StepStone Group Inc. (STEP) September 2026 Conference Transcript

All right. Good morning. Welcome, everyone. Thanks for joining us for our 24th annual Global Financials Conference. I'm Ben Budish. I cover the U.S. brokers, asset managers, and exchanges. And kicking it off this morning from StepStone, we've got Mike McCabe, Head of Strategy, and Jason Ment, President and Co-CEO. Gentlemen, thanks so much for being Great.

Thanks, Ben. Good to be here.

Maybe just to start it off, as a solutions provider, you're in a bit of a unique position to see your clients' entire portfolios. So with that in mind, how would you describe traditional LP allocations to an appetite for private markets, which asset classes are seeing greatest demand? And how would you characterize the impact of recent macro trends, stickier inflation, geopolitical uncertainty, AI-related news from over the weekend, anything like that?

Sure. Great. Thanks, Ben. As a solution provider and one of the leaders in our space, I guess I'll answer the question through a framing or a perspective that we have, which begins with Our total capital responsibility today is approximately $900 billion, so just under a trillion dollars, of which $230 billion are assets under management and the remaining are assets under advisement. That gives us a broad view across the entire spectrum of private markets. And within the markets, we're deploying close to $75 billion each year. And so when we think about what's going on with LP behavior, our perspective is real-time. It's lived every day across every asset class, geography, and strategy. I would say there are a couple of themes that we're seeing in the marketplace when it comes to LP behavior. I think the first theme is LPs have, at least on the public pension side, seen over the last year a denominator effect where public market recoveries have improved, but allocations are typically at or a little bit above policy targets. And as a result, some of the larger pension funds out there have been slow to deploy relative to prior years. And then I would say the insurance industry and family offices continue to remain pretty active. Insurance typically has an allocation range of somewhere between 5% to 8%, and they're typically hovering around 7% right now. So we expect insurance industries to continue to remain active. And then the last thing I would say, the family offices and more opportunistic investors continue to be active. There's a complexity, though, within LP behavior that's worth noting, and that is it's really the theme of distributions. I think LPs are still waiting for GPs to send capital back for them to reinvest in the next fund. When we look at our data over the last 20 years or so, distributions as a percentage of the portfolio value, considering maybe last year's net asset value, have typically run around 20%, 21%, 22% of a yield. The last three years, we've seen that yield cut in half, and we're seeing distributions coming off of prior portfolios, existing portfolios in that 11%, 12%, 13%. So I think the LP behavior is more about distributions and less about the numerator, denominator, and where they are relative to policy targets.

Got it. We'll come back to maybe this macro question in a second, but maybe sticking with the traditional LPs, maybe another high-level question about StepStone. What does this mean for the firm? Can you talk a bit about your growth, Algo, your cadence of flagship funds, your historic retention and re-up rates? and given what's going on, what gives you confidence that your growth can continue over the next several years?

Sure, Ben. We've just come off a record year of nearly $30 billion of gross AUM additions. So the demand for StepStone's work product hasn't wavered one bit. I think where we're seeing a lot of interest and demand is in the secondary market and in certain asset classes, such as private credit and infrastructure, continues to see strong demand, and we would expect to see the next year to be particularly positive for StepStone for three reasons. First, the one algorithm we've talked about at each earnings call is our separate managed account business. Our managed accounts really operate like evergreen vehicles. These are funds of one, and our LPs have a re-up rate of roughly three to five years. And when they do re-up, we've enjoyed a 90% re-up rate at about 120% of the size of the prior vintage vehicle. So you have this growth algorithm of a same-store sales model, if you will, up north of 100% on the managed account side of the business. The second growth algorithm is our Co-Mingled Fund business. You've seen StepStone's Co-Mingled fund platform expand over the years and as we enter the market this particular fiscal year starting you call it april of 26 we go forward a full year to the end of this fiscal year march of 27 all of stepstones flagship commingled funds are in the market and when we add up the prior vintage year fund sizes that amounts to close to 17 billion dollars add a little bit of growth to that, Ben, and we're seeing close to a $20 billion year starting at the beginning of the fiscal year of communal funds. As we finished June 30th quarter, we were roughly $9 billion into that $20 billion program. So we feel we are on or a little bit ahead of target. And I suspect we'll touch on this in a minute later, Ben, but it goes without saying StepZone's wealth management platform is one of its biggest and greatest, you know, strongest growth engines, and we don't see that slowing down.

Great. Maybe before we get to wealth, just tying back what we talked about in the first question, you know, the macro trends, how would you describe the near-medium-term outlet for both deployment and realization? It sounds like on the deployment side, a lot of confidence. What are you seeing in terms of the potential to realize?

Well, we came into the year pretty optimistic about deployment, and we continue to remain an optimistic, but it's slow. I mean, what we're seeing is bid-ask spreads continue to be gapped out. With the 10-year treasury now close to 5%, we would expect to see deployment continue to really, I would say most of the capital is going to the highest quality companies out there that are up for sale. What we're seeing statistically is the dollar amount of capital being deployed is up roughly 10% year over year, but the number of deals is certainly smaller. What that says is GPs are looking for larger, better operating companies, higher quality companies. On the realization front, again, it's really a narrative of two tales. I think one tale is how many dollars are being realized and sent back to LPs. And then the second I alluded to earlier is what does that look like in terms of a yield relative to the size of the portfolio they're currently sitting on? The good news is dollar value of distributions or realizations back to LPs have been improving year over year. But as net asset value has been expanding significantly over the years as a result of a lower yield, we're seeing the yield narrative continue to be on LP's mind more so than ever right now. So we remain cautiously optimistic about deployment realizations. We were hoping to see the backlog of deals that have been building over the last year start to flow through. So we remain optimistic on both fronts, but fairly cautious. The StepStone view on both fronts has a little bit to do with how we manage our platform with the commercial structures that we have. I mentioned our managed accounts. Our managed accounts often charge our clients on deployed capital, invested capital. And as a result, they commit a bunch of capital to us up front, and then we'll invest it over a three- to five-year period. The amount of capital that's been committed to StepStone platform but remains undeployed is roughly $40 billion. And so, you know, we expect to see, you know, call it $8 to $9 billion a year of deployment run rate. And having seen over 5,000 unique investment opportunities over the last year, we don't have any concerns about deploying that capital.

Okay, great. Let's talk about your wealth business. So maybe just setting the stage, you know, this has been a real success for StepStone. I'd like to say you guys are really punching above your weight class. What would you say has been the key differentiator as you kind of reflect in the last few years?

When we set out to create the Wealth Platform, we took the exact same approach we had done for 15 years at that time in the institutional space. And that was going in, listening, and not speaking for a long time. We spent a year on the road talking to the distribution channel partners to figure out what was missing, what were the problem points, and designed specifically to address those aspects of the wealth channel. We started with S-Prime, our model portfolio, because that was clearly missing, a one-click solution for the individual investor. As we, in our venture team, there was a real opportunity to bring the innovation economy to the individual investor in a truly diversified way. And Spring has been just a standout success. Structure multi-asset, multi-strategy, multi-manager offering let the individual investor participate in an area of the economy where they really didn't have much experience. They were able to bring a diversified portfolio to bear. Our private equity offering builds on a longstanding success in the PE secondaries and co-invest market. And finally, our credit offering, which is, again, multi-manager, very differentiated from what you see in the BDC space, hyper-focused on diversification, which when you've got capped upside in the direct lending market, you really need to manage the downside. And so we average about 70 basis points as our max position size. So a very different offering. All of that on the back of ease of use. We're hyper-focused on ease of use. So four of the five strategies have no accreditation requirement. They're buy with a click, right, and a CC ticker. That makes the life of the advisor and the individual investor profoundly easier. 1099 tax reporting, of course. And really, the beginning of the cycle is really on education, right, because the individual investor is new to this BFA. the large majority of EFAs are new to this. And so really just being out there with a focus on the Stepstone Academy and bringing folks through to make sure they understand what they're buying.

Maybe he's talking through some of the flagship products here. So Spring has been a particular standout for the company. What have been the themes, the sectors that have been the key contributors to performance? What are the key selling points for investors today? I'll start with that.

Yeah. So access to the innovation economy has historically blocked out the individual investor, right? And to bring them into the fold, product design had to take into account two different things. One, a focus on diversification. In an early venture where you can have binary outcomes, the individual investor cannot be taking binary bets. And so there are 2,000 portfolio companies underlying Spring. That's a powerful message as you're thinking about venture and growth as a component of the portfolio. The second is you still need to take into account the power law. And in venture, what that really means is a small number of companies tend to drive a vast majority of the outcomes. And so you need to take somewhat more concentrated bets even within that diversifying portfolio. The venture team that we've built here at Stepstone is really one of the leading allocators to the space and has been for 20 years. And as a result, the level of relationships that we've got with leading venture managers is unparalleled. That gives us access from the primaries perspective into their funds, co-investments or direct investments in which we're invited in, secondaries in their funds. And where we've really taken the business over the last 10 years or so is into direct secondaries. So being invited to the port codes directly by management teams, originally introduced by the venture managers, and providing liquidity to former management, early investors, and the like, and allowing us to proactively create portfolios that source these power law companies. Sound performance has been driven by exposure to the right companies in the right sectors. Clearly, everybody knows that AI has been a piece of that, but energy, defense, health care, a lot of different sectors are represented in that portfolio mix, and the performance of spring has been really, just really great over the last several years. And, you know, we talked about retention. I might talk about the gross and net retention on the institutional side. On the wealth side, we kind of view that as, you know, what does redemption activity look like? People have the opportunity to get out every quarter. Well, in spring, you know, our most recent redemption period closed a couple weeks ago. The number will get finalized after 930 NAS, but we are comfortably under 1% redemption in that fund. And I'm sure a lot of people didn't think that's what we were going to be seeing. So that's just a great vote of confidence from the investor base that we've got.

All right, your oldest fund is S-Prime. It's also continuing to show some pretty solid growth. So maybe talk about this one, about the benefits of scale, how the increasing ability to make direct investments could impact your investment opportunities, performance, liquidity.

So I mentioned earlier S-Prime is our model portfolio. And really, you know, we were out there with a private markets model portfolio without a single click before people were talking about it, because that's what the Wealth Channel needs, right? For the vast majority of individual investors, they can't create their own diversified portfolio of private markets. It needs to be easier. The interesting part that's probably counterintuitive for many is that as you're building one of these private markets evergreen funds that's focused on the equity strategy. So let's put credit to the side for a moment. The easiest way to create diversification, get the capital deployed, and not sit on cash is to use secondaries, and in particular LP secondaries, buying interest in other funds. that gives you an instant ramp of a diversification. The interesting part is that as the fund grows, you're able to predict the pacing of cash flows much better, not just from inflows from raising capital, but coming off of the underlying portfolio. And S-Pime, as an example, has 4,000 underlying portfolio companies and growing. We're able to use our mathematical modeling to understand how cash is going to come off that portfolio. Well, when you know when cash is going to be coming in, you can start to layer in other kinds of investment strategies, including fund investments, primary fund investments into third-party managers. And we have a lot of data that supports us understanding how they're going to draw capital over time. We can marry those two things so that these capital commitments, which would normally create cash drag because you'd want to reserve cash, actually serve as a sponge to observe the cash coming off the portfolio. The great part is fund investments are the most scalable part of the private markets, easier than co-investments or secondaries. And so, in essence, scale begets scale, and S-Prime is a great example of that.

So you talked about your flagship funds. Where else across the products that are you seeing particularly strong demand, and how are you thinking about potential new products for the channel?

I think, you know, we touched on it earlier with the infrastructure space being an area of increasing attention from the well channel. One, they're getting more acclimated and educated as to what it represents. It also, in the era of AI and data centers, it represents a picks and shovels opportunity there as well. Michael Lurita, the 10-year, for those who have inflation on the mind, it also represents a defensive attribute, including a yield component that tends to come with contracted cash flows that are often CPI-adjusted in the infrastructure space. So seeing a lot of attention there in building that syndicate for one of our newer funds. The second area where we've seen increasing growth and strength is on credit. Again, probably counterintuitive to the narrative that's been out in the market for the last year or so. But that hyper-focus, I can say maniacal focus on diversification that we bring to credit is differentiated the multi-manager model sourcing co-investments through a variety of different GPs around the world, including from private equity sponsors, not just from credit sponsors, and allowing us to really partner with everybody in the market gives us a differentiated way to source. You look at the loss ratios in that fund, better than just about everybody. With the performance in that fund, better than just about everybody. And we continue to see really strong growth in the syndicate. It's showing up in flows and showing up, again, in really low redemption numbers. So folks are happy with what we're delivering.

One kind of like in the weeds question on the wealth business. So you're in a position, I think, in a year or so to purchase the remainder of the business you don't own. Can you kind of remind us the mechanics of that buy-in of the profits interest? How exactly does that work? I know the legacy management team now has, I believe, a put option. They have not exercised that. Any thoughts on why? And given today's stock price and your level of wealth revenues, how should investors be thinking about what the accretion of that transaction would look like right now?

Sure. So as everyone's aware, we stood up a wealth management platform from scratch just before we took the company public in 2019. brought in a seasoned team of veterans who had decades of experience in retail and wealth management in the alternative space, which was a nascent part of the market. And we were at $500 million of asset center management just five years ago. Now we're sitting north of $20 billion. It is real economic value for everyone. And I think the vision that we had when we stood our wealth management platform up was that this could be a significant part of our business. And so to really forge an aligned interest between us and the team, we created basically a partnership where there would be a put-call structure such that the success of the economics would be shared between the two groups for a period of time. And when that period of time expired, which is this year and next year, the teams would have the option to exercise a put or a call to bring all the economics together under one ownership. Right now, as you know, all of the economics are consolidated, but there's an NCI line that shows the economics to flow back to the team. This, you know, the next 12 months, the team has the right to put the profit's interest to StepStone, and if they don't exercise that put option, we have the right to call that interest in September of 2027. The way it works, it's very simple. You take a look at the prior six months fee-related earnings of the Wealth Management Platform plus the performance-related earnings, which are spread out over the last two years in proportion, and then there's a multiple that gets applied to that combined FRE, and that multiple starts with StepStone's trading multiple, and a discount is applied to that multiple, and that discounted multiple then is applied to the FRE to come up with the purchase price. And if we were to take a look at StepStone's share price today and its trading multiple, that discount would translate to something like 30%. And so you can imagine from an accretion math standpoint, the 30% discount plus the rate at which this business has grown from $500 million to $20-plus billion, we expect it to continue to grow going forward. The accretion math is pretty compelling. And for that reason, the question that you asked, what's the management team's intentions here? But we have not heard from the wealth management team that they have any intention to exercise their put. So we're signaling to our shareholders that you should expect StepStone to call the profits interest this time next year.

Okay, great. Maybe just one last very high-level question on the Wealth Channel. So historically, we've seen that sentiment from retail investors can shift very quickly. It was the REIT several years ago, the BDCs more recently. So in your view, where are we today? Where are retail allocations? And how do you think about the next five to 10 years of growth in this channel?

Yeah, to use the baseball analogy, we're still taking batting practice before the game, right? So, yes, investor sentiment will vary from asset class to asset class, maybe from structure to structure. But this is all in a secular backdrop where the individual investor has asymptotically approaching no allocation to privates. The ultra-high net worth maybe are at 5% or a bit more, but the mass affluent are much closer to zero than that. And so this is a multi-year, I think, 5, 10, 15, 20-year cycle of private markets allocations coming into the individual investor portfolio. And some of that will be through product innovation, but some of it will be simply through the passage of time, education, and continuing to be out there in front of advisors and individuals and secular things going on that I think will continue to give that a lot of room to grow. One talked about S-Prime being a model portfolio, but obviously across traditional asset management and wealth, model portfolios in general have been thematic over the last 10 years and I think will continue to be for quite some time due to a lot of different dynamics in the wealth channel. The products that we've brought to bear, so beyond S-prime, so think the pure play of StepX, the pure play of CredX, the pure play of Strux, with ticker, interval fund structures, they fit very well in those model portfolios. So that's going to give us a great way to participate there. And we haven't even talked about the 401k market yet, and obviously it's a $15 trillion opportunity here in the U.S. with, in essence, again, asymptotically approaching 0% allocation to private markets, and we think we're just extremely well positioned.

Well, you gave me a good segue into the next couple of questions here. So thinking about new growth opportunities, one of them is the still emerging USDC opportunity. I think earlier this year you hired a head of U.S. Defined Contributions. Maybe talk about what this person's mandate is, and how would you describe the goals of the next 12 to 18 months, and what would you say are stepstones, key points of differentiation to compete in this market specifically?

Yeah, so we brought on – her name is Taylor Benson. She's fantastic, so shout out to Taylor. Really happy to have her on the team, and I've spent a ton of time working with her over the last several months. Her remit is it's the USDC market, but it's all of the different system players, right? So she's covering record keepers. She's covering wealth managers, aggregators, target date fund managers, stable value. You name it, she's talking to them. Her calendar is tough to get onto for many. Very busy. The reason we're going to win in D.C. is the same reason we're winning in wealth, which is we're bringing portfolio building blocks to the market. We're not bringing a product and trying to jam it at folks. We're just bringing the building blocks to the players that need them. And these multi-manager diversified portfolios, whether it be StepX for private equity or Strux for infrastructure, CredX for credit, they allow a portfolio manager, so think the portfolio manager of a target date fund or the advisor who's managing an advisor-managed account, to pick and choose what they need incorporated into a managed portfolio, which in target date is a glide path. They need to be able to mix and match over the different vintages of the glide path, what kind of portfolio attributes they're trying to source. We give them a very easy way to do that. And as a result, we think that we're just going to be very well positioned for all of this. Over the next 12 to 18 months, we will have solutions that are incorporated into U.S. D.C.

And what about outside the U.S.? How would you describe the private assets and retirement opportunity, ex-US, and similarly, what are you doing to access these markets?

Outside the United States, every country is its own country, and that really matters in the D.C. space. It's obviously a very regulated area of the economy. If you look at Australia, we've been active in the Australian D.C. market, or super, basically since we started the firm. And these represent today some of our largest clients, and we work with most of the largest superannuation plan managers today and have for years. Their adoption of private markets into retirement is profound. You look at the largest of the Australian supers, they have balanced portfolios or pre-mixed portfolios, 25% allocation to privates. And that's representative of really what you've seen in that market. You look to the Mexican market closer to home, the afores there are target date funds. And they've been using privates in their target date funds for a number of years now. And we've been, you know, the intel inside helping them to do that. So different geographies are at different gestation points in terms of how they're going to do it. But the direction of travel globally has been from DB to D.C., and the direction of travel has been from traditional assets to a total portfolio that includes private. So our global but local staffing model, we're in 31 offices around the world. We're very well positioned to be on the ground helping people to figure out how to do this. Most recent stuff that we announced obviously was in the U.K. I think we talked about it a couple of quarters ago with the Aviva Trust. I'm really happy to be partnering with a leading group there and more to come as well.

Maybe a couple of your other newer growth opportunities. So your relationships across the GP universe give you unique access to data. Can you talk about how this has enabled you to strike partnerships with FTSE, Russell, Kroll, PitchBook, and what you're doing there?

As I mentioned early in our conversation here, StepStone is overseeing close to a trillion dollars of assets around the world. And that includes data back to the 1990s and even the late 80s. As such, we're tracking nearly 20,000 general partners. We're tracking 150,000 funds and unique investment opportunities in companies across the private markets. The estuary of data in StepStone is unparalleled when you take a look at venture, buyout, infrastructure, real estate, and credit. Now, we've used this data historically to drive our investment decisions. We've also used it to attract capital, whether giving access to our databases through co-mingled fund commitments or managed accounts. But I think the bigger enterprise value question is, how can StepStone better monetize this data platform that really is so unique and large and scaled and diversified? And we realized we couldn't do it internally. We felt we needed a partner or two that understands how to make data available to the broader markets in a very effective way. And on the credit side, we couldn't think of a better partner than Kroll. And the timing of it couldn't be better either, Ben, given all the headlines with respect to risks or perceived risks within private credit. And so we forged a partnership with Kroll to allow LPs, GPs, and service providers to take a look at loan-level data to really try to measure the risks that are out there, rather than some of the vernacular that's been used by certain people to describe what's going on in private credit. And we're now serving hundreds of subscribers to the Kohl-Stepstone partnership. The next question was, and Jason mentioned this a little bit, in the 401k in D.C. and other emerging markets, particularly in wealth, what we're seeing is a drumbeat from LPs today that is getting louder and louder. Performance is table stakes, and I don't think that that's in question anymore. So how to measure returns, time-weighted versus IRR, how to measure risk, how to measure volatility, what do I own, what is it worth? All of these questions feed into sort of governance questions that our LPs are asking themselves. How do I allocate and to which? And what's the total return of my portfolio, not just the return of my privates versus publics? Oh, and by the way, there are different measurement tools used for each. These are table stakes for this asset class to continue to grow. We could not have thought of a better partner to work with in making our data available to the broader markets in a very objective, independent, third-party way than FTSE Russell. FTSE Russell, of course, is one of the leaders in indices and benchmarking and data analytics, and they've been looking for a solution provider to partner with as well on the data front to add to their suite of indices. So earlier this year, we launched a number of indices with FTSE Russell, including the Global Private Markets Index. We also have private equity. We also have real estate, infrastructure, and private credit. So all the asset classes are now available on the FTSE Russell and Bloomberg terminals. And these indices provide the traditional quarterly lag returns, but we've added some technology to make those quarterly returns available on a daily basis by cash-adjusting the quarterly lag number and then layering on a beta to the quarterly lag cash-adjusted to provide with a daily value. And we're starting to see the FTSE Russell StepStone Partnership really be embraced by the market. And last but not least, how do we serve the GPs with the data that they're basically serving us so that they can figure out ways to slice and dice their track records and market their future products, but also really analyze how their performance is on a company-by-company, not fund-by-fund basis among their peer group. And you couldn't think of a better partner to work with on that front than PitchBook, who has the largest and broadest access to the GP community when it comes to selling data services. So, Pro for Credit, Putzi Russell for the broader private markets, and PitchBook for the GPs in particular.

And maybe just tying in the financial question. So, you know, you guys have indicated publicly several times that it's quite early. You know, how would you frame up, say, the medium-term P&L opportunity in the indexing space? Jason, what types of early adoption from LPs are you seeing?

Well, we're pleased with the adoption rate so far, but I'm going to borrow an analog from Jason. He mentioned how the wealth management platform went from zero to 60 in three seconds. It's education, and it's going to take some time for all three partnerships to get out into the marketplace and educate all of the various constituents who may have an interest in subscribing to these services. In the near term, we're not expecting to see much revenue growth. In the medium term, we're expecting to see adoption rates really pick up. We're not expecting to see significant subscription revenues relative to the total platform. Where there might be a medium or longer term opportunity from an economic standpoint would certainly be if any of these benchmarks turn into investable indices or wrapped in some sort of asset management product, you can expect to see some real economic value grow there. And I think the DC and 401k market is going to be needing some sort of investable index for the individual investor across their portfolios and I think Stepson is well positioned to lead that charge. Great.

I have just a couple, couple of questions left here. And if there are any questions in the audience, we can open it up as well. Maybe just kind of moving to capital allocation. You know, we talked about the NCI buy-in earlier, you know, what else are you thinking about under the capital capital priority umbrella?

Well, as we've said in the past and remind each, you know, everyone, each quarter, you know, step stone is a very capital light business balance sheet light business. We don't expect that to change. And, and as a result, we are a high cash generative business. Our, the first dollar of after tax cashflow goes back into the business for driving whatever growth opportunity that may be available. We've already touched on a few today. So the first dollar goes back into the business to drive growth. The second dollar goes back to you, our shareholders. And we have two dividends to support that thesis. The first is a quarterly dividend, which is tied largely to fee-related earnings, which is a very stable, predictable fee stream. And the second is an annual dividend that we will pay out each June based on the board's decision at the end of the fiscal year. What we do is we accumulate our performance fees throughout the year, and we distribute our performance fees, think of it, a carried interest payment back to our shareholders in June each year. I would say the third would be M&A or some sort of transaction that provides strategic value to the firm. And we've built the business on a number of M&A transactions, the most recent one being the acquisition of Greenspring, which led to the spring product that Jason spent some time talking about, and whenever we've done an M&A deal, it's really been adding to something we're already doing or accelerating something that we felt was important. We feel we've built the platform out geographically, asset class-wise, and strategy-wise, and in doing so, we've created these partnerships with each asset class and wealth management. And so I think the third dollar, you know, after distributions and investing for growth will go to be buying in the NCI, the profits interest from our infrastructure, real estate, private credit and wealth management. And I think it's the safest and most reliable form of M&A you could come up with given how we've lived and worked with these partners now for, you know, five to 10 years. So that's the safest form of M&A we could come up with.

Makes a lot of sense. Before I ask my last question, anything from the audience in the room? Okay, last one for me here. StepStone's margins have expanded pretty meaningfully over the past several years. We talked about capital priorities, maybe like on the OPEX side. What are your other investment priorities, and how should investors be thinking about the longer-term margin profile of this business?

I remember being asked this question in 2020 when we took the company public because we were sitting at an FRE margin of like 26.5%. And, you know, the question was, well, your peers are in a substantially different category. Do you think you could ever get there? You know, as we sit here in 2026, you know, we're approaching an FRE margin of close to 40%. So we've added nearly, you know, 1,200 basis points of margin expansion. I think, Ben, that speaks to the operating leverage of this business as we scale up capital. And we expect that operating leverage to be a key part of anyone's thesis in the StepZone story. You know, as we approach 40% FRE margins, you can see wealth management has been a big driver given the margin profile of the wealth management products, as well as the commingled fund products, because they are at a substantially higher fee rate than the managed accounts and other activities. So, you know, our view is we're sitting comfortably, you know, in the high 30s, close to 40% FRE margin, five, six years after our public offering. And frankly, we don't see any constraints to seeing further upside to margin expansion. But as we've said from the very beginning, you know, our first priority is going to go to investing growth. And so you will see a nonlinear development of our FRE margins as we decide to invest in future activities. We have a history of putting the cart way before the horse, and I don't think that philosophy or culture of StepStone is going to change anytime soon. So it'll be nonlinear, but you'll expect to see additional margin expansion as private wealth continues to grow and we continue to add capital to a very strong foundation.

Okay, great. We're nearly out of time, so we'll leave it there. But Mike, Jason, thank you so much for being here. Pleasure to have you. Thanks, everyone.