Fidelity Funds Are in Talks to Buy Minority StepStone Stake
Fidelity Funds Are in Talks to Buy Minority Stake in StepStone
(Bloomberg) -- Funds managed by Fidelity Investments are in talks to buy a minority stake in investment advisory firm StepStone Group, according to people with knowledge of the matter.
A deal, which would precede a potential initial public offering of StepStone as soon as 2020, is not certain, said the people, who requested anonymity because the talks are private. Representatives for Fidelity and StepStone declined to comment.
New York-based StepStone, led by Chief Executive Officer Monte Brem, oversees more than $260 billion in asset allocations on behalf of clients including domestic and offshore pension funds, and has more than $52 billion in assets under management, according to its website.
It’s not unusual for asset managers to accept institutional investments before an IPO. In 2003, Hamilton Lane Inc. sold an ownership position to Cascade Investment, the personal investment arm of Bill Gates. In 2015, Hamilton Lane repurchased that stake and went public two years later. Its stock has more than tripled to more than $54 a share from its $16 debut.
In a similar deal, Apollo Global Management LLC sold a stake to California Public Employees’ Retirement System and the Abu Dhabi Investment Authority in 2007, before going public in 2011.
StepStone tailors portfolios for clients and often combines fund commitments with co-investments, in which pensions and sovereign wealth funds directly invest in deals alongside the funds they back, enabling them to reduce overall fees.
To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Annie Massa in New York at amassa12@bloomberg.net
To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Vincent Bielski, Josh Friedman
©2019 Bloomberg L.P.