(HedgeCo.Net) StepStone Group has become one of the most closely watched public-market proxies for the future of private markets. At a time when private equity exits remain uneven, venture capital liquidity remains constrained, private credit is facing rising scrutiny, and allocators are demanding more transparency from alternative asset managers, StepStone’s latest results offered a strong counterpoint to the industry’s bear case: private markets are still growing, clients are still allocating, and the firms with scale, data, secondaries expertise and diversified access may continue to benefit from the long-term shift away from traditional public-only portfolios.
The company’s March-quarter results reinforced that message. StepStone reported that, as of March 31, 2026, it was responsible for approximately $885 billion of total capital, including $233 billion of assets under management. That AUM figure was up sharply from the prior year and underscored the firm’s position as one of the most important advisory and investment platforms in global private markets.
For investors, the headline was not simply that StepStone grew. It was that StepStone grew during a period when parts of the private markets ecosystem are being tested. Private equity distributions remain below the boom-period levels allocators became accustomed to. Venture capital remains marked by a backlog of late-stage companies waiting for liquidity. Private credit is under sharper examination as retail-oriented funds confront redemption pressure and questions over liquidity labels. And public shareholders are increasingly asking whether private-markets managers can keep producing fee growth when fundraising cycles become more selective.
StepStone’s answer is that the private markets growth story remains intact, but the winners will be different. Scale, specialization, data, manager access and secondary-market execution are becoming more valuable as investors navigate a more complicated environment. The industry is no longer being lifted by a simple zero-rate tide. Capital is becoming more discerning. Allocators are demanding evidence. And platforms that can help clients build, monitor and rebalance portfolios across private equity, private debt, infrastructure, real estate and venture may become more important, not less.
That is the story StepStone is trying to tell. The firm’s model differs from the traditional image of a private equity sponsor. StepStone is not primarily known as a single-strategy buyout shop that controls companies and exits them through IPOs or sales. Instead, it operates as a global private markets investment firm and advisory platform, helping large institutions and private wealth clients access funds, co-investments, secondaries and customized portfolios across asset classes. Its business sits at the intersection of allocation, analytics and execution. In a market where investors are trying to determine which managers deserve capital, which private assets are fairly valued and where liquidity can be found, that positioning is increasingly relevant.
StepStone’s latest results also came amid scrutiny of one of the most important accounting and valuation debates in private markets: how to treat discounted secondary purchases. The firm has been criticized by some market observers over accounting gains that can be recorded when it buys private fund interests or private-company stakes at a discount to existing marks and then books those investments at the prior holder’s valuation. StepStone has defended the practice as consistent with GAAP and standard across secondary-market transactions, while emphasizing that discounts reflect liquidity conditions rather than necessarily proving the underlying assets are overvalued.
That debate matters because secondaries are becoming one of the most important growth engines in private markets. As companies stay private longer, IPO markets remain selective and limited partners look for liquidity, the secondary market has become a critical pressure valve. Investors who need cash can sell fund interests or private holdings. Buyers with capital, data and underwriting expertise can acquire exposure at discounts. Managers like StepStone can use that environment to source assets and provide liquidity in a market where traditional exit channels are not fully functioning.
The controversy is not whether secondary discounts exist. They clearly do. The issue is what they mean. Critics argue that if an investor is willing to sell an asset below its carrying value, that may suggest the prior valuation is too high or insufficiently current. Supporters argue that discounts often reflect liquidity pressure, portfolio rebalancing, denominator effects or the seller’s need for cash rather than a fundamental impairment of the underlying asset. In other words, the price of liquidity may differ from the fair value of a long-term holding.
StepStone CEO Scott Hart pushed directly into that distinction, arguing that a discount does not automatically mean an asset is overvalued; it may simply show that liquidity has a price. According to Barron’s, Hart also said that only a small portion of the StepStone Private Venture and Growth Fund’s recent return came from initial “day-one” markups, with the larger gains tied to asset appreciation, including high-profile investments such as SpaceX.
For StepStone, this defense is strategically important. The firm’s growth story is tied not only to fundraising, but also to credibility. Private markets depend on trust in valuations, process and long-term underwriting. If investors begin to believe that reported gains are driven primarily by accounting mechanics rather than genuine portfolio performance, the entire story becomes vulnerable. StepStone’s task is to show that its returns are not merely a function of buying discounted assets and marking them up, but of identifying high-quality private companies and funds where sellers are offering liquidity at attractive terms.
That distinction is central to the broader private markets debate in 2026.
The industry is in a transition period. During the long era of low rates, private markets benefited from abundant liquidity, rising valuations, strong fundraising and a relatively forgiving exit environment. Investors were willing to accept illiquidity in exchange for higher expected returns and smoother reported volatility. But the post-2022 environment has been more difficult. Higher rates increased discount rates and financing costs. IPO markets slowed. M&A became more selective. Private equity firms held assets longer. Venture capital portfolios faced markdown pressure. And allocators became more focused on distributions, liquidity and transparency.
In that environment, secondaries have become more than an opportunistic niche. They are now a structural part of portfolio management. Limited partners use secondaries to manage liquidity, rebalance overallocated private markets portfolios, reduce exposure to older vintages or raise cash for new commitments. General partners use continuation vehicles and GP-led transactions to hold prized assets longer while offering liquidity to existing investors. Private wealth vehicles use secondaries to create more diversified exposure and shorter J-curves. For firms with scale and data, the opportunity set can be significant.
StepStone has leaned into that opportunity. The firm has emphasized that private markets remain attractive because companies are staying private longer, investors still need access to growth and institutions continue to seek differentiated return streams. It has also argued that secondary-market returns are driven by both discounts and asset quality, with asset appreciation playing a central role over time. In a StepStone market commentary focused on venture secondaries, the firm argued that investors should not focus solely on discounts, because quality and future appreciation remain crucial drivers of results.
That is an important point for allocators. A cheap asset is not automatically a good asset. A secondary purchase can be attractive only if the buyer understands what is being acquired, why the seller is selling, whether the valuation is credible and whether the underlying companies or funds can appreciate over time. In venture secondaries especially, the dispersion between winners and losers can be extreme. Buying at a discount into weak companies may still produce poor outcomes. Buying at a discount into durable, high-growth companies may produce strong returns.
This is where StepStone’s platform argues it has an advantage. The firm’s pitch rests on global reach, data, manager relationships and private-market underwriting experience. In a market with limited transparency, access to information can be a meaningful edge. StepStone evaluates thousands of managers and private companies, advises institutional portfolios and participates across fund investments, secondaries and co-investments. That breadth can create insight into pricing, quality, liquidity needs and portfolio construction.
The public market appears to be paying attention. Barron’s reported that StepStone shares rose after its strong March-quarter results, with investors responding positively to earnings, fundraising and the company’s defense of its accounting practices. The same report noted that fee-related earnings increased and adjusted earnings per share topped analyst expectations.
Still, the growth story is not without complications. StepStone reported a GAAP net loss tied to potential payouts to its fund management team, even as adjusted metrics showed stronger operating performance. That tension reflects a broader challenge across alternative asset managers: public investors must evaluate both economic performance and complex compensation, incentive and accounting structures. For platforms built around private-markets talent, long-term economics can be attractive, but shareholder analysis requires careful attention to fee-related earnings, carried interest, incentive allocation, compensation obligations and distributable earnings.
This complexity can create confusion. Private-markets firms often report a range of metrics that differ from traditional corporate income statements. Fee-related earnings may show the recurring profitability of management fees. Performance revenues may depend on realized gains and fund performance. GAAP earnings may be affected by mark-to-market changes, incentive liabilities and compensation structures. Investors must decide which metrics best capture the durability of the business.
For StepStone, the most important long-term metric may be capital responsibility. With $885 billion of total capital responsibility and $233 billion of AUM, the firm is operating at a scale that gives it relevance across the private markets ecosystem. That scale matters because private markets are increasingly becoming a platform business. Allocators want fewer, deeper relationships with firms that can deliver access across strategies, geographies and vehicles. Managers with data and broad coverage can help clients navigate not only investment selection, but also portfolio pacing, liquidity management and risk analysis.
This is one reason StepStone’s story resonates beyond its own stock. It reflects a larger shift in alternative investments. The old model of private markets was dominated by institutional commitments to blind-pool funds with long lockups. That model still exists, but it is being supplemented by secondaries, co-investments, evergreen funds, interval funds, semi-liquid vehicles and private wealth platforms. Investors want more flexibility, more customization and more transparency. StepStone’s model is built around that demand.
The private wealth opportunity is particularly important. StepStone’s website highlights its global footprint and scale, and its shareholder materials have emphasized the firm’s responsibility across both AUM and advisory capital. As wealth platforms continue to allocate more capital to private markets, firms that can package institutional-quality access for advisors and high-net-worth clients may benefit. But wealth-channel growth also raises the bar for education, liquidity management and valuation transparency. The same issues now affecting private credit—how to describe liquidity, how to value assets, how to manage redemptions—can apply more broadly across private-market products.
StepStone’s secondaries expertise could be especially valuable in this context. Private wealth investors typically prefer diversified access and shorter time to invested exposure. Secondary strategies can help reduce blind-pool risk and J-curve effects because buyers acquire interests in existing portfolios with known assets and more mature holdings. That can make secondaries attractive inside private wealth allocations. But the accounting and valuation debate around discounted purchases also becomes more sensitive when the investor base broadens beyond large institutions.
That is why StepStone’s defense of its practices matters so much. The company is not merely answering analysts. It is defending a core pillar of the private markets growth model: the idea that secondaries provide real liquidity, real access and real opportunity in a market where traditional exit pathways remain constrained.
The venture component is especially high-profile. Venture capital has been under pressure because many late-stage companies raised capital at peak-era valuations, then faced a slower IPO market and tougher fundraising conditions. Limited partners have been waiting longer for distributions. Some investors have sought liquidity through secondary sales. Buyers like StepStone can step in, but they must be highly selective. The best venture-backed companies may still command strong valuations, while weaker companies may face significant discounts for good reason.
SpaceX has become a major reference point in this debate because it represents the kind of private company that remains highly valuable while staying private. Exposure to such companies can be attractive for investors who cannot access them through public markets. But it also raises concentration and valuation questions. If a private-market fund’s performance is boosted by a small number of high-profile private holdings, investors must ask how repeatable that performance is and whether the platform can continue finding similar opportunities.
Hart’s argument, according to Barron’s, is that StepStone’s appeal is broader than any single high-profile company. That is a necessary message. A sustainable private markets platform cannot rely on one trophy asset. It must show that it can source opportunities across cycles, vintages and sectors.
The broader market context may help StepStone’s case. Private companies continue to stay private longer. The universe of venture-backed and growth companies is larger and more mature than it was a decade ago. Secondary liquidity is becoming essential rather than optional. Institutional investors still need distributions, but they also need exposure to innovation that increasingly remains outside public markets. These dynamics create structural demand for managers that can intermediate private-market liquidity.
At the same time, critics will continue to scrutinize the industry. The more private markets grow, the more public investors, regulators and allocators will demand transparency. Valuation practices will be questioned. Fee structures will be examined. Retail access will be debated. Accounting rules may face pressure. Large managers will be compared not only on AUM growth, but on realized performance, distribution consistency and quality of earnings.
StepStone is therefore operating in a market that is both attractive and more demanding. Its latest results show strength, but also place the firm squarely in the middle of the industry’s most important debates. Can private markets continue growing when exits are slow? Can secondaries provide liquidity without undermining confidence in marks? Can venture exposure be delivered responsibly through new vehicles? Can private wealth channels absorb more alternative assets without creating mismatches around liquidity and expectations? Can publicly traded private-markets platforms explain their economics clearly enough for shareholders?
These are not small questions. They define the next phase of alternative investments.
For HedgeCo.Net readers, StepStone’s story should be understood as a signal. While much of the market commentary has focused on private credit stress, redemption pressure and semi-liquid fund concerns, StepStone’s results show that allocator demand for private markets has not disappeared. It is changing. Investors are not abandoning the asset class; they are becoming more selective about how they access it, which managers they trust and what liquidity tools they need.
That selectivity favors platforms with depth. StepStone’s model is designed for a world where investors need help navigating complexity. The firm’s growth suggests that many clients are still willing to allocate to private markets, especially when they can do so through diversified, data-rich, solutions-oriented platforms.
But the accounting debate also shows that trust will be the industry’s central currency. Private markets are opaque by nature. Investors accept that opacity only if they believe the manager’s valuation process, reporting framework and investment judgment are sound. StepStone’s defense of its secondary-marking practices is therefore more than a technical accounting discussion. It is part of a larger fight over credibility in private markets.
The company’s defenders will argue that StepStone is being transparent, following GAAP and generating returns from asset quality rather than accounting tricks. Its critics will argue that day-one markups can flatter performance and that secondary discounts may deserve more conservative interpretation. Both sides are really debating the same issue: how private markets should translate illiquid assets into reported returns.
As private markets become more mainstream, that debate will intensify.
StepStone’s latest quarter gives the company momentum. AUM growth, fee growth and public-market investor response all support the idea that its platform remains well positioned. But the next phase will require continued proof. Investors will want to see durable fundraising, strong realized performance, disciplined valuation practices and evidence that private-market growth can continue even without the easy exits and valuation expansion of the prior cycle.
The firm’s long-term opportunity remains significant. The private markets universe continues to expand. Institutions continue to seek customized access. Wealth managers continue to broaden portfolios beyond public stocks and bonds. Secondaries continue to grow as a liquidity channel. And data-driven allocation platforms are becoming more important in a fragmented manager universe.
That is why StepStone’s defense of the private markets growth story matters. It is not just defending one quarter. It is defending the proposition that private markets remain a structural growth industry, even in a tougher cycle. The firm is arguing that liquidity pressure, valuation debate and exit delays do not undermine the asset class; they create opportunities for platforms that can price complexity, provide access and help investors manage portfolios more intelligently.
The market will decide how persuasive that argument is. For now, StepStone has delivered a strong answer: private markets are not retreating. They are evolving. And in that evolution, platforms with scale, secondary expertise and allocator trust may become more central than ever.