On this episode of Talk Your Book, Bob Long, CEO of StepStone Private Wealth sits down with the Animal Spirits team to discuss StepStone Private Wealth’s newest evergreen fund focused on private credit, available to all investors, ticker: CRDEX.
The podcast takes a deep dive into a hot topic on Wall Street: Private Credit.
Tune in for:
- Insights on the fundamentals of private credit
- The reasons behind private credit’s higher yield opportunities
- StepStone’s unique advantages within the space
Important Information
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the SPRIM, SPRING, STRUCTURE, and CREDX prospectus, a copy of which may be obtained from StepStone Private Wealth at 704.215.4300 or by visiting stepstonepw.com. An investor should read the prospectus carefully before investing.
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, 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.
Diversification does not assure a profit nor protect against loss in a declining market.
On a quarterly basis, STRUCTURE 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 Fund currently intends to repurchase 5% of its outstanding Shares. CREDX will offer to repurchase no less than 5% of the Fund’s outstanding shares at NAV on a quarterly basis. 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.
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.
In addition to shareholder specific fees, investors are also subject to annual Fund operating expenses which can be found in the prospectus.
CRDEX is a newly formed investment company with no operating or performance history that Shareholders can use to evaluate the Fund.
Secured Overnight Financing Rate (“SOFR”), is a benchmark interest rate for dollar-denominated loans and derivatives. It represents the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement market.
London Interbank Offered Rate (“LIBOR”), is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans. LIBOR is calculated and published daily by the Intercontinental Exchange (ICE) based on submissions from a panel of leading banks regarding the rates they believe they would be charged if they borrowed from other banks.
Basis points (“bps”) are a unit of measurement used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equal to 0.01% or 0.0001 in decimal form.
The loss rate in finance and banking refers to the percentage of loans or assets that are not expected to be recovered due to defaults or other forms of non-payment.
The StepStone Funds are distributed by UMB Distribution Services, LLC which is not affiliated with StepStone Group.
