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Stepstone advises institutional investors and private-wealth clients on their portfolios.
Nichapa Srimai/Dreamstime
With technology IPOs snagging all the attention, StepStone Group is going forward with an offering that is no less interesting.
The private-markets adviser and manager could aim to raise as much as $298 million when it prices its IPO later Tuesday. The firm is offering 17.5 million shares at $15 to $17 each. Underwriters on the deal include
JPMorgan Chase
(ticker: JPM),
Goldman Sachs
(GS) and
Morgan Stanley
(MS). The banks have the option to buy an additional 2.625 million shares at the IPO—the so-called green shoe—according to a regulatory filing dated Sept. 9.
StepStone is expected to begin trading Wednesday on the Nasdaq, under the ticker STEP. Other companies were also expected to price IPOs later Tuesday, including Snowflake, a cloud-data platform to trade under the ticker SNOW, and JFrog, a software provider to trade as FROG.
Founded in 2007, StepStone is an alternatives manager. The firm advises institutional investors including pension funds, sovereign-wealth funds, insurance companies, endowments, foundations, family offices and private wealth clients on their portfolios. StepStone also offers asset management, private-wealth solutions, portfolio analytics and reporting, as well as advisory services. It oversaw $292 billion of private-markets allocations, including $66 billion of assets under management and $226 billion of assets under advisement, the filing said. StepStone employs 526 people, including 190 investment professionals.
The New York firm plans to use part of its IPO proceeds to pay off its debt.
StepStone was profitable until the most recent quarter. The firm reported $132 million in profit on $446.6 million in revenue for the year ended March 31, the S-1 filing said. Driven by a decline in carried interest allocation for accounting purposes, StepStone posted $56.5 million in net losses for the quarter ended June 30, on $61.4 million in revenue losses. (Carried interest represents StepStone’s profit from the funds it manages.) The firm reported a loss of $128.5 million in carried interest allocation for the quarter, from $99.6 million for the same period in 2019.
Monte Brem, StepStone’s chairman and co-CEO, will have 9.2% economic interest after the IPO, while Fidelity will own 6.9%, the filing said. Fidelity couldn’t immediately be reached for comment.
StepStone’s offering follows the IPO of
Hamilton Lane
(HLNE), its closest peer, which went public in 2017, raising $190 million. Shares of Hamilton Lane, which also advises institutional investors, have nearly quadrupled from their $16 IPO price. The stock was trading at $62.07, up 1.6%, Tuesday afternoon.
Write to Luisa Beltran at [email protected]
