StepStone Group Inc.

Thank you for standing by and welcome to StepStone Group's fiscal fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Seth Weiss. Head of Investor Relations. Please go ahead.

Thank you and good afternoon. Joining me on today's call are Scott Hart, Chief Executive Officer, Jason Ment, President and Co-Chief Operating Officer, Mike McCabe, Head of Strategy, and David Park, Chief Financial Officer. During our prepared remarks, we will be referring to a presentation which is available on our Investor Relations website at shareholders.stepstonegroup.com. Before we begin, I'd like to remind everyone that this conference call, as well as the presentation, contains certain forward-looking statements regarding the company's expected operating and financial performance for future periods. Forward-looking statements reflect management's current plans, estimates, and expectations and are inherently uncertain and are subject to various risks, uncertainties, and assumptions. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to changes in circumstances or number of risks or other factors that are described in the risk factor section of StepStone's periodic filings. These forward-looking statements are made only as of today and, except as required, we undertake no obligation to update or revise any of them. Today's presentation contains references to non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our earnings release, our presentation, and our filings with the SEC. Turning to our financial results for the fourth quarter of fiscal 2024. Beginning with slide three, we reported gap net income of $82.5 million. Gap net income attributable to Stepstone Group Incorporated was $30.8 million, or 48 cents per share. Moving to slide five, we generated fee-related earnings of $50.9 million, up 35% from the prior year quarter. and we generated an FRE margin of 33%. The quarter reflected retroactive fees primarily from an interim closing of StepStone's private equity secondaries fund. Retroactive fees contributed $5.4 million to revenue, which compares to retroactive fees of $0.5 million in the fourth quarter of fiscal 2023. Finally, we earned $37.7 million in adjusted net income for the quarter or 33 cents per share. This is up from $27.1 million, or 24 cents per share, in the fourth fiscal quarter of last year, driven primarily by higher fee-related earnings. I'll now hand the call over to Scott.

Thanks, Seth. We finished our fiscal year on a high note. Earnings, fundraising, and fee-earning asset growth accelerated in the back half of the year, generating strong results and setting us up for continued success. As we enter our new fiscal year, StepStone is facing a much better market environment compared to the backdrop from 12 months ago. At that time, declines in public asset prices and cyclically low levels of investment realizations put pressure on some of our clients' near-term appetite for private market commitments. We expressed caution for more difficult fundraising conditions, but we characterized the impact as largely timing-related. Our investment performance was solid, and underlying demand for our solutions remained strong. But at that time, there was simply less urgency for our LPs to commit capital. This led to extended re-up discussions for our managed accounts and longer fundraising cycles for our commingled funds. Even against that backdrop, we delivered strong financial performance in fiscal 2024 and solid growth in our key performance indicators, which underscores the resilience of our business. Fast forward to today, the sentiment has shifted markedly. Public markets are at or near all-time highs, and despite a higher for longer interest rate environment, expectations are that M&A activity will return to more normal levels. The improved sentiment is already translating to our results. In our fiscal fourth quarter, we generated gross new commitments of $6 billion, matching the very strong fundraising result from our third quarter. We raised nearly $4 billion in managed accounts, and we raised over $2 billion in commingled funds. Included in that figure are over $600 million in private wealth subscriptions, which is far and away our best quarter in the private wealth channel. The continued acceleration in private wealth is broad-based with record subscriptions for each individual product and record gross inflows in both the U.S. and abroad. As a reminder, we currently have three private wealth funds in market, S Prime, Spring, and Structure, with a collective net asset value of $3.4 billion, and we anticipate executing the first close of our private wealth credit product, CredX, this coming quarter. For the full year, we raised $18.6 billion of new AUM commitments across the firm, which is a strong result for any year. Perhaps as encouraging as the strong nominal level of fundraising is the progression of those inflows. We doubled our pace of fundraising in the second half of the year, and we see strong momentum continuing. The pipeline in managed accounts remains very strong for both new and existing clients, and we have several large commingled funds in the market across our asset classes. Of note, after the end of the quarter, we closed on an additional $800 million in our Venture Capital Secondaries Fund, which takes the fund size to approximately $3.3 billion, or 25% bigger than our previous Venture Secondaries Fund. We anticipate a small final close of this fund in the coming weeks. Moving to slide 8, last year we hosted our first Investor Day and set goals to at least double our fee-related earnings over the next five years and expand our FRE margins to the mid-30s. We'd like to take a moment to measure our progress since Investor Day. While the path to those targets may not be linear, we believe we are off to a very strong start despite what was a difficult backdrop when we articulated these goals. In the last year, we have grown our fee-earning AUM by 10%, we've grown fee-related earnings by over 20%, and we've expanded our FRE margins by over 100 basis points. Importantly, we've also grown our undeployed fee-earning capital, or UFIC, to more than $22 billion, our highest level ever, driven in large part by the $12 billion of gross AUM additions over the last six months. Included in the March 31st UFIC balance are commitments from our Venture Capital Secondaries Fund. We activated this fund after the end of the quarter, which will result in an approximate $3.3 billion addition to our fearing AUM in our first fiscal quarter. Additionally, we are optimistic about our prospect for continued growth in the coming fiscal year, given the pipeline of managed account re-ups, our expectation for ongoing commingled fundraisers, and continued progress in the private wealth channel. Furthermore, we broadened our fund platform with the introduction of new commingled funds, including our infrastructure co-investment fund and our infrastructure secondaries fund, and with the launch of new private wealth funds, including structure and credits. Strategically, as discussed last quarter, we entered into an agreement to buy in the non-controlling interests of our infrastructure, private debt, and real estate businesses over the coming years. The buy-ins will lead to a simpler ownership model and are being executed on an accretive basis. The first exchange is effective as of April 1st, with an anticipated closing by the end of June. We also executed on the sale of Greenspring Back Office Solutions, the fund administration entity that formed part of our acquisition of Greenspring, and we believe this will result in net savings and improved efficiency. All this gives us a clear line of sight for even stronger growth in our operating earnings and KPIs in fiscal 2025. I'll now turn the call over to Mike, who will speak to our growth in the quarter and our plans for upcoming dividend distributions.