Private market opportunities are gaining traction as public markets become increasingly concentrated around a select group of names. What does this mean for investors seeking diversification and alpha? Neil Menard, President of Global Distribution at StepStone Private Wealth, joins InvestmentNews to unpack this trend and explore how alternatives are playing a critical role in today’s portfolios.
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 (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 the prospectus carefully before investing.
Mutual funds, closed-end funds, exchange-traded products (ETPs), and private funds, as well as 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’s 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.
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. Diversification does not assure a profit nor protect against loss in a declining market.
An investment in the Funds involves 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. 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 increasing 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.
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. While the Funds provide transparent disclosure of structure, strategy, holdings, and financial condition, the valuation of the Funds’ 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.
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. SPRING, STRUCTURE, and CRDEX are non-diversified, meaning they may concentrate their assets in fewer individual holdings than a diversified fund. 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
SPRIM is a diversified, continuously offered closed-end management investment company operated as a tender- offer fund.
SPRING is a non-diversified, continuously offered closed-end management investment company operated as a tender-offer fund.
STRUCTURE is a non-diversified, continuously offered closed-end management investment company that is operated as an interval fund
CRDEX is a non-diversified, continuously offered closed-end management investment company that is operated as an interval fund
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, the 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 requirement s. 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.
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, carried interests, performance/incentive fees or allocations, and other expenses incurred by the Fund as an investor in the Portfolio Funds. As of the most recent prospectuses, the total annual fund operating expenses for the Class I, Class D, and Class S shares of SPRIM were 2.43%, 2.68% and 3.28%, respectively. The total annual fund operating expenses for the Class I, Class D, and Class S shares of SPRING were 4.45%, 4.63% and 5.23%, respectively. The total annual fund operating expenses for the Class I, Class D, and Class S shares of STRUCTURE were 3.40%, 3.65% and 4.25%, respectively. The total annual fund operating expenses for the Class I, Class D, and Class S shares of CRDEX were 3.61%, 3.87% and 4.47%, respectively.
The StepStone Funds are distributed by Distribution Services, LLC which is not affiliated with StepStone Group Private Wealth or any other entity discussed in the recording.
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 limited operating and performance history that Shareholders can use to evaluate the Fund.
