StepStone: StepStone F1Q27 — Headline Misses on Lower Fee Rate / Lower Carry, but Strength of FPAUM Growth Drives a Stronger Outlook

Research evidence excerpt

J P M O R G A N

North America Equity Research

07 August 2026

StepStone

Steptone F1Q27 — Headline Misses on Lower Fee

Rate / Lower Carry, but Strength of FPAUM Growth

Drives a Stronger Outlook

Overweight

STEP, STEP US

Price (06 Aug 26):$50.33

▲Price Target (Dec-26):$73.00

Prior (Dec-26):$69.00

StepStone reported EPS of $0.48, falling slightly below our projection of $0.49 and

the Bloomberg LP consensus of $0.51. The EPS fell slightly below our

expectations on somewhat lower carry, but also a lower fee rate (largely timing

related). The surprise to us was the magnitude of the increase in Fund FPAUM this

quarter, which rose to $72.8bn driven by $8.2bn of fundraising, deployment and

activations. The outlook for fundraising remains strong with nine drawdown funds

currently 'in-market,' including its biggest funds. We make a number of changes to

our model with the net result of higher estimates in CY2027. Our Dec 2026 price

target rises to $73.

Step-up in FPAUM — The key driver of an improving earnings outlook was

the meaningful step-up in FPAUM this quarter. STEP’s commingled fund

business saw FPAUM rise from $62.2bn in the March quarter to $70.3bn,

driven by $8.2bn of contributions. Here, StepStone’s wealth business was

particularly strong (even slightly better than modeled with a record June for

Spring) with $2.8bn of commitments, complemented by somewhat better fund

commitments of ~$2.1bn. In addition, StepStone pulled forward two fund

activations totalling ~$3.0bn.

Outlook for fundraising strong — The June quarter was a strong quarter for

fundraising with ~$10bn of gross additions — $4.5bn in SMAs and $5.5bn in

commingled funds. StepStone is currently in-market with nine drawdown

funds — it’s the largest collection of funds we can recall seeing in-market at one

time for STEP. In addition, the funds in-market are investing behind key themes

that investors are focused on, including venture, secondaries and coinvestment. On the private wealth side, the slowdown (ex-Spring) of wealth

fund flows late in the March quarter and June quarter seems to be diminishing

early in the August quarter as industry concerns with regard to private credit

…