StepStone Group plans to revamp the fee structure of its flagship private equity secondaries funds, lowering costs during investment periods and raising them afterward. This move, led by Head of Strategy Michael McCabe, aims to align with market practices and ease the J-curve burden on limited partners (LPs). The shift was disclosed during StepStone’s Q4 FY2026 earnings call, signaling a strategic pivot to address post-investment performance challenges.

The adjustment reflects broader industry trends where asset managers recalibrate fees to balance investor returns and operational costs. By reducing initial fees, StepStone seeks to cushion LPs from early-stage volatility, while later hikes may compensate for long-term fund performance. This approach mirrors peers like Pryor Capital and Carlyle, which have adopted tiered fee models to navigate uncertain markets.

The changes could enhance StepStone’s competitiveness in the $100B+ secondaries market, where investors increasingly demand fee flexibility. However, the firm must balance LP expectations with profitability, particularly as delinquencies and valuations remain volatile. Market watchers will monitor how this strategy impacts deal flow and retention in a sector sensitive to cost structures.

StepStone’s fee overhaul highlights a growing trend among secondaries funds to innovate pricing models amid stagnant returns. For investors, this shift underscores the need for transparency in aligning fee structures with performance outcomes. As McCabe noted, the goal is to “create a fairer partnership,” but execution will hinge on market resilience and liquidity conditions.