StepStone : Fiscal Year 2022 Third Quarter Earnings Presentation

Third Quarter Fiscal Year 2022 Earnings Presentation

FEBRUARY 8, 2022

Today's Presenters

Scott Hart	Jason Ment	Mike McCabe	Johnny Randel
CEO	President & Co-COO	Head of Strategy	Chief Financial Officer

STEPSTONE GROUP

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GAAP Consolidated Income Statements

GAAP net income was $126.3 million for the quarter and $380.7 million year-to-date. GAAP net income attributable to StepStone Group Inc. was $48.3 million (or $0.83 per share) for the quarter and $152.1 million (or $3.22 per share) year-to-date.

($ in thousands, except per share amounts)						Quarter									Year-to-Date
				Dec '20			Dec '21		% Fav / Unfav			Dec '20				Dec '21			% Fav / Unfav
Revenues
Management and advisory fees, net	$	70,093	$	106,384	52%	$	209,245	$	268,028	28%
Performance fees:
Incentive fees		313			27	-91%			5,098				6,005	18%
Carried interest allocations:
Realized		26,063			66,559	155%			38,257				169,053	342%
Unrealized		150,681			132,535	-12%			176,050				452,789	157%
Total carried interest allocations			176,744			199,094		13%			214,307				621,842		190%
Legacy Greenspring carried interest allocations(1)		-			104,960		na			-				104,960			na
Total revenues			247,150			410,465		66%			428,650				1,000,835		133%
Expenses
Compensation and benefits:
Cash-based compensation		36,732			51,665	-41%			113,858				138,217	-21%
Equity-based compensation		3,206			3,407	-6%			4,641				10,363	-123%
Performance fee-related compensation:
Realized		10,241			34,033	-232%			17,952				86,122	-380%
Unrealized		73,629			68,368	7%			83,487				228,146	-173%
Total performance fee-related compensation			83,870			102,401		-22%			101,439				314,268		-210%
Legacy Greenspring performance fee-related compensation(1)		-			104,960		na			-				104,960			na
Total compensation and benefits			123,808			262,433		-112%			219,938				567,808		-158%
General, administrative and other		12,624			30,299	-140%			34,487				72,049	-109%
Total expenses			136,432			292,732		-115%			254,425				639,857		-151%
Other income (expense)
Investment income		5,361			7,230	35%			6,508				20,841	220%
Legacy Greenspring investment income(1)		-			17,890		na			-				17,890			na
Interest income		83			43	-48%			342				329	-4%
Interest expense		(26)			(543)	-1988%			(7,353)				(637)	91%
Other income (loss)		799			(273)		na			1,261				(2,662)			na
Total other income			6,217			24,347		292%			758				35,761		4618%
Income before income tax			116,935			142,080		22%			174,983				396,739		127%
Income tax expense		9,546			15,787	-65%			11,585				16,065	-39%
Net income			107,389			126,293		18%			163,398				380,674		133%
Less: Net income attributable to non-controlling interests in subsidiaries		5,496			7,091	-29%			18,634				18,737	-1%
Less: Net income attributable to non-controlling interests in legacy Greenspring entities(1)		-			17,890		na			-				17,890			na
Less: Net income attributable to non-controlling interests in the Partnership		76,315			52,966	31%			119,976				191,977	-60%
Net income attributable to StepStone Group Inc .		$	25,578		$	48,346		89%		$	24,788		$	152,070		513%
Earnings per share of Class A common stock - Basic
	$	0 .87	$	0 .84	-3%	$	0 .85	$	3 .29	287%
Earnings per share of Class A common stock - Diluted
	$	0 .87	$	0 .83	-5%	$	0 .84	$	3 .22	283%
1 Reflects amounts attributable to consolidated VIEs for which we did not acquire any direct economic interests. Such amounts are attributable to employees and therefore have been reflected as legacy Greenspring performance fee-related compensation and net income	3
attributable to non-controlling interests in legacy Greenspring entities, respectively.

Robust Growth Profile Since Inception

TOTALS ASSETS UNDER MANAGEMENT AND ADVISEMENT ($B)	$548
Assets under management	$427
Assets under advisement

$296

$266

											$130	$155
										$116
							$62	$64	$84
					$47	$54
				$27
$1	$5	$9
2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	FY'17	FY'18	FY'19	FY'20	FY'21	FQ3'22
Note: Fiscal 2017-2021 reflect AUM/AUA as of March 31 of each fiscal year then ended. Prior year amounts are reported on a calendar year basis. Strategic acquisitions contributed approximately $5.6 billion, $1.8 billion, $0.9 billion, $3.6 billion, $2.4 billion and $22.5
billion of AUM and $1.0 billion, $0.0 billion, $0.0 billion, $1.0 billion, $92.5 billion and $0.0 billion of AUA in calendar year 2010, 2012, 2013, 2016, and fiscal year 2019 and 2022, respectively. As of December 31, 2021, approximately $0.9 billion, $0.2 billion, $0.1 billion,
$2.8 billion, $2.2 billion and $22.8 billion of AUM and $0.0 billion, $0.0 billion, $0.0 billion, $0.2 billion, $104.1 billion and $0.0 billion of AUA acquired in calendar year 2010, 2012, 2013, 2016, and fiscal year 2019 and 2022, respectively, remains. An expansion of client
data tracked contributed $70 billion of AUA for fiscal 2021. The incremental client data captured represents assets for which StepStone serves as investment advisor for the portfolio, but does not provide monitoring/reporting services and did not make the initial
investment recommendation.												STEPSTONE GROUP	4

Fiscal Q3 2022 Overview

KEY BUSINESS DRIVERS

FINANCIAL HIGHLIGHTS

BUSINESS UPDATE

1 Includes advisory accounts for which we have discretion.

		FQ3'22	FQ3'21	vs. FQ3'21	FQ2'22	vs. FQ2'22
Assets under management ("AUM")	$127.0 B	$80.5 B	58%	$121.3 B	5%
Fee-Earning AUM ("FEAUM")	$71.2 B	$46.6 B	53%	$66.7 B	7%
Undeployed fee-earning capital	$17.3 B	$17.4 B	-1%	$17.8 B	-3%
Gross accrued carry	$1,347.7 M	$636.9 M	112%	$1,215.9 M	11%
($M, except per share data)	FQ3'22	FQ3'21	vs. FQ3'21	FQ3'22 YTD	FQ3'21 YTD	vs. FQ3'21 YTD
Adjusted revenues	$173.0	$96.5	79%	$448.9	$257.3	74%
Management and advisory fees, net	$106.4	$70.1	52%	$268.0	$209.2	28%
Fee-related earnings ("FRE")	$36.8	$22.3	65%	$86.4	$68.4	26%
Fee-related earnings margin	35%	32%		32%	33%
Adjusted Net Income ("ANI")	$48.6	$27.0	80%	$129.2	$60.8	113%
ANI per share	$0.42	$0.28	50%	$1.23	$0.62	98%

• Declared a dividend of $0.15 per share of Class A common stock. The dividend is payable on March 15, 2022 to record holders of Class A common stock at the close of business on February 28, 2022
• Raised a total of approximately $12 billion of new SMA1 capital in the last twelve months
• Final closing of StepStone Tactical Growth Fund III ("STGF III"), and additional closings of StepStone's private equity co-investment fund, StepStone's venture secondaries fund and StepStone's senior corporate lending fund; raised a total of approximately $4 billion for commingled funds in the last twelve months
• Conversus StepStone Private Markets ("CPRIM") achieved a 65% total return since inception on October 1, 2020, and AUM of approximately $390 million as of February 1, 2022

STEPSTONE GROUP

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