StepStone combines fund, direct and secondary investing in venture and growth

Hunter Somerville, a co-head of StepStone Group’s venture and growth-equity group, says the platform combines fund investments, direct investments in companies and secondary transactions. Somerville previously was a partner at Greenspring Associates, which StepStone acquired about five and a half years ago. StepStone is a publicly traded company with teams across multiple asset classes.

The group backs early-stage venture managers investing at seed and Series A, then may invest directly in their portfolio companies in Series B, C or D rounds through primary or secondary purchases. Somerville says the strategy uses those ecosystem relationships to identify companies where StepStone wants to build concentrated positions.

StepStone works with more than 300 venture and growth managers, and companies under consideration may already have three, four or five of those managers in their syndicate. Somerville says the business is approximately split 50/50 between direct and fund investing. Its secondary activity provides liquidity to company-cap-table holders and to institutions selling LP interests in funds.