StepStone Q2 2026 presentation: AUM grows 19% as fee revenues rise 17%

Introduction & Market Context

StepStone Group (NASDAQ:STEP), a global private markets investment firm, presented its second quarter fiscal year 2026 earnings on November 6, 2025, revealing strong growth in assets under management and fee revenues despite a slight earnings per share miss. The company's stock closed at $62.67 and declined 0.69% in aftermarket trading following the announcement.

The presentation highlighted StepStone's expanding global footprint and diversified investment platform across private equity, real estate, infrastructure, and private debt asset classes. With total capital responsibility of $771 billion, the firm continues to strengthen its position as a strategic partner in the private markets ecosystem.

Quarterly Performance Highlights

StepStone reported significant growth across key performance metrics for Q2 FY2026. Assets under management reached $209.1 billion, up 19% year-over-year and 5% quarter-over-quarter. Fee-earning AUM grew even more impressively at 27% year-over-year to $132.8 billion.

As shown in the following comprehensive overview of the quarter's performance:

Fee revenues increased 17% year-over-year to $217.5 million, while fee-related earnings grew 9% to $78.6 million. The company reported adjusted net income of $66.7 million, up 25% from the prior year, translating to adjusted net income per share of $0.54, a 20% increase year-over-year.

However, the earnings article reports that adjusted EPS came in at $0.45, slightly below analyst expectations of $0.46, representing a 2.17% negative surprise. This discrepancy between the presentation and reported figures may reflect different calculation methodologies or adjustments.

The financial highlights table provides a detailed breakdown of StepStone's performance:

Performance fee-related earnings showed remarkable growth, increasing 133% year-over-year to $33.9 million. The company also declared a quarterly cash dividend of $0.28 per share.

Detailed Financial Analysis

StepStone's financial strength is further demonstrated by its growing accrued carry and fund investments. Net accrued carry increased 20% to $842 million, while investments grew 35% to $314 million, as illustrated in the following chart:

The company's revenue diversification remains strong, with contributions from separately managed accounts, focused commingled funds, and advisory services. Fee-earning AUM is split between separately managed accounts ($78.2 billion, up 26% year-over-year) and focused commingled funds ($54.6 billion, up 29% year-over-year).

StepStone's core FRE margin was 36% for the quarter, reflecting the company's operational efficiency. Total revenue reported in the earnings article was $271.68 million, exceeding analyst expectations of $266.13 million, representing a positive surprise of 2.09%.

Strategic Initiatives

StepStone continues to expand its global footprint, now operating across 31 cities in 19 countries on 5 continents. The company's capital responsibility is distributed across the Americas ($356 billion), EMEA ($303 billion), and Asia-Pacific ($112 billion), demonstrating its truly global reach:

A key strategic advantage for StepStone is its comprehensive customized solutions approach, offering tailored strategies across private equity, real estate, infrastructure, and private debt, supported by proprietary technology capabilities:

The company's SPI platform provides unique insights through tracking of 19,000 general partners, 51,000 funds, 130,000 companies, and 276,000 investments:

StepStone's investment expertise spans multiple asset classes, with private equity representing the largest portion at 51% of AUM ($106 billion) and 50% of AUA ($283 billion):

The firm's diversified platform across private markets demonstrates strong performance across various strategies:

Forward-Looking Statements

During the earnings call, CEO Scott Hart emphasized the strength of the quarter, stating, "Our second quarter was strong on all fronts," and highlighting record subscriptions within the Private Wealth platform. The company's private wealth platform now manages approximately $12.1 billion in AUM.

StepStone raised $18 billion in new capital for separately managed accounts and $11 billion for commingled funds over the last twelve months, demonstrating continued investor confidence despite challenging fundraising conditions industry-wide.

Looking ahead, the company anticipates continued growth through strategic initiatives such as the expansion of its Private Wealth platform and the launch of new products like StepX. According to the earnings article, StepStone projects future EPS growth, with forecasts of $0.78 for Q3 FY2026 and $0.79 for Q4 FY2026.

However, the company faces several challenges, including market volatility, industry-wide fundraising difficulties, low distributions in private markets affecting short-term returns, geopolitical tensions potentially disrupting international operations, and fierce competition in the private equity and asset management sectors.

Despite these challenges, StepStone's strong Q2 performance across key metrics positions the company well for continued growth in the private markets investment landscape.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.