StepStone Group

“If you look at this step stone data, you know, it actually shows that, you know, basically what differentiates those top tier funds and by top tier, what I mean is that the top five percent decile funds. They're earning about a four and a half X, you know, cas…”

“In terms of size probably vent cap. They, they've been around a long time. There's one called vintage investment partners out of Tel Aviv and, or from forgetting the large us one step stone is a large, has a large fund of funds. Sapphire Ventures has a sizable…”

“They are one of the largest fund investors globally and have more than six hundred billion in capital responsibility and over a hundred billion dollars in AUM.”

“The venture team is, is over a hundred people.”

“So in order to fully answer that, you know, we have to factor in what we do on the discretionary side of our business, and then also what we do in separate account and advisory work. And that number of venture growth managers is over 200 at this point.”

“If you're waiting around and just judging what people have done on a realized basis or in DPI, you're not going to have a good sense for the momentum in those managers, and you'll probably wait too long to eventually pick A really interesting up and coming gro…”

“And on top of that, because we do direct investing, we're oftentimes board observers within companies, and we actually see the managers in action. So you see who comes to board meetings and who has nothing to say or isn't adding value or doesn't even show up t…”

“We have done investing in China going back to the beginning, although that's tapered off more recently.”

“Smallest fund would probably be around forty-ish million in terms of size.”

“Within the rest of our book, you know, we are very biased towards early stage. So seed in series A has been our approach and where we're the most comfortable.”

“Where we see that spin out activity that I just referred to, where people leave and decide to do something new, and if you then see, like, the interesting younger cohort of the firm leaving, you recognize there's probably some level of internal dysfunction or …”

“So we've been investors in India for a while, going back to pre 2010. I think the first manager we invested with back then was Nexus.”

“And I would say probably within the past three years, we're near the most optimistic we've been around that.”

“What I will say now is that we are most focused on the smaller end. So I think we've got some of the best Series A performers in our portfolio that are out there. And where we're thinking now is, you know, who makes sense to back that's more Seed early Series …”

“So Stellaris is actually probably the newest commitment in India. And I, you know, I, we literally have just done diligence work on that one.”

“We want very hands-on relationships with anyone that we work with on the GP side, and it's because we do secondary and direct investing alongside of them, because we take advisory board seats on pretty much everyone that we work with.”

“Zepto we led. Pocket we participated in. We weren't the lead on it.”

“People can say they're excited and thrilled about a company and they're doing pro rata or less than pro rata. You know, we're looking for the scenarios where they want to cross it into a growth fund or where they want to invest a really meaningful amount of ca…”

“We've been in discussions with a lot of managers in India increasingly that I think are exploring that. And they're either selling single positions to, you know, folks like us who do secondary investing, they're selling to private equity or other financial buy…”

“That's prob, that's probably a fair assumption, but I would say on the fund side because we're beginning to be more active on the direct side. So it would not be that high yet.”

“We're not gonna suddenly have 20 to 30 managers in India. That, that's not our desire, and I don't think there's 20 to 30 that we would view as worth doing at this point in time.”

“No, we do not. I think we have one between a 102 hundred million, but not sub a hundred.”

“Secondary is the biggest thing that we do at this point.”

“Specific to how we invest in, in the seed category, we define micro as sub-three hundred million, so it's a broader definition than I would say others that maybe would say that it's, you know, 50 to a 150.”

“We don't want people who are a clubby deal participant Who come in with, you know, two to three percentage ownership. We want someone that's leading seed rounds or leading series A rounds, getting 10 to 20% ownership, and is seen as that go-to partner, at leas…”

“We are actively scanning the Indian market. We added a handful last year. We'll continue to do a bunch of managers this year, but we'll be selective about it. It's not like we're going to suddenly start adding a ton of new ones and it'll be, you know, two or t…”

“We have bought LP interest purchases where people have been fatigued by those situations that I just described where they're getting into higher years and, you know, they don't want to continue to wait and they'd like to redeploy that capital where we've come …”

“We're buying LP interest generally in years seven to 10 of the life, I would say, if I had to average that out. So, you know, we're not going to buy secondary interest when it's like two to three years old. That's like almost a season primary and doesn't fit o…”

“And we always have a bias towards probably the hardest workers out there. We like people with more of a blue collar mentality. That have had to earn something in life that have dealt with difficulty.”

“There's nothing worse than a fun one or two know it all. Particularly some of the spin outs where they've left and they feel like they have nothing left to learn. And we're probably not the right partner for that. Cause we're just not going to passively sit an…”

“Right now what I'm seeing is probably more of like a festering kind of situation because it's pretty difficult to spin out and start your own firm right now. You know, people who may want to do that are just going to choose to wait because LPs aren't adding a …”

“And particularly in an environment like the one we have now, where other liquidity options are more limited. You're not seeing companies go public, you're not seeing strategic M&A as a robust of a clip, and so they need to think more creatively about getting l…”

“The denominator effect is effectively when you have both a public and a private book, the public side has gone down more significantly. The private side has come down, but not at the degree or the speed that you've seen the public side go down. And what you're…”

“I think we looked on average funds have come down around 19% on the venture side somewhere between 15 and 20, I would say, is, is what we've typically seen.”

“I think what you'll see is smaller investment sizes in the managers that they like. In the ones they really like, they'll just stay the same instead of growing. And in the ones that are on the fringe or in their, you know, respective penalty boxes, as you may …”

“Twenty-twenty-one had quarters that exceeded all of twenty-twenty-two from a liquidity standpoint”

“On LP interest, a lot of what we're seeing is in the 30 to 45% range. A lot of what we're seeing on the company secondaries is in, like, the 20 to 35% range.”

“Now, if a fund is at a three to a four X and you're asking them to take a 50% discount, they're still going back to their board with a two X return and the ability from an opportunity cost standpoint to then deploy it. Into what we all expect to be very good v…”

“I think on the fun side, just underestimating the human element with people that join on a lateral basis that have great pedigrees that you think will be additive, it's not always that way. You can have someone join and it completely messes up the chemistry of…”

“You can pick a winner in a bad category, and you can still really not do well if you're entering in at a growth phase. I think we've picked some companies that have proven to be the category leader, but if it's in an area like InsureTech, or areas of PropTech,…”

“Structure doesn't necessarily stay when a company exits. It gets negotiated out by management or the rest of the board, and so you can think that you've protected yourself with structure, and it ends up absolutely evaporating.”

“For a larger than average co-investment, we typically have More than one consultant often will have two or three, an industry expert, a banker, and sometimes a private equity sort of fund consultant, like a pathway or a step stone, and they're hugely helpful t…”