StepStone raising largest dedicated VC secondaries fund

StepStone Group has held an interim close on the largest ever venture capital secondaries fund.

The investment manager has collected $2.13 billion for StepStone VC Secondaries Fund V from 1,252 separate investors, according to a filing with the Securities and Exchange Commission. Its target is not clear, but a source familiar with the fundraise said the fund has not yet held a final close.

Fund V is more than twice the size of the current record holder for largest blindpool fund dedicated to VC secondaries.

The new vehicle was formed this year and counts Monument Group, Raymond James Associates and RBC Wealth Management among 14 placement agents, according to the filing. The fund is registered at the address of Greenspring Associates, the Maryland-headquartered VC firm acquired by StepStone in September.

As an independent manager Greenspring’s last secondaries fund, Greenspring Secondaries Fund IV, raised $800 million from investors including Metropolitan Government of Nashville and Davidson County Employees’ Benefit Trust Fund and Wichita State University Foundation, according to Secondaries Investor data.

StepStone announced in July that it was to acquire Greenspring for $185 million in cash and $540 million in equity. Greenspring executives are also in the running for an earnout of $75 million, payable in 2025, Secondaries Investor reported.

Last week, StepStone closed its third tactical opportunities fund on $690 million. The fund targets high-growth technology and healthcare assets on a primary, secondary and co-investment basis.

Up to now, the largest blindpool fund dedicated to VC secondaries was the $850-million Industry Ventures Secondary Fund IX, which held final close in April, according to Secondaries Investor data.

NewView Capital raised $1.35 billion for its Fund I. The vehicle was seeded by a portfolio of direct secondaries positions acquired from New Enterprise Associates by Goldman Sachs Asset Management, Hamilton Lane and other investors.

There was $46 billion of secondaries transaction volume in the first half of this year, with venture capital and growth accounting for 23 percent, or $10.6 billion, according to investment bank Greenhill’s mid-year report. This compares with 19 percent, or $11.4 billion, for the whole of 2020.

The rapid growth of VC-backed companies has pushed many institutional LPs close to their allocation limits, encouraging them to sell down portfolios at the top of the market, Secondaries Investor noted in mid-October.

StepStone did not wish to comment on fundraising.