StepStone holds USD 690m final close for STGF III

Harriet Matthews
11 November 2021

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StepStone Group has held a final close for StepStone Tactical Growth Fund III (STGF III), its third fund focused on fund, secondary and co-investments, with more than USD 690m in commitments.

Fried Frank Harris Shriver & Jacobson provided legal advice on the fund.

The firm registered its second Tactical Growth Fund in 2017, according to a regulatory filing, and held a final close in 2019.

The news comes shortly after StepStone announced the initiation of its leadership transition, as reported. The transition will see co-founder and co-CEO Monte Brem take up the role of executive chair, while Scott Hart will become sole CEO.

StepStone acquired venture capital and growth equity firm Greenspring Associates in September 2021, bringing its growth equity and venture-focused investment team to more than 70 staff. The firm has 730 staff across its 21 offices.

The New York-listed firm makes a range of private markets investments across private equity, private debt, real estate and infrastructure.

StepStone registered its fifth Secondary Opportunities fund in September 2021, as reported. The fund's predecessor, StepStone Secondary Opportunities Fund IV (SSOF IV), held a final close in April 2020 on USD 2.1bn, exceeding its USD 1.25bn target. The secondaries strategy focused on parts of the market that the firm considers to be inefficient, targeting small high-quality deals as well as selected larger opportunities.

Investors
StepStone's investors include public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, family offices and private wealth clients, such as high-net-worth individuals.

LPs in the firm's previous secondaries-focused funds include US pension funds such as Los Angeles City Employees Retirement System, as well as Cathay Life Insurance and the George Kaiser Family Foundation, as previously reported.

Investments
STGF III will make fund, secondary and co-investments, focusing on building a portfolio with exposure to high-growth technology and the healthcare sector, including venture capital and growth equity-backed companies. According to its website, the firm makes co-investments on a no-fee, no-carry basis and approves less than 10% of the transactions that it is offered annually.

The combination of opportunistic fund investments, secondaries and co-investments is intended to manage potential volatility, reduce fees and provide liquidity at greater speed for LPs.

People
StepStone – Brian Borton, Andrew Callahan, John Coelho (partners).