- Bain & Company. (2024, November 7). Private market assets to grow at more than twice the rate of public assets, reaching up to $65 trillion by 2032, Bain & Company finds. Bain & Company. https://www.bain.com/about/media-center/press-releases/2024/private-market-assets-to-grow-at-more-than-twice-the-rate-of-public-assets-reaching-up-to-$65-trillion-by-2032-bain–company-finds/
Important Information
Before investing you should carefully consider the Funds’ investment objectives, risks, charges and expenses. This and other information is in the StepStone Private Markets Fund (SPRIM), StepStone Private Venture and Growth Fund (SPRING), StepStone Private Infrastructure Fund (STRUCTURE), and StepStone Private Credit Income Fund (CRDEX) prospectuses, copies of which may be obtained from StepStone Private Wealth at 704.215.4300 or by visiting stepstonepw.com. An investor should read each prospectus carefully before investing.
SPRIM and SPRING are a non-diversified, closed-end management investment companies that are operated as non-traded tender-offer funds. STtRUCTURE and CRDEX are non-diversified, closed-end management investment companies that are operated as non-traded interval funds.
References to “Evergreen Funds” generally describe non-traded registered closed-end funds or products. Potential benefits of the products discussed and the investment results of underlying holding realization events for financial gain are not guaranteed.
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance is net of fees and reflects the reinvestment of dividends. For the most recent month end performance please call 704.215.4300 or visit stepstonepw.com. Short term performance in particular is not a good indication of the fund’s future performance and an investment should not be made based solely on returns.
The statements and opinions expressed are those of the presenter(s). Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. Information presented is for general purposes only and is not intended to provide specific advice or recommendations for any individual. Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current income tax regulations and it is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Diversification does not assure a profit nor protect against loss in a declining market.
An investment in the Funds involve risks. The Funds should be considered speculative investments that entail substantial risks, and a prospective investor should invest in the Funds only if it can sustain a complete loss of its investment. Fund fees and expenses may offset trading profits. Fund shares are illiquid and appropriate only as a long-term investment. There is no secondary market for the Funds’ Shares and the Funds expect that no secondary market will develop in the foreseeable future.
The risks of investing in venture capital and growth equity companies are generally greater than the risks of investing in public companies that may be at a later stage of development. Secondary investments may be acquired by the Funds as a member of a purchasing syndicate, and they may be exposed to additional risks such as (i) counterparty risk, (ii) reputation risk, (iii) breach of confidentiality by a syndicate member, and (iv) execution risk.
Infrastructure companies may be subject to a variety of factors that may adversely affect their business, including economic slowdown, supply and demand volatility, increased competition, fluctuations in usage, expenses, and revenue, lack of fuel availability, energy conservation policies, technological obsolescence and changes in interest rates, regulations, or fiscal and monetary policy. Property values may fall due to in-creasing vacancies or declining rents resulting from unanticipated economic, legal, cultural or technological developments. There is no regular market for interest in infrastructure assets, which typically must be sold in privately negotiated transactions that can occur at a discount to the stated NAV.
Debt securities are subject to the risk that an issuer will be unable to make principal and interest payments on its outstanding debt obligations when due. Several factors may impair the ability of an issuer to make such payments and result in defaults on, and declines in, the value of its debt, including interest rate risk, prepayment risk, and adverse changes in the financial condition of an issuer. Originated credit investments which will depend on several factors, including the availability of opportunities for the origination or acquisition of target investments, the level and volatility of interest rates, the availability of adequate short and long-term financing, conditions in the financial markets and economic conditions. The current lending market in is competitive and rapidly changing, and there may be increasing competition for access to loans (especially direct loans) as the lending industry continues to evolve. The fact that a loan is secured does not guarantee that the holder will receive principal and interest payments according to the loan’s terms, or at all, or that the holder will be able to collect on the loan should the remedies be enforced. Investments in fixed income securities rated investment grade or non-investment grade (commonly referred to as high yield securities or “junk” securities) and unrated fixed income securities may involve a substantial risk of default.
Investments may consist of loans to small and/or less well-established privately held companies that have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress. The Funds are non-diversified, meaning they may concentrate their assets in fewer individual holdings than a diversified fund. Though valuations of Fund investments are ordinarily made quarterly, some of the Funds will provide valuations, and will issue shares, on a more frequent basis. Fund investments will be fair valued and are subject to adjustment. Fund acquisitions may be negotiated based on incomplete or imperfect information which could impact performance. The Funds may maintain a sizeable cash position in anticipation of funding capital calls. Holding a portion of the investment portfolio in cash or cash equivalents may have a negative effect on overall performance. The Fund’s “over-commitment” strategy could result in an insufficient cash supply to fund unfunded commitments to investment funds resulting in negative impacts to the Fund. Please see the prospectuses for details of these and other risks.
While the Funds provides transparent disclosure of structure, strategy, holdings, and financial condition, the valuation of the Fund’s investments in Private Markets Investment Funds is ordinarily determined based upon valuations provided by the Investment Managers on a quarterly basis. A large percentage of these securities do not have a readily ascertainable market price and are fair valued by the Investment Manager subject to future adjustment or revision. No assurances can be given regarding accuracy of the valuation methodology or the sufficiency of systems utilized by any Investment Manager, and an Investment Manager’s valuation of the securities may fail to match the amount ultimately realized with respect to the disposition of such securities.
Mutual funds, private funds, equities, bonds, and other asset classes have different investment strategies and risk profiles, which should be considered when investing. All investments contain risk and may lose value. Tax features of the products will vary based on an individual circumstances. Public and private securities have different investment strategies and risk profiles, which should be considered when investing. Differences may include objectives, costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features. Investment objectives will vary greatly among all structures and directly impact the volatility of any given fund, however private market funds are generally expected to be more speculative than registered funds due to the differences in regulatory oversight requirements. While mutual funds are limited in the amount of illiquid and derivative investments they may make, closed-end funds have less limitations, and private funds generally have no restrictions on such holdings. The performance of private market funds is difficult to measure and therefore such measurements may not be as reliable as performance information for other investment products. In addition to the transactional fees and ongoing operating expenses contained within most fund structures, many private market funds often include an additional performance fee applicable to investors.
StepStone Private Wealth’s assertation that SPRIM is one of the lowest fee providers is based on the following analysis: The Advisers define the fee structure to include a combination of management fees and carried interest. The peer set is a group of investment companies registered under the Investment Company Act of 1940 who invest in private equity investments similar to the Fund. The Fund’s management fee falls in the top quartile of the peer set which ranged from 1.25% to 1.75% during the most recent analysis of 9 funds as of December 31, 2023. The Fund’s management fee falls in the top quartile of the peer set. In addition to shareholder specific fees, investors are also subject to annual Fund operating expenses which can be found in the prospectuses.
Evergreen funds may not be obligated to redeem any shares, and approval is at the discretion of the fund’s board. The share redemption plan may be subject to other limitations, and may be modified, suspended or terminated. Please see the offering document for a specific fund for a full discussion regarding liquidity/share repurchase limitations.
On a quarterly basis, at the discretion of the Board of Trustees, the Funds offer a share repurchase program of up to 5% for SPRIM and up to 2.5% for SPRING of the Funds’ outstanding Shares per quarter subject to limitations. The Funds are not obligated to redeem any shares, and the Board may modify, suspend or terminate the plan. On a quarterly basis, STRUCTURE and CRDEX will conduct offers at net asset value to repurchase between 5% and 25% of outstanding Shares, unless such offer is suspended or postponed in accordance with regulatory requirements. In connection with any given quarterly repurchase offer, the Funds currently intend to repurchase 5% of their outstanding Shares. It is possible that a repurchase offer may be oversubscribed, with the result that Shareholders may only be able to have a portion of their Shares repurchased.
Investment in SPRIM and STRUCTURE may be made only by investors who represent that they are an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. Investment in SPRING may be made only by investors who represent that they are a “qualified client” within the meaning of Rule 205-3 under the Advisers Act and an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act).
STRUCTURE was formed in 2023 and has limited performance history that Shareholders can use to evaluate the Fund. CRDEX is a newly formed investment company with no operating or performance history that Shareholders can use to evaluate the Fund.
J-Curve describes the typical pattern of private equity and venture capital returns, where investments initially show negative returns due to early costs and fees, followed by positive returns as assets mature and generate profits, forming a “J” shape on a graph.
Initial rate of return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments.
The StepStone Funds are distributed by UMB Distribution Services, LLC which is not affiliated with StepStone Group or any other entity discussed in the recording.
