StepStone Group Inc

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 September 30, 2024, we were responsible for approximately $682 billion of total capital, including $176 billion of AUM and $506 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 December 31, 2024, we were responsible for approximately $698 billion of total capital, including $179 billion of AUM and $519 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 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.

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 December 31, 2024, we had approximately 1,090 total employees, including approximately 375 investment professionals and 715 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 $107 billion of our AUM as of September 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 $109 billion of our AUM as of December 31, 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 $54 billion of our AUM as of September 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 $55 billion of our AUM as of December 31, 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$506 billion of our AUA and $15 billion of our AUM as of September 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$519 billion of our AUA and $15 billion of our AUM as of December 31, 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 $730 billion of client commitments as of September 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 $755 billion of client commitments as of December 31, 2024, inclusive of our total capital responsibility, previously exited investments and investments of former clients.

Previous 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.

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. Between September 2024 and December 2024, the Federal Reserve announced several decisions to lower the target range for the federal funds rate ultimately to a range of 4.25% to 4.50% 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, 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.

Current wording

We are continuing to closely monitor developments related to inflation, decreasing but still higher interest rates, potential trade, regulatory and governmental policy developments as a result of U.S. elections, banking system volatility, geopolitical tension, unrest or conflicts, including in or with China, 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” included in Part II, Item 1A of this quarterly report on Form 10-Q 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

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 wording

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”), in a private placement exempt from registration under the Securities Act.

Previous wording

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 wording

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. So long as no default or event of default shall have occurred and be continuing under the Note Purchase Agreement, no make-whole amount will be due if the Notes are paid on or after April 22, 2029.

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 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.

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 December 31, 2024, the Sunset Holders collectively maintained direct or indirect beneficial ownership of approximately 27.9% of the Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock) and approximately 55.9% of the aggregate voting power of our outstanding Class A common stock and Class B common stock.

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 0.88% 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.

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 0.90% and 1.03% of average FEAUM for the twelve months ended December 31, 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 0.57% 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.

Current wording

•The weighted-average management fee rate across SMAs and focused commingled funds was approximately 0.58% and 0.64% of average FEAUM for the twelve months ended December 31, 2023 and 2024, respectively, and primarily reflected the timing of new funds and shifts in mix between SMAs and focused commingled funds.

Previous 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.

Current wording

We earn two types of performance fee revenues: incentive fees and carried interest allocations, as described below. As of December 31, 2024, we had over $90 billion of performance fee-eligible capital (excluding certain legacy Greenspring funds) across over 200 programs.

Previous wording

Carried interest allocations include the allocation of performance-based fees, commonly referred to as carried interest, to us from limited partners in the StepStone Funds in which we hold an equity interest. We are entitled to a carried interest allocation (typically 5% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These carried interest allocations are subject to the achievement of minimum return levels (typically 5% to 10%), in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the StepStone Funds, including carried interest allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member. Accordingly, carried interest allocations are not deemed to be within the scope of Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

Current wording

Carried interest allocations include the allocation of performance-based fees, commonly referred to as carried interest, to us from limited partners in the StepStone Funds in which we hold an equity interest. We are entitled to a carried interest allocation (typically 5% to 20%) based on cumulative fund or account performance to date, irrespective of whether such amounts have been realized. These carried interest allocations are subject to the achievement of minimum return levels (typically 5% to 10%), in accordance with the terms set forth in the respective fund’s governing documents. We account for our investment balances in the StepStone Funds, including carried interest allocations, under the equity method of accounting because we are presumed to have significant influence as the general partner or managing member. Accordingly, carried interest allocations are generally not deemed to be within the scope of Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

Previous wording

Interest expense primarily consists of the interest expense on the Revolver, as well as the related amortization of deferred financing costs.

Current wording

Interest expense primarily consists of the interest expense on the Revolver and the Notes, as well as the related amortization of deferred financing costs.

Previous wording

Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership held by third parties and employees in those entities. Non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.

Current wording

Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership, including certain general partner entities for the StepStone Funds, held by third parties and employees. Non-controlling interests in subsidiaries are allocated a share of income or loss in the respective consolidated subsidiary in proportion to their relative ownership interests, after consideration of contractual arrangements that govern allocations of income or loss.

Previous 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.

Current wording

Total revenues increased $353.6 million to $339.0 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The overall increase was driven by positive carried interest allocations and legacy Greenspring carried interest allocations in the current period as compared to a reversal in the prior year period, higher management and advisory fees, net, and higher incentive fees, in each case, as described below.

Previous 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.

Current wording

Management and advisory fees, net increased $39.3 million, or 26%, to $190.8 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase was driven by new client activity and 24% growth in average FEAUM across the platform. The three months ended December 31, 2024 included retroactive fees of $9.7 million from the closings of StepStone’s special situation real estate secondaries, multi-strategy growth equity and Infrastructure Co-Investment Partners 2022 funds. The three months ended December 31, 2023 included retroactive fees of $8.6 million from the closings of StepStone’s Secondary Opportunities V, VC Global Partners XI and Infrastructure Co-Investment Partners 2022 funds.

Previous 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.

Current wording

Realized carried interest allocation revenues increased $9.0 million, or 59%, to $24.3 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 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 $24.3 million, unrealized carried interest allocation revenues increased $231.9 million to $117.6 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase in unrealized carried interest allocations for the three months ended December 31, 2024 primarily reflected a net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity funds.

Previous 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.

Current wording

Legacy Greenspring carried interest allocation revenues increased $77.9 million to $8.2 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 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 net unrealized depreciation in the prior year period. The three months ended December 31, 2024 reflect gross realized carried interest allocations of $38.3 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(30.1) million. The three months ended December 31, 2023 reflect gross realized carried interest allocations of $0.1 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(69.8) million.

Previous wording

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 wording

Total revenues increased $442.3 million, or 125%, to $797.1 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The overall increase was driven by 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, higher management and advisory fees, net, and higher incentive fees, in each case, as described below.

Previous wording

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 wording

Management and advisory fees, net increased $121.9 million, or 28%, to $553.6 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The increase was driven by new client activity and 18% growth in average FEAUM across the platform. The nine months ended December 31, 2024 included retroactive fees of $36.8 million from the closings of StepStone’s Secondary Opportunities V, special situation real estate secondaries, Infrastructure Co-Investment Partners 2022, multi-strategy growth equity and VC Global Partners XI funds. The nine months ended December 31, 2023 included retroactive fees of $9.5 million from the closings of StepStone’s Secondary Opportunities V, VC Global Partners XI and Infrastructure Co-Investment Partners 2022 funds.

Previous wording

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 wording

Realized carried interest allocation revenues increased $52.4 million, or 167%, to $83.7 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 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 $83.7 million, unrealized carried interest allocation revenues increased $197.6 million to $204.1 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The increase in unrealized carried interest allocations for the nine months ended December 31, 2024 primarily reflected a higher net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity and infrastructure funds.

Previous wording

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 wording

Legacy Greenspring carried interest allocation revenues increased $119.3 million to $13.0 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 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 net unrealized depreciation in the prior year period. The nine months ended December 31, 2024 reflect gross realized carried interest allocations of $56.8 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(43.8) million. The nine months ended December 31, 2023 reflect gross realized carried interest allocations of $26.0 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $(132.2) million.

Previous wording

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 wording

Total expenses increased $679.0 million to $698.1 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The overall increase resulted from increases in equity-based compensation, performance fee-related compensation, legacy Greenspring performance fee-related compensation and cash-based compensation, partially offset by lower general, administrative, and other expenses, in each case, as described below.

Previous 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.

Current wording

Cash-based compensation increased $11.6 million, or 16%, to $85.2 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 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.

Previous 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.

Current wording

Equity-based compensation increased $472.4 million to $486.4 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The increase was primarily attributable to a $474.5 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, partially offset by a decrease in RSU expense due to the final vesting of RSUs issued in connection with our IPO.

Previous 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.

Current wording

Total performance fee-related compensation expense increased $121.9 million to $75.1 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023, primarily reflecting the increase in carried interest allocation revenue. Realized performance fee-related compensation increased $10.0 million, or 65%, to $25.5 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023, primarily reflecting higher realization activity and higher incentive fees from SPRING.

Previous 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.

Current wording

Legacy Greenspring performance fee-related compensation expense increased $77.9 million to $8.2 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The three months ended December 31, 2024 reflect gross realized performance fee-related compensation expense of $38.3 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(30.1) million. The three months ended December 31, 2023 reflect gross realized performance fee-related compensation expense of $0.1 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(69.8) million.

Previous 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.

Current wording

General, administrative and other expenses decreased $4.9 million, or 10%, to $43.1 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023. The overall decrease primarily reflected a $6.6 million lower expense for change in fair value of contingent consideration obligations as compared to the prior period, partially offset by increases of $0.6 million in marketing expenses, $0.5 million in information and technology expenses, $0.4 million in travel and associated costs for investment evaluation and client service and other general operating expenses.

Previous 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.

Current wording

Total expenses increased $787.4 million, or 291%, to $1,058.1 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The overall increase resulted from increases in equity-based compensation, legacy Greenspring performance fee-related compensation, performance fee-related compensation, cash-based compensation and general, administrative and other expenses, in each case, as described below.

Previous wording

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 wording

Cash-based compensation increased $27.7 million, or 13%, to $246.3 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 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 $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 wording

Equity-based compensation increased $514.5 million to $542.9 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The increase was primarily attributable to a $514.9 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, partially offset by a decrease in RSU expense due to the final vesting of RSUs issued in connection with our IPO.

Previous wording

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 wording

Total performance fee-related compensation expense increased $104.6 million, or 617%, to $121.6 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023, primarily reflecting the increase in carried interest allocation revenue. Realized performance fee-related compensation increased $28.8 million, or 110%, to $55.1 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023, primarily reflecting higher realization activity and higher incentive fees from SPRING.

Previous wording

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 wording

Legacy Greenspring performance fee-related compensation expense increased $119.3 million to $13.0 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The nine months ended December 31, 2024 reflect gross realized performance fee-related compensation expense of $56.8 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(43.8) million. The nine months ended December 31, 2023 reflect gross realized performance fee-related compensation expense of $26.0 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $(132.2) million.

Previous wording

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 wording

General, administrative and other expenses increased $21.2 million, or 19%, to $134.2 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023. The overall increase primarily reflected $11.4 million of higher expense for change in fair value of contingent consideration obligations as compared to the prior period, $3.4 million in travel and associated costs for investment evaluation and client service, $2.5 million in professional fees, $2.1 million in marketing expenses, $1.4 million in information and technology expenses, partially offset by decreases of $1.9 million in accelerated depreciation for leasehold improvements due to a reduction in lease terms in the prior year and other general operating expenses.

Previous 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.

Current wording

Legacy Greenspring investment income (loss) increased $3.4 million to income of $1.2 million for the three months ended December 31, 2024 as compared to a loss for the three months ended December 31, 2023. The three months ended December 31, 2024 reflected gross realized investment income of $3.9 million and unrealized investment loss, net of the reversal of realized investment income, of $2.8 million. The three months ended December 31, 2023 reflected gross realized investment income of $0.4 million and unrealized investment loss, net of the reversal of realized investment income, of $2.6 million.

Previous 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.

Current wording

Investment income of Consolidated Funds increased $3.8 million, or 34%, to $15.0 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds.

Previous 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.

Current wording

Interest income increased $1.7 million, or 209%, to $2.6 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 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 $0.5 million in the prior year period.