StepStone Group Inc.STEP
StepStone Group Inc. Commitments Disclosure
Commitments and Contingencies
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Litigation
In the ordinary course of business, and from time to time, the Company may be subject to various legal, regulatory and/or administrative proceedings. The Company accrues a liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Although there can be no assurance of the outcome of such proceedings, based on information known by management, the Company does not expect a potential liability related to any current legal proceedings or claims that would individually or in the aggregate materially affect its consolidated financial statements as of March 31, 2026.
Lease Commitments
The Company leases offices in 31 cities in North America, South America, Europe, Middle East, Asia and Australia, and certain equipment subject to operating lease agreements expiring through 2039, some of which may include options to extend or terminate the lease. As of March 31, 2026, there were no finance leases outstanding.
In May 2025, the Company executed an agreement to lease an additional floor for its New York office. The Company expects to gain access to the office space during the fiscal year ending March 31, 2027. At that time, the Company will establish a ROU asset and lease liability for the new lease. Upon lease commencement, total future lease payments are expected to be approximately $59 million over approximately 15 years.
The components of lease expense included in general, administrative and other expenses in the consolidated statements of income (loss) were as follows:
| Year Ended March 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
Operating lease cost(1) | $ | 16,881 | $ | 16,190 | $ | 15,578 | |||||||||||
| Variable lease cost | 1,439 | 1,269 | 459 | ||||||||||||||
| Sublease income | (1,852) | (1,842) | (1,851) | ||||||||||||||
| Total lease cost | $ | 16,468 | $ | 15,617 | $ | 14,186 | |||||||||||
(1)Operating lease cost includes an immaterial amount of short-term leases.
Supplemental cash flow information related to leases was as follows:
| Year Ended March 31, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows used for operating leases | $ | 17,334 | $ | 15,577 | $ | 12,650 | |||||||||||
| Weighted-average remaining lease term for operating leases (in years) | 10.5 | 10.7 | 11.4 | ||||||||||||||
| Weighted-average discount rate for operating leases | 4.7 | % | 4.7 | % | 4.7 | % | |||||||||||
As of March 31, 2026, maturities of operating lease liabilities were as follows:
| FY2027 | $ | 16,001 | |||
| FY2028 | 13,832 | ||||
| FY2029 | 15,880 | ||||
| FY2030 | 16,179 | ||||
| FY2031 | 16,229 | ||||
| Thereafter | 56,610 | ||||
| Total lease liabilities | 134,731 | ||||
| Less: Imputed interest | (31,131) | ||||
| Total operating lease liabilities | $ | 103,600 | |||
Unfunded Capital Commitments
As of March 31, 2026 and 2025, the Company, generally in its capacity as general partner or managing member of the StepStone Funds, had unfunded commitments totaling $110.0 million and $125.0 million, respectively. The $110.0 million and $125.0 million of unfunded commitments as of March 31, 2026 and 2025, respectively, exclude $28.3 million and $47.8 million, respectively, related to commitments held by general partner entities for certain funds in which the Company does not hold any direct economic interests, including the legacy Greenspring funds. As of March 31, 2026 and 2025, the Consolidated Funds had unfunded capital commitments to funds of $2,401.1 million and $0 million, respectively.
Carried Interest Allocations
Carried interest allocations are subject to reversal in the event of future losses, to the extent of the cumulative revenues recognized by the Company in income to date. Additionally, if the Company has received net profits over the life of the fund in excess of its allocable share under the applicable partnership agreement, the Company may be obligated to repay previously distributed carried interest that exceeds the amounts to which the Company is ultimately entitled. In these situations, a liability is accrued for the potential clawback obligation if amounts previously distributed to the Company would require repayment to a fund if such fund were to be liquidated based on the current fair value of their underlying investments as of the reporting date. Actual repayment obligations generally do not become realized until the end of a fund’s life. As of March 31, 2026 and 2025, no material amounts for potential clawback obligations had been accrued. This contingent obligation is normally reduced by income taxes that the Company has paid related to the carried interest allocations. As of March 31, 2026, the maximum amount of carried interest allocations (excluding legacy Greenspring carried interest allocations) attributable to the Company subject to contingent repayment was an estimated $438.7 million, net of tax, assuming the fair value of all investments was zero, a possibility that the Company views as remote.
Indemnification Arrangements
In the normal course of business and consistent with standard business practices, the Company has provided general indemnifications to its limited partners, officers and directors when they act in good faith in the performance of their duties for the Company. The terms of these indemnities vary from contract to contract. The Company’s maximum exposure under these arrangements cannot be determined as these indemnities relate to future claims that may be made against the Company or related parties, but which have not yet occurred. No liability related to these indemnities has been recorded in the consolidated balance sheets as of March 31, 2026 and 2025. Based on past experience, management believes that the risk of loss related to these indemnities is remote.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 27, 2026 | Showing above |
| 2025 | May 23, 2025 | |
| 2024 | May 24, 2024 | |
| 2023 | May 26, 2023 | |
| 2022 | May 31, 2022 | |
| 2021 | Jun 23, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.