StepStone Group Reports Mixed Q1 FY2027 Results Amid Rising AUM
Event summary
- StepStone Group reported a net loss of $170.4 million for Q1 FY2027, despite a 23% increase in assets under management (AUM) to $245.4 billion.
- Fee revenues rose by 27% year-over-year to $270.9 million, but total performance fees dropped by 28% to $109.7 million.
- The company declared a quarterly cash dividend of $0.33 per share, payable on September 15, 2026.
- Fee-related earnings (FRE) increased by 30% year-over-year to $105.6 million, with an FRE margin of 39%.
- Undeployed fee-earning capital grew by 37% year-over-year to $39.3 billion.
The big picture
StepStone Group's Q1 FY2027 results reflect the broader challenges in the private markets, where fee income remains resilient but performance fees are subject to market volatility. The company's strategic focus on customized investment solutions and advisory services is driving AUM growth, but the net loss highlights the need for careful management of operating expenses and performance-related compensation.
What we're watching
- Revenue Diversification
- How StepStone will balance fee revenue growth with the volatility in performance fees.
- Capital Deployment
- The pace at which undeployed capital will be invested to generate additional management fees.
- Market Conditions
- Whether favorable private markets fundraising environment will sustain AUM growth.