StepStone Group Inc. (STEP) Q1 2023 Earnings Call Transcript

Thank you, and good afternoon, everyone. Joining me on the call today are Scott Hart, Chief Executive Officer; Jason Ment, President and Co-Chief Operating Officer; Mike McCabe, Head of Strategy; 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 Factors section of StepStone's most recent 10-K. 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. In addition, 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 first quarter of fiscal 2023. We reported a GAAP net loss of $21.5 million for the quarter ended June 30, 2022. The GAAP net loss attributable to StepStone Group Inc. was $11.0 million. We generated fee-related earnings of $36.6 million, adjusted net income of $47.1 million, and adjusted net income per share of $0.41. The quarter reflected retroactive fees resulting from the final closing of StepStone's private equity co-investment fund that contributed $2.4 million to revenue and $2.2 million to fee-related earnings and pretax adjusted net income. This compares to retroactive fees in the first quarter of fiscal 2022 that contributed $0.9 million to revenue and $0.8 million to fee-related earnings and pretax adjusted net income. I'd now like to turn the call over to StepStone's Chief Executive Officer, Scott Hart.

Thank you, Seth, and good afternoon, everyone. We delivered another robust quarter of earnings, fundraising, and growth in fee-earning assets as we kicked off our 2023 fiscal year. Our strong performance comes despite what was one of the most challenging periods for public equity and fixed income markets in the last two decades. These results exemplify the strength of StepStone's platform and the resilience of our business model. As I think back to our September 2020 IPO road show, which took place just six months into the pandemic, the resilience of our business model was a major focal point. While there are notable differences between the current environment and the COVID-driven market correction, the stability of our model remains relevant and is largely driven by three factors; one, our exclusive focus on the private markets with a dedication to customized offerings; two, our diversification; and three, our visibility into future earnings and growth. I'd like to touch on each of these topics. First, we are exclusively focused on the private markets, which have historically generated stronger performance and weathered volatility better than their public equivalents. As a result, private market allocations have continued to grow over time, representing a larger percentage of the overall portfolio for experienced investors while also attracting new LPs. While we and our clients have benefited from the favorable market conditions in recent years, the value of our service has become especially apparent during times of stress. Over the last several years, we operated in an environment in which investors were often rewarded simply for deploying capital into a rising market. Going forward, there will be more differentiation in performance, and we believe that disciplined portfolio and risk management, data-driven manager and investment selection, and access to cost-effective private market strategies will be the determinants of success. These are all areas that we work in partnership with our clients and where the StepStone platform is well-positioned to add value. Second, StepStone's diversification is a significant differentiator and gives us the flexibility to navigate through challenging markets and capitalize on new opportunities as they arise. Even in a shifting environment, there are few challenges that our clients face in their private markets portfolios that we cannot help them address as a result of the comprehensive toolbox we have built over the last 15 years. Our platform spans across avenues for investment, geography, and client type. Our diversification by asset class and strategy allows us to weather economic headwinds better than more concentrated managers. For example, the inflation protection embedded in real estate and infrastructure and the liquidity offered by secondaries are in high demand in today's environment. We offer leading solutions in all three areas, which are significant drivers of LP capital inflows today. Furthermore, we are consistently investing for our clients through cycles, which produces strong vintage diversification. Experienced LPs who pulled back after the 2001 and the 2008 market dislocations are keenly aware of the value of investing through market troughs and understand that these are often the best performing vintage years. Geographically, we have a very wide reach with nearly 70% of our last 12 months' management and advisory fees and approximately 80% of our fundraising coming from outside North America. The international market has ample room to grow, as allocations are rising and new pools of capital are coming online. In addition to geography, our client roster spans a range of investor types and sizes from individual investors to some of the largest pension and sovereign wealth funds in the world. At the core of our value proposition, we recognize that each client has unique needs and portfolio goals in the private markets. While some of our clients are undoubtedly impacted by allocation limits and pressures from the denominator effect, we also have clients that are just starting to build a private markets portfolio or are actively increasing allocations or accelerating the pace of deployment. Third, we have extremely strong visibility into our future earnings. The vast majority of our management fees are contractually tied to committed or invested capital and are therefore not impacted by market fluctuations. Over 80% of our management fees come from accounts that have a remaining tenor of three or more years, and over 50% come from accounts that have a remaining tenor of seven or more years. Our clients tend to be very persistent even well beyond their contractual commitments. Our re-up rate on SMA capital since inception is over 90%, with an average increase in account size of over 30% on renewal. Furthermore, we have over $17 billion of dry powder that will allow us to tactically capitalize on the more attractive pricing environment and which will contribute to our fee-earning assets as we deploy capital over the coming years. This un-deployed capital alone represents over 20% growth potential to our current fee-earning assets. While there may be fluctuations from quarter to quarter, combined these factors provide tremendous earnings stability and contribute to the long-term earnings power of the business without even accounting for any new business development. Moving on to our first-quarter results on slide 5, we generated $47 million in adjusted net income for the quarter or $0.41 per share which is the same as the prior fiscal year's first quarter. Looking over our trailing four quarters, we have generated $1.62 of adjusted net income per share which is up 45% from a year ago. Included in the quarter were $74 million of gross realized performance fees and $32 million of net realized performance fees, which represents our highest gross and third-highest net realized performance fees on record. Johnny will speak to carry dynamics in more detail. We generated fee-related earnings of $37 million, up 58% from the prior year quarter as we produced strong organic growth and benefited from the Greenspring acquisition. Accounting for the increase in our share count, we grew fee-related earnings per share by 39%. The integration of Greenspring is progressing well. We continue to be strong believers in the innovation economy and the power of technology. Our ability to provide solutions across the venture life cycle is evident through the successful recent closings of our micro fund which has raised over $230 million to-date; our VC direct fund which has raised nearly $850 million; and the final close of our VC secondaries fund which raised a total of $2.6 billion and is the largest venture secondaries fund in the market today. Shifting to assets under management, we produced another strong period of asset growth, finishing the quarter with approximately $137 billion of AUM and nearly $79 billion of fee-earning assets. Excluding acquired assets, we have organically grown fee-earning AUM by over $14 billion in the last 12 months generating consistent and balanced growth across asset class and commercial structure.

Thanks, Scott. Turning to slide 7, we generated $24 billion of gross AUM inflows in the last 12 months, with $7 billion coming from our commingled funds and $17 billion in separately managed accounts. Slide 8 shows our fee-earning AUM by structure and asset class. For the quarter, we grew fee-earning assets by over $3 billion. We are well positioned to grow through market cycles and this quarter's results serve as a continued proof point of our business model. While individual managers may experience fundraising pressures, a multi-manager platform like ours, diversified by geography, asset class, and strategy casts a much wider net. This was a balanced quarter for growth in fee-earning assets with approximately 60% of the growth coming from infrastructure, real estate, and private debt. Demand for real assets continues to be extremely robust as the inflation protection embedded in the underlying investments is driving strong capital formation and generating positive absolute investment performance. This was our best period for growth in real estate since the fiscal second quarter of 2021 driven by significant re-up activity. As Scott mentioned, secondaries investments are a particularly compelling strategy in today's market. As a leader in the secondaries space, we can play both offense and defense for our clients as we help them navigate these challenging markets. We have a multibillion-dollar arsenal of dry powder in our newly raised venture secondaries fund, our private equity secondaries fund, and our real estate secondaries fund and within separately managed accounts across all four asset classes that we will deploy as investors look to reposition their portfolios or seek liquidity. The prospect for continued growth remains strong as investors look to the secondaries market as both a viable entry and exit point. Moving to growth by commercial structure, commingled funds contributed about $800 million of net fee-earning assets driven by final closings in our VE co-invest fund which raised a total of $2.4 billion; our VC secondaries fund which raised a total of $2.6 billion; and our two credit funds which raised a combined $1.9 billion. Each of these funds surpassed their prior vintages and exceeded our targets, highlighting the resilient and growing demand from our clients. Looking at gross AUM additions, total commingled fundraising for the quarter was nearly $3 billion, our best quarter ever. In addition to the previously mentioned closings, we had successful fundraises across our Venture Capital Opportunities Fund and our VE secondaries fund. We anticipate activating fees on these funds later this calendar year. We also recently launched our first infrastructure commingled fund which will be focused on co-investments. We expect to execute our first closing on this fund near the end of this calendar year. This commingled fund expands access to the infrastructure asset class to a wider group of investors. With this new product we now offer commingled funds across all four private market asset classes. Moving to separately managed accounts, we generated $2.6 billion of fee-earning asset growth driven by re-ups and deployments. Looking over the last 12 months and excluding the impact from acquisitions, we have organically grown fee-earning assets by over $14 billion or 27% which is generally consistent with the 30% organic compounded annual growth rate since fiscal 2018. We continue to see strong results from our evergreen product CPRIM, our private market fund for accredited investors. As of July 1st, we have grown CPRIM to approximately $650 million of net asset value and have delivered a 78% total return since inception. We continue to make progress across all distribution channels. Our undeployed fee-earning capital stands at over $17 billion, slightly higher than last quarter. We were able to maintain this level, despite deploying nearly $3 billion from this balance as a robust fundraising replenished our dry powder. Slide 9 shows the evolution of our management and advisory fees, where we are generating nearly $3.80 per share in revenues over the last 12 months, representing an annual growth rate of 25% since fiscal 2018. As a reminder, over 80% of these fees come from accounts that have a remaining tenor of three or more years. We generated a blended management fee rate of 54 basis points, which is slightly higher than the prior year due to a mix shift toward commingled funds from the contribution of Greenspring.

Thank you, Mike. I'd like to turn your attention to Slide 11 to speak to a few of our financial highlights. For the quarter, we earned management and advisory fees of $117 million. The strength in revenue was driven primarily by continued growth in fee-earning assets. Profitability remains strong as our FRE margin expanded to 31% for the quarter, up approximately 200 basis points year-over-year, but down slightly versus the prior quarter. We benefited from retroactive fees in the quarter which contributed 130 basis points to the FRE margin. For comparison, retroactive fees contributed 70 basis points to the FRE margin in the year-ago quarter and contributed 170 basis points last quarter. Excluding the impact from retro fees, our margin was up over 100 basis points year-over-year and was essentially flat to the prior quarter. Shifting to expenses, compensation was up versus the prior quarter as we continued to invest in our teams. We have also seen sequential increases in travel and marketing, driving increases in our G&A expense. As we think about the near-term trajectory of expenses, we expect further increases driven by higher compensation and occupancy costs as we grow our team. We see a pathway for continued long-term sustainable growth, and we are investing to position ourselves accordingly. Over the last few quarters, we have commented that we view a near-term FRE margin of about 30% as reasonable with some variability quarter-to-quarter based on the timing of expenses and the cadence of large commingled fund closings and activation of fees. This might mean that we dip below 30% in certain individual quarters, but we still expect that we will generate an FRE margin of about 30% for this full fiscal year. We anticipate expanding our margins to the mid-30s over the longer term as we balance profitability with sustainable growth. Gross realized performance and incentive fees were $74 million for the quarter, which is our highest quarter ever. We benefited from transactions that were announced in 2021, and we also benefited from some realization activity outside of private equity. Factoring in compensation, net realized performance fees were $32 million for the quarter. Capital markets have become more challenging in recent periods, so we anticipate some downward pressure on realizations over the next few quarters. As a reminder, we do not typically control the timing of exits. Moving to Slide 12, we grew adjusted revenues per share by 20% year-over-year, driven primarily by 29% growth in per-share management and advisory fees. Speaking to longer-term growth, adjusted revenues per share has grown by a 32% compounded annual growth rate since Fiscal 2018. Shifting to our profitability on Slide 13, we grew fee-related earnings per share by 39% year-over-year. The increase was driven by growth in management and advisory fees and by margin expansion. Looking over the longer term, we have a compounded annual growth rate of 47% in fee-related earnings per share since fiscal 2018. Our adjusted net income per share was flat when compared to last year's first quarter as we saw strong growth in FRE per share. Net performance-related earnings were relatively flat in dollar terms but were down on a per-share basis due to the issuance of shares to complete the Greenspring acquisition. Looking at the longer-term, adjusted net income per share has grown at a 42% compounded annual growth rate, driven by robust growth in both FRE and realized net performance fees. Moving to the balance sheet on slide 14, gross accrued carry finished the quarter at approximately $1.4 billion, which is $115 million lower than the previous quarter. The majority of the decline was driven by record gross realizations in the quarter. Our accrued carry balance has increased more than 27% over the last 12 months, despite a record period of realizations and pressure on underlying valuations. As a reminder, our accrued carry balance is marked on a one-quarter lag, so recent market pressure may impact next period's reported balance. Our owned investment portfolio ended the quarter at $108 million, up 1% from the prior quarter and up 30% over the same quarter in the prior year reflecting both market appreciation and net contributions. Unfunded commitments to these programs were $82 million as of quarter-end. Our pool of performance fee-eligible capital has grown to $58 billion, and this capital is widely diversified across multiple vintage years in 160 programs as of June 30. 64% of our unrealized carry was tied to programs with vintages of 2017 or earlier, meaning that these programs are largely out of their investment periods and have entered harvest mode. 61% of this unrealized carry is sourced from vehicles with deal-by-deal waterfalls, meaning realized carry may be payable at the time of investment exit. This concludes our prepared remarks. I'll now turn it back over to the operator to open the line for any questions.

And first question comes from Michael Cyprys from Morgan Stanley. Please go ahead, Michael.

Thanks for taking my question. I hope everyone is doing well. To start, you mentioned there’s an opportunity to assist LPs in the marketplace with repositioning portfolios. How would you describe the current level of activity and dialogue in that area? How does this compare to the emerging opportunities you foresee? Also, could you share your expectations for how this will develop over the next year? Additionally, please remind us which segments of the secondaries marketplace you typically engage with and which ones you usually avoid.

Sure. Thanks, Mike for the question. This is Scott. So, look, as we started to hint at even last quarter, we do see the secondaries opportunity emerging as an important one from both an investment standpoint, but also as a portfolio construction tool for our clients. I think we really have seen that play out over the last couple of quarters. If you look at some of the market statistics for the first half of 2022, depending on which stats you're looking at, deal volume was up anywhere from 10% to 20%. And unlike the last couple of years, the key driver of that was LP secondaries as opposed to GP-led secondaries which, as we've all talked about, has been a key driver of growth over the last several years. I would say, we saw a similar trend in our own deal flow in the first half of the year. Volume in both the LP secondary and the GP-led secondary market was up pretty significantly in terms of what we saw. But obviously just given the quality or perhaps the uncertainty that exists ahead of June 30 valuations coming out, you can imagine that we were very selective and as a result had an even lower completion rate than what we would have seen over the last several years. And I think that sort of characterizes the type of environment that we're in here. I think there is this uncertainty that exists until we have further visibility into June 30 valuations. I think at that point is when we would expect to see activity pick up to an even greater extent. In terms of where we play, as Mike mentioned during the prepared remarks, we're active across all four of the asset classes today. We think that's a differentiator. If you think back to some of our prior commentary, our real estate team was really some of the pioneers in the real estate secondaries market. We pursued infrastructure secondaries through separate accounts. And as we've talked quite a bit about, both this quarter and last quarter, have now the largest venture secondaries fund in the market and have just held the first close on our next private equity secondaries market. But our activity crosses both the GP-led and the LP part of the secondary market. In both areas, we think that the StepStone platform brings with it pretty significant advantages from both a sourcing as well as a due diligence and an information standpoint.

Great. Thanks. And maybe just a follow-up question. More broadly growing concerns around sticky inflation, potential recession, geopolitical risk, all of that still remains here a risk. I'm just curious, when you think about the broader private markets, what's sort of top of your wall of worry? What tail risks do you see out there? And ultimately, what sort of deployment opportunities could that lead to, or where do you think you might become most excited?

Look, I mean, I think as you listed a number of the different concerns that are out there, I mean it's probably hard to pick exactly one, but I do certainly think that the recession risk continues to be high on everyone's mind. If I use for an example, as we started to see rates rise, our private debt team, in particular, was doing quite a bit of stress testing and scenario planning across portfolios to understand the impact, for example, of rising rates on credit quality, on interest coverage, on ratings, etc. and found that, look, the rise in rates on its own would have somewhat limited impact. But it's the potential risk for recession and certainly those tend to be scenarios where you could then see a decline in earnings and cash flow generation, and that's certainly where you start to see more of an impact on portfolios. If we step back and think about our portfolios today, the operating performance has continued to be quite strong, strong top-line growth, partially offset by inflation and margin pressure, but still resulting in growth in earnings and cash flow. It's really been more of a valuation reset that we've experienced. But if you were to experience a recession, obviously, different sectors will respond in different ways. I think that's where some of the concern lies. From a deployment standpoint, again, this is the point that we made during the prepared remarks. Many of our most experienced investors understand that, with that kind of correction comes new investment opportunities. And when you have the chance to buy companies at trough earnings and trough multiples and benefit from both, growth from the bottom as well as potential multiple expansion, yes, that's where we've seen some of the best returns historically in the private markets.

Hi, good afternoon. It seems you have been quite active in fundraising for SMAs, and the second half of the year looks promising. What is the sentiment among your limited partners, considering the macroeconomic conditions and other factors? I am interested in understanding how your perception of sentiment aligns with your fundraising pipeline, and what this indicates for StepStone's fundraising prospects for SMAs in the latter half of the year. The first half was very strong, so how should we view the potential for this to continue into the second half of the calendar year?

Sure. I'll start. Over the last earnings call, which was just over two months ago, we took a cautious yet realistic view on the fundraising environment. With two additional months and numerous conversations with clients and prospects, I have a few points to share. First, we still believe that even amidst concerns about the denominator effect, for every discussion regarding it, we are also having conversations about launching new private markets programs or accelerating investments in existing ones, which gives us some confidence. Additionally, clients facing denominator effect challenges often reflect on the lessons from the dot-com bubble and the global financial crisis, recognizing the missed opportunities from pulling back. They are determined not to repeat that mistake. Consequently, limited partners have responded in various ways: some have increased their allocations to private markets, others have explored the secondaries market, and some have reduced their commitments but continue to make new investments. They may opt for smaller commitments spread across the same number of managers or be more selective and invest with a select group. In terms of our separate accounts, they focus on areas like secondaries and co-investments. Clients who have collaborated with us to launch these programs are keen to remain engaged in the market, valuing the time and effort spent establishing these efforts. This is a significant reason we highlighted our re-up statistics across separate accounts, which drive our fundraising activities.

If I can rephrase and give you my impression, it seems you were definitely cautious last quarter, but you appear to be less cautious now, considering the past two months and the conversations you've been having. Is that a fair interpretation, or am I missing the mark?

No, we remain cautious. However, I believe some of our historical messaging may not have emphasized that our platform is well-suited for the current environment. This belief is reflected in our prepared remarks regarding the business's stability, the strength of contract renewals, and continued growth with existing clients.

Hey, everybody. Good afternoon, as well. Thanks for the question. So I was hoping to go back to some of the points you made around the secondary business; again, something we've been talking about for a while. Maybe just put a little bit more meat around the bones on what that actually means for StepStone's P&L and kind of how it all comes together. So the $17 billion of sort of dry powder or sort of shadow AUM that will turn on fees once deployed, can you help us frame how much of that is the secondaries business I guess outside of the commingled funds? Because I guess those will turn on fees once the investment period begins. So it feels like the deployment base in secondaries will be accelerated here. So I'm just trying to better understand how that impacts the revenue base.

Thanks, Alex. This is Scott again. So look, we've never disclosed the exact breakdown either by asset class or strategy of the $17 billion of undeployed fee-earning capital. I would say that it's probably more heavily weighted towards co-investments than secondaries. More of the secondaries programs do tend to pay on committed capital. So the main part of that $17 billion that will convert into fee-earning AUM is the first closing on the private equity secondaries fund once it's activated.

Got it. Okay. And you guys plan to activate it in the back half of the year? I think I heard in the prepared remarks Q4, right? Is that still the case?

That's our current plan, yes.

Got it. Okay. And then separately just zoning in on Greenspring for a second we obviously had some questions on that last quarter. We've seen another quarter of sort of more challenging marks in some of the growthier kind of venture-based investments. How did the marks look across Greenspring's portfolio now that we're halfway through the year? To what extent do you think that could impact capital fundraising efforts for that business?

Yes. So I mean, look, one as a reminder as we talked about last quarter, I would say that, again we did not acquire some of the legacy Greenspring carried interest. So in terms of how those valuations impact the realized carry we'll have limited impact there. But I think to your point, the question is how does that impact track record future fundraising, etc. Rather than get into the Greenspring portfolio specifically I would say across the portfolios that we manage, and if we look at how venture marks came in as of March 31 and again still limited visibility on where June 30 comes out, look I'd say we generally saw sort of mid-single-digit type declines across venture more broadly. But even if you break that down by individual subsector, you saw a pretty wide range of activity. Early-stage was less impacted. Late-stage, which is more tied to the public markets and public market valuations was probably down more like high single digits. And growth equity was somewhere in between. And so again recall we've got a very diversified portfolio in venture ranging from early-stage to late-stage in growth equity and everything in between and ranging across primary, secondaries, and direct investments. But look the portfolio is holding up well. From a – to your question around fundraising activity, continued to see quite a bit of strength there. We talked in the prepared remarks about not only the secondaries fund but the direct fund, the micro fund, and are now in the market with sort of the flagship global venture multi-strategy fund as well. So a lot of good activity taking place across the venture and growth portfolio.

Hi, good afternoon, thank you. I wanted to ask about the resilience of flows. Scott, you talked about the kind of strength of new clients continuing to initiate or expand private markets programs and also about some learned experience of LPs around attractive vintages that may be in times of disruption. One thing that I didn't hear you mention, forgive me if you did, was the geographic footprint of StepStone. It seems to me that with some of the US maybe public pension, LPs in particular being more constrained that your more global presence might have helped with resilience of flows. Is that the case? And if you could give some details around that, I'd appreciate it.

Yes. So Adam, we did make brief mention of the international mix during our prepared remarks, mentioned that really over the last 12-month period, and this is consistent with the last few years, something like 80% of the AUM inflows have come from outside the US, closer to 20% from the US or North America. Look, I would step back and say, and I do think that is a source of strength for us. I would say, I'm not sure I always totally agree with the narrative that has emerged around it just being US public pension funds that are impacted. And I say that for a couple of reasons, one of which is, we've had some good performance here in the US over the last couple of quarters as well, including US public pension fund clients of ours that have re-upped or expanded relationships. So again, I often find it somewhat difficult to generalize on these topics. And I think, look the same is true, I mean outside of the US. There are certainly some investors that are impacted by the denominator effect as well. But look, we do think that will be a continued source of strength for us. If I think about some of the legacy Greenspring funds, they've probably been more heavily weighted towards the US historically. And so certainly, one of the opportunities here is for us to introduce our global client base to our expanded venture and growth capability.

Thank you. It's a good perspective straightening out my thinking a little bit. And then just moving on, I wanted to ask about the realized carry acknowledging that StepStone doesn't really control that. Johnny's comments sounded like, at this point from what you can see, a slowdown is ahead. So I guess the question is, how quickly could a rebound in conditions, whatever that may be, it's deal-making activity or what have you, or valuations, how quickly could that kind of turn around that outlook? Would it take a quarter or two, or could it be longer than that? Thanks.

I believe it may take a quarter or two for things to improve, mainly due to the time it takes for signed transactions to be completed. As Johnny pointed out during the prepared remarks, one reason for the continued strength this quarter was the pipeline of exits signed in late 2021 that were ultimately closed last quarter. It does require some time, and while I don't expect realizations to immediately return to 2021 activity levels, it’s worth noting that last year we had access to various exit routes, including IPOs and strategic M&A, which are not as accessible now. Currently, the IPO window is mostly closed, and strategic M&A has slowed down. Over the past couple of quarters, our exit activity has primarily come from sales to other private equity firms or GP-led secondaries. The good news is that there is still a significant amount of capital available, so I anticipate that some activity will continue, but possibly not at the elevated levels seen in 2021.

And at this time, there appears to be no further questions. I'd like to turn the call back over to Scott for closing remarks.

Well, great. As always, we appreciate the time and the interest in the StepStone story, and we'll look forward to keeping you updated in future quarters. Thank you.

This concludes today's conference call. Thank you for attending.