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 December 31, 2024, we were responsible for approximately $698 billion of total capital, including $179 billion of AUM and $519 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 June 30, 2025, we were responsible for approximately $723 billion of total capital, including $199 billion of AUM and $524 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 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.

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 29 cities across 17 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, 2025, we had 1,160 total employees, including over 385 investment professionals and over 770 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 $109 billion of our AUM as of December 31, 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 $121 billion of our AUM as of June 30, 2025.

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 $55 billion of our AUM as of December 31, 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 $63 billion of our AUM as of June 30, 2025.

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$519 billion of our AUA and $15 billion of our AUM as of December 31, 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$524 billion of our AUA and $16 billion of our AUM as of June 30, 2025.

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 $755 billion of client commitments as of December 31, 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. We provided portfolio analytics and reporting on over $789 billion of client commitments through SPI Reporting as of June 30, 2025.

Previous 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.

Current wording

We are continuing to closely monitor developments related to inflation, decreasing but still elevated interest rates, trade, regulatory and other governmental policy, fluctuations in foreign currency exchange rates, 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” 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, 2025.

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. 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.

Current wording

Interest on the Notes is payable semi-annually in arrears on April 22 and October 22 of each year. Interest on the Notes accrues 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

The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) newly-created Class D equity interests (“Class D units”) in the Partnership with terms substantially similar to the Partnership’s existing Class C units, in the case of SRA and SRE, or shares of Class A common stock, in the case of SPD, and (ii) cash (at our discretion for all exchanges except the initial exchange), in up to ten annual exchanges (or up to fifteen annual exchanges in certain circumstances in the case of the sellers of SRA equity interests).

Current wording

The Transaction Agreements provide for, among other things and subject to the terms and conditions therein, the exchange of the sellers’ equity interests in the Asset Class Entities, as applicable, for a combination of (i) Class D units, in the case of SRA and SRE, or shares of Class A common stock, in the case of SPD, and (ii) cash (at our discretion for all exchanges except the initial exchange), in up to ten annual exchanges (or up to fifteen annual exchanges in certain circumstances in the case of the sellers of SRA equity interests).

Previous wording

On May 31, 2024, we completed the first annual exchange (the “2024 Exchange”) to acquire approximately 5% of the equity interests of each of SRA, SRE and SPD pursuant to the Transaction Agreements dated as of February 7, 2024. As a result of the 2024 Exchange, the Partnership now owns approximately 54% of the outstanding equity interests of SRA, 56% of the outstanding equity interests of SRE and 54% of the outstanding equity interests of SPD. The aggregate consideration paid by us in the 2024 Exchange was approximately (i) $13 million in cash, (ii) 513,394 shares of Class A common stock and (iii) 2,239,185 Class D units of the Partnership.

Current wording

On May 31, 2024, we completed the first annual exchange (the “2024 Exchange”) to acquire approximately 5% of the equity interests of each of SRA, SRE and SPD pursuant to the Transaction Agreements dated as of February 7, 2024. As a result of the 2024 Exchange, the Partnership owned approximately 54% of the outstanding equity interests of SRA, 56% of the outstanding equity interests of SRE and 54% of the outstanding equity interests of SPD. The aggregate consideration paid by us in the 2024 Exchange was approximately (i) $13 million in cash, (ii) 513,394 shares of Class A common stock and (iii) 2,239,185 Class D units of the Partnership.

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 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.

Current wording

In June 2025, we issued 152,768 shares of Class A common stock to certain limited partners of the Partnership in exchange for 152,768 Class B units of the Partnership in accordance with the 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. We also issued 18,000 shares of Class A common stock to certain limited partners of the Partnership in exchange for 18,000 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. We also issued 864,640 shares of Class A common stock to certain limited partners of the Partnership in exchange for 864,640 Class D units of the Partnership in accordance with the elective exchange notices submitted pursuant to the Class D Exchange Agreement, and 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 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.

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 June 30, 2025, the Sunset Holders collectively maintained direct or indirect beneficial ownership of approximately 26.9% of the Class A common stock (determined assuming all outstanding Class B units have been exchanged for Class A common stock) and approximately 55.7% of the aggregate voting power of our outstanding Class A common stock and Class B common stock. At this time, we anticipate that the Sunset will occur on September 18, 2025.

Previous wording

•Management fees from SMAs are generally based on a contractual rate applied to committed capital or net invested capital. These fees will vary over the life of the contract due to changes in the fee basis or contractual rate changes or thresholds, built-in declines in applicable contractual rates, and/or changes in net invested capital balances. The weighted-average management fee rate from SMAs was approximately 0.40% and 0.39% of average FEAUM for the twelve months ended December 31, 2023 and 2024, respectively.

Current wording

•Management fees from SMAs are generally based on a contractual rate applied to committed capital or net invested capital. These fees will vary over the life of the contract due to changes in the fee basis or contractual rate changes or thresholds, built-in declines in applicable contractual rates, and/or changes in net invested capital balances. The weighted-average management fee rate from SMAs was approximately 0.39% of average FEAUM for both the twelve months ended June 30, 2024 and 2025.

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 0.90% 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.

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 0.99% and 1.02% of average FEAUM for the twelve months ended June 30, 2024 and 2025, respectively, and primarily reflected the timing of new funds and growth in our private wealth funds which earn higher fee rates.

Previous 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.

Current wording

•The weighted-average management fee rate across SMAs and focused commingled funds was approximately 0.61% and 0.64% of average FEAUM for the twelve months ended June 30, 2024 and 2025, respectively, and primarily reflected the timing of new funds, shifts in mix between SMAs and focused commingled funds and growth in our private wealth funds which earn higher fee rates.

Previous 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.

Current wording

We earn two types of performance fee revenues: incentive fees and carried interest allocations, as described below. As of June 30, 2025, we had over $100 billion of performance fee-eligible capital (excluding certain legacy Greenspring funds) across over 225 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 generally 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 not deemed to be within the scope of Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

Previous wording

Legacy Greenspring carried interest allocations include the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest. The legacy Greenspring general partner entities 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. We account for the investment balances in the legacy Greenspring 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, legacy Greenspring carried interest allocations are not deemed to be within the scope of ASC 606. We do not have any direct economic interests in the legacy Greenspring general partner entities and thus are not entitled to any carried interest allocation from the legacy Greenspring funds. All of the carried interest allocations in respect of such legacy Greenspring funds are payable to employees who are considered affiliates to us and are therefore reflected as legacy Greenspring performance fee-related compensation in the consolidated statements of income.

Current wording

Legacy Greenspring carried interest allocations include the allocation of carried interest to legacy Greenspring general partner entities from limited partners in certain legacy Greenspring funds in which the legacy Greenspring general partner entities hold an equity interest. The legacy Greenspring general partner entities 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. We account for the investment balances in the legacy Greenspring 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, legacy Greenspring carried interest allocations are not deemed to be within the scope of ASC 606. We do not have any direct economic interests in the legacy Greenspring general partner entities and thus are not entitled to any carried interest allocation from the legacy Greenspring funds. All of the carried interest allocations in respect of such legacy Greenspring funds are payable to employees who are considered affiliates to us and are therefore reflected as legacy Greenspring performance fee-related compensation in the condensed consolidated statements of income (loss).

Previous wording

Cash-based compensation primarily includes salaries, bonuses, employee benefits and employer-related payroll taxes.

Current wording

Cash-based compensation primarily includes salaries, bonuses, employee benefits, cash-based incentive awards and employer-related payroll taxes.

Previous wording

Performance fee-related compensation represents the portion of carried interest allocation revenue and incentive fees that have been awarded to employees as a form of long-term incentive compensation. Performance fee-related compensation is generally tied to the investment performance of the StepStone Funds. Approximately 50% of carried interest allocation revenue is awarded to employees as part of our long-term incentive compensation plan, fostering alignment of interest with our clients and investors, and retaining key investment professionals. Carried interest-related compensation is accounted for as compensation expense in conjunction with the related carried interest allocation revenue and, until paid, is recorded as a component of accrued carried interest-related compensation in the condensed consolidated balance sheets. Amounts presented as realized indicate the amounts paid or payable to employees based on the receipt of carried interest allocation revenue from realized investment activity. Carried interest-related compensation expense may be subject to reversal to the extent that the related carried interest allocation revenue is reversed. Carried interest-related compensation paid to employees may be subject to clawback on an after-tax basis under certain scenarios. To date, no material amounts of realized carried interest-related compensation have been reversed. Incentive fee-related compensation is accrued as compensation expense when it is probable and estimable that payment will be made. On April 1, 2024, certain of our non-wholly owned subsidiaries underwent transactions to effect unitization of the outstanding limited partnership interests, including the class of interests relating to awards of carried interest allocations granted to employees, to combine into a single class of limited partnership interests and redesignated into units. The class of interests relating to awards of carried interest allocations granted to employees were previously presented as carried interest-related compensation expense.

Current wording

Performance fee-related compensation represents the portion of carried interest allocation revenue and incentive fees that have been awarded to employees as a form of long-term incentive compensation. Performance fee-related compensation is generally tied to the investment performance of the StepStone Funds. Approximately 50% of carried interest allocation revenue is awarded to employees as part of our long-term incentive compensation plan, fostering alignment of interest with our clients and investors, and retaining key investment professionals. Carried interest-related compensation is accounted for as compensation expense in conjunction with the related carried interest allocation revenue and, until paid, is recorded as a component of accrued carried interest-related compensation in the condensed consolidated balance sheets. Amounts presented as realized indicate the amounts paid or payable to employees based on the receipt of carried interest allocation revenue from realized investment activity. Carried interest-related compensation expense may be subject to reversal to the extent that the related carried interest allocation revenue is reversed. Carried interest-related compensation paid to employees may be subject to clawback on an after-tax basis under certain scenarios. To date, no material amounts of realized carried interest-related compensation have been reversed. Incentive fee-related compensation is accrued as compensation expense when it is probable and estimable that payment will be made. On April 1, 2024, certain of our non-wholly owned subsidiaries underwent transactions to effect unitization of the outstanding limited partnership interests, including the class of interests relating to awards of carried interest allocations granted to employees, to combine into a single class of limited partnership interests and redesignated into units.

Previous wording

Non-controlling interests reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us. Non-controlling interests are presented as separate components in our condensed consolidated statements of income to clearly distinguish between our interests and the economic interests of third parties and employees in those entities. Net income (loss) attributable to SSG, as reported in the condensed consolidated statements of income, is presented net of the portion of net income (loss) attributable to holders of non-controlling interests.

Current wording

Non-controlling interests (“NCI”) reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us. Non-controlling interests are presented as separate components in our condensed consolidated statements of income (loss) to clearly distinguish between our interests and the economic interests of third parties and employees in those entities. Net income (loss) attributable to SSG, as reported in the condensed consolidated statements of income (loss), is presented net of the portion of net income (loss) attributable to holders of non-controlling interests.

Previous 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.

Current wording

Non-controlling interests in subsidiaries represent the economic interests in the consolidated subsidiaries of the Partnership 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 $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.

Current wording

Total revenues increased $177.9 million, or 95%, to $364.3 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The overall increase was driven by higher carried interest allocations, positive legacy Greenspring carried interest allocations in the current period as compared to a reversal in the prior year period and higher management and advisory fees, net, partially offset by lower incentive fees, in each case, as described below.

Previous 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.

Current wording

Management and advisory fees, net increased $33.2 million, or 19%, to $211.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was driven by new client activity and 28% growth in average FEAUM across the platform. The three months ended June 30, 2025 included retroactive fees of $2.9 million from the closings of StepStone’s Real Estate Partners V and infrastructure secondaries funds. The three months ended June 30, 2024 included retroactive fees of $19.1 million from the closings of StepStone’s Secondary Opportunities V, Real Estate Partners V and Infrastructure Co-Investment Partners 2022 funds.

Previous wording

Incentive fees increased $4.5 million, or 25%, to $22.4 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 2023 largely due to higher incentive fees generated by StepStone’s Private Venture and Growth Fund (“SPRING”).

Current wording

Incentive fees decreased $0.7 million, or 77%, to $0.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, largely due to lower realization activity, partially offset by higher incentive fees generated by certain private wealth funds.

Previous 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.

Current wording

Realized carried interest allocation revenues decreased $17.4 million, or 42%, to $24.4 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, reflecting lower realization activity within our private equity, infrastructure and real estate funds. Unrealized carried interest allocation revenues include the reversal of realized carried interest allocation revenues. Excluding the reversal of $24.4 million, unrealized carried interest allocation revenues increased $96.7 million to $113.3 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase in unrealized carried interest allocations for the three months ended June 30, 2025 primarily reflected a net increase in the cumulative allocation of gains associated with the underlying portfolios within our private equity funds as compared to a net decrease in the prior year period.

Previous 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.

Current wording

Legacy Greenspring carried interest allocation revenues increased $48.7 million to $39.6 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 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 June 30, 2025 reflect gross realized carried interest allocations of $4.9 million and unrealized carried interest allocations, net of the reversal of realized carried interest allocations, of $34.8 million. 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.

Previous 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.

Current wording

Total expenses increased $284.1 million, or 204%, to $423.3 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. 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 $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.

Current wording

Cash-based compensation increased $17.8 million, or 23%, to $96.0 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, due to increased staffing and compensation levels. Our average headcount was 14% higher in the current year period as compared to the prior year period.

Previous 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.

Current wording

Equity-based compensation increased $169.5 million, or 884%, to $188.7 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was primarily attributable to a $170.5 million increase in expenses for liability classified awards related to the profits interest issued in SPW in the current year period as compared to the prior year period and restricted stock units (“RSUs”) and performance-based RSUs (“PRSUs”) granted in the current year period with no comparable expense for these grants in the prior year period. These increases were partially offset by a decrease of $2.5 million in expense due to the final vesting of RSUs issued in connection with our IPO. We expect that there may be additional significant increases in equity-based compensation in future periods due to further increases in the fair value of liability classified awards, which is driven by the performance of SPW. SPW generated profitability in fiscal 2025, and we expect that there will be an increase in the profitability generated by SPW in the future which would increase the fair value of the associated liability for the profits interest issued in SPW. As of June 30, 2025 and March 31, 2025, we had recognized $841.7 million and $663.9 million, respectively, for liability classified awards within accrued compensation and benefits in the condensed consolidated balance sheets.

Previous 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.

Current wording

Total performance fee-related compensation expense increased $46.1 million, or 465%, to $56.1 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily reflecting the increase in carried interest allocation revenue. Realized performance fee-related compensation decreased $9.1 million, or 44%, to $11.7 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily reflecting lower realization activity.

Previous 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.

Current wording

Legacy Greenspring performance fee-related compensation expense increased $48.7 million to $39.6 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The three months ended June 30, 2025 reflect gross realized performance fee-related compensation expense of $4.9 million and unrealized performance fee-related compensation expense, net of the reversal of realized performance fee-related compensation expense, of $34.8 million. 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.

Previous 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.

Current wording

General, administrative and other expenses increased $1.9 million, or 5%, to $42.9 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The overall increase primarily reflected $2.1 million in professional fees, $0.7 million in information and technology expenses, $0.7 million in marketing and conference expenses, $0.4 million in occupancy costs, $0.3 million in general and administrative expenses for the Consolidated Funds and other general operating expenses, partially offset by a decrease of $2.9 million for lower loss on change in fair value for contingent consideration obligation.

Previous wording

Investment income increased $1.6 million, or 39%, to $5.7 million for the nine months ended December 31, 2024 as compared to the nine months ended December 31, 2023, primarily reflecting overall changes in the valuations of the underlying investments in the StepStone Funds.

Current wording

Investment income increased $7.9 million, or 305%, to $10.5 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily reflecting overall changes in the valuations of the underlying investments in StepStone Funds.

Previous 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.

Current wording

Legacy Greenspring investment income (loss) increased $4.6 million to income of $3.4 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The three months ended June 30, 2025 reflect gross realized investment income of $1.8 million and unrealized investment income, net of the reversal of realized investment income, of $1.6 million. The three months ended June 30, 2024 reflect gross realized investment income of $0.9 million and unrealized investment loss, net of the reversal of realized investment income, of $2.1 million.

Previous 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.

Current wording

Investment income of Consolidated Funds increased $14.0 million, or 184%, to $21.7 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily reflecting overall changes in the valuations of the underlying investments of the Consolidated Funds on higher investment balances during the current year period as compared with the prior year period.

Previous 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.

Current wording

Interest income increased $0.4 million, or 21%, to $2.5 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to higher average cash and cash equivalent balances during the current year period as compared with the prior year period. Interest income attributable to Consolidated Funds was $1.0 million in the current year period as compared to $0.9 million in the prior year period.

Previous wording

Interest expense increased $0.4 million, or 17%, to $3.0 million for the three months ended December 31, 2024 as compared to the three months ended December 31, 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. In October 2024, all outstanding amounts under the Revolver were repaid. As the Notes have a lower interest rate than the Revolver, the higher interest under the Revolver partially offset the lower interest rate on the Notes for a portion of the current year period.

Current wording

Interest expense increased $1.5 million, or 52%, to $4.5 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The increase was due to higher average outstanding debt balances during the current year period as compared with the prior year period, partially offset by the lower interest rate on the Notes for the current year period.

Previous wording

Other income (loss) decreased $6.9 million to a loss of $2.5 million for the three months ended December 31, 2024 as compared to income for the three months ended December 31, 2023, primarily reflecting of a gain of $5.3 million in the prior year period for amounts received as part of negotiations with a third party related to certain corporate matters, partially offset by loss of $0.8 million associated with the sale of a subsidiary in the prior year period and net foreign currency transaction losses in the current year period as compared with net foreign currency transaction gains in the prior year period.

Current wording

Other income (loss) increased $5.5 million to income of $5.2 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily reflecting net foreign currency transaction gains in the current year period as compared with net foreign currency transaction losses in the prior year period.

Previous wording

Our effective income tax rate was 16.7% and 3.0% for the three months ended December 31, 2024 and 2023, respectively, and 19.8% and 15.5% for the nine months ended December 31, 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 for the three and nine months ended December 31, 2024.

Current wording

Our effective income tax rate was 41.0% and 12.4% for the three months ended June 30, 2025 and 2024, respectively. The increase in the effective tax rate for the three months ended June 30, 2025 as compared to the prior year period was driven, in part, by the additional tax benefit associated with losses that were not allocated to non-controlling interests. For the three months ended June 30, 2024, the lower effective tax rate relative to the statutory rate was primarily due to the allocation of income to non-controlling interests in a period of pre-tax net income, for which the tax liability on such income is borne by the holders of those non-controlling interests.