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Fund Investments | Co-Investments | Secondary Investments

Fund Investments

StepStone’s fund investment process utilizes proprietary market level research, sourcing, due diligence, analysis and structuring practices to identify private equity funds that are positioned to out-perform the market on a risk-adjusted basis. These practices include:

• Assessing the macro environment to identify the economic trends likely to have an impact on the portfolio in the next 5 to 10 years. StepStone’s investment professionals are organized into sector focused teams (small market buyout, venture capital, distressed, etc.). These teams develop a sector thesis that is then reviewed and refined by the StepStone investment committee. In addition, sector focused research reports are prepared and distributed periodically to StepStone clients.
• Maintaining a comprehensive global pipeline of fund managers who are best positioned to outperform over the next several years within the context of the sector thesis.
• Ensuring access to maximum allocations to the best positioned funds by utilizing StepStone’s unique market relationships, maintaining an exclusive list of clients that are highly desirable to fund managers and providing early indications of interests (supported by our extensive market research).
• Utilizing an Extensive Proprietary Due Diligence Process to identify managers only those fund managers that are exceptional and whose investment strategies, firm resources and philosophies are best positioned to out-perform in the current market environment. StepStone’s due diligence process relies on the deep involvement of experienced senior investment professionals and the unique analytical capabilities of its investment team. Examples of the highly analytical and comprehensive nature of StepStone’s due diligence process include an analysis of the sources of return (operating improvements, financial engineering, etc.) for each fund manager considered and risk focused analysis to determine the volatility of returns generated by the manager’s strategy.
• Negotiating and Structuring the legal structure and business terms of funds to ensure that alignment of interests are maintained and that fee arrangements are equitable and supportive of maximizing our investor’s net returns. StepStone has a group of experienced senior professionals who are considered market leaders in the structuring of private equity partnerships.

Through this combination of market research, sourcing, due diligence, analytical techniques and partnership structuring the StepStone professionals have managed private equity portfolios that have consistently outperformed the market.