-based compensation represents grants of equity related awards or arrangements to certain employees and directors.
Current wording
Equity-based compensation represents grants of equity related awards or arrangements to certain employees and directors and expense associated with the employee stock purchase plan (“ESPP”).
Previous wording
Total revenues increased $8.4 million, or 5%, to $186.4 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The overall increase was driven by higher management and advisory fees, net, a lower reversal of legacy Greenspring carried interest allocations in the current period as compared to the prior year period and higher incentive fees, partially offset by a decrease in carried interest allocations, in each case, as described below.
Current wording
Total revenues increased $80.3 million, or 42%, to $271.7 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The overall increase was driven by higher management and advisory fees, net, higher carried interest allocations, and positive legacy Greenspring carried interest allocations in the current period as compared to a reversal in the prior year period, partially offset by lower incentive fees, in each case, as described below.
Previous wording
Management and advisory fees, net increased $39.9 million, or 29%, to $178.0 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase was driven by new client activity and 12% growth in average FEAUM across the platform. The three months ended June 30, 2024 included retroactive fees of $19.1 million from the closings of StepStone’s private equity secondaries, special situation real estate secondaries and infrastructure co-investment funds. The three months ended June 30, 2023 included retroactive fees of $2.8 million from the closings of StepStone’s private equity secondaries, infrastructure co-investment and StepStone VC Global Partners XI funds.
Current wording
Management and advisory fees, net increased $42.6 million, or 30%, to $184.8 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase was driven by new client activity and 17% growth in average FEAUM across the platform. The three months ended September 30, 2024 included retroactive fees of $14.9 million from the closings of StepStone’s Secondary Opportunities V, special situation real estate secondaries, and infrastructure co-investment funds. The three months ended September 30, 2023 included retroactive fees of $3.7 million from the closings of StepStone’s Secondary Opportunities V and VC Global Partners XI funds.
Previous wording
Realized carried interest allocation revenues increased $27.3 million, or 189%, to $41.8 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, reflecting higher realization activity within our private equity and infrastructure funds. Unrealized carried interest allocation revenues include the reversal of realized carried interest allocation revenues. Excluding the reversal of $41.8 million, unrealized carried interest allocation revenues decreased $47.2 million, or 74%, to $16.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The decrease in unrealized carried interest allocations for the three months ended June 30, 2024 primarily reflected a smaller net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity funds.
Current wording
Realized carried interest allocation revenues increased $16.0 million to $17.6 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, reflecting higher realization activity within our private equity and infrastructure funds. Unrealized carried interest allocation revenues include the reversal of realized carried interest allocation revenues. Excluding the reversal of $17.6 million, unrealized carried interest allocation revenues increased $12.9 million, or 23%, to $69.8 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase in unrealized carried interest allocations for the three months ended September 30, 2024 primarily reflected a higher net increase in the cumulative allocation of gains associated with the underlying portfolios within our infrastructure funds.
Previous wording
Legacy Greenspring carried interest allocation revenues increased $14.9 million, or 62%, to $(9.1) million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 as a result of lower net unrealized depreciation in the fair value of certain underlying fund investments in the current year period as compared to the prior year period. The three months ended June 30, 2024 reflect gross realized carried interest allocations of $6.6 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(15.7) million. The three months ended June 30, 2023 reflect gross realized carried interest allocations of $0.9 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(24.9) million.
Current wording
Legacy Greenspring carried interest allocation revenues increased $26.5 million to $13.9 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 as a result of net unrealized appreciation in the fair value of certain underlying fund investments in the current year period as compared to the prior year period. The three months ended September 30, 2024 reflect gross realized carried interest allocations of $11.9 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $2.0 million. The three months ended September 30, 2023 reflect gross realized carried interest allocations of $25.0 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(37.6) million.
Previous wording
Cash-based compensation increased $8.1 million, or 12%, to $78.2 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to increased staffing and compensation levels. Our average full-time headcount increased 4% in the current year period as compared to the prior year period.
Current wording
Cash-based compensation increased $8.0 million, or 11%, to $82.9 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to increased staffing and compensation levels. Our average headcount was 5% higher in the current year period as compared to the prior year period.
Previous wording
Equity-based compensation increased $10.7 million, or 126%, to $19.2 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase was primarily attributable to a $9.6 million increase in expenses related to liability classified awards in the current year period as compared to the prior year period, additional grants of RSUs made in February 2024 and no comparable expense for these grants in the prior year period, and expense related to the first offering period for the employee stock purchase plan.
Current wording
Equity-based compensation increased $31.4 million, or 531%, to $37.3 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase was primarily attributable to a $30.8 million increase in expenses for liability classified awards related to the profits interest issued in the private wealth subsidiary in the current year period as compared to the prior year period, additional grants of RSUs made in February 2024 and no comparable expense for these grants in the prior year period, and expense related to the first offering period for the employee stock purchase plan.
Previous wording
Performance fee-related compensation expense decreased $23.4 million, or 70%, to $9.9 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily reflecting the decrease in carried interest allocation revenue. Realized performance fee-related compensation increased $11.7 million, or 129%, to $20.8 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily reflecting higher realization activity.
Current wording
Performance fee-related compensation expense increased $6.1 million, or 20%, to $36.5 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily reflecting the increase in carried interest allocation revenue. Realized performance fee-related compensation increased $7.0 million, or 410%, to $8.8 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily reflecting higher realization activity.
Previous wording
Legacy Greenspring performance fee-related compensation expense increased $14.9 million, or 62%, to $(9.1) million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The three months ended June 30, 2024 reflect gross realized performance fee-related compensation expense of $6.6 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(15.7) million. The three months ended June 30, 2023 reflect gross realized performance fee-related compensation expense of $0.9 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(24.9) million.
Current wording
Legacy Greenspring performance fee-related compensation expense increased $26.5 million to $13.9 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The three months ended September 30, 2024 reflect gross realized performance fee-related compensation expense of $11.9 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $2.0 million. The three months ended September 30, 2023 reflect gross realized performance fee-related compensation expense of $25.0 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(37.6) million.
Previous wording
General, administrative and other expenses increased $7.7 million, or 23%, to $41.0 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The overall increase primarily reflected increases of $4.2 million due to loss on change in fair value for contingent consideration obligation as compared to gain on change in fair value for contingent consideration obligation in the prior period, $1.6 million in travel and associated costs for investment evaluation and client service, $0.9 million in marketing expenses, $0.7 million in professional fees and other general operating expenses.
Current wording
General, administrative and other expenses increased $18.3 million, or 58%, to $50.1 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The overall increase primarily reflected increases of $13.8 million due to loss on change in fair value for contingent consideration obligation as compared to gain on change in fair value for contingent consideration obligation in the prior period, $1.5 million in professional fees, $1.4 million in travel and associated costs for investment evaluation and client service, $1.1 million in information and technology expenses and other general operating expenses.
Previous wording
Total expenses increased $18.1 million, or 15%, to $139.3 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The overall increase resulted from a lower reversal of legacy Greenspring performance fee-related compensation in the current year period as compared to the prior year period, and increases in equity-based compensation, cash-based compensation, and general, administrative and other expenses, partially offset by a decrease in performance fee-related compensation in each case, as described below.
Current wording
Total expenses increased $108.4 million, or 43%, to $359.9 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The overall increase resulted from increases in equity-based compensation, legacy Greenspring performance fee-related compensation, general, administrative and other expenses, and cash-based compensation, partially offset by a decrease in performance fee-related compensation in each case, as described below.
Previous wording
Investment income decreased $0.5 million, or 16%, to $2.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily reflecting overall changes in the valuations of the underlying investments in the StepStone Funds.
Current wording
Investment income decreased $1.0 million, or 33%, to $2.1 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily reflecting overall changes in the valuations of the underlying investments in the StepStone Funds.
Previous wording
Legacy Greenspring investment loss decreased $1.6 million, or 56%, to $1.3 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The three months ended June 30, 2024 reflected gross realized investment income of $0.9 million and unrealized investment loss, net of the reversal of realized investment income, of $2.1 million. The three months ended June 30, 2023 reflected gross realized investment income of $0.2 million and unrealized investment loss, net of the reversal of realized investment income, of $3.1 million.
Current wording
Legacy Greenspring investment loss increased $0.1 million, or 2%, to $4.0 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The three months ended September 30, 2024 reflected gross realized investment income of $2.0 million and unrealized investment loss, net of the reversal of realized investment income, of $6.0 million. The three months ended September 30, 2023 reflected gross realized investment income of $3.9 million and unrealized investment loss, net of the reversal of realized investment income, of $7.9 million.
Previous wording
Investment income of Consolidated Funds increased $5.3 million, or 223%, to $7.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds.
Current wording
Investment income of Consolidated Funds decreased $0.6 million, or 6%, to $8.2 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds.
Previous wording
Interest income increased $1.6 million, or 377%, to $2.1 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to higher average interest rates earned on cash and cash equivalent balances and higher average cash and cash equivalent balances during the current year period, as compared with the prior year period. Interest income attributable to the Consolidated Funds was $0.9 million in the current year period as compared to $0.2 million in the prior year period.
Current wording
Interest income increased $2.0 million, or 209%, to $3.0 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to higher average interest rates earned on cash and cash equivalent balances and higher average cash and cash equivalent balances during the current year period as compared with the prior year period. Interest income attributable to the Consolidated Funds was $1.4 million in the current year period as compared to $0.2 million in the prior year period.
Previous wording
Interest expense increased $1.0 million, or 49%, to $3.0 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase was due to higher average interest rates and higher average outstanding balances under the Revolver during the current year period, as compared with the prior year period.
Current wording
Interest expense increased $1.4 million, or 67%, to $3.5 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase was due to higher average interest rates and higher average outstanding balances under the Revolver during the current year period as compared with the prior year period.
Previous wording
Other income (loss) decreased $0.6 million to a loss of $0.4 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily reflecting net foreign currency transaction losses in the current period as compared with net foreign currency transaction gains in the prior year period.
Current wording
Other income (loss) increased $2.0 million to income of $1.2 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily reflecting net foreign currency transaction gains in the current period as compared with net foreign currency transaction losses in the prior year period.
Previous wording
Our effective income tax rate was 12.4% and 14.8% for the three months ended June 30, 2024 and 2023, respectively. Our overall effective tax rate in each of the periods described above is less than the statutory rate as a portion of income was allocated to non-controlling interests and the tax liability on such income is borne by the holders of non-controlling interests. For the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, the primary rate difference was due to a decrease in tax expense associated with income allocated to non-controlling interests, partially offset by certain tax expense adjustments that were recorded to our outside tax basis difference in the Partnership for the three months ended June 30, 2023 that did not reoccur during the three months ended June 30, 2024.
Current wording
Our effective income tax rate was 8.2% and 11.5% for the three months ended September 30, 2024 and 2023, respectively, and 10.2% and 13.1% for the six months ended September 30, 2024 and 2023, respectively. Our overall effective tax rate in each of the periods described above is less than the statutory rate as a portion of income was allocated to non-controlling interests and the tax liability on such income is borne by the holders of non-controlling interests. The primary rate difference was driven by an increase in tax benefits related to income allocated to non-controlling interests, as well as an increase in tax benefits associated with the vesting of RSUs for the three and six months ended September 30, 2024.
Previous wording
Income tax expense decreased $1.8 million, or 21%, to $6.8 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The decrease in income tax expense was primarily driven by lower pre-tax income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Current wording
Income tax expense decreased $3.0 million, or 39%, to $4.8 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The decrease in income tax expense was primarily due to lower pre-tax income and an increased tax benefit from the vesting of RSUs for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous wording
Net income attributable to non-controlling interests in subsidiaries increased $7.0 million, or 73%, to $16.6 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. The increase was primarily attributable to an increase in income generated by our consolidated subsidiaries not wholly-owned by us and an increase in our economic interests in the Asset Class Entities as a result of the Transaction Agreements.
Current wording
Net income attributable to non-controlling interests in subsidiaries increased $9.5 million, or 99%, to $19.1 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase was primarily attributable to an increase in income generated by our consolidated subsidiaries not wholly-owned by us and an increase in our economic interests in the Asset Class Entities as a result of the Transaction Agreements.
Previous wording
Net income (loss) attributable to non-controlling interests in legacy Greenspring entities represents the net income or loss attributable to the interests held by the legacy Greenspring general partner entities. We did not acquire any direct economic interests in the legacy Greenspring general partner entities. As a result, all of the net income or loss related to the legacy Greenspring general partner entities is allocated to non-controlling interests in legacy Greenspring entities. Net loss attributable to non-controlling interests in legacy Greenspring entities was $1.3 million and $2.9 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
Net income (loss) attributable to non-controlling interests in legacy Greenspring entities represents the net income or loss attributable to the interests held by the legacy Greenspring general partner entities. We did not acquire any direct economic interests in the legacy Greenspring general partner entities. As a result, all of the net income or loss related to the legacy Greenspring general partner entities is allocated to non-controlling interests in legacy Greenspring entities. Net loss attributable to non-controlling interests in legacy Greenspring entities was $4.0 million for the three months ended September 30, 2024 and 2023, respectively, and $5.3 million and $6.8 million for the six months ended September 30, 2024 and 2023, respectively.
Previous wording
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. Net income attributable to non-controlling interests in the Partnership was $13.3 million and $19.9 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
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. Net income attributable to non-controlling interests in the Partnership was $13.6 million and $22.9 million for the three months ended September 30, 2024 and 2023, respectively, and $26.9 million and $42.8 million for the six months ended September 30, 2024 and 2023, respectively.
Previous wording
Net income attributable to redeemable non-controlling interests in Consolidated Funds was $5.7 million and $1.6 million for the three months ended June 30, 2024 and 2023, respectively, which represents income of the Consolidated Funds attributable to third-party investors.
Current wording
Net income attributable to redeemable non-controlling interests in Consolidated Funds represents income of the Consolidated Funds attributable to third-party investors. Net income attributable to redeemable non-controlling interests in Consolidated Funds was $6.5 million and $4.4 million for the three months ended September 30, 2024 and 2023, respectively, and $12.2 million and $6.0 million for the six months ended September 30, 2024 and 2023, respectively.
Previous wording
Net income attributable to redeemable non-controlling interests in subsidiaries was $0.4 million for the three months ended June 30, 2024. There were no redeemable non-controlling interests in subsidiaries for the three months ended June 30, 2023.
Current wording
Net income attributable to redeemable non-controlling interests in subsidiaries was $0.3 million and $0.7 million for the three and six months ended September 30, 2024, respectively. There were no redeemable non-controlling interests in subsidiaries for the three and six months ended September 30, 2023.
Showing the first 40 of 76 pairs. Open the source sections for the rest.
Rearranged current paragraphs (13)
Current report — wording carried from elsewhere
Management and advisory fees, net increased $82.5 million, or 29%, to $362.8 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The increase was driven by new client activity and 13% growth in average FEAUM across the platform. The six months ended September 30, 2024 included retroactive fees of $31.5 million from the closings of StepStone’s Secondary Opportunities V, special situation real estate secondaries, infrastructure co-investment, and VC Global Partners XI funds. The six months ended September 30, 2023 included retroactive fees of $5.3 million from the closings of StepStone’s Secondary Opportunities V, VC Global Partners XI and infrastructure co-investment funds.
Current report — wording carried from elsewhere
Realized carried interest allocation revenues increased $43.4 million, or 270%, to $59.4 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, reflecting higher realization activity within our private equity and infrastructure funds. Unrealized carried interest allocation revenues include the reversal of realized carried interest allocation revenues. Excluding the reversal of $59.4 million, unrealized carried interest allocation revenues decreased $34.3 million, or 28%, to $86.5 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The decrease in unrealized carried interest allocations for the six months ended September 30, 2024 primarily reflected a lower net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity funds.
Current report — wording carried from elsewhere
Legacy Greenspring carried interest allocation revenues increased $41.4 million to $4.8 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023 as a result of lower net unrealized depreciation in the fair value of certain underlying fund investments in the current year period as compared to the prior year period. The six months ended September 30, 2024 reflect gross realized carried interest allocations of $18.6 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(13.7) million. The six months ended September 30, 2023 reflect gross realized carried interest allocations of $25.9 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(62.5) million.
Current report — wording carried from elsewhere
Equity-based compensation increased $42.1 million, or 293%, to $56.5 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The increase was primarily attributable to a $40.4 million increase in expenses for liability classified awards related to the profits interest issued in the private wealth subsidiary in the current year period as compared to the prior year period, additional grants of RSUs made in February 2024 and no comparable expense for these grants in the prior year period, and expense related to the first offering period for the ESPP.
Current report — wording carried from elsewhere
Interest income increased $3.7 million, or 260%, to $5.1 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily due to higher average interest rates earned on cash and cash equivalent balances and higher average cash and cash equivalent balances during the current year period as compared with the prior year period. Interest income attributable to the Consolidated Funds was $2.3 million in the current year period as compared to $0.5 million in the prior year period.
Current report — wording carried from elsewhere
Interest expense increased $2.4 million, or 58%, to $6.5 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The increase was due to higher average interest rates and higher average outstanding balances under the Revolver during the current year period as compared with the prior year period.
Current report — wording carried from elsewhere
Other income (loss) increased $1.5 million to income of $0.8 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily reflecting net foreign currency transaction gains in the current period as compared with net foreign currency transaction losses in the prior year period.
Current report — wording carried from elsewhere
Net income attributable to non-controlling interests in subsidiaries increased $16.5 million, or 86%, to $35.7 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023. The increase was primarily attributable to an increase in income generated by our consolidated subsidiaries not wholly-owned by us and an increase in our economic interests in the Asset Class Entities as a result of the Transaction Agreements.
Current report — wording carried from elsewhere
FEAUM increased approximately $10.6 billion to $104.4 billion as of September 30, 2024 as compared to March 31, 2024. During the period, FEAUM from SMAs increased approximately $3.2 billion and FEAUM from commingled funds increased approximately $7.3 billion.
Current report — wording carried from elsewhere
FRE increased $55.8 million, or 63%, to $144.0 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily reflecting higher adjusted management and advisory fees, net, partially offset by higher adjusted cash-based compensation, adjusted general, administrative and other expenses, and adjusted equity-based compensation.
Current report — wording carried from elsewhere
ANI increased $51.2 million, or 86%, to $110.8 million for the six months ended September 30, 2024 as compared to the six months ended September 30, 2023, primarily due to an increase in FRE as discussed above, higher net realized performance fee-related earnings (adjusted incentive fees, including the deferred portion, plus realized carried interest allocation revenues, less realized performance fee-related compensation) and higher realized investment income. The overall increase was partially offset by a higher allocation of income to non-controlling interests and higher interest expense.
Current report — wording carried from elsewhere
(2)Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
Current report — wording carried from elsewhere
2024 and 2023, respectively), compensation paid to certain employees as part of an acquisition earn-out ($0.3 million and $0.6 million for the three months ended September 30, 2024 and 2023, respectively, $0.8 million and $1.1 million for the six months ended September 30, 2024 and 2023, respectively) and other non-core operating income and expenses.