What changed in this filing

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Item 1. Business

2025-05-23 compared with 2024-05-24 · 99 added, 142 removed, 379 unchanged (39% of the section changed)

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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 March 31, 2024, we were responsible for $678 billion of total capital, including $157 billion of AUM and $521 billion of AUA.

As of March 31, 2025, we were responsible for approximately $709 billion of total capital, including $189 billion of AUM and $520 billion of AUA.

We were founded in 2007 to address the evolving needs of investors focused on private markets, reflecting a number of converging themes:

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Since our inception, we have focused on recruiting and retaining the best talent.

As of March 31, 2024, 100 partners led the firm, with an average of over 20 years of investment or industry experience.

As of March 31, 2024, we had 990 total employees, including 335 investment professionals and 655 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.

As of April 1, 2025, 108 partners led the firm, with an average of over 20 years of investment or industry experience.

As of March 31, 2025, we had approximately 1,130 total employees, including over 375 investment professionals and approximately 750 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.

We believe our scale and position in private markets provide us a distinct competitive advantage with our clients and fund managers.

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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 $685 billion of client commitments as of March 31, 2024, inclusive of our total capital responsibility, previously exited investments and investments of former clients.

We provided portfolio analytics and reporting on nearly $780 billion of client commitments through SPI Reporting as of March 31, 2025.

Our Competitive Strengths

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As of March 31, 2025, we had 348 bespoke SMAs and focused commingled funds.

For the year ended March 31, 2024, approximately 51% of our management and advisory fees were generated from focused commingled funds, 38% from SMAs, 10% from advisory, data and administrative services and 1% from fund reimbursement revenues.

For the year ended March 31, 2025, approximately 57% of our management and advisory fees were generated from focused commingled funds, 33% from SMAs, 9% from advisory and data services and 1% from fund reimbursement revenues.

Scale Across Private Markets Asset Classes

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SPI Reporting is used extensively by our StepStone Portfolio Analytics & Reporting (“SPAR”) team to provide customized portfolio analytics and reporting on the performance of our clients’ investments.

We also have a number of additional proprietary tools that we use and license in service of our clients, including our SPI Pacing tool that enables clients to forecast liquidity needs, our daily valuation engine that facilitates asset management solutions offering periodic subscription or liquidity (such as the mass affluent and defined contribution plan markets), ESG reporting dashboards that allow our clients to monitor their portfolio against these non-financial metrics, and a secondary pricing engine that drives operating leverage in our evaluation of larger and more complex transactions.

We also have a number of additional proprietary tools that we use and license in service of our clients, including our SPI Pacing tool that enables clients to forecast liquidity needs, our daily valuation engine that facilitates asset management solutions offering periodic subscription or liquidity (such as the mass affluent and defined contribution plan markets), sustainability reporting dashboards that allow our clients, if they so desire, to monitor their portfolio against these non-financial metrics, and a secondary pricing engine that drives operating leverage in our evaluation of larger and more complex transactions.

The combination of SPI Research, SPI Reporting, and our other tools offers an end-to-end software technology and data solution that delivers significantly more information than most private markets investors have available, providing us with a meaningful advantage in our investment, due diligence and client relations efforts.

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Strong Investment Performance Track Record

Our track record is a key point of differentiation to our clients.

We believe our track record is a key point of differentiation to our clients.

As shown below, we have outperformed the MSCI ACWI Index, the benchmark index used for comparison across all of our investment strategies on an inception-to-date basis as of December 31, 2024.

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Our management and advisory fees grew from $235 million in fiscal 2020 to $767 million in fiscal 2025, representing a 27% compounded annual growth rate.

We have had a high level of success in retaining our advisory clients with an over 90% retention rate since inception.

We have had a high level of success in retaining our advisory clients with an approximately 95% retention rate since inception.

Highly predictable with strong visibility into near-term growth

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As of March 31, 2025, we had $24.6 billion of committed but undeployed fee-earning capital, which we expect to generate management fees when deployed or activated.

As of March 31, 2024, we had approximately 425 revenue-generating asset management and advisory programs and therefore are not dependent upon or concentrated in any single investment vehicle or client.

As of March 31, 2025, we had 460 revenue-generating asset management and advisory programs and therefore are not dependent upon or concentrated in any single investment vehicle or client.

For the year ended March 31, 2025, no single client contributed more than 5% of our total management and advisory fees, and our top 10 clients, which comprise over 60 separate mandates and commitments to commingled funds, contributed approximately 20% of our total management and advisory fees.

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We believe our biggest asset is our people, and therefore we focus on consistently recruiting the best people, many of whom are proven leaders in their areas of expertise.

As of March 31, 2024, 100 partners led the firm, with an average of over 20 years of investment or industry experience.

As of March 31, 2024, nearly half of our employees have equity interests in us in the form of direct equity interests and/or restricted stock units under our 2020 Long-Term Incentive Plan (“LTIP”), and more than 200 employees are eligible to participate in our carried interest allocations in one or more of the asset classes.

As of April 1, 2025, 108 partners led the firm, with an average of over 20 years of investment or industry experience.

As of March 31, 2025, nearly two-thirds of our employees have equity interests in us in the form of direct equity interests and/or restricted stock units under our 2020 Long-Term Incentive Plan (“LTIP”), and more than 200 employees are eligible to participate in our carried interest allocations in one or more of the asset classes.

Strategic Priorities

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Many high-net-worth and mass affluent individual investors continue to have difficulty accessing private markets investment opportunities because of a lack of products currently available that satisfy regulatory and structural requirements related to liquidity, transparency and administration.

We have developed an investment platform, StepStone Private Wealth LLC (“SPW”), designed to expand access to the private markets for accredited investors.

StepStone Private Wealth LLC (“SPW”) is designed to expand access to the private markets for individual investors.

Leverage Our Scale to Enhance Operating Margins

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We may complement our strong organic growth with selective strategic and tactical acquisitions.

We intend to remain highly disciplined in our development strategy to ensure that we are allocating management time and our capital in the most productive areas to fuel growth.

We intend to remain highly disciplined in our development strategy to help ensure that we are allocating management time and our capital in the most productive areas to fuel growth.

Our strategy will continue to focus on opportunities that expand our scale in existing markets, add complementary capabilities, enhance distribution, or provide access to new markets.

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Private equity, real estate and infrastructure primary investment funds typically range in duration from 10 to 18 years, including extensions, while private debt primary investment funds typically range in duration from eight to 10 years.

Underlying investments in portfolio investments generally have a three to six year range of duration for private equity, with potentially shorter periods for private debt or real estate, and longer for infrastructure.

Underlying portfolio investments generally have a three to six year range of duration for private equity, with potentially shorter periods for private debt or value-add and opportunistic real estate, and longer for infrastructure.

Typically, fund managers will not launch new funds more frequently than every two to four years.

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We leverage our SPI Research database to track a large cross section of fund managers and funds globally—irrespective of fundraising cycles.

Secondaries refer to investments in existing private markets funds or companies through the acquisition of an existing interest by one investor from another in a negotiated transaction.

Secondaries refer to investments in existing private markets funds, companies, or assets through the acquisition of an existing interest by one investor from another in a negotiated transaction.

In so doing, the buyer will agree to take on future funding obligations in exchange for future returns and distributions.

Because secondary investments are generally made when a primary investment fund is three to seven years into its life, these investments are viewed as more mature.

Secondaries have historically generated a high risk-adjusted internal rate of return (“IRR”) relative to other strategies in the private equity market.

Because secondary investments are generally made when an investment is several years into its life, these investments are viewed as more mature.

Secondaries have historically generated a high risk-adjusted internal rate of return (“IRR”) relative to other strategies in the private markets.

This performance is due, in part, to:

(1) the lack of a centralized market, (2) imperfect information among buyers and sellers, (3) wide bid spreads, (4) shorter holding periods, (5) fee mitigation and (6) transactions priced at a discount to fair value.

Unlike primary commitments, secondaries offer visibility into a portfolio of known assets and their historical performance, which can mitigate some of the risk normally associated with primaries.

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Co-investments

Co-investments involve directly acquiring an interest in an operating company, project or property alongside an investment by a fund manager or direct investor that leads the transaction.

Co-investments involve directly acquiring an equity interest or a debt instrument of an operating company, project or property alongside an investment by a fund manager or direct investor that leads the transaction.

We participate in co-investments across each of our asset classes.

Co-investments are generally structured such that the lead and co-investors collectively hold the same security on the same terms in a controlling interest of the operating company, project or property.

Co-investments are generally structured such that the lead and co-investors collectively hold the same security on the same terms in a controlling equity interest or a debt instrument of the operating company, project or property.

Capital committed to a co-investment is typically invested immediately, thereby advancing the timing of expected returns on investment and creating more predictable cash flows for the investor.

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We provide our clients with tailored reporting packages, including customized performance benchmarks as well as compliance, administration and tax capabilities.

The team of professionals dedicated to SPAR is organized by sector and geography to ensure deep coverage of all private markets, facilitating detailed investment review and analysis services by private markets specialists.

The team of professionals dedicated to SPAR is organized by sector and geography to promote deep coverage of all private markets, facilitating detailed investment review and analysis services by private markets specialists.

Once an investment has been made, our SPAR team provides active, ongoing analytical review for portfolio risk management for our clients.

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Fund managers’ information is entered into SPI Reporting, our proprietary, web-based application and database for private market portfolio analytics and reporting.

Data are reconciled daily to ensure data integrity and that pertinent details are entered correctly.

Data are reconciled daily to help ensure data integrity and that pertinent details are entered correctly.

In order to be included in SPI Reporting, a fund manager must send us sufficient materials, including specific data fields required by us.

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Our risk management process focuses on risk identification, measurement, treatment/mitigation, monitoring and management/reporting, with particular risk assessments tailored by asset class and individual client.

Responsible Investment Philosophy

Responsible investment is a core tenet of our operating and investment philosophies.

We believe that full integration of ESG factors in both our investment process and internal operations will improve long-term, risk-adjusted returns for our clients and stakeholders.

Responsible Investment

Responsible investment (“RI”) is a core tenet of our investment philosophy.

We believe that the integration of RI factors in our investment process can improve long-term, risk-adjusted returns for our clients and stakeholders.

We aim to continually improve and evolve our practices.

As part of our responsible investment journey, we:

As part of our RI journey, we:

• Became a signatory to the United Nations Principles for Responsible Investment (“UNPRI”) in 2013;

• Adopted a Responsible Investment policy in 2014, which is reviewed annually;

• Became a formal supporter of the Task Force on Climate-Related Financial Disclosures (“TCFD”);

• Became a member of the Sustainability Accounting Standards Board (“SASB”) and created asset class responsible investment workgroups in 2019;

• Became a member of the GRESB and a founding signatory to the ILPA Diversity in Action initiative in 2020;

• Implemented standalone policies for climate and stewardship in 2022, reflecting TCFD-aligned climate considerations within our investment process and our approach to corporate sustainability, as well as our continued emphasis on stewardship practices in our investments;

• Became a member of the Sustainability Accounting Standards Board (“SASB”) and enhanced our governance framework by creating asset class RI workgroups in 2019;

• Became a member of the GRESB and a founding signatory to the Institutional Limited Partners Association (“ILPA”) Diversity in Action initiative in 2020;

• Implemented a standalone climate policy and incorporated Task Force on Climate Related Financial Disclosures (“TCFD”) aligned climate considerations within our investment process and our approach to corporate sustainability reporting in 2022;

• Became a founding financial services member supporting Ownership Works in 2022, a consortium of organizations dedicated to promoting employee ownership programs;

• Became a signatory to the UK Stewardship Code in 2023.

• Implemented a standalone stewardship policy in 2022 reflecting our continued emphasis on stewardship practices in our investments.

Accepted as a signatory to the UK Stewardship Code in 2023 and again in 2024.

Responsible Investment in the Investment Process

Composed of leaders from across our organization, the Responsible Investment Committee provides oversight and direction for our responsible investment process.

Among other things, it reviews ESG-focused due diligence within our investment memoranda before they are submitted to the relevant Investment Committee.

Our ESG due diligence process is tailored for each asset class and strategy and incorporated into the broader business, financial, and operational diligence process — detailing a comprehensive set of ESG-related risk and return considerations.

Among other things, it reviews RI due diligence within our investment memoranda before they are submitted to the relevant Investment Committee.

Our RI due diligence process is applied in each asset class and strategy and incorporated into the broader business, financial, and operational diligence process — detailing material RI considerations that could drive value creation or risk mitigation.

Primary Investments

For all primary investments, we perform a review of each fund manager and fund’s responsible investment policy, implementation and monitoring framework.

For primary investments, we perform a review of each fund manager and fund’s RI policy, implementation and monitoring framework.

We evaluate the level of commitment, accountability and leadership engagement across the fund manager.

We seek to understand how aligned their ESG processes are to established frameworks and how specific material risks and opportunities are considered including climate and modern slavery (e.g., forced labor, child labor, and human trafficking).

Further, we evaluate their ESG monitoring and reporting systems.

We seek to understand how aligned their RI processes are to established external frameworks and how specific material risks and opportunities are considered, including climate and modern slavery (e.g., forced labor, child labor, and human trafficking).

Further, we evaluate their RI monitoring and reporting systems.

Where relevant, for impact strategies, we layer on an additional layer of due diligence focused on the quality of the fund manager’s impact practices.

Co-investments

With respect to our co-investments, we complete an ESG assessment at both the manager and asset level.

We use several tools to complete the latter, including information from the manager and company, along with SASB materiality standards, and for specific sectors information from GRESB.

Post investment, we monitor the co-investment’s performance focusing on material financial and ESG factors.

With respect to our co-investments, we complete an RI assessment at both the manager and asset level.

We use several tools to complete the latter, including information from the manager and company, along with industry-specific SASB materiality standards, and for specific sectors information from GRESB.

Post investment, we monitor the co-investment’s performance focusing on material financial and RI factors.

The majority of this monitoring is conducted through regular engagement with the fund manager supplemented by Limited Partner Advisory Committees of which we are a member.

In cases where we hold a board or observer seat at the fund, we seek to be active in advocating for material issues as standard agenda items.

With respect to secondary transactions, we utilize primary ESG assessments along with an evaluation of the ESG risk and opportunities of the key, value-driving assets.

With respect to secondary transactions, we utilize primary RI assessments where available, along with an evaluation of the RI risk and opportunities of the key, value-driving assets.

Due diligence timelines are often compressed for secondary transactions.

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We have observed that investors globally are increasingly focused on the real-world outcomes of their investment programs, typically referred to as impact investing.

We look to work with clients in crafting customized investment programs that target non-financial objectives side-by-side with commercial financial objectives.

These may include a focus on, for example, climate change, social equity and the United Nations’ Sustainable Development Goals.

We believe impact programs build on our firm’s strong ESG foundations supplemented with specific impact practice considerations and evaluation.

The impact sector is fast-growing and we see developments in this sector that we believe will increasingly allow for the deployment of capital at scale.

ESG in Our Corporate Operations

We are committed to incorporating ESG factors across our operational decision making and internal policies.

Our key focus areas are diversity, equity and inclusion (“DEI”), managing our carbon footprint, and community engagement.

We value diversity among our staff and leadership, recognizing that through diversity, we gain a variety of perspectives, views, and ideas which strengthen our ability to strategize, communicate, and deliver on our mission.

In addition to being the right thing to do, we believe building and maintaining a diverse, equitable and inclusive firm is critical to our mission and our success as a business.

In short, we believe DEI:

• Makes us better investors, sharpens our analysis and makes us more effective communicators;

• Enables our firm to tap into our employees’ full potential;

• Improves performance and contributes to a more sustainable enterprise.

In 2017, we established a global DEI Committee comprising senior and mid-level members from across our organization to evaluate our current diversity efforts, lead new initiatives to improve DEI at our firm, and continue to improve upon our policies and culture.

To build a diverse workforce, we are focused on expanding our recruiting processes and outreach to broaden our pipeline of potential candidates.

These efforts allow us to build more diverse slates of prospective new hires.

We actively monitor our progress in this regard.

Talent development, promotion and retention are also key components of our DEI efforts.

This includes sponsorship programs, education and executive coaching opportunities.

We have also continued to review and expand relevant policies, including our parental leave policies and related benefits.

Building awareness and engagement around the importance of DEI, both internally and externally, represents another core tenet of our efforts.

As an example, our employees have launched multiple Employee Resource Groups (“ERGs”) established with the intention of providing a supportive community for employees of certain affinity groups and their allies .

In addition, from time to time, we host internal and external networking and educational events in various jurisdictions, in support of DEI.

Finally, StepStone is a supporter of several organizations that advocate for further diversity in our industry.

Managing Our Carbon Footprint

We are focused on the firm’s carbon footprint as we seek to maintain carbon neutrality within our operations as a stated firm goal.

We look to work with clients in crafting customized investment programs that target commercial returns while investing in certain impact or thematic investment opportunities such as climate change, nature and biodiversity, and the United Nations’ Sustainable Development Goals.

Corporate Sustainability

Corporate sustainability considerations are relevant in our operational decision making and internal policies.

Our key focus areas are managing our emissions profile and monitoring our supply chain for modern slavery.

Managing Our Emissions Profile

We are focused on the firm’s emissions profile as we seek to maintain carbon neutrality within our operations as a stated firm goal.

As such, the following efforts have been undertaken:

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• Prioritizing selection of highly rated Leadership in Energy and Environmental Design (“LEED”) or comparable standard in leasing office space.

Community Engagement

We encourage and support community engagement.

Our community program uses a global-and-local approach and is driven by our community involvement teams at many of our offices.

Projects are organized locally and partnered with various service organizations within our communities dedicated to causes encompassing public service, education, environmental efforts, healthcare, and military veterans.

Additionally, we have implemented a volunteer time-off policy that gives employees 16 hours per calendar year of paid time to volunteer at an organization of their choice.

We actively monitor participation in these programs.

We have also established a formalized charitable giving program with an employee matching component.

Modern Slavery

We have processes in place to address the applicable regulatory obligations in certain jurisdictions where we operate related to modern slavery, which encompass forced labor, human trafficking, and child labor.

Within our vendor due diligence process, we query and evaluate for this topic seeking to identify any substantive supply chain risks.

Further, to align with applicable regulations, this topic is also considered within our investment due diligence and monitoring processes.

We believe the value proposition we offer across our asset management, advisory, data, portfolio monitoring and reporting services has resulted in strong relationships with our clients.

Our client base includes some of the world’s largest public and private 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 globally.

During the year ended March 31, 2024, nearly two-thirds of our management and advisory fees came from clients based outside of the United States, reflecting the strength and breadth of our relationships within the global investor community.

During the year ended March 31, 2025, more than half of our management and advisory fees came from clients based outside of the United States, reflecting the strength and breadth of our relationships within the global investor community.

We believe the stability of our client base, reflecting in part the longer tenor of our SMAs and focused commingled funds, reflects the strength of the long-term client relationships we have developed.

We have also had a high level of success in retaining our advisory clients with an over 90% retention rate since inception.

We have also had a high level of success in retaining our advisory clients with an approximately 95% retention rate since inception.

At the same time, we believe we have been successful in expanding relationships with our clients, often expanding from advisory relationships to discretionary asset management relationships.

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We have served defined contribution plans, family offices and private wealth clients for over 10 years, and have more recently expanded to delivering our institutional capabilities to high-net-worth and mass affluent investors.

Our platform leverages our deep expertise across private equity, infrastructure, private debt and real estate to develop and distribute innovative products for individual investors, integrating primaries, secondaries and co-investments to create customized product solutions for the private wealth sector.

Our platform leverages our deep expertise across private equity (including venture capital), infrastructure, private debt and real estate to develop and distribute innovative products for individual investors, integrating primaries, secondaries and co-investments to create customized product solutions for the private wealth sector.

Our solutions include:

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• private wealth solutions for registered investment advisors, independent broker dealers and wirehouses in the United States and wealth managers internationally;

• registered funds available to mass affluent and accredited investors in the United States;

• registered funds available to mass affluent individual investors in the United States;

• global distribution of our institutional funds to family office investors and high-net-worth investors.

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Advisory and data service contracts can typically be terminated by our clients for any reason upon short notice, generally 30 to 90 days.

Advisory and data service contracts with governmental pension plans typically are subject to a renewal process involving our submission of information in response to an RFP issued by the client.

Advisory and data service contracts with governmental pension plans typically are subject to a renewal process involving our submission of information in response to a request for proposal (“RFP”) issued by the client.

We compete in all aspects of our business with a large number of asset management firms, commercial banks, broker-dealers, insurance companies and other financial institutions.

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The Investment Advisers Act imposes substantive regulation on virtually every aspect of our business and our client relationships.

Applicable requirements relate to, among other things, fiduciary duties to clients, engaging in transactions with clients, maintaining an effective compliance program, performance fees, solicitation arrangements, allocation of investments, conflicts of interest, marketing, recordkeeping, reporting and disclosure.

Applicable requirements relate to, among other things, fiduciary duties to clients, engaging in transactions with clients, maintaining an effective compliance program, performance fees, solicitation arrangements, marketing materials and marketing, allocation of investments, conflicts of interest, recordkeeping, reporting and disclosure.

The Investment Advisers Act also regulates the assignment of advisory contracts by the investment adviser.

The SEC is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act, ranging from fines and censures to termination of an investment adviser’s registration.

Failure to comply with the requirements of the Investment Advisers Act or the rules and regulations promulgated by the SEC could have a material adverse effect on our business.

Recently, the SEC has adopted a number of significant new rules that may have a significant impact on our business, including new rules imposing a number of significant new disclosure and reporting requirements on private fund advisers and imposing substantive restrictions on certain types of practices by the private fund advisers that the SEC has deemed to be unfair or present conflicts of interest.

In addition, the SEC has recently adopted amendments to Regulation S-P (the privacy regulations applicable to financial institutions, including investment advisers) that will expand the scope of the regulation and mandate notification to clients and customers in the event of privacy breaches.

A number of new rules have also been proposed by the SEC that, if adopted, could also have a significant impact on our business.

These include new rules proposed by the SEC on ESG investing, safekeeping of client assets, management of cybersecurity risk by investment advisors, monitoring of service providers, and the use of artificial intelligence.

In addition, the SEC and FinCEN have recently jointly proposed a new rule that will require investment advisers to adopt formal anti-money laundering and customer identification programs.

If all of these rules are adopted in substantially the form in which they have been proposed, this will result in a significant increase in the compliance risks and regulatory burden of operating our business.

Failure to comply with the requirements of the Investment Advisers Act or the rules and regulations promulgated by the SEC thereunder could have a material adverse effect on our business.

In May 2024, the SEC adopted amendments to Regulation S-P (the privacy regulations applicable to financial institutions, including investment advisers) that will expand the scope of the regulation and mandate notification to clients and customers in the event of privacy breaches.

The SEC has also adopted disclosure rules related to cybersecurity applicable to public companies.

In addition, the SEC and FinCEN have recently jointly adopted a new rule that will require investment advisers to adopt formal anti-money laundering and customer identification programs by the end of 2025.

Bringing our firm into compliance with these new rules (and any others adopted by the SEC), could result in a significant increase in the compliance risks and regulatory burden of operating our business.

Our SMAs and the majority of our focused commingled funds are not registered under the Investment Company Act because we only form SMAs for, and offer interests in our focused commingled funds to, persons who we reasonably believe to be “qualified purchasers” as defined in the Investment Company Act.

However, certain U.S.

funds we manage on our private wealth platform are registered investment companies or business development companies under the Investment Company Act.

The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies and business development companies.

Among other things, the Investment Company Act imposes significant requirements and limitations on investment companies and business development companies, including with respect to their capital structure, investments and transactions.

While we exercise broad discretion over the day-to-day management of our investment companies and business development companies, each of our investment companies and business development companies is also subject to oversight and management by a board of directors, a majority of whom are not “interested persons” as defined under the Investment Company Act.

The responsibilities of each board include, among other things, approving our advisory contract with our investment company or business development company, approving certain service providers and monitoring transactions involving affiliates, and approving certain co-investment transactions.

Additionally, each quarter, the applicable investment adviser, as the valuation designee, will provide the audit committee of each of our investment companies and business development companies with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its fair value process.

The audit committee of each of our investment companies and business development companies oversees the valuation designee and reports to the respective investment company or business development company’s board of directors on any valuation matters requiring such board’s attention.

The advisory contracts with each of our investment companies and business development companies may be terminated by the stockholders or directors of such investment companies and business development companies on not more than 60 days’ notice, and are subject to annual renewal by each respective entity’s board of directors after an initial two-year term.

funds we manage on our private wealth platform are registered investment companies or business development companies under the Investment Company Act (the “Registered Funds”).

The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of the Registered Funds, including, among other things, their capital structure, investments and transactions.

While we exercise broad discretion over the day-to-day management of our Registered Funds, each of them is also subject to significant oversight by a board of trustees, a majority of whom are not “interested persons” as defined under the Investment Company Act.

The responsibilities of each board include, among other things, approving our advisory contracts with our Registered Funds on an annual basis, approving certain other service providers, monitoring transactions involving affiliates, and approving certain co-investment transactions.

Additionally, the boards appoint a Chief Compliance Officer who meets independently with the independent trustees of our Registered Funds on a quarterly basis or more frequently, as needed.

Further, boards’ audit committees are responsible for overseeing the valuation process for each of our Registered Funds and the applicable investment adviser for each of our Registered Funds is required to provide the audit committee with a summary or description of material fair value matters that occurred in the prior quarter and on an annual basis, as well as a written assessment of the adequacy and effectiveness of its valuation process.

The audit committee for each Registered Fund may escalate any significant valuation issue to the full board.

The advisory contracts with each of our Registered Funds may be terminated by the stockholders or trustees of such Registered Funds on not more than 60 days’ notice.

ERISA-Related Regulation

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In the EU, we are subject to the EU Alternative Investment Fund Managers Directive (“AIFMD”), the EU Alternative Investment Fund Managers Directive II (“AIFMD II”) and the Undertakings for Collective Investment in Transferable Securities Directive (“UCITS”) under which we are subject to regulatory requirements regarding, among other things, registration for marketing activities, the structure of remuneration for certain of our personnel and reporting obligations.

The EU published AIFMD II in the Official Journal of the European Union on March 26, 2024.

AIFMD II entered into force on April 15, 2024 and member states will have two years after publication to implement the rules into national law.

AIFMD II entered into force in the EU on April 15, 2024 and member states have two years to implement the rules into national law.

Our EU-based subsidiary, StepStone Group Europe Alternative Investments Limited (“SGEAIL”), engages in regulated activities within the EU.

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Continuing compliance with MiFID II may result in greater overall complexity, higher compliance, administration and operational costs, and less overall flexibility.

It is expected that additional laws and regulations will come into force in the UK, the EEA, the EU, and other countries in which we operate.

Regulation (EU) 2019/2033 on the prudential requirements for investment firms (“IFR”) and Directive (EU) 2019/2034 on the prudential supervision of investment firms (“IFD”) entered into force on December 25, 2019.

Together the IFR and IFD introduced a new prudential regime for EU investment firms that are subject to MiFID II, including new requirements such as general capital requirements, liquidity requirements, remuneration requirements, requirements to conduct internal capital adequacy assessments and additional requirements on disclosures and public reporting.

The legislation could hinder our ability to deploy capital as freely as we would wish and to recruit and incentivize staff.

Different and extended internal governance, disclosure, reporting, liquidity, and group “prudential” consolidation requirements (among other things) could also have a material impact on our EU-based operations.

The UK introduced a new prudential regime for investment firms that are subject to MiFID II (as implemented in the UK), that entered into force on January 1, 2022.

This new regime introduced (amongst other things) increased regulatory capital requirements, new remuneration requirements and increased reporting requirements.

In addition, there may be future changes to the AIFMD and UCITS regimes and also further regulation adopted which may impact those parts of our business operating within the EU.

For instance, key requirements under Directive (EU) 2019/1160 and Regulation (EU) 2019/1156 on the cross-border distribution of collective investment undertakings have come into effect in EU member states from August 2, 2021.

Among other things, this legislation introduces rules regarding the pre-marketing of funds.

The European Commission is introducing a package of legislative proposals to reform the EU anti-money laundering and counter-terrorist financing regime.

The proposals, amongst others, clarify rules relating to internal policies and procedures, introduce more granular client due diligence requirements, clarify reliance on outsourcing and harmonize suspicious activity reporting.

The European Parliament voted on the proposed legislation at its plenary session on April 24, 2024.

The proposals are subject to formal adoption by the European Council, after which the adopted texts will be published in the Official Journal of the European Union.

This is expected in summer 2024.

EU member states will then have 36 months to transpose the legislation in to national law.

The European Commission has passed a package of legislative proposals reforming the EU anti-money laundering and counter-terrorist financing regime, which amongst others, clarifies rules relating to internal policies and procedures, introduces more granular client due diligence requirements, clarifies reliance on outsourcing and harmonizes suspicious activity reporting.

The legislation was published in the Official Journal of the European Union on June 19, 2024 and came into force on June 26, 2024.

EU member states have 36 months to transpose the legislation into national law.

Regulation (EU) 2022/2554 on digital operational resilience for the financial sector (“DORA”) establishes a harmonized and comprehensive digital operational resilience framework across the whole EU financial sector by requiring a wide range of financial entities, including asset managers and investment firms, to manage their information and communication technology (“ICT”) risks in a robust and effective way through internal governance, control and risk frameworks.

DORA also requires financial institutions to report major ICT-related incidents to regulatory authorities and undertake digital operational resilience testing.

DORA will apply from January 17, 2025.

The EU Corporate Sustainability Reporting Directive (“CSRD”) is a framework that requires companies to include a large body of sustainability information in their annual reporting.

It first takes effect for financial years beginning on or after January 1, 2024 for companies (EU and non-EU) with securities listed on an EU “regulated market.” From 2025, large private EU companies will be in scope.

Asset managers with EU companies in their group may themselves be in scope of CSRD, subject to a size threshold.

The CSRD will also impact EU portfolio companies, given the amount of preparation required to complete the reports required in 2025.

DORA came into force from January 17, 2025.

There have also been significant legislative developments affecting the private equity industry in Europe and there continues to be discussion regarding enhancing governmental scrutiny and/or increasing regulation of the private equity industry.

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We measure employee satisfaction and engagement through a variety of surveys.

As of March 31, 2024, we had 990 employees globally, including 335 investment professionals and 655 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.

As of March 31, 2025, we had approximately 1,130 employees globally, including over 375 investment professionals and approximately 750 employees across our operating team and implementation teams dedicated to sourcing, executing, analyzing and monitoring private markets opportunities.

We consider our relationship with our employees to be good and have not experienced interruptions of operations due to labor disagreements.

Talent Acquisition and Retention

The process by which we attract, recruit and select new members to join our team is strategic and purposeful to ensure our business and culture continue to thrive.

We leverage technology to ensure each hiring process utilizes data-driven assessment tools which evaluate candidates on merit and fitness for the job.

Given our global business and client base, we seek to consider candidates from diverse backgrounds, cultures and educational institutions.

We strive to maintain hiring practices that are handled with professionalism and responsiveness, in a fair and inclusive selection process.

We aspire to have candidates progress within the hiring process with a positive impression of the firm.

StepStone’s retention strategy encompasses the entire life cycle of the employee, including our strategic hiring and co mprehensive onboarding processes, ongoing professional development, mentoring and sponsorship programs, our learning and inclusive culture and conduct of exit interviews to gain further insights on retention.

Talent Acquisition, Development and Retention

StepStone believes that the strength of its team and a positive culture bring tremendous value and are fundamental to our success.

Bringing together the highest caliber of available talent with a wide range of backgrounds, experiences, and perspectives allows StepStone to better serve its clients and investors.

Our people are our most important asset, and we invest in their success through various professional development programs.

StepStone’s commitment to upholding equal employment is embodied in the three key principles:

• A level playing field – Providing all employees an equal chance to develop and advance professionally within the firm;

• A culture of belonging – Fostering an environment where every colleague is invited to contribute freely;

• Continuous improvement – Fostering an environment where data, analysis, and debate drive decision making and raise the level of talent within the firm.

These principles are integrated into:

(a) our practices and policies on recruitment, interviewing, assessment and hiring;

(b) firm-wide policies and benefits;

as well as (d) our community and partnership outreach and engagement.

StepStone prides itself on growing talent from within, designing well-structured training programs and creating development opportunities for all which are crucial in supporting the firm’s growth.

We believe that a strong, performance-oriented culture is the foundation for a stable organization that will attract and retain industry-leading talent.

We offer our team members the benefit of a collegial, intellectually challenging environment where they are empowered to exercise their creativity.

As an example, our sponsorship program seeks to identify high-potential employees in mid-level roles, and partners them with one of the firm’s partners, who serves as a sponsor, as well as an executive coach, and is intended to support participants in advancing their professional development and leadership skills.

Our mentor program provides interested employees with structured access to one of their more senior colleagues who provide guidance and career advice.

New employees also have the opportunity to connect with an onboarding mentor to support their integration into the firm.

StepStone also recognizes that different developmental outcomes are needed as employees progress throughout their careers, specifically in the transition period from individual contributors to people managers.

To help ease this transition, we provide a series of manager workshops, for new and mid-level managers.

Total Rewards

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Cash compensation, in the forms of base salary, bonus and revenue share, is just one of several core elements of total rewards that we offer our team members.

We also offer competitive health and wellness benefits, parental benefits described further below, volunteer time off, and company contributions to employees’ 401(k) plans.

As a public company, we are able to diversify our employee ownership by providing equity grants to employees.

We also offer competitive health and wellness benefits, volunteer time off, and company contributions to employees’ retirement plans.

We provide benefits such as paid parental leave, parental leave coaching for managers and employees, paying for travel for newborns and caretakers when the employee has business required travel, paid shipping of breast milk, and wellness rooms for new parents at our offices.

As a public company, we are able to diversify our employee ownership by providing equity grants to certain employees.

Our LTIP provides us the ability to offer a variety of equity-based awards and our employee stock purchase plan allows us to offer equity for purchase at an attractive discount to the market price through payroll deductions, in each case, to further incentivize our employees.

In addition, we award annually a portion of carried interest allocations earned by us to certain employees.

We believe we offer an engaging culture and opportunities for ongoing professional development.

We believe that a strong, performance-oriented culture is the foundation for a stable organization that will attract and retain industry-leading talent.

We offer our team members the benefit of a collegial, intellectually challenging environment where they are empowered to exercise their creativity.

Diversity, Equity and Inclusion

We believe that a diverse team and an inclusive environment bring tremendous value to us and our clients and are fundamental to our success.

Bringing together individuals with diverse backgrounds, experiences, and perspectives allows us to better serve our clients and investors, and is integral to retaining an engaged and dedicated workforce.

We have established various initiatives and programs to promote and foster diversity, equity and inclusion within StepStone and the broader financial services community, including:

• StepStone Diversity, Equity & Inclusion Committee – The committee was established to promote, monitor and implement our diversity, equity and inclusion strategy, and comprises employees from different asset classes, functions, seniority, geographies, gender and race, ethnicity and national origin.

The committee also supports the firm’s various employee-led ERGs.

• Mentorship and Sponsorship Programs – The mentorship program provides interested employees with structured access to one of their more senior colleagues who provide guidance and career advice.

The sponsorship program pairs promising mid-level employees, including female and diverse professionals, with one of the firm’s partners, who serves as a sponsor, as well as an executive coach, and is intended to support participants in advancing their professional development and leadership skills.

• Partnerships and Outreach – In addition to promoting diversity and inclusion through our own events, such as hosting events encouraging undergraduate female students to pursue careers in finance, we sponsor and partner with several organizations dedicated to making financial services more diverse and inclusive.

In addition, from time to time, we host internal and external networking and educational events in various jurisdictions, in support of DEI.

• Parental Leave and Benefits – We provide benefits such as paid parental leave, parental leave coaching for managers and employees, paying for travel for newborns and caretakers when the employee has business required travel, paid shipping of breast milk, and wellness rooms for new parents at our offices.

We periodically review and seek to improve our parental leave policies and related benefits.

Available Information

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Item 1. Business