Stepstone Closes Record $3.3B VC Secondaries Fund

StepStone Group, a global private markets investment firm, has raised $3.3 billion for its sixth vehicle focused on venture capital secondaries opportunities.

The oversubscribed fund, StepStone VC Secondaries Fund VI, secured support from existing investors as well as new limited partners and is the largest fund ever pursuing venture capital secondaries raised to date, according to the firm. The fund had “strong participation” from existing investors as well as select new limited partners.

NY-based StepStone Group said strong performance over the last decade, coupled with limited liquidity in recent years, had driven significant growth – in addition to the VC market itself becoming an order of magnitude larger.

Assets under management in venture capital have expanded from approximately $600 billion in 2014 to around $3.3 trillion at the end of 2023, StepStone said, with about half of that value concentrated in older funds with vintages between 2010 and 2018.

The assets under management held by venture funds, which at times has been labeled a “small market”, now represents 64% of the assets held by traditional private equity funds – and has grown by 123% since 2014, Stepstone added.

“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,” said John Avirett, Partner at StepStone. “With exit timelines extending by several years and trillions of dollars locked up in illiquid private companies, that mindset is starting to change.

The fund 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.

As of March 31, 2024, StepStone was responsible for approximately $678 billion of total capital, including $157 billion of assets under management.