StepStone: Diving into StepStone‘s Acquisition of StepStone Private Wealth — We View the Acquisition Structure / Valuation as Attractive, with Some Risk

Research evidence excerpt

StepStone: Diving into StepStone‘s Acquisition of StepStone Private Wealth — We View the Acquisition Structure / Valuation as Attractive, with Some Risk

Kenneth B. Worthington, CFA AC North America Equity Research

(1-212) 622-6613 09 July 2026 J P M O R G A N

kenneth.b.worthington@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Demand is elevated for private-market solutions like

StepStone’s relative to public market solutions due to higher

returns and diversification not found in public markets. This

demand is expected to continue, creating a healthy environment

in which STEP will continue to grow. We see StepStone as

earlier in its growth algorithm than longer-tenured and larger

peer HLNE, and therefore see the potential for faster growth

should market conditions remain stable. STEP has been

investing in growth heavily in recent years (which we see

YTD 1m 3m 12m contributing to lower historical FRE margins), and we expect

Abs -33.8% -1.7% -12.4% -26.9% these investments to pay off, especially as pertaining to the

Rel -52.9% -5.3% -25.2% -59.6%

private wealth channel.

Company Data

Valuation

Shares O/S (mn) 122

52-week range ($) 76.82-38.85 We arrive at our December 2026 price target of $69 by applying

Market cap ($ mn) 5,198.67 a 22x multiple to our 2028E post-tax adjusted CY net earnings

Exchange rate 1.00 per share, and accounting for the expected accretion and

Free float (%) 98.4%

3M ADV (mn) 1.30 capitalized costs to come from what we view as the probable

3M ADV ($ mn) 61.4 exercise of STEP’s call option to acquire the outstanding stake

Volatility (90 Day) 49 in its private wealth business (since it only impacts our

Index RUSSELL 2000

BBG ANR (Buy | Hold | Sell) 7|1|0 projection period for one quarter).