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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________________ to ___________________________
Commission file number 001-39510
STEPSTONE GROUP INC.
(Exact name of Registrant as specified in its charter)
Delaware84-3868757
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
450 Lexington Avenue, 31st Floor
New York, NY
10017
(Address of principal executive offices)(Zip Code)
(212) 351-6100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.001 par value per shareSTEPThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No  
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of November 3, 2022, there were 62,061,427 shares of the registrant’s Class A common stock, par value $0.001, and 46,716,897 shares of the registrant’s Class B common stock, par value $0.001, outstanding.




Table of Contents
Page
PART I - FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets as of September 30, 2022 and March 31, 2022
Condensed Consolidated Statements of Income (Loss) for the Three and Six Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended September 30, 2022 and 2021
PART II - OTHER INFORMATION

2


This Quarterly Report on Form 10-Q (“Form 10-Q”) includes certain information regarding the historical investment performance of our focused commingled funds and separately managed accounts. An investment in shares of our Class A common stock is not an investment in any StepStone Fund (as defined below). The StepStone Funds are separate, distinct legal entities that are not our subsidiaries. In the event of our bankruptcy or liquidation, you will have no claim against the StepStone Funds. In considering the performance information relating to the StepStone Funds contained herein, current and prospective Class A common stockholders should bear in mind that the performance of the StepStone Funds is not indicative of the possible performance of shares of our Class A common stock and also is not necessarily indicative of the future results of the StepStone Funds, even if fund investments were in fact liquidated on the dates indicated, and we cannot assure you that the StepStone Funds will continue to achieve, or that future StepStone Funds will achieve, comparable results.
Unless otherwise indicated or the context otherwise requires:
• “StepStone Group Inc.” or “SSG” refers solely to StepStone Group Inc., a Delaware corporation, and not to any of its subsidiaries;
• the “Partnership” refers solely to StepStone Group LP, a Delaware limited partnership, and not to any of its subsidiaries;
• “General Partner” refers to StepStone Group Holdings LLC, a Delaware limited liability company, and the sole general partner of the Partnership;
• “we,” “us,” “our,” the “Company,” “our company,” “StepStone” and similar terms refer to SSG and its consolidated subsidiaries, including the Partnership;
• “StepStone Funds” or “our funds” refer to our focused commingled funds and our separately managed accounts, including acquired Greenspring funds, for which we act as both investment adviser and general partner or managing member;
• references to the “Greenspring acquisition” refer to the acquisition of Greenspring Associates, Inc. and certain of its affiliates (“Greenspring”) that was completed on September 20, 2021;
• references to “FY,” “fiscal” or “fiscal year” are to the fiscal year ended March 31 of the applicable year;
• references to the “Reorganization” refer to the series of transactions immediately before the Company’s initial public offering (“IPO”), which was completed on September 18, 2020;
• references to “private markets allocations” or “combined AUM / AUA” refer to the aggregate amount of our assets under management (“AUM”) and our assets under advisement (“AUA”);
• references to “high-net-worth” individuals refer to individuals with net worth of over $5 million, excluding primary residence; and
• references to “mass affluent” individuals refer to individuals with annual income over $200,000 or net worth between $1 million and $5 million, excluding primary residence.


3


TRADEMARKS, SERVICE MARKS AND TRADE NAMES
We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are owned by us or licensed by us. We also own or have the rights to copyrights that protect the content of our solutions. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Form 10-Q are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, trade names and copyrights.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact, including statements regarding guidance, industry prospects or future results of operations or financial position made in this Form 10-Q are forward-looking. We use words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current plans, estimates and expectations and are inherently uncertain. The inclusion of any forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated will be achieved. Forward-looking statements are subject to various risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, global and domestic market and business conditions, our successful execution of business and growth strategies and regulatory factors relevant to our business, as well as assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity and the risks and uncertainties described in greater detail under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 and in our subsequent reports filed from time to time with the U.S. Securities and Exchange Commission (“SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Form 10-Q and in our other periodic filings. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
4


Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
StepStone Group Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share amounts)
As of
September 30, 2022March 31, 2022
Assets
Cash and cash equivalents$143,562 $116,386 
Restricted cash921 1,063 
Fees and accounts receivable34,344 34,141 
Due from affiliates13,516 19,369 
Investments:
Investments in funds106,977 107,045 
Accrued carried interest allocations1,189,323 1,480,515 
Legacy Greenspring investments in funds and accrued carried interest allocations(1)
991,116 1,334,581 
Deferred income tax assets39,500 27,866 
Lease right-of-use assets, net62,768 61,065 
Other assets and receivables36,640 27,426 
Intangibles, net376,385 398,126 
Goodwill580,542 580,542 
Total assets
$3,575,594 $4,188,125 
Liabilities and stockholders’ equity
Accounts payable, accrued expenses and other liabilities$84,377 $80,541 
Accrued compensation and benefits75,466 39,966 
Accrued carried interest-related compensation625,360 769,988 
Legacy Greenspring accrued carried interest-related compensation(1)
817,673 1,140,101 
Due to affiliates196,410 199,355 
Lease liabilities72,084 70,965 
Debt obligations63,115 62,879 
Total liabilities1,934,485 2,363,795 
Commitments and contingencies (Note 15)
Class A common stock, $0.001 par value, 650,000,000 authorized; 62,061,427 and 61,141,306 issued and outstanding as of September 30, 2022 and March 31, 2022, respectively
62 61 
Class B common stock, $0.001 par value, 125,000,000 authorized; 46,716,897 and 47,149,673 issued and outstanding as of September 30, 2022 and March 31, 2022, respectively
47 48 
Additional paid-in capital596,355 587,243 
Retained earnings164,044 229,615 
Accumulated other comprehensive income671 658 
Total StepStone Group Inc. stockholders’ equity761,179 817,625 
Non-controlling interests in subsidiaries28,922 32,063 
Non-controlling interests in legacy Greenspring entities(1)
173,443 194,480 
Non-controlling interests in the Partnership677,565 780,162 
Total stockholders’ equity1,641,109 1,824,330 
Total liabilities and stockholders’ equity$3,575,594 $4,188,125 
(1)Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. See notes 5 and 14 for more information.
See accompanying notes to condensed consolidated financial statements.
5


StepStone Group Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)


The following presents the portion of the condensed consolidated balances presented above attributable to consolidated variable interest entities.
As of
September 30, 2022March 31, 2022
Assets
Cash and cash equivalents$25,554 $19,386 
Restricted cash921 1,063 
Fees and accounts receivable30,882 29,060 
Due from affiliates5,262 5,252 
Investments in funds
26,282 22,808 
Legacy Greenspring investments in funds and accrued carried interest allocations991,116 1,334,581 
Deferred income tax assets316 301 
Lease right-of-use assets, net16,403 17,206 
Other assets and receivables5,081 5,588 
Total assets
$1,101,817 $1,435,245 
Liabilities
Accounts payable, accrued expenses and other liabilities$14,246 $8,548 
Accrued compensation and benefits23,767 14,806 
Legacy Greenspring accrued carried interest-related compensation817,673 1,140,101 
Due to affiliates76 190 
Lease liabilities15,907 17,593 
Total liabilities
$871,669 $1,181,238 
See accompanying notes to condensed consolidated financial statements.
6

StepStone Group Inc.
Condensed Consolidated Statements of Income (Loss) (Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended September 30,Six Months Ended September 30,
2022202120222021
Revenues
Management and advisory fees, net$119,121 $83,583 $235,853 $161,644 
Performance fees:
Incentive fees5,365 1,796 5,365 5,978 
Carried interest allocations:
Realized22,469 52,531 96,076 102,494 
Unrealized(176,778)143,855 (290,728)320,254 
Total carried interest allocations(154,309)196,386 (194,652)422,748 
Legacy Greenspring carried interest allocations(1)
(128,672) (282,279) 
Total revenues(158,495)281,765 (235,713)590,370 
Expenses
Compensation and benefits:
Cash-based compensation59,501 43,881 119,562 86,552 
Equity-based compensation3,783 3,213 7,497 6,956 
Performance fee-related compensation:
Realized13,630 26,781 55,365 52,089 
Unrealized(86,126)74,206 (140,679)159,778 
Total performance fee-related compensation(72,496)100,987 (85,314)211,867 
Legacy Greenspring performance fee-related compensation(1)
(128,672) (282,279) 
Total compensation and benefits(137,884)148,081 (240,534)305,375 
General, administrative and other33,733 25,320 67,965 41,750 
Total expenses(104,151)173,401 (172,569)347,125 
Other income (expense)
Investment income (loss)(3,691)7,187 (4,792)13,611 
Legacy Greenspring investment loss(1)
(15,357) (23,961) 
Interest income356 206 367 286 
Interest expense(817)(88)(1,404)(94)
Other loss(634)(1,952)(1,738)(2,389)
Total other income (expense)(20,143)5,353 (31,528)11,414 
Income (loss) before income tax(74,487)113,717 (94,672)254,659 
Income tax expense (benefit)(7,422)(14,145)(6,136)278 
Net income (loss)(67,065)127,862 (88,536)254,381 
Less: Net income attributable to non-controlling interests in subsidiaries8,690 6,032 16,261 11,646 
Less: Net loss attributable to non-controlling interests in legacy Greenspring entities(1)
(15,357) (23,961) 
Less: Net income (loss) attributable to non-controlling interests in the Partnership(31,177)59,756 (40,575)139,011 
Net income (loss) attributable to StepStone Group Inc.$(29,221)$62,074 $(40,261)$103,724 
Net income (loss) per share of Class A common stock:
Basic$(0.48)$1.49 $(0.66)$2.57 
Diluted$(0.48)$1.45 $(0.66)$2.50 
Weighted-average shares of Class A common stock:
Basic61,407,834 41,745,492 61,276,707 40,401,379 
Diluted61,407,834 45,908,361 61,276,707 44,405,055 
(1)Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests. The three and six months ended September 30, 2021 reflect the net effect of gross realized gains and the reversal of such amounts in unrealized gains. See notes 3, 5 and 14 for more information.
See accompanying notes to condensed consolidated financial statements.
7

StepStone Group Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(in thousands)
Three Months Ended September 30,Six Months Ended September 30,
2022202120222021
Net income (loss)$(67,065)$127,862 $(88,536)$254,381 
Other comprehensive income:
Foreign currency translation adjustment286 143 61 391 
Total other comprehensive income286 143 61 391 
Comprehensive income (loss) before non-controlling interests(66,779)128,005 (88,475)254,772 
Less: Comprehensive income attributable to non-controlling interests in subsidiaries8,831 6,101 16,291 11,842 
Less: Comprehensive loss attributable to non-controlling interests in legacy Greenspring entities(15,357) (23,961) 
Less: Comprehensive income (loss) attributable to non-controlling interests in the Partnership(31,112)59,797 (40,561)139,124 
Comprehensive income (loss) attributable to StepStone Group Inc.$(29,141)$62,107 $(40,244)$103,806 
See accompanying notes to condensed consolidated financial statements.
8

StepStone Group Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands)
Class A Common StockClass B Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive IncomeNon-Controlling Interests in SubsidiariesNon-Controlling Interests in Legacy Greenspring EntitiesNon-Controlling Interests in the PartnershipTotal Stockholders’ Equity
Balance at June 30, 2022$61 $48 $593,159 $205,946 $586 $31,829 $187,365 $730,381 $1,749,375 
Net income (loss)— — — (29,221)— 8,690 (15,357)(31,177)(67,065)
Other comprehensive income— — — — 80 141 — 65 286 
Contributed capital— — — — — — 3,798 17 3,815 
Equity-based compensation— — 2,087 — — 4 — 1,692 3,783 
Distributions— — — — — (11,742)(2,363)(16,847)(30,952)
Dividends declared— — — (12,681)— — — — (12,681)
Vesting of RSUs, net of shares withheld for employee taxes— — (1,504)— — — — (1,203)(2,707)
Exchange of Class B units for Class A common stock and redemption of corresponding Class B common shares1 (1) — — — — —  
Equity reallocation between controlling and non-controlling interests— — 5,358 — 5 — — (5,363) 
Deferred tax effect resulting from transactions affecting ownership in the Partnership, including net amounts payable under Tax Receivable Agreements(1)
— — (2,745)— — — — — (2,745)
Balance at September 30, 2022$62 $47 $596,355 $164,044 $671 $28,922 $173,443 $677,565 $1,641,109 
Balance at March 31, 2022$61 $48 $587,243 $229,615 $658 $32,063 $194,480 $780,162 $1,824,330 
Net income (loss)— — — (40,261)— 16,261 (23,961)(40,575)(88,536)
Other comprehensive income— — — — 17 30 — 14 61 
Contributed capital— — — — — — 8,785 17 8,802 
Equity-based compensation— — 4,126 — — 8 — 3,363 7,497 
Distributions— — — — — (19,440)(5,861)(54,346)(79,647)
Dividends declared— — — (25,310)— —   (25,310)
Vesting of RSUs, net of shares withheld for employee taxes— — (1,504)— — — — (1,203)(2,707)
Exchange of Class B units for Class A common stock and redemption of corresponding Class B common shares1 (1) — — — — —  
Equity reallocation between controlling and non-controlling interests— — 9,871 — (4)— — (9,867) 
Deferred tax effect resulting from transactions affecting ownership in the Partnership, including net amounts payable under Tax Receivable Agreements(1)
— — (3,381)— — — — — (3,381)
Balance at September 30, 2022$62 $47 $596,355 $164,044 $671 $28,922 $173,443 $677,565 $1,641,109 
(1)See notes 10, 13 and 14 for more information.
See accompanying notes to condensed consolidated financial statements.
9

StepStone Group Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
(in thousands)
Class A Common StockClass B Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive IncomeNon-Controlling Interests in SubsidiariesNon-Controlling Interests in Legacy Greenspring EntitiesNon-Controlling Interests in the PartnershipTotal Stockholders’ Equity
Balance at June 30, 2021$40 $55 $205,561 $99,057 $215 $26,585 $ $429,622 $761,135 
Net income— — — 62,074 — 6,032 — 59,756 127,862 
Other comprehensive income— — — — 33 69 — 41 143 
Contributed capital— — — — — — — 21 21 
Equity-based compensation— — 1,385 — — — — 1,828 3,213 
Distributions— — — — — (7,540)— (18,806)(26,346)
Purchase of non-controlling interests— — (657)— — (1,502)— (887)(3,046)
Dividends declared— — — (3,000)— — — — (3,000)
Vesting of RSUs1 — (1)— — — — —  
Class A common stock issued for Greenspring acquisition13 — 267,842 — — — — 290,744 558,599 
Class C Partnership units issued for Greenspring acquisition— — 64,847 — — — — 70,392 135,239 
Exchange of Class B units for Class A common stock and redemption of corresponding Class B common shares2 (2)(2)— — — — — (2)
Initial consolidation of legacy Greenspring general partner entities— — — — — — 219,086 — 219,086 
Equity reallocation between controlling and non-controlling interests— — 27,294 — 20 914 — (28,228) 
Deferred tax effect resulting from transactions affecting ownership in the Partnership, including net amounts payable under Tax Receivable Agreements(1)
— — (41,151)— — — — — (41,151)
Balance at September 30, 2021$56 $53 $525,118 $158,131 $268 $24,558 $219,086 $804,483 $1,731,753 
Balance at March 31, 2021$38 $57 $188,751 $60,407 $155 $25,885 $ $384,400 $659,693 
Net income— — — 103,724 — 11,646 — 139,011 254,381 
Other comprehensive income— — — — 82 196 — 113 391 
Contributed capital— — — — — — — 42 42 
Equity-based compensation— — 2,931 — — 4 — 4,021 6,956 
Distributions— — — — — (12,585)— (43,249)(55,834)
Purchase of non-controlling interests— — (657)— — (1,502)— (887)(3,046)
Dividends declared— — — (6,000)— — — — (6,000)
Vesting of RSUs1 — (1)— — — — —  
Class A common stock issued for Greenspring acquisition13 — 267,842 — — — — 290,744 558,599 
Class C Partnership units issued for Greenspring acquisition— — 64,847 — — — — 70,392 135,239 
Exchange of Class B units for Class A common stock and redemption of corresponding Class B common shares4 (4)(4)— — — — — (4)
Initial consolidation of legacy Greenspring general partner entities— — — — — — 219,086 — 219,086 
Equity reallocation between controlling and non-controlling interests— — 39,159 — 31 914 — (40,104) 
Deferred tax effect resulting from transactions affecting ownership in the Partnership, including net amounts payable under Tax Receivable Agreements(1)
— — (37,750)— — — — — (37,750)
Balance at September 30, 2021$56 $53 $525,118 $158,131 $268 $24,558 $219,086 $804,483 $1,731,753 
(1)See notes 10, 13 and 14 for more information.
See accompanying notes to condensed consolidated financial statements.
10

StepStone Group Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended September 30,
20222021
Cash flows from operating activities
Net income (loss)$(88,536)$254,381 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization23,245 3,626 
Unrealized carried interest allocations and investment (income) loss299,593 (329,031)
Unrealized legacy Greenspring carried interest allocations and investment loss349,763  
Unrealized performance fee-related compensation(140,679)159,778 
Unrealized legacy Greenspring performance fee-related compensation(322,428) 
Amortization of deferred financing costs236  
Equity-based compensation7,497 6,956 
Change in deferred income taxes(13,113)(3,700)
Fair value adjustment for acquisition-related contingent consideration7,960  
Gain on remeasurement of lease liabilities(2,709) 
Other non-cash activities17 1,852 
Changes in operating assets and liabilities:
Fees and accounts receivable(203)