StepStone hits $450m hard-cap for secondary fund

The firm exceeded its $350m target, raising a total of $650m for secondaries including separately managed accounts.

StepStone Group has raised $450 million for its StepStone Secondary Opportunities Fund II.

The firm had targeted $350 million for the fund, which closed on its hard-cap. Including capital raised for separately managed accounts, StepStone has collected roughly $650 million for secondaries.

The firm will continue to focus on smaller opportunities in the secondaries market “where StepStone believes it can capture market inefficacies to drive returns”, the firm said in a statement. StepStone’s secondaries strategy involves “building a more concentrated portfolio of high quality assets, purchased at attractive prices”, co-manager of Fund II Tom Bradley said in the statement.

StepStone was unavailable for comment at press time.

Limited partners in Fund II include public pension funds such as the Los Angeles Fire and Police Pension System, corporate pensions, insurance companies, endowments, foundations, family offices and financial service and advisory firms.

StepStone emerged as a significant new entrant in the secondaries market in 2009. The group’s first secondaries fund collected $595 million, including separately managed accounts, and purchased 33 fund interests with an average size of $22 million and an average discount of 35 percent.

StepStone ramped up its secondaries business in 2010 by acquiring secondaries group SilverBrook Private Equity and with it three veterans of the secondaries market: former Pomona executives Mark Maruszewski and Thomas Bradley and Michael McCabe, former vice president at Hamilton Lane.