StepStone Stock Falls After Hunterbrook Short Report Flags $2.3 Billion Liability

Stepstone Group Inc (NASDAQ: STEP ) shares are trading lower Thursday morning after Hunterbrook Media published a short report raising concerns about the asset manager’s balance sheet, private-market valuations and a looming buyout tied to its fast-growing retail arm.

Hunterbrook Media disclosed that Hunterbrook Capital is short STEP and long a basket of comparable securities.

StepStone did not immediately respond to request for comment.

Here’s what investors need to know.

StepStone Group stock is feeling bearish pressure.

What’s pressuring STEP stock? Hunterbrook Flags StepStone Private Wealth Liability The short report targets StepStone Private Wealth (SPW), the firm’s retail private-markets platform.

According to the full-length report published on Hunterbrook’s recently acquired sister publication, The Bear Cave, StepStone originally granted CH Equity Partners an option to buy back the business when it was still nascent.

As SPW turned into a major growth engine, StepStone renegotiated the deal in 2022, creating the mandatory buyout structure now drawing scrutiny.

Hunterbrook notes that SPW’s assets under management surged from $3 billion in 2024 to roughly $18 billion today.

Since April 1, CH Equity Partners, an entity controlled by SPW executives, has held the right to force a buyout of profit interests tied to the retail arm.

Hunterbrook estimates this liability at $2.3 billion, contrasted against just $213 million in corporate cash.

Why It Matters for STEP Investors Hunterbrook argues StepStone may be forced to dilute shareholders by issuing stock or raising debt to fund the obligation.

The report also questions opaque private-market valuations and fees tied to unrealized gains.

StepStone pushed back, telling Hunterbrook its valuation analysis is "fundamentally flawed." The company stated the deal is structured at a discount to STEP’s current multiple and noted that valuations are strictly reviewed by auditors, an independent board, and a third-party agent.

STEP Stock Edges Lower Thursday Morning STEP Price Action: StepStone Group shares were down 1.45% at $40.07 at the time of publication on Thursday.

The stock is trading near its 52-week low of $38.85, according to Pro data.

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