StepStone Group—a global private markets investment firm focused on providing customized investment solutions, advisory, and data services—announced that it has raised $3.3 billion for StepStone VC Secondaries Fund VI, L.P. (VSF VI), the firm’s sixth secondary fund focused on opportunities in the venture capital asset class.
The oversubscribed fund had strong participation from existing investors, as well as select new limited partners. This represents the largest fund exclusively pursuing venture capital secondaries raised to date.
StepStone Group launched the inaugural venture capital secondaries fund in 2014 when the venture capital market was an order of magnitude smaller. With strong performance over the last decade, coupled with limited liquidity in recent years, has driven significant growth.
The assets under management in venture capital have expanded from about $600 billion in 2014 to around $3.3 trillion at the end of 2023, with about half of that value concentrated in older funds (2010 – 2018 vintages). The AUM held by venture funds, at times labeled a small market, now represents 64% of the assets held by traditional private equity funds and has grown by 123% since 2014.
Keeping with the firm’s longstanding strategy, VSF VI seeks to provide liquidity to founders and early investors in mature venture-backed companies, purchase interests in venture capital funds from limited partners, and assist fund managers with structured solutions such as portfolio strip sales, tenders, and continuation funds. And StepStone’s venture capital platform spans fund and direct investments on both a primary and secondary basis, helping the firm capitalize on the flywheel effects of an integrated approach.
KEY QUOTES:
“The traditional view is that venture capital is a cradle to grave industry where the only exit opportunities come from a full acquisition or IPO. With exit timelines extending by several years and trillions of dollars locked up in illiquid private companies, that mindset is starting to change. Shareholders of venture-backed companies, limited partners, and fund managers are increasingly turning to the secondary market as a tool for interim liquidity. We are in a privileged position to help each of these parties achieve their goals through the solutions we offer.”
- John Avirett, Partner at StepStone
“StepStone has grown to become one of the largest allocators to venture funds globally. With deep relationships, vast data on venture-backed companies, and a 75-person investment team dedicated to venture capital and growth equity, we believe we are well positioned to effectively diligence, price, and structure a broad range of secondary opportunities. We are humbled by the support of new and existing investors in the fund. We look forward to executing on our mission of seeking strong returns by financing innovation.”
- Hunter Somerville, Partner at StepStone
