StepStone Group Inc. (STEP) Q4 2021 Earnings Call Transcript

Good afternoon, ladies and gentlemen, and welcome to StepStone’s Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. As a reminder, this call will be recorded. I would now like to turn the conference over to Seth Weiss, StepStone’s Head of Investor Relations.

Thank you, and good afternoon, everyone. Joining me on the call today are Scott Hart, Co-Chief Executive Officer; Jason Ment, President and Co-Chief Operating Officer; Mike McCabe, Head of Strategic; and Johnny Randel, 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 a number of risks or other factors that are described in the Risk Factor section of StepStone’s prospectus filed with the U.S. Securities and Exchange Commission on March 19, 2021. Turning to our financial results on Slide 3. We reported GAAP net income of $151.2 million and $314.6 million for the quarter and fiscal year ended March 31, 2021. GAAP net income attributable to StepStone Group was $37.8 million for the quarter and $62.6 million for the year-to-date period since the IPL. Fee-related earnings for the quarter was $21.0 million, an increase of 38% from a year ago, while full-year fee-related earnings were $89.5 million, up 45%. Adjusted net income for the quarter was $24.6 million, up 191%, while full-year ANI was $85.4 million, up 70% from the prior year. Finally, we reported adjusted net income per share of $0.25 for the quarter and $0.87 for the full year. The current quarter contained retroactive fees tied to additional closes of StepStone Tactical Growth Fund III that benefited revenue, fee-related earnings, and pre-tax adjusted net income by $0.8 million. This compares to retroactive fees in the fourth quarter of fiscal 2020 that contributed $3.8 million to revenue and $3.7 million to fee-related earnings and pre-tax adjusted net income. I’d now like to turn the call over to StepStone’s Co-Chief Executive Officer, Scott Hart.

Thank you, Seth, and good afternoon, everyone. I hope everyone is staying healthy and well. Before I get started, please join me in welcoming Seth Weiss, who recently joined us as our Head of Investor Relations. We’re thrilled to have him onboard. Our last 12 months represented our busiest year ever at StepStone. Turning to Slide 4. We conducted over 4,200 meetings with GPs, reviewed over 3,200 investment opportunities, helped facilitate over $50 billion of private market capital allocation, and added $11 billion of fee-earning assets under management, marking our largest year ever of total deployment and growth of fee-earning AUM. We’re optimistic about the outlook as we’ve stepped into the new fiscal year. Declining incidents of COVID and rising vaccination rates bode well for a return to normalcy in many geographies. We have reopened the majority of our offices on a voluntary basis and have begun to resume in-person due diligence and business development in a measured way. Turning to Slide 5. Our strength lies in our ability to provide efficient, customized private market solutions that help meet our clients’ needs by utilizing a diversified set of investment tools across geographies, asset classes, and strategies. Another layer is our proprietary technology and data, which yields a wealth of information and is a critical competitive advantage. We now oversee $427 billion in combined assets under management and advisement. As we continue to grow and build scale, our platform grows stronger as our increased activity leads to better information, insights, and deal flow. Shifting to our results on Slide 6. As Seth mentioned, adjusted net income for the quarter was $24.6 million, or $0.25 per share, up 191% versus the prior year’s quarter. For the full year, adjusted net income was $85.4 million, or $0.87 per share, up 70% versus the prior year. These results reflect robust growth in fee-earning assets and strong performance fees. We finished the year with $52 billion in fee-earning assets, up 12% sequentially and up 26% annually. The growth in our fee-earning AUM was the primary driver of a 19% year-on-year growth in fee-related revenue and a 38% growth in fee-related earnings, illustrating the positive operating leverage in our business. Lower travel-related costs due to the pandemic also contributed to our margin when comparing expenses relative to the prior fiscal year’s quarter. Johnny Randall will speak to the financial results in more detail shortly. Our expertise across all the major private market asset classes positions us to thrive in a variety of market conditions and allows us to pivot to the best opportunities for our clients. Within private equity, our momentum remains very strong. Our private equity fee-earning AUM increased by over $3 billion in the quarter due to the activation of recently awarded mandates as well as solid deployment across strategies. The environment remains favorable across primary co-invest and secondary opportunities. While there is a significant amount of activity in the market, we remain disciplined in our deployment to ensure we deliver optimal performance for our clients. In infrastructure, we are seeing market activity accelerate following a relatively slow pace in the second half of 2020. Investments within the renewable energy sector, in particular, are driving compelling deployment opportunities. Infrastructure and real assets have the ability to provide a natural hedge against inflation and rising interest rates, further stoking client demand for this asset class. Moving to real estate, fee-earning assets are up about $1 billion, or 25% in the last 12 months. However, the environment has been challenging for the last few quarters. Certain segments, such as office and retail, remain under pressure while yields in more highly favored sectors such as industrial and multi-family are relatively low. We remain very active in sourcing and researching opportunities and we anticipate that the real estate asset class will be one of the biggest beneficiaries of a post-pandemic reopening, and the return to travel will favor fundraising and enhance research and due diligence. Finally, private debt has grown at the fastest rate of all of our asset classes over the last year. We added $4 billion of fee-earning AUM, representing growth of more than 65%. Private debt is in high demand as yields have proven resilient, performance remains strong even in stress scenarios, and shorter durations on the underlying investments provide protection against rising rates. Before concluding my remarks, I’m excited to welcome Valerie Brown as the third Independent Director of our Board. Valerie’s deep experience in financial services and expertise in wealth management are invaluable as StepStone continues to expand our footprint within high net worth and mass affluent investors. Finally, I would like to thank our team for their dedication, ingenuity, and flexibility in what has been a challenging but invigorating year. I’m extremely proud of all we’ve accomplished and I’m even more excited about what we will achieve in the future. With that, I’ll pass it over to Mike McCabe, our Head of Strategy.

Great. Thanks, Scott. Now turning to Slide 8, as Scott mentioned, our asset footprint has reached $427 billion, reflecting our ability to execute on a global growth strategy. Turning to Slide 9. As we laid out during the last quarter, we have six strategic priorities designed to drive growth: one, continue to grow with our existing clients; two, add new clients globally; three, continue to expand distribution for private wealth clients; four, leverage our scale to enhance operating margins; five, monetize our data and analytical capabilities; and lastly, pursue accretive transactions to complement our existing platform. I would now like to take a few minutes to talk through our asset and revenue growth. So turning to Slide 10. We had a really strong year for growth in assets under management and fee-earning AUM, driven by robust fundraising among new clients, high retention, and growth among existing clients and healthy deployment into the market. We generated over $13 billion of new growth AUM in the last year, of which over 90% was generated outside of the U.S. It was a good year for business development with approximately $2 billion raised in commingled funds and over $1 billion raised in separately managed accounts from new relationships. Perhaps even more constructive is our continued growth with existing clients, who made over $10 billion in our separately managed accounts of inflows during the year. Furthermore, over a third of our clients conduct business across multiple asset classes, which tends to make our relationships with those clients larger and stickier. Earlier this year, we launched the private markets fund for high net worth and mass affluent individuals. As of June 1, the fund’s net asset value grew to over $135 million with an exceptional net return of 43% since inception. The robust returns were driven by strong portfolio company performance. We also benefited from pricing dislocations during the pandemic by purchasing funds managed by top-tier managers at meaningful discounts to current net asset values. Strong fundraising and investment performance positions us well as we look to expand distribution and more deeply penetrate the private wealth market. Moving to Slide 11, we have grown fee-earning AUM at a 33% annual rate over the last three years. Furthermore, as of quarter-end, we have $14 billion of undeployed earning capital, which we anticipate will generate management fees as capital is deployed in the coming years. The combination of our fee-earning and undeployed fee-earning capital increased nearly 20% from the prior year and has grown at a compounded annual rate of 24% over the last three years. We view this combination of fee earnings and undeployed capital as an important indicator of our future earnings power. Slide 12 shows the evolution of our management and advisory fees, as you can see our management fees grew at a 32% annual rate over the last three years, which is a similar pace as our growth in fee-earning AUM. Notably, the blended fee rate of 52 basis points has stayed relatively steady throughout the last three years. And with that, I’d like to turn it over to Johnny Randel, our CFO, to discuss our financials in more detail.

Thank you, Mike. Moving on to Slide 14, to touch on a few of our financial highlights. Our financial performance for the quarter and the fiscal year was driven by continued strong growth in fee-earning AUM, margin expansion, and strong realized performance. We generated fee-related earnings of $21 million in the quarter and $89.5 million for the fiscal year. Pre-tax adjusted net income was $29.2 million for the quarter and $110.03 million for the year, and earnings per share were $0.25 for the quarter and $0.87 for the year. Our FRE margin for the quarter is 28%, approximately 400 basis points versus the prior year quarter, and our FRE margin for the fiscal year was 31%, up about 500 basis points as previously mentioned retroactive fees had a positive impact on both the current quarter and the fourth quarter of fiscal 2020. Normalizing for these items shows an even greater year-over-year improvement in this quarter’s FRE and FRE margins. The expense fees within the FRE included an increase in cash compensation, both sequentially and year-over-year. A portion of the increase sequentially relates to annual salary increases, which occurred at the beginning of the calendar year, and increases in headcount. However, the majority of the sequential quarter change in cash compensation relates to elevated bonuses in the period. The increase was driven by strong financial performance leading to higher accruals, as well as the alignment of the timing of bonus payments within certain asset classes to our fiscal year-end that changed from calendar year timing. General and administrative expenses, net of non-core items, increased $5.9 million from the prior quarter. The increase primarily reflects ongoing investments in our infrastructure and other general operating costs. Additionally, since the IPO in September, we have also seen the continued layering in of expenses associated with being a public company which also impacts prior year comparisons. Gross realized performance fees were $25.1 million for the quarter and $73.1 million for the year. Realized performance can fluctuate significantly in any given quarter, so we believe a longer-term view on performance is more appropriate. Slide 26 in the appendix provides quarterly and last 12-month trends on net performance. Finally, a comment on the effective tax rate reflected in adjusted net income. The current quarter’s results have an effective tax rate of 15.8%, reflecting a true-up to our blended statutory rate of 22.6% for fiscal ‘21. This is a decrease from the 25% rate that had been previously used. The new blended statutory tax rate reflects our updated state apportionment of income based on our most recently filed tax returns. The 22.6% rate is the best estimate of our blended statutory tax rate moving forward.

I’ll start there and then maybe Johnny you can come in on the final question around the fee rate on the remaining $14 billion there. But I think the reality is the answer to that question hasn’t changed much. I think the investment period across many of the accounts that are embedded in that $14 billion of undeployed capital tend to have a three to five-year investment period that is the time period that we would expect to invest the capital over. I think that gives us sufficient flexibility to make sure that we are being patient and disciplined. Looking in a market environment that has been very active but is also characterized as having full valuation. So I think one of the things that that we are spending a lot of time talking about today and year is rather cheap as well as really kind of picking your spot where you want to be deploying and oftentimes that is in areas that you feel are in your core areas of expertise or where you have a competitive advantage. And certainly for StepStone, we talk a lot about the fact that our advantages are in the sourcing as a result of the platform that we’ve built and the amount of capital that we are allocating into the private markets as well as the due diligence benefits that come as a result of the data and the network of relationships that we have.

Hi. Good afternoon. Thanks for taking my questions. Maybe first, StepStone deployed a lot of previously undeployed capital in the quarter in the SMA business. Is that pace of deployment continuing or likely to remain elevated here? And how much pent-up demand is there to invest capital as the global economy continues to recover from COVID?

Sure, Ken. This is Scott. Thanks for the question. Look, I think you are correct to point out that we did have a nice increase in fee-earning AUM as a result of some of the undeployed fee-earning capital. And I think to understand what drove that, it’s actually important to think back to the prior quarter where we did have quite a strong quarter for new fundraising that led to a nice increase in both AUM and undeployed fee-earning capital. This quarter, we did see a significant portion of that convert into fee-earning AUM. It was actually a combination of both deployment and some activated accounts that were signed up in the prior quarter but not activated and therefore not fee-paying until the quarter ending March 31. The deployment was really driven by the private debt and private equity asset classes in particular. I think we continue to see strong levels of activity there really across the different investment strategies and are also encouraged by some of the recovery that we’re seeing in infrastructure activity. Real estate, while it’s tracked a bit slower, is also coming back; the team is quite active in evaluating new opportunities. So that’s what I would say on deployment. I would just circle back to my comment on activated as it’s not something that we’ve discussed on prior calls. This is not something that we will see frequently in quarters going forward, but may happen from time to time. Typically, when we’ve had a commingled fund that has a first close prior to the predecessor fund being fully invested, and so therefore has a delay in activating or where we have a separate account that pays on committed capital and maybe signed up in one quarter, but not activated until the subsequent quarter. And so there was a combination of factors that drove that jump in fee-earning AUM this quarter.

Great. We currently have investment committee approval for about 50 platforms, and this group has remained consistent each month as we proceed. The due diligence process varies for each RIA, independent broker dealer, wire, or international platform. Once we receive IC approval or the necessary improvements for a particular platform, we typically enter an education phase that can last from a few weeks in the short term to two to three months in the long term, depending on the platform. There are no obstacles; enthusiasm has been strong and is actually increasing with the platforms we’re engaging with. As the NAV has grown, it has facilitated easier conversations with more platforms that are looking for a minimum size.

Hi, good afternoon. Thank you for taking the questions. First, I wanted to hone in a little bit on the fee rate, appreciate all the disclosure and it looks like the non-PE asset classes had a nice improvement in fee rate over the past fiscal year. And just trying to parse that out a little bit more in terms of what the main driver was. Is it asset class mix, or is it more about account type within the non-PE asset classes? And how much of that was the retroactive fees where you did provide some additional detail? Thanks.

Sure, Adam, thanks for the question. This is Scott, I’ll start on that question. I might ask Johnny Randel to just jump in with a bit of additional detail if needed. But I think on your specific question around the increase in the fee rate for the real estate infrastructure and private debt asset classes, I think part of that’s going to be driven by the final closing in the fundraising for our commingled product in the real estate business. And as you can see from the chart on Page 12 of our presentation, the different fee rates across commingled funds and SMAs, the commingled funds have a higher fee rate. So some of that is mixed shift. But I would maybe just pause, Johnny, just jump in and keep me honest on that point there.

Yes. That is right, Scott. There’s nothing to add, but it is that subsequent close on the real estate commingled fund that drove that increase you’re seeing.

Sure. Jason, do you want to jump in again? In terms of how we think about monetizing the technology platform, today we are licensing access to SPI, which is our front-end investment decisioning tool, or Omni, which is the back-end portfolio monitoring tool, or other value-added tools that we’ve built on top of those things. Think about things like ESG dashboards for clients, these are still newer initiatives today, but certainly active. In terms of the tools that we built and the technologies that we’ve built on top of the data, some of those are able to attract differentiation in our solutions or to drive differentiation in our solutions. So, for example, the interaction of our pacing tool and our daily valuation engine and cash management optimization tools enable us to deliver better risk-adjusted returns and deliver on the promise of liquidity for something like CPRIM and the mass affluent space or for the potential target date opportunity when that arises here in the U.S. Or as another example, very data-driven analysis to put together capital-efficient rate of note structures for insurance companies. The next I would say is that by granting access to the technology solutions as a value-added service, we’re able to secure and retain asset management opportunities, whether that be in the commingled or SMA arena. And then obviously, because of the homegrown technology stack that we’ve built and own ourselves and it’s not purely outsourced, there’ll be future embedded options in how we use that technology in the future and how that will adapt.

I wanted to expand on Ken’s question regarding deployment. It seems you are able to quickly replenish the undeployed capital that has not yet started generating fee spread. As we look ahead over the next few quarters and years, Scott, given your comments about strong deployment activity, could you help us understand how quickly we can expect that undeployed capital to impact the management fee run rate? Additionally, what is the fee rate related to the approximately $14 billion future deployment opportunity?

I’ll start there and then maybe Johnny you can come in on the final question around the fee rate on the remaining $14 billion there. But I think the reality is the answer to that question hasn’t changed much. I think the investment period across many of the accounts that are embedded in that $14 billion of undeployed capital tend to have a three to five-year investment period that is the time period that we would expect to invest the capital over. I think that gives us sufficient flexibility to make sure that we are being patient and disciplined. Looking in a market environment that has been very active but is also characterized as having full valuation. So I think one of the things that that we are spending a lot of time talking about today and year is rather cheap as well as really kind of picking your spot where you want to be deploying and oftentimes that is in areas that you feel are in your core areas expertise or where you have a competitive advantage. And certainly for StepStone, we talk a lot about the fact that our advantages are in the sourcing as a result of the platform that we’ve built and the amount of capital that we are allocating into the private markets as well as the due diligence benefits as a result of the data and the network of relationships that we have. I think in terms of how the top of the funnel is progressing, I think exactly to you to the prior point I made around the deal flow and interesting opportunities that are coming across the platform, I think we continue to see a number of interesting opportunities that is across that strategy. I think if I look, for example, in the private equity business, each of the primary fund invest in business secondary business and co-invest business have been particularly active over the last couple of quarters maybe driven by different reasons. But again, no shortage of deal flow. We’re really focused, again, on maintaining discipline and being very selective about which opportunities we ultimately pursue. It probably has resulted in certain cases in an inability to come back to market for either separate accounts or commingled funds on a slightly accelerated basis. But I think we remain focused on maintaining a vintage advantage year diversification. I think frankly, one of the things that we’ve seen across the private markets are a number of managers returning to market quite quickly. I think we are mindful of wanting to build portfolios that are diversified from a vintage year standpoint. And really even early in the COVID crisis, as we were communicating with the management teams and looking at which portfolios were most heavily impacted, they were those that had concentrated positions in the wrong company industry or vintage year. So again, I think particularly coming out of that COVID crisis, we remain quite focused on making sure that we are disciplined from a vintage year standpoint. That being said, I think on the fundraising side we continue to be in market with our venture and growth fund, as well as for our private debt vehicles and have also earlier this year launched our private equity co-investment type vehicle as well. All generally according to plan from a timing standpoint.

Thank you. We will now conduct a question-and-answer session. Our first question is from Ken Worthington with JPMorgan. Please proceed.

Hi. Good afternoon. Thanks for taking my questions. Maybe first, StepStone deployed a lot of previously undeployed capital in the quarter in the SMA business. Is that pace of deployment continuing or likely to remain elevated here? And how much pent-up demand is there to invest capital as the global economy continues to recover from COVID?

Sure, Ken. This is Scott. Thanks for the question. Look, I think you are correct to point out that we did have a nice increase in fee-earning AUM as a result of some of the undeployed fee-earning capital. And I think to understand what drove that, it’s actually important to think back to the prior quarter where we did have quite a strong quarter for new fundraising that led to a nice increase in both AUM and undeployed fee-earning capital. This quarter, we did see a significant portion of that convert into fee-earning AUM. It was actually a combination of both deployment and some activated accounts that were signed up in the prior quarter but not activated and therefore not fee paying until the quarter ending March 31. The deployment was really driven by the private debt and private equity asset classes in particular. I think we continue to see strong levels of activity there really across the different investment strategies and are also encouraged by some of the recovery that we’re seeing in infrastructure activity and real estate, while it’s tracked a bit slower, is also coming back; the team is quite active in evaluating new opportunities. So that’s what I would say on deployment. I would just circle back to my comment on activated as it’s not something that we’ve discussed on prior calls. This is not something that we will see frequently in quarters going forward, but may happen from time to time. Typically, when we’ve had a commingled fund that has a first close prior to the predecessor fund being fully invested and so therefore has a delay in activating or where we have a separate account that pays on committed capital and may be signed up in one quarter, but not activated until the subsequent quarter. And so there was a combination of factors that drove that jump in fee-earning AUM this quarter.

Great. We currently have approval from our investment committee for around 50 platforms, and that number has remained stable each month as we progress through the process. The diligence procedures at different RIAs, independent broker-dealers, wires, or international platforms can vary significantly. Once we receive investment committee approval or the corresponding improvements depending on the platform, we typically enter an education phase that can range from a few weeks to about two to three months, again depending on the specific platform. There are no obstacles in our way; the enthusiasm has been excellent and has actually been increasing with the platforms we are engaging with. As the net asset value has increased, it facilitates discussions with more platforms that have minimum size requirements.

Hi, good afternoon. Thank you for taking the questions. First, I wanted to hone in a little bit on the fee rate, appreciate all the disclosure and it looks like the non-PE asset classes had a nice improvement in fee rate over the past fiscal year. And just trying to parse that out a little bit more in terms of what the main driver was. Is it asset class mix, or is it more about account type within the non-PE asset classes? And how much of that was the retroactive fees where you did provide some additional detail? Thanks.

Sure, Adam, thanks for the question. This is Scott, I’ll start on that question. I might ask Johnny Randel to just jump in with a bit of additional detail if needed. But I think on your specific question around the increase in the fee rate for the real estate infrastructure and private debt asset classes, I think part of that’s going to be driven by the final closure in the fundraising for our commingled product in the real estate business. And as you can see from the chart on Page 12 of our presentation, the different fee rates across commingled funds and SMAs, the commingled funds have a higher fee rate. So some of that is mixed shift. But I would maybe just pause, Johnny, just jump in and keep me honest on that point there.

Yes. That is right, Scott. There’s nothing to add, but it is the subsequent close on the real estate commingled fund that drove that increase you’re seeing.

Sure. Jason, do you want to jump in again? In terms of how we think about monetizing the technology platform, today we are licensing access to SPI, which is our front-end investment decisioning tool, or Omni, which is the back-end portfolio monitoring tool, or other value-added tools that we’ve built on top of those things. Think about things like ESG dashboards for clients, these are still newer initiatives today, but certainly active. In terms of the tools that we built and the technologies that we’ve built on top of the data, some of those are able to attract differentiation in our solutions or to drive differentiation in our solutions. So, for example, the interaction of our pacing tool and our daily valuation engine and cash management optimization tools enables us to deliver better risk-adjusted returns and deliver on the promise of liquidity for something like CPRIM and the mass affluent space or for the potential target date opportunity when that arises here in the U.S. Or as another example, very data-driven analysis to put together capital-efficient rate of note structures for insurance companies. The next I would say is that by granting access to the technology solutions as a value-added service, we’re able to secure and retain asset management opportunities, whether that be in the commingled or SMA arena. And then obviously, because of the homegrown technology stack that we’ve built and own ourselves and it’s not purely outsourced, there’ll be future embedded options in how we use that technology in the future and how that will adapt.

I wanted to expand on Ken’s question regarding deployment. It appears that you are managing to quickly replenish the previously deployed capital that hasn't yet started generating fee spread. Looking ahead to the next few quarters and years, Scott, considering your comments about strong deployment activity, could you share your expectations on how quickly you think some of that undeployed capital will start contributing to the management fee run rate? Additionally, what is the fee rate linked to that approximately $14 billion future deployment opportunity?

Sure. I mean I’ll start, then I might just ask Johnny to jump in as well because in addition to the accrued performance fees you’ve also seen a bit of an uptick in some of the realized performance fees and that’s largely driven by some of the same factors that we’ve mentioned in prior quarters. We’ve really seen an environment where all exit routes are open whether the public markets, strategic gaming activities, certainly financial buyers activity amount of dry powder in the market as well as some new exit rules that have emerged. So are you seeing a pickup in realized performance fees. But Johnny out if you look we certainly in terms of the go forward is difficult to predict quarter to quarter but maybe John if you want to point to some of the aging of those vehicles and how we think about the performance fees on a go forward basis.

Yeah, I think what we’ve tried to do on some of the pages 17, 18 in the deck is to give you some sense of how the programs are diversified and then the accrued amounts, what’s tied to programs that are in harvesting mode. So on page 18 we talk about the 7% of that accrued amount is tied to programs of 2015 vintages or earlier. So those are the ones that we’re largely seeing the exits out of and Scott mentioned we don’t control that so quarter to quarter is certainly hard to predict but we are seeing good performing portfolios start to mature on exit as we would expect. We’ve got track record detail in the back seat and kind of see how that performance has trended but we’re going to be dependent on the markets the ability to exit and we’re doing our best to try and disclose at least some sense of where we think is likely to occur more recently than not and I think you mentioned that roughly was a two thirds or so American style waterfalls. Is that similar sort of mix applied to that 2015 and earlier vintages as well so we haven’t put that number out there but because we have had thankfully strong performance on some of our more recent vintages but we’re still trying to settle on the right disclosure. That’s helpful, but we don’t have a number out there that ties to 64 percent of that kind of American style waterfall to the vintage but we’ll give that some thought.

Thank you. This concludes the question-and-answer session, and I’d like to turn the call back over to Scott Hart for closing remarks.

Great. I would just like to thank everyone for participating in the call today and for your continued interest in StepStone, and we look forward to keeping you updated in future quarters.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you very much for your participation. Have a great day.