StepStone's Q3 2025: Contradictions in Private Equity Strategy, Capital Deployment, and Market Growth

These are the key contradictions discussed in StepStone's latest 2025 Q3 earnings call, specifically including: Private Equity Secondaries Market Growth, Undeployed Fee-Earning Capital Pipeline, Ticker-based Products Impact, and Fundraising and Commingled Funds:



Record Fee-Related Earnings and AUM Growth:
- StepStone Group reported fee-related earnings of $74.1 million, up 46% from the prior year quarter, with an FRE margin of 39%.
- The growth was driven by a strong fundraising effort over the past year, deploying over $2 billion of capital and activating over $6.5 billion from their undeployed fee-earning capital balance.

Infrastructure and Private Wealth Platform Expansion:
- The company closed its first infrastructure co-investment fund with a total size of approximately $1.2 billion, becoming one of the largest infrastructure solutions providers globally.
- Additionally, the private wealth platform grew to over $6 billion with over $1 billion of new subscriptions, marking the best growth quarter for this platform.

Strong Fundraising and Capital Deployment:
- StepStone increased its fee-earning AUM by nearly $10 billion, reaching over $114 billion, up 28% from a year ago, with a compounded annual growth rate of 18% since 2021.
- This success was achieved through strategic fundraising, investing, and relationship building, despite industry-wide fundraising pressure from 2021 to 2024.

Diversified Business Model:
- StepStone's flexible commercial structure, broad geographic reach, and diversified asset class offerings have allowed it to provide a complete array of solutions for clients, leading to consistent growth for shareholders.
- The company's strategy has proven resilient, even when certain investment approaches may be in or out of favor during different periods.