StepStone's 2025Q4 Earnings Call: Unpacking Contradictions in Fee Growth, Secondaries Market, and Private Wealth Strategy

Fee-related earnings and growth, secondaries market activity, private wealth platform and product evolution, fundraising and commingled fund performance, and secondaries market conditions and opportunities are the key contradictions discussed in StepStone's latest 2025Q4 earnings call.



Record Financial Performance:
- StepStone Group Inc. reported a GAAP net loss for Q4 2025 of $18.5 million, but generated record fee related earnings of $94.1 million, up 85% from the prior year quarter.
- The increase was driven by higher fee-related earnings and performance-related earnings, particularly retroactive fees primarily from the Special Situations Real Estate Secondaries Fund and the multi-strategy growth equity fund.

Asset Growth and Fundraising Success:
- The company raised over $31 billion in assets under management for fiscal 2025, with $27.5 billion of growth in fee earning AUM, indicating a record organic growth rate of 29%.
- This growth was fueled by strong performance in managed account re-ups, new account inflows, and commingled fund closings, notably the real estate secondaries fund at over $3.75 billion.

Commingled Funds and Private Wealth Expansion:
- StepStone's private wealth platform increased from $3.4 billion in AUM at the end of fiscal 2024 to over $8 billion, representing a significant expansion.
- This growth was fueled by new products, expansion of distribution, and cross-selling efforts, with $1.2 billion in evergreen subscriptions marking the best quarter ever for the platform.

Operational Efficiency and Margin Expansion:
- The company's FRE margin was 44% for the quarter, up from 37% excluding retroactive fees, and core operating margin has consistently risen since its IPO in 2020.
- The margin expansion was attributed to higher fee revenues, an increased blended management fee rate, and operational efficiencies, positioning StepStone for future growth.