StepStone Group Inc.

Hello, and welcome to StepStone Group's Q2 2026 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Seth Weiss, Head of Investor Relations. Please go ahead.

Thank you and good evening. 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, contain 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 a 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 second quarter of fiscal 2026. Beginning with slide three, we reported a GAAP net loss attributable to StepStone Group Incorporated of $366 million or $4.66 per share. As a reminder, GAAP accounting requires us to factor the change in fair value of the buy-in of the StepStone private wealth profits interests to our income statement. This option is expected to be accretive DPS and we plan to exercise the call option as soon as it's available in September of 2027. This quarter's gap loss is significantly larger than prior periods and is a direct function of the progress of our private wealth platform, which Scott will speak to in more detail. Moving to slide five, we generated fee-related earnings of $79 million, up 9% from the prior year quarter, and we generated an FRE margin of 36%. The quarter reflected retroactive fees from our infrastructure secondaries fund. Retroactive fees contributed $0.3 million to revenue, which compares to retroactive fees of $14.9 million in the second quarter of the prior fiscal year. When excluding the impact of retro fees, core fee-related earnings were $78 million, up 34% to the prior year quarter, and core FRE margin remains at 36%. We earned $66.7 million in adjusted net income for the quarter, or 54 cents per share. This is up from $53.6 million, or 45 cents per share, in the second quarter of the last fiscal year, driven by higher performance-related earnings and higher core fee-related earnings. I'll now hand the call over to Scott.

Thank you, Seth. Our second quarter was strong on all fronts. We continue to deliver for our clients both in the form of strong investment performance and value-added services. We produce a record quarter of subscriptions within our private wealth platform. We generate a robust institutional fundraising within both managed accounts and focused commingled funds. We generate strong financial results, and we continue to enhance our data and technology offerings and partnerships. Starting with private wealth, where our momentum is nothing short of spectacular, We generate $2.4 billion of new subscriptions, a record result for StepStone, and nearly double our previous highest quarter. There are several drivers of the strength this quarter. First, we continue to generate growth in our existing suite of products. Spring, our venture and growth fund, was a standout this quarter, with over $800 million in new subscriptions. It's a true one-of-a-kind product whose popularity is continuing to grow. Second, we launched StepX. a pure play private equity interval fund that enables daily subscription through a ticker. We constructed StepX to address the request of several channel partners, leading to over $700 million in gross subscriptions in the first 30 days. This is an incredible result that frankly exceeded our own expectations. While subscriptions will moderate after this initial surge, we expect StepX to become a significant source of private wealth inflows. Third, we are accelerating internationally as we continue to build on our syndicate, establish a track record of our international funds, and grow the StepStone brand. Last month, we were thrilled to announce a partnership with Aviva to be one of five specialist managers in its UK trust-based pension scheme. We believe this solidifies the StepStone name as a trusted partner in private markets for retirement savings, a trend we expect to develop globally. Moving to institutional, this was another solid quarter for fundraising within both managed accounts and commingled funds. We generated $3.8 billion in managed account gross additions in the quarter and over $10 billion for the first half of our fiscal year, continuing the momentum from our record-setting fundraising last year. Our strength in managed accounts has been a differentiator for StepStone as a result of nearly two decades of investment and relationship building across the globe. we are generating a healthy mix of new mandates as well as retention and growth in existing mandates. Over the last 12 months, more than a third of our managed account inflows have come from new and expanded relationships, which not only contribute to gross inflows today, but plants the seeds for growth as those LPs re-up with us in the future. As we have consistently said since our IPO over five years ago, we are very proud of our success with existing clients. Our re-up rate remains above 90%, and on average, those re-up accounts have grown in each success of vintage at nearly 30%. These are incredibly strong numbers and are even more powerful when you consider the compounding growth that results when we get to the second, third, and fourth re-up cycles. Stepstone success with both new and existing clients is the result of strong investment performance and the high level of service we provide. A key means of achieving this is by placing senior and experienced professionals in the asset classes and geographies where our limited partners reside. Over the last six months, we have opened new offices in the Netherlands, Spain, South Korea, and Saudi Arabia, representing increasing footholds for StepStone in Europe, Asia, and the Middle East, and highlighting the importance of our partnership with key clients in those regions. Pivoting to commingled funds, we generated $3.4 billion of gross additions. In addition to record private wealth subscriptions, we executed the first close of our PE Co-Investment Fund. We are also now in the market with our PE Secondaries Fund, which invests in both LP and GP-led secondaries, and with a first-time dedicated GP-led private equity secondaries fund. Mike will speak about these funds in more detail. The fundraising momentum has led to continued growth in our fee-earning AUM, which is up more than $5.5 billion in the quarter to nearly $133 billion. The strong progression of Fearing AUM translates to growing earnings power. We generated $78 million of core fee-related earnings, representing 34% year-over-year growth. On the strategic front, we are continuing to make strides in leveraging our data and technology. In September, we announced the launch of the Kroll Stepstone Private Credit Benchmarks. These benchmarks and analytic tools provide up-to-date data and analysis on a wide pool of loans with insights down to the loan level. Last week, we were pleased to announce the launch of the FTSE Stepstone Global Private Market Indices. We are beginning with three indices, a U.S. Buyouts Index, a U.S. Infrastructure Index, and an All Private Markets Index, which offer daily index performance based on comprehensive institutional-grade inputs. We believe this lays the groundwork for additional indices across other sectors and asset classes, and ultimately for establishing index-tracking investment products. I'll now turn the call over to Mike.