StepStone heads to market with latest VC secondaries fund

The fundraise comes as the same time as the firm has taken the lead on a healthcare-focused single-asset continuation fund transaction.

StepStone Group is in the fundraising market with its latest venture capital secondaries flagship.

The vehicle is targeting a slightly higher amount than its predecessor, a source familiar with the raise told Secondaries Investor. StepStone VC Secondaries Fund V closed on a record-breaking $2.6 billion in May 2022, according to Secondaries Investor data. It remains the largest venture capital fund closed to date, data shows.

CEO Scott Hart confirmed the firm is raising the vehicle during its earnings call earlier this month, and added that it is working towards a first close.

Other secondaries vehicles StepStone is raising include its secondaries flagship StepStone Secondary Opportunities Fund V, which had raised approximately $1.6 billion as of June, Secondaries Investor reported, and its latest real estate fund StepStone Real Estate Partners V.

StepStone has also taken the lead on a healthcare-focused single-asset continuation fund transaction. WindRose Health Investors has set up a continuation fund for Healthmap Solutions – a US population health management company focused on kidney disease, according to a statement.

The transaction, which also saw commitments from WindRose’s $1.4 billion sixth fund as well as new and existing investors, saw total capital formation of over $500 million, a source familiar with the matter told Secondaries Investor. That total included the continuation fund. The deal also included $100 million in growth capital to support the company, according to the source and the statement.

It is unclear which StepStone funds or programmes backed the transaction.

Evercore advised on the deal.

StepStone declined to comment further on the fundraise or the continuation fund. A spokesperson for WindRose did not respond to request for comment at press time.

There was a disconnect between secondaries opportunities that came to market in the first half of the year compared with what closed over the period, StepStone’s Hart said during the firm’s earnings call.

The bid-ask spread is closing, however, as valuations begin to stabilise, “particularly across private equity and even to some extent the venture space… which will give secondary buyers like ourselves a bit more confidence to transact in this market”, he added.

Buyouts made up 76 percent of investments in the first half. Venture capital and growth receded from 12 percent of volume in the first half of last year to 7 percent across the same period this year due to valuation concerns and the performance of tech indices, according to Evercore’s first-half report.