StepStone Group Inc. 10-K Summary (Fiscal Year Ended March 31, 2026)
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended March 31, 2026. StepStone Group Inc. is a global private markets investment firm providing customized investment solutions, advisory, and data services. The firm operates across four asset classes: private equity, infrastructure, private debt, and real estate. As of March 31, 2026, StepStone was responsible for approximately $885 billion of total capital, comprising $233 billion in Assets Under Management (AUM) and $652 billion in Assets Under Advisement (AUA). The company operates as a single segment and is a large accelerated filer.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Total Revenues | $1,993.6 million | $1,174.8 million | +70% |
| Management & Advisory Fees (Net) | $926.5 million | $767.0 million | +21% |
| Performance Fees | $1,067.1 million | $407.8 million | +162% |
| Net Income (Loss) Attributable to SSG | $(535.8) million | $(179.6) million | Widened Loss |
| Adjusted Net Income (ANI) | $264.6 million | $244.1 million | +8% |
| Fee-Related Earnings (FRE) | $354.4 million | $312.2 million | +14% |
| Cash & Cash Equivalents | $213.1 million | $244.8 million | -13% |
| Total Debt Obligations (Company) | $270.6 million | $269.3 million | Flat |
Note: GAAP Net Loss widened significantly due to a $1.74 billion increase in equity-based compensation expense, primarily driven by the mark-to-market valuation of liability-classified awards related to the StepStone Private Wealth (SPW) subsidiary.
Material Changes vs. Prior Period
- Revenue Surge: Total revenues increased 70% year-over-year, driven by a 162% increase in performance fees. Unrealized carried interest allocations rose to $539.7 million (from $141.5 million), reflecting higher net unrealized appreciation in private equity, infrastructure, and real estate portfolios.
- Expense Volatility: Total expenses increased 109% to $3.0 billion. The primary driver was a $1.07 billion increase in equity-based compensation, largely attributable to the fair value adjustment of profits interests issued to the SPW management team.
- Fee-Earning AUM Growth: Fee-Earning AUM (FEAUM) grew 19% to $144.0 billion, with $14.0 billion added from focused commingled funds and $8.6 billion from separately managed accounts (SMAs).
- Dividends: The company declared a quarterly dividend of $0.28 per share and a supplemental dividend of $0.55 per share for Fiscal 2026, totaling $1.48 per share for the year.
Guidance, Outlook, and Risks
Outlook & Commentary: Management highlights a scalable business model with predictable management fees and upside from performance fees. The firm maintains $40.1 billion of undeployed fee-earning capital expected to generate future fees. Strategic priorities include expanding distribution for private wealth clients and monetizing data capabilities via the SPI platform.
Key Risks & Contingencies:
- Valuation Sensitivity: A significant portion of revenue and compensation is tied to unrealized carried interest, which is sensitive to market valuations and interest rates. A 10% decline in market values could reduce annual management fees by approximately $21.2 million.
- SPW Liability: The company faces a substantial contingent liability related to the SPW profits interest option agreement. As of March 31, 2026, the estimated cash settlement range is between $564.4 million and $2.26 billion.
- Regulatory Environment: The firm faces evolving regulations regarding AI, cybersecurity, and sustainability (ESG), including the EU AI Act and potential U.S. tax reforms (Pillar Two).
- Market Conditions: Elevated interest rates and geopolitical tensions (e.g., Middle East, Russia-Ukraine) may impact fundraising, capital deployment, and the ability of portfolio companies to service debt.
Investor Verification Checklist
- Equity Compensation Volatility: Verify the sustainability of GAAP earnings given the $1.74 billion equity-based compensation expense driven by SPW liability mark-to-market adjustments.
- Unrealized Carried Interest: Assess the quality and realizability of the $2.04 billion accrued carried interest balance, noting its sensitivity to underlying asset valuations.
- SPW Option Liability: Review the assumptions (earnings projections, trading multiples) used to value the SPW profits interest liability, which could require significant future cash outflows.
- Fee-Earning Capital Deployment: Monitor the pace of deploying the $40.1 billion in undeployed fee-earning capital to ensure future fee growth.
- Debt Covenants: Confirm continued compliance with leverage ratios and minimum fee-earning AUM covenants under the $300 million Revolver and $175 million Senior Notes.