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StepStone Group Inc. (NASDAQ:STEP), a global private markets firm valued at $6.79 billion, has completed a significant transaction, expanding its ownership stakes in three asset class entities, as per a recent SEC filing. According to InvestingPro data, the company has demonstrated impressive growth with a 65% year-over-year revenue increase, though currently trading below its Fair Value. On Monday, the New York-based investment firm, along with StepStone Group LP, finalized the second part of a series of transactions to acquire equity interests in StepStone Group Real Estate LP, StepStone Group Real Assets LP, and StepStone Group Private Debt AG.
The latest exchange has increased StepStone’s ownership to approximately 60% in both real estate and real assets entities, and 61% in the private debt entity. The consideration for this transaction included roughly $11 million in cash, 756,105 shares of StepStone’s Class A common stock (currently trading at $57.85), and 2,438,403 Class D Units of StepStone Group LP. Want deeper insights? InvestingPro offers comprehensive analysis with 8 additional key tips about StepStone’s performance and outlook.
The shares and units issued in this exchange were not registered under the Securities Act of 1933, relying on exemptions provided by Section 4(a)(2) of the Act. The Class A common stock issued is subject to transfer restrictions as outlined in the transaction agreement. Each Class D Unit is exchangeable for one share of Class A common stock, with such exchanges relying on exemptions from registration.
This transaction is part of StepStone’s strategic efforts to consolidate its interests in various asset class entities, using a formula based on adjusted net income and trading multiples to determine the value of consideration. While analysts maintain price targets ranging from $51 to $74, InvestingPro analysis suggests the company is expected to return to profitability this year, marking a potential turning point for investors. The information provided is based on a press release statement and InvestingPro research.
In other recent news, StepStone Group reported a significant rise in earnings per share (EPS) for the fourth fiscal quarter of 2025, achieving $0.68, which surpassed both Goldman Sachs’ and consensus estimates. This performance was attributed to record fee-related earnings of $94 million and a strong net performance fee contribution of $42 million. Goldman Sachs subsequently increased StepStone’s price target to $63, maintaining a Neutral rating, while JPMorgan raised its target to $68, keeping an Overweight rating. The company’s management fee revenue was bolstered by $15.7 million of retroactive fees, contributing to a robust fee-related earnings margin of 44%.
StepStone’s growth in fee-earning assets under management (AUM) reached $121 billion, driven by private wealth subscriptions and firmwide gross inflows. Looking forward, Goldman Sachs anticipates high-teen growth in management fees, supported by strong fundraising momentum and over $25 billion of undeployed capital. Meanwhile, Step Energy Services reported a challenging fourth quarter in 2024, with revenue dropping to $147 million and a net loss of $45 million. Despite these challenges, Step Energy remains cautiously optimistic about 2025, expecting increased activity in Canada but potential challenges in the U.S. market.
The company highlighted technological advances, such as dual fuel fracturing capacity and new coiled tubing records, as part of its strategic focus. Step Energy has also significantly reduced its debt since 2018, with plans for further reduction. The company anticipates potential risks from geopolitical factors and exchange rates, which could impact margins.
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