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 infrastructure assets, ticker: STRUX. Topics within the podcast include:

  • The types of investments STRUCTURE is focused on: Transportation, Power & Data
  • How liquidity generally works with infrastructure and secondary markets
  • The correlation between infrastructure and traditional portfolio assets
  • What typically drives the return stream for infrastructure
  • How an interval fund works

Listen Here! 

Important Information
As of June 30, 2023, the proprietary StepStone SPAR Infrastructure Universe returned 9.7% for the 10-year period. The StepStone SPAR Infrastructure universe consists of 175 infrastructure funds, excluding funds within the commodities logistics subsector. Return is calculated using an annualized time-weighted return on GP reported fund NAVs and NAVs are in USD based on foreign exchange rates as at the date the NAV is reported. The opinions expressed herein reflect the current opinions of StepStone as of the date appearing in this material only. There can be no assurance that views and opinions expressed in this document will come to pass. The referenced indices/benchmarks are shown for general market comparisons and are not meant to represent any particular fund. An investor cannot directly invest in an index. Moreover, indices do not reflect commissions or fees that may be charged to an investment product based on the index, which may materially affect the performance data presented. Past performance is not necessarily indicative of future results and there can be no assurance that the investment will achieve comparable results or avoid substantial losses. 

The statement that StepStone deployed $14 billion in 2022 as one of the largest allocators to the infrastructure market globally is based on StepStone’s proprietary private markets database, SPI research.

StepStone Group’s largest institutions it invests on behalf of is based on Preqin, as of January 2023, public disclosures and StepStone research. Note that there are no comprehensive ranking sources for these activities. Independent private LPs defined as investors that are not an affiliate of a government or financial institution. Represents StepStone’s position among independent private LPs by comparing our annual fund commitments on behalf of discretionary and non-discretionary advisory clients to LP allocations in Preqin’s LP database. StepStone’s total capital responsibility equals Assets Under Management (AUM) plus Assets Under Advisement (AUA). AUM includes any accounts for which StepStone Group has full discretion over the investment decisions, has responsibility to arrange or effectuate transactions, or has custody of assets. AUA refers to accounts for which StepStone Group provides advice or consultation but for which the firm does not have discretionary authority, responsibility to arrange or effectuate transactions, or custody of assets. $659B in total capital responsibility includes $149B in AUM and $510B in AUA. Reflects final data for the prior period (September 30, 2023), adjusted for net new client account activity through December 31, 2023. Does not include post-period investment valuation or cash activity. NAV data for underlying investments as of September 30, 2023, as reported by underlying managers up to the business day occurring on or after 100 days following September 30, 2023. When NAV data is not available by the business day occurring on or after 100 days following September 30, 2023, such NAVs are adjusted for cash activity following the last available reported NAV.

The source for the following statement is Preqin Global Report 2023 Infrastructure: The amount of capital raised in infrastructure is approximately 8x over a 12 or 15 year period.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the 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 Fund involves risks. The Fund should be considered a speculative investment that entails substantial risks, and a prospective investor should invest in the Fund only if it can sustain a complete loss of its investment. Fund shares are illiquid and appropriate only as a long-term investment. There is no secondary market for the Fund’s Shares and the Fund expects that no secondary market will develop in the foreseeable future. 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. 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 Fund is non-diversified, meaning it may concentrate its assets in fewer individual holdings than a diversified fund. Though valuation of Fund investments is ordinarily made quarterly, the Fund will provide valuations, and will issue shares, daily. 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 Fund 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 prospectus for details of these and other risks.

Infrastructure Sector Risk: Specific Infrastructure Assets in which the Fund invests may be subject to the following additional risks:

  • Communication infrastructure companies are subject to risks involving changes in government regulation, competition, dependency on patent protection, equipment incompatibility, changing consumer preferences, technological obsolescence, and large capital expenditures and debt burdens.
  • Energy infrastructure companies are subject to adverse changes in fuel prices, the effects of energy conservation policies and other risks, such as increased regulation, negative effects of economic slowdowns, reduced demand, cleanup and litigation costs as a result of environmental damage, changing and international politics, regulatory policies of various governments, and the potential negative impact of natural disasters or terrorist attacks damaging sources of energy supplies.
  • Social infrastructure companies/issuers are subject to government regulation and the costs of compliance with such regulations and delays or failures in receiving required regulatory approvals.
  • Transportation infrastructure companies can be significantly affected by economic changes, fuel prices, labor relations, insurance costs, government regulations, and the potential negative impact of natural disasters or terrorist attacks.
  • Utilities companies are subject to regulation by states and other regulators, may have limited access to new markets, may incur unexpected increases in fuel and other operating costs, and are subject to considerable costs associated with environmental compliance, nuclear waste clean up and safety regulation.

Diversification does not ensure a profit nor protect against loss in a declining market.

Equities, bonds, and other asset classes 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. For example, the general public can freely invest in public securities via developed secondary markets and have a reasonable expectation of regulated disclosure of information such as financials, revenue, and performance. Private markets are generally illiquid and are less heavily regulated, resulting in less accessible and accurate valuation information. While mutual funds are limited in the amount of illiquid and derivative investments they may make, closed-end funds have less limitations. All investments contain risk and may lose value.

STRUCTURE seeks to distribute substantially all net capital gains and net investment income on an annual basis. There is no guarantee that STRUCTURE can or will pay distributions or if any of the distributions will be derived from return of capital.

In addition to shareholder specific fees, investors are also subject to annual Fund operating expenses which can be found in the Funds prospectuses. Management fee is charged as a percentage of the Fund’s annualized net asset value. Shareholders also indirectly bear a portion of the asset-based fees, performance or incentive fees or allocations and other expenses incurred by the Fund as an investor in the Portfolio Funds. Some or all of the Investment Funds in which the Funds intend to invest charge carried interests, incentive fees or allocations based on the Investment Funds’ performance. The Investment Funds in which the Funds intend to invest generally charge a management fee of 1.50% to 2.50% based on committed capital and approximately 20% to 25% of net profits as a carried interest allocation.

Investment in the Fund may be made only by prospective investors that are “accredited investors” within the meaning of Regulation D promulgated under the Securities Act.

“J Curve” references the tendency of private equity funds to post negative returns in the initial years and then post increasing returns in later years when the investments mature.

The Fund is distributed by UMB Distribution Services, LLC.

STRUCTURE is a newly formed investment company with no operating or performance history that Shareholders can use to evaluate the Fund.