StepStone Group

But still, the deals are going for 2021 prices.

That would point to your chart, the bubble chart of things going down, probably go down, right? If you're not making the businesses better, and you found in this report that from 2020 to 20, sorry, 2000 to 2021, so that 20-year stretch, StepStone, I think, had some of this data with you guys, is that in nine of those 21 vintages, the largest deals had EBITDA margin declines, right? nine of 21 times the biggest deals, the companies were worse than when they were before they were acquired.

That happened a couple of times in smaller deals over that 2021 vintage.

So we've got a chart up here for people who are listening, basically shows by company size, transaction size, what's the entry multiples across small to very large funds.

Is there something you're working on in your research that you're really excited about? Is there a theme you're mining pretty hard? There's some stats that you're seeing and things you're working on that you want to preview for the audience?

I think where we want to go next is to look more into the specialization aspect of it.

And we've recently partnered with StepStone and gotten a lot of great data, quality data, right? At PitchBook, we see a lot of top-down fund metrics on a quarterly basis, whereas StepStone, obviously an LP and a lot of different funds, they see things on a deal-by-deal level basis with financials.

So we've been limited on that side, I think.

And it's all registered.

Like you said, it's literally like a I mean, the one that I saw was like the Stepstone products and then like two others where they're basically marketing like three major asset manager products now.

And I was like,

yeah, yeah.

One, life started to get massively more competitive.

You've got Blackstone entering the market and StepStone doing a really good job.

And it's just getting a lot more competitive.

But the flows were still quite strong.

And there's no notion that that won't continue to be the case.

Because a lot of the ultimate sources of capital are so big, I'm talking hundreds of billions, that they are very happy allocating both through an Adam Street, a Stepstone, a Wilshire, a Top Tier, and a Mundi, as well as allocating direct.

And I think, again, this is what we've been building our business for.

Something I wanted to come back to, you've used the Sumitomo analogy.

Besides that, I think you're going to start seeing real movement.

And I venture to guess every market we're in, has a second derivative that's improving right now, right? It's losing rent more slowly, if you want to put it that way, as our friend Liz from StepStone liked to say last week.

So I think that trend continues and you start seeing the positive momentum.

I think smaller markets are going to pop first again.

This changes everything.

Well, our next guest -- Our first guest is Hunter Somerville from StepStone Group.

He's partner there, and it's his first appearance on the show so we'll bring him in to the TV in Ultradome.

What's goin' on?

I'm the Group Head of Equity and Alternative Indices at FTSE Russell.

And today I'm joined by Mike McCabe, who's a partner at StepStone.

We're going to talk about private markets and indices.

Welcome, Mike.

Thank you for having me, Gerald.

Well, before we start going into market, why don't you take a moment to introduce us a little bit more to StepStone.

You sit at the intersection of portfolio construction, investment, advisory, as well as data and analytics.

StepStone sits at the center of a very powerful flywheel within the private markets ecosystem, globally speaking, with a total capital responsibility of just under a trillion dollars.