Bob Long, CEO of StepStone Private Wealth dives into the rise of evergreen funds within the private markets. These funds, which are designed to offer long-term investment opportunities have become increasingly popular due to their flexibility and potential to provide consistent, predicable returns.
As of December 31, 2024 STRUCTURE Class I Shares returned 26.38% total return since the Fund’s inception on September 11, 2023. 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 shown is net of fees. For the most recent month end performance please call 704.215.4300 or visit stepstonepw.com.
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 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.
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. Secondary investment acquisition negotiations may rely on incomplete or imperfect information, resulting in the risk that the Fund may pay a higher price that it would have otherwise given more comprehensive facts which could negatively impact performance. When the Fund acquires a secondary investment fund, it is typically not empowered to make modifications or amendments to the constituent documents and does not usually have the authority to negotiate the underlying economic terms of the interests it is acquiring.
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 and STRUCTURE 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.
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) and StepStone Private Infrastructure Fund (STRUCTURE) 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.
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 operated as an interval fund.
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.
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.
StepStone Group investment examples are provided for illustrative purposes only and not intended as a recommendation to buy or sell any securities. Individual fund holdings and allocations are subject to change. There is no guarantee any fund would find similar opportunities in the future.
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 requirements. In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5% of its 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. The Fund expects to make its first repurchase offer in December 2023.
Basis Points (bps): One hundredth of a percent (0.01%). Used to measure changes in or differences between yields or interest rates.
Internal Rate of Return (IRR): a metric used in financial analysis to estimate the profitability of potential investments.
J-Curve: A J-Curve refers to the typical pattern of return of closed-end private markets funds over their lifecycle. In the early years of a fund’s life, the internal rate of return (“IRR”) of a fund is typically negative due to the relatively small amount of invested capital as compared to the management fees that have been paid. The return, if graphed over time, resembles a “J,” as negative early performance turns increasingly positive over time as underlying investments within the portfolio begin to appreciate and generate a return.
The StepStone Funds are distributed by Distribution Services, LLC which is not affiliated with StepStone Group 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.
