StepStone’s New Private Equity Fund STPEX Might Change the Case for Investing in StepStone Group (STEP)

• StepStone Group recently announced the successful launch of the StepStone Private Equity Strategies Fund (STPEX), an evergreen interval fund that has raised over US$750 million since its September debut to invest in private equity assets managed by leading sponsors.
• STPEX aims to broaden private equity access through daily investments, semi-annual liquidity options, and simplified tax reporting, now available to a wide range of U.S. investors with no accreditation requirement.
• We’ll explore how STPEX’s accessibility and diversification features may shape StepStone’s investment narrative in the evolving private markets landscape.

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What Is StepStone Group's Investment Narrative?

For those considering StepStone Group, the big picture often comes down to belief in the long-term growth of private markets and StepStone’s ability to broaden access and scale. The launch of STPEX is a direct move to capture the growing demand from individual and non-institutional investors, potentially serving as a near-term catalyst if inflows remain strong. This product's simplicity, diverse private equity exposure and accessibility could help differentiate StepStone, especially as recent results showed rising revenues but ongoing net losses. However, while STPEX introduces a fresh access point for capital, the company’s persistent unprofitability and slow expected revenue growth versus the US market remain critical risks. Recent stock price weakness suggests the STPEX launch may not immediately offset concerns about earnings and valuation, but it could alter the narrative if asset flows turn significant. On the other hand, changes in earnings quality could impact sentiment faster than new product momentum.

The valuation report we've compiled suggests that StepStone Group's current price could be quite moderate.

Exploring Other Perspectives

The Simply Wall St Community’s sole fair value estimate for StepStone stands at US$9.10, far below consensus targets, showing just how varied growth expectations can be. Despite the influx from STPEX, ongoing net losses could keep investor sentiment cautious. Explore more perspectives from the community to see how your view compares.

Explore another fair value estimate on StepStone Group - why the stock might be worth as much as $9.10!

Build Your Own StepStone Group Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your StepStone Group research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free StepStone Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate StepStone Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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