As filed with the Securities and Exchange Commission on July 11, 2023
Securities Act File No. 333-268986
Investment Company Act File No. 811-23848
 
 
 
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM N-2
(CHECK APPROPRIATE BOX OR BOXES)
☒ REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
☒    Pre‑Effective Amendment No. 4
☒ REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
☒    Amendment No. 4
StepStone Private Infrastructure Fund
(Exact name of Registrant as specified in Charter)
 
 
128 S Tryon St., Suite 1600
Charlotte, NC 28202
 
 
Registrant’s Telephone Number, including Area Code: (704) 215-4300
Robert W. Long
Chief Executive Officer
StepStone Group Private Wealth LLC
128 S Tryon St., Suite 880
Charlotte, NC 28202
(Name and address of agent for service)
 
 
COPY TO:
Richard Horowitz, Esq.
Dechert LLP
1095 Avenue of the Americas
New York, NY 10036
 
 
Approximate date of commencement of proposed public offering:
As soon as practicable after the effective date of this Registration Statement
 
 
 
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If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, check the following box ☐
If any securities being registered on this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (the “Securities Act”), other than securities offered in connection with dividend or interest reinvestment plans, check the following box ☒
If this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto, check the following box ☐
If this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box ☐
It is proposed that this filing will become effective (check appropriate box):
☐
when declared effective pursuant to Section 8(c), or as follows:
 
 
 
If appropriate, check the following box:
 
☐
This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
 
☐
This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:             .
 
☐
This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:             .
 
☐
This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is:             .
Check each box that appropriately characterizes the Registrant:
 
☒
Registered Closed‑End Fund (closed‑end company that is registered under the Investment Company Act of 1940 (the “Investment Company Act”)).
 
☐
Business Development Company (closed‑end company that intends or has elected to be regulated as a business development company under the Investment Company Act).
 
☒
Interval Fund (Registered Closed‑End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c‑3 under the Investment Company Act).
 
☐
A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).
 
☐
Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).
 
☐
Emerging Growth Company (as defined by Rule 12b‑2 under the Securities and Exchange Act of 1934).
 
☐
If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
 
☒
New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).
 
 
 
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until such Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.
 
 
 
 
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Preliminary Prospectus
Dated July 11, 2023
Subject to Completion
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer is not permitted.
STEPSTONE PRIVATE INFRASTRUCTURE FUND PROSPECTUS
 
LOGO
[ ], 2023
Class T Shares
Class S Shares
Class D Shares
Class I Shares
StepStone Private Infrastructure Fund (the “Fund”) is a newly formed Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended, as a non‑diversified, closed‑end management investment company that is operated as an interval fund.
Investment Objectives. The Fund’s investment objectives are to seek current income and long-term capital appreciation by offering investors access to a global investment portfolio of private infrastructure assets.
Principal Investment Strategies. The Fund’s strategy involves investing in a range of private infrastructure investments (i.e., non‑governmental infrastructure investments that are made through private transactions (as discussed below)) across multiple sponsors and investment types. The portfolio will consist of private infrastructure investments that vary across industry sectors and geographies and allocated strategically by StepStone Group Real Assets LP. The Fund intends to make investments in equity and debt interests across a variety of private infrastructure investments such as transportation and logistics, renewables and energy, communications/digital infrastructure, utilities, social infrastructure, natural capital and other real assets that provide necessary services to society. These private infrastructure investments will be made through private transactions that are exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) and will not be made in governmental entities; collectively, these private infrastructure investments are referred to as “Infrastructure Assets.” Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowing for investment purposes, in Infrastructure Assets. For purposes of this 80% threshold, the Fund will include (i) investments in specific Infrastructure Assets, (ii) investments in companies that invest primarily in Infrastructure Assets and (iii) investments in private investment funds that invest primarily in Infrastructure Assets.
In making an investment decision, an investor must rely upon his, her or its own examination of the Fund and the terms of the offering, including the merits and risks involved, of acquiring shares of the Fund (“Shares”) as described in this prospectus (“Prospectus”). The Shares have not been approved or disapproved by the Securities and Exchange Commission or any other U.S. federal or state governmental agency or regulatory authority or any national securities exchange. No agency, authority or exchange has passed upon the accuracy or adequacy of this Prospectus or the merits of an investment in the Shares. Any representation to the contrary is a criminal offense.
Per Class T
Share
Per Class S
Share
 Per Class D Share Per Class I Share Total
Public Offering Price At current net asset value At current net asset value At current net asset value At current net asset value Unlimited
Sales Load(1) as a percentage of purchase amount 3.50% 3.50% None None Up to 3.5%
Proceeds to the Fund(2) Current net asset value minus sales load Current net asset value minus sales load Current net asset value Current net asset value Unlimited
 
(1)
Generally, the minimum initial investment for Class T Shares, Class S Shares, and Class D Shares in the Fund from each investor is at least $25,000, and the minimum initial investment for Class I Shares in the Fund from each investor is at least $1,000,000. The minimum initial investment may be reduced at the Adviser’s discretion, but not below $25,000 for any individual investor. Investors purchasing Class T Shares or Class S Shares (as defined herein) may be charged a sales load as described above. The table assumes the maximum sales load is charged.
(2)
Assumes the maximum sales load is charged. Shares will be offered in a continuous offering at the respective Share’s then current net asset value, as described herein. The Fund will also bear certain ongoing offering costs associated with the Fund’s continuous offering of Shares. See “Fund Expenses.”
The Fund is offering an unlimited number of Shares in four separate classes designated as Class T (“Class T Shares”), Class S (“Class S Shares”), Class D (“Class D Shares”) and Class I (“Class I Shares”) on a continuous basis at the net asset value (“NAV”) per Share plus any applicable sales loads. Shares are being offered through the distributor at an offering price equal to the Fund’s then-current NAV per Share, plus any applicable sales load. Shares are subject to restrictions on transferability, and liquidity will be provided by periodic repurchase offers for a portion of the Fund’s outstanding Shares. See “Share Repurchase Program.”
TO ALL INVESTORS
No person has been authorized to make any representations concerning the Fund that are inconsistent with those contained in this Prospectus. Prospective investors should not rely on any information not contained in this Prospectus. This Prospectus is intended solely for the use of the person to whom it has been delivered for the purpose of evaluating a possible investment by the recipient in the Shares and is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective investor receiving this document). The Shares are subject to substantial restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and applicable state securities laws, pursuant to registration or exemption from these provisions.
 
●
The Fund’s Shares will not be listed on an exchange, and no secondary market is expected to develop. Thus, an investment in the Fund may not be suitable for investors who may need the money they invest in a specified timeframe.
 
●
The amount of distributions that the Fund may pay, if any, is uncertain.
 
●
The Fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the Fund’s performance, such as borrowings.
 
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The Fund’s distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Fund for investment. Any capital returned to Shareholders through distributions will be distributed after payment of fees and expenses.
 
●
A return of capital to Shareholders is a return of a portion of their original investment in the Fund, thereby reducing the tax basis of their investment. As a result of such reduction in tax basis,
Shareholders may have taxable gains in connection with the sale of Shares, even if such Shares are sold at a loss relative to the Shareholder’s original investment.
 
●
An investor in Class T or Class S Shares will pay a sales load of up to 3.50%. If you pay the maximum sales load of 3.50%, you must experience a total return on your net investment of 3.63% in order to recover these expenses.
 
●
In the near term, leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares. See “Types of Investments and Related Risks — Investment Related Risks — Leverage Utilized by the Fund.”
The Fund is an interval fund (as defined below) pursuant to which it, subject to applicable law, will conduct quarterly repurchase offers for between 5% and 25% of the Fund’s outstanding Shares. In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5% of its outstanding Shares. It is also possible that a repurchase offer may be oversubscribed, with the result that Shareholders may only be able to have a portion of their Shares repurchased. The Fund does not currently intend to list its Shares for trading on any national securities exchange. The Shares are, therefore, not readily marketable. Even though the Fund will make quarterly repurchase offers to repurchase a portion of the Shares to provide liquidity to Shareholders, you should consider the Shares to have limited liquidity. The Fund expects to make its first repurchase offer in December 2023.
Notification of each quarterly repurchase offer is made available to Shareholders at least 21 calendar days before the “Repurchase Request Deadline” (typically March 15, June 15, September 15, or December 15); however, the Fund will provide such written notification earlier but no more than 42 calendar days before the “Repurchase Request Deadline.” The net asset value will be calculated no later than the “Repurchase Pricing Date,” which will be no later than 14 calendar days after the Repurchase Request Deadline, or the next business day if the fourteenth day is not a business day. The Fund will distribute payment to Shareholders within seven calendar days after the Repurchase Pricing Date. See “Share Repurchase Program.”
This Prospectus concisely provides the information that a prospective investor should know about the Fund before investing. You are advised to read this Prospectus carefully and to retain it for future reference. Additional information about the Fund, including a statement of additional information (“SAI”) dated [ ], has been filed with the Securities and Exchange Commission (“SEC”). The SAI and the Fund’s annual and semi-annual reports and other information filed with the SEC are available upon request and without charge by writing to the Fund at c/o StepStone Group Private Wealth LLC, 128 S Tryon St., Suite 1600, Charlotte, NC 28202, by calling (704) 215‑4300 or by visiting the Fund’s website, www.stepstonepw.com. The SAI, and other information about the Fund, is also available on the SEC’s website (http://www.sec.gov). The address of the SEC’s Internet site is provided solely for the information of prospective investors and is not intended to be an active link.
Shares are not deposits or obligations of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and Shares are not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.
You should rely only on the information contained in this Prospectus. The Fund has not authorized anyone to provide you with different information. The Fund is not making an offer of Shares in any state or other jurisdiction where the offer is not permitted.
 
 
UMB Distribution Services, LLC
TABLE OF CONTENTS
 
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SUMMARY OF PROSPECTUS
This summary highlights selected information contained elsewhere in this Prospectus and does not contain all of the information that you may want to consider when making your investment decision. To understand this offering fully, you should read the entire Prospectus carefully, including the section entitled “Types of Investments and Related Risks,” before making a decision to invest in our Shares.
StepStone Private Infrastructure Fund is a newly formed Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended, as a non‑diversified, closed‑end management investment company that is operated as an interval fund. Unless the context requires otherwise or as otherwise noted, the terms “we,” “us,” “our,” and the “Fund” refer to StepStone Private Infrastructure Fund; the terms “Adviser” or “StepStone Private Wealth” refer to StepStone Group Private Wealth LLC; the terms “Sub‑Adviser” or “StepStone” refer to StepStone Group Real Assets LP; the term “Advisers” refers to both StepStone Private Wealth and StepStone Group Real Assets LP together; the term “primary offering” refers to this offering of Class T Shares, Class S Shares, Class D Shares, and Class I Shares, when referenced together “Shares” and when all shareholders referenced together “Shareholders;” and the term “Distributor” refers to UMB Distribution Services, LLC.
 
Q:
What is the StepStone Private Infrastructure Fund?
 
A:
The Fund’s investment objectives are to seek current income and long-term capital appreciation by offering investors access to a global investment portfolio of private infrastructure assets.
The Fund’s strategy involves investing in a range of private infrastructure investments (i.e., non‑governmental infrastructure investments that are made through private transactions (as discussed below)) across multiple sponsors and investment types. The portfolio will consist of private infrastructure investments that vary across industry sectors and geographies allocated strategically by StepStone.
The Fund intends to make investments in equity and debt interests across a variety of private infrastructure investments within areas such as transportation and logistics, renewables and energy, communications/digital infrastructure, utilities, social infrastructure, natural capital and other real assets that provide necessary services to society. These private infrastructure investments will be made through private transactions that are exempt from registration under the Securities Act and will not be made in governmental entities; collectively, these private infrastructure investments are referred to as “Infrastructure Assets.” Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowing for investment purposes, in Infrastructure Assets. For purposes of this 80% threshold, the Fund will include (i) investments in specific Infrastructure Assets, (ii) investments in companies that invest primarily in Infrastructure Assets and (iii) investments in private investment funds (“Investment Funds”) that invest primarily in Infrastructure Assets. This policy is non‑fundamental and can be changed without Shareholder approval upon 60 days’ prior notice.
In select cases, the Fund may allocate a portion of its investments to other private market asset classes, including but not limited to real estate, private equity and private debt. Infrastructure Assets, along with all other forms of private assets in which the Fund may invest, are broadly referred to as “Private Market Assets.”
The Fund will primarily deploy capital into the following investment types, including combinations thereof:
 
●
Secondary Investments: Secondary purchases of existing investments in (i) individual operating companies or assets and (ii) Investment Funds sponsored by unaffiliated managers and/or strategic acquirers (“Investment Managers”) (collectively, “Secondary Purchases”). The Fund may also make investments in open-ended funds, which are Investment Funds that are often substantially invested, with evergreen or long duration structures which may not have an explicit termination date, that are typically designed to provide consistent income streams and quarterly liquidity over a long-term investment horizon (“Open-Ended Funds”). Together,
 
1
Secondary Purchases and Open-Ended Funds are referred to as “Secondary Investments” or “secondaries.”
 
●
Co‑Investments: Investments directly in an operating company, project or property generally alongside who we believe to be a high-quality Investment Manager that leads or participates in the transaction via equity or debt (“Co‑Investments”). Typically, these investments include controlling ownership in the target company, project or property, and the Investment Manager holds significant influence over the strategic vision of the investment, with potential to hold a position on the underlying investment’s board of directors.
 
●
Primary Investments: Investments in Investment Funds actively fundraising that are sponsored by who we believe to be high-quality Investment Managers (“Primary Investments” or “primaries”). The Fund expects that most of its Primary Investments will be seasoned primary investments (“Seasoned Primaries”) which are investments made after the Investment Fund has already invested a certain percentage of its capital commitments (e.g., 25%, at the time of closing) in Infrastructure Assets.
The Fund will follow an open architecture approach, which is a sourcing strategy focused on identifying investments from a variety of relationships and sources including Investment Managers, institutional investors and other industry participants.
The Advisers believe that high‑net‑worth investors have historically had limited access to Infrastructure Assets. The merits of each of the underlying investment strategies are outlined below under “Investment Program.”
We cannot assure you that we will achieve our investment objectives. See “Investment Program — Investment Objectives” and “Types of Investments and Related Risks.”
 
Q:
Who is responsible for managing the Fund?
 
A:
StepStone Group Private Wealth LLC, a wholly owned business of StepStone Group LP, serves as the Adviser of the Fund and will be responsible for the overall management of the Fund’s activities, including structuring, governance, distribution, reporting and oversight. StepStone Group Real Assets LP serves as the Sub‑Adviser of the Fund and will provide ongoing research, recommendations and portfolio management regarding the Fund’s investment portfolio.
StepStone was formed in 2014 and is the infrastructure and real assets business group of StepStone Group LP. StepStone oversees $75 billion in “private market allocations” which is composed of $27 billion in assets under management and $48 billion in assets under advisement1, including $14 billion of investments approved in 2022. Led by 11 partners with an average of 21 years of infrastructure and real assets experience and supported by a team of dedicated professionals, StepStone provides clients with an “on‑the‑ground” presence in Australia, Europe, the United Kingdom and North America with deep experience in infrastructure, energy, agriculture and natural resources. StepStone is owned 49% by StepStone Group LP (together with the Sub‑Adviser, the “Firm”) and 51% by full-time investment professionals of the StepStone team.
As an affiliate of StepStone Group LP, StepStone benefits from the organization’s scale and depth across the private markets. StepStone Group LP is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. StepStone Group LP’s clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients. As of December 31, 2022, StepStone Group LP was responsible for $602 billion of “private market allocations”
 
1 “Private market allocations” means the total amount of assets under management and assets under advisement. StepStone classifies assets under management if the StepStone has full discretion over the investment decisions in an account or has responsibility or custody of assets. Assets under advisement consists of client assets for which StepStone does not have full discretion to make investment decisions but plays a role in advising the client or monitoring their investments.
 
2
which includes $134 billion of assets under management and $468 billion of assets under advisement2. StepStone Group LP has 920 professionals across 25 cities in 15 countries.
StepStone Group Inc. is the sole managing member of StepStone Group Holdings LLC, which in turn is the general partner of StepStone Group LP. In 2020, StepStone Group Inc. listed and began trading on the Nasdaq Global Select Market under the trading symbol STEP. Please see StepStone Group Inc.’s website at www.stepstonegroup.com for more information.
See “Management of the Fund – General.”
 
Q:
What is the market opportunity that the Advisers believe exists for investors in the Fund?
 
A:
The Advisers believe investors should consider the following factors when considering an investment in the Fund:
 
●
Essential Services are Resilient to Economic Cycles: User demand patterns for Infrastructure Assets tend to be relatively stable given the essential nature of these services. Therefore, we believe they tend to exhibit a lower correlation to economic cycles. According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities.3
 
●
Inflation Hedge: Most regulated infrastructure assets, and many non‑regulated infrastructure assets, include inflation-indexed user pricing which effectively passes on the impact of inflation to the end‑user. We believe that infrastructure assets tend to perform better in inflationary environments as inflationary increases in revenue typically outpace inflationary increases in expenses, given the relatively high margins that are typical of infrastructure investments.
 
●
Diversified End‑User Base: The ultimate end‑users of infrastructure assets are generally a widely diversified group of individuals, such as local populations and communities and worldwide travelers utilizing essential services which reduces some risks associated with market and customer concentration and variability in demand.
 
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High Barriers to Entry: Infrastructure typically requires a high level of initial capital investment and have relatively long useful lives, and this acts as a significant impediment to potential competitors entering the market. We believe that these assets may enjoy monopolistic or quasi-monopolistic market positioning, and it may be economically unsound, or legally prohibited, to build a competing facility, such as an airport, toll-road or timberland farm.
 
●
Long-term Cash Flow Predictability: Regulated and heavily contracted business models often provide long-term revenue visibility to infrastructure investments.
 
●
Sustainability Tailwinds: Infrastructure assets are playing an important role in the transition to net zero emissions supporting decarbonization across numerous industries, in particular energy generation and storage, transportation and carbon sequestration through natural capital related opportunities.
 
2 “Private market allocations” means the total amount of assets under management and assets under advisement. StepStone Group LP classifies assets under management if the StepStone Group LP has full discretion over the investment decisions in an account or has responsibility or custody of assets. Assets under advisement consists of client assets for which StepStone Group LP does not have full discretion to make investment decisions but plays a role in advising the client or monitoring their investments.
3 According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities with correlation coefficients of 0.0, ‑0.1 and –0.1, respectively. Source: MSCI, Bloomberg, Burgiss, NCREIF, Cliffwater, HFRI, J.P. Morgan Asset Management, May 31, 2022.
 
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Q:
What are the Fund’s areas of differentiation?
 
A:
The Advisers believe the following attributes create an attractive opportunity for investors when considering an investment in the Fund.
 
●
Proactive Investment Sourcing: The Advisers believe that their advisory practice, separate account investment management mandates and portfolio analytics and reporting capabilities serve as differentiated advantages that will enable the Fund to capitalize on attractive investment opportunities sourced directly from Investment Managers. These advantages include:
 
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Approximately $26 billion of private infrastructure primary commitments approved across over 65 Investment Funds in the last three years, making StepStone what we believe to be one of the top global allocators of primary capital in infrastructure.
 
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Relationships with over 500 infrastructure general partners and 1,200 infrastructure funds.
 
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Ability to leverage a global network that includes offices in 25 cities in 15 countries.
 
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Large, stable senior team of professionals, each of whom offers their own extensive personal relationship network.
 
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Part of the Firm’s broad private markets business that consistently has thousands of third-party sponsor interactions each year and approved over $80 billion across asset classes in 400 plus separate transactions, including over $14 billion of infrastructure capital, in 2022 alone.
 
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Deep Knowledge and Expertise in Infrastructure: The Advisers utilize a highly disciplined, research‑focused investment approach with a fully scaled, global and dedicated infrastructure team to provide broad, educated and highly networked coverage of the infrastructure asset class. The Advisers believe that their dedicated and broad coverage of the infrastructure market differentiates StepStone from other private market managers, who typically cover infrastructure through a more generalist approach or with a smaller dedicated footprint.
 
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Dedicated investment team with over 65 professionals focused on infrastructure investments.
 
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$75 billion of assets under advisement or assets under management4.
 
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Senior team members have an average of 20 years of experience.
 
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Information Advantage: We believe the Firm’s proprietary database (“SPI”) represents one of the industry’s most comprehensive and powerful databases tracking over 16,000 general partners across 42,000 Investment Funds garnered from the over 4,700 annual Investment Manager meetings the Firm holds per year. Combined with over two decades of investment experience, StepStone believes that these tools enable it to identify historically top performing managers and promising companies, projects or properties across the infrastructure investing landscape and make better informed underwriting decisions.
StepStone has also developed a proprietary infrastructure risk index (the “StepStone Infrastructure Risk Index”), allowing it to track and compare qualitative and quantitative risk factors as a relative assessment of risk and risk-adjusted returns across every deal.
 
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Multi-Dimensional Due Diligence Approach: The Fund will leverage the differentiated attributes and advantages of the Firm’s global platform through an investment process that integrates StepStone’s analytical and investment expertise, access to proprietary information
 
4 StepStone Group LP classifies assets as assets under management if StepStone Group LP has full discretion over the investment decisions in an account or has responsibility or custody of assets. Assets under advisement consists of client assets for which StepStone Group LP does not have full discretion to make investment decisions but play a role in advising the client or monitoring their investments.
 
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and insights gained through deep relationships with Investment Managers, industry relationships and portfolio companies. The Fund will target opportunities where StepStone’s evaluation, independent due diligence and broad reference network intersect, and will use its access to a large pool of investment opportunities to make comparisons and seek‑out the most attractive opportunities, based on a relative assessment of prospective investments in the market.
 
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High-Quality Infrastructure Exposure: The Fund will seek to provide exposure that varies across sectors, geographies, vintages and asset sizes, with a focus on managing risk while considering the underlying investment and infrastructure characteristics of each opportunity when assessing relative attractiveness and associated portfolio construction benefits for the Fund.
 
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Expanded Access: StepStone believes that individual investors have historically had limited access to private infrastructure investments. Through a single investment in the Fund, investors can gain broad exposure to this part of the private markets with a comprehensive solution in a structure that solves for many of the common challenges that have historically restricted access to these types of investments.
 
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Favorable Structure: Our structure solves many of the common challenges that have historically restricted access for individual investors. We believe the Fund offers a favorable structure as compared to private markets funds, including 1099 tax reporting instead of K‑1s, a single investment instead of recurring capital calls, and potential liquidity in the form of a share repurchase program.
 
Q:
Please describe the Fund’s features that would be considered ‘investor friendly’?
 
A:
Shareholders can access Infrastructure Assets through an investment product with terms that we believe are more attractive than historically available investment vehicles providing similar exposure.
 
●
Shareholders will fund their entire investment concurrent with their subscription and avoid the complexity of capital calls. Upon investment, Shareholders immediately gain broad exposure to Infrastructure Assets. The Fund will reinvest most of the proceeds of realizations, providing investors with more consistent exposure to the private markets through economic cycles.
 
●
An investment in the Fund will not require Shareholders to file for an extension. Tax information is reported via a 1099‑DIV or 1099‑B for the current year rather than a Schedule K‑1 that is typically provided later in the year, potentially past the April 15th tax deadline.
 
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Investment minimums as low as $25,000 on initial purchases rather than the higher (in most cases, substantially higher) institutional threshold that would be required from co‑investors in each of the underlying investments.
 
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Liquidity provisions that require the Fund to repurchase Shares of the Fund at the then calculated NAV on a periodic basis pursuant to a share repurchase program, as discussed below. The Fund may purchase from 5% to 25% of its outstanding shares quarterly, and the Fund currently intends to repurchase 5% of its outstanding Shares in any quarterly repurchase offer.
 
Q:
Will the Fund invest in the same Infrastructure Assets as other Firm advised funds and clients?
 
A:
To the extent permitted by law, the Fund intends to invest alongside other Firm advised funds and clients in the same assets. The 1940 Act imposes significant limits on the ability of the Fund to co-invest with other Firm advised funds and clients. The Advisers and the Fund have obtained an exemptive order from the SEC that permits the Fund to co‑invest alongside its affiliates. However, the SEC exemptive order contains certain conditions that limit or restrict the Fund’s ability to
 
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participate in such transactions, including, without limitation, where the Firm advised funds have an existing investment in the operating company or Investment Fund.
 
Q:
What are the Fund’s plans regarding leverage?
 
A:
In the near term, leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares. The terms of the Fund’s leverage may require a minimum amount to be outstanding for a certain period. The Fund’s borrowings will always be subject to the Asset Coverage Requirement as defined below.
The 1940 Act requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time the investment company incurs the indebtedness (the “Asset Coverage Requirement”). This requirement means that the value of the investment company’s total indebtedness may not exceed one third the value of its total assets (including the indebtedness).
In general, the use of leverage may increase the volatility of an investment in the Fund. See “Types of Investments and Related Risks — Investment Related Risks — Leverage Utilized by the Fund.”
 
Q:
Who can buy Shares in the Fund?
 
A:
Shares are sold to investors who represent that they are an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. See “Purchases of Shares — Eligible Investors.”
 
Q:
For whom may an investment in our Shares be appropriate?
 
A:
An investment in Shares of the Fund may be appropriate if investors:
 
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Meet the minimum suitability standards described below under “Purchases of Shares — Eligible Investors.”
 
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Desire to obtain the potential benefit of current income and long-term capital appreciation.
 
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Can hold the Shares as a long-term investment and do not need short-term liquidity from the investment.
We cannot assure you that an investment in our Shares will allow you to realize any of these objectives.
 
Q:
What is the purchase price for each Share?
 
A:
The initial per Share offering price for Shares will be $10.00 per share. Accordingly, revisions to the share purchase price will be made daily to reflect updated valuations and other Fund activity. See “Calculation of Net Asset Value.”
 
Q:
What is the difference between Class T, Class S, Class D, and Class I Shares?
 
A:
The Fund is offering four classes of Shares to provide investors with more flexibility in making their investment and to provide broker dealers with more flexibility to facilitate investment.
 
●
Class T Shares and Class S Shares are available through brokerage and transaction-based accounts. For Class T Shares and Class S Shares, the minimum initial investment is $25,000 with additional investment minimums of $5,000. The minimum initial and additional investments may be reduced at the Adviser’s discretion. The minimum initial investment for any individual investor will not be reduced below $25,000.
 
6
●
Class D Shares are generally available for purchase in this offering only (1) through fee‑based programs, also known as wrap accounts, that provide access to Class D Shares, (2) through participating broker-dealers that have alternative fee arrangements with their clients to provide access to Class D Shares, (3) through transaction/brokerage platforms at participating broker-dealers, (4) through certain registered investment advisers, (5) through bank trust departments or any other organization or person authorized to act in a fiduciary capacity for its clients or customers or (6) other categories of investors that we name in an amendment or supplement to this prospectus. For Class D Shares, the minimum initial investment is $25,000 with additional investment minimums of $5,000. The minimum initial and additional investments may be reduced at the Adviser’s discretion. The minimum initial investment for any individual investor will not be reduced below $25,000.
 
●
Class I Shares are generally available for purchase in this offering only (1) through fee‑based programs, also known as wrap accounts, that provide access to Class I Shares, (2) by endowments, foundations, pension funds and other institutional investors, (3) through participating broker-dealers that have alternative fee arrangements with their clients to provide access to Class I Shares, (4) through certain registered investment advisers, (5) by the Advisers’ employees, officers and directors and their family members, and joint venture partners, consultants, other service providers, and other similar parties or (6) other categories of investors that we name in an amendment or supplement to this prospectus. For Class I Shares, the minimum initial investment is $1,000,000 with additional investment minimums of $100,000. The minimum initial and additional investments may be reduced at the Adviser’s discretion. The minimum initial investment for any individual investor will not be reduced below $25,000.
If you are eligible to purchase all four classes of Shares, then in most cases you should purchase Class I Shares because Class I Shares have no upfront selling commissions or shareholder servicing fees, which will reduce the NAV or distributions of the other Share classes. However, Class I Shares will not receive shareholder services. If you are eligible to purchase Class T Shares, Class S Shares, and Class D Shares but not Class I Shares, in most cases you should purchase Class D Shares because Class D Shares have no upfront selling commission, no dealer fees and lower annual shareholder servicing fees.
See “Plan of Distribution” for a discussion of the differences between our Class T Shares, Class S Shares, Class D Shares, and Class I Shares.
 
Q:
What are the fees that investors pay with respect to the Shares they purchase in the offering?
 
A:
There are two types of fees that you will incur:
 
●
First, for Class T Shares and Class S Shares, there are shareholder transaction expenses that are a one‑time upfront fee calculated as a percentage of the offering price. Class T Shares have an upfront maximum total sales load of 3.50% which is split between a maximum selling commission of 3.00% and a maximum dealer fee of 0.50%. Class S Shares have a maximum selling commission of 3.50%.
 
●
Second, for Class T Shares, Class S Shares, and Class D Shares, there are ongoing distribution and shareholder servicing fees that are calculated as a percentage of NAV. Class T Shares have maximum aggregate annual distribution and shareholder servicing fees of 0.85%. Class S Shares have annual distribution and shareholder servicing fees of 0.85%, and Class D Shares have annual shareholder servicing fees of 0.25%.
Additional details regarding the fees that investors pay with respect to purchased Shares are discussed in “Summary of Fees and Expenses.”
 
7
Q:
How does the Fund compensate the Adviser and Sub‑Adviser for the management of the underlying assets and other administrative requirements associated with the ongoing operation of the Fund?
 
A:
In consideration of the advisory and other services provided by the Adviser to the Fund, the Fund will pay the Adviser a monthly investment management fee (“Management Fee”) equal to 1.60% on an annualized basis of the Fund’s daily net assets. The Management Fee will be accrued daily and payable monthly in arrears within ten (10) business days after the end of the month. The Management Fee is an expense paid out of the Fund’s assets. For the avoidance of doubt, the Management Fee is applied to any assets in respect of Shares that will be repurchased by the Fund on such date.
The Adviser will pay 50% of the Management Fee proceeds to the Sub‑Adviser on a monthly basis. See “Management Fee.”
In addition, the Fund will also pay for certain recurring expenses, including organizational and offering costs. See “Summary of Fees and Expenses.”
 
Q:
If I buy Shares, will I receive distributions and how often?
 
A:
The Fund intends to make distributions semi-annually in amounts that represent substantially all net investment income and net capital gains earned each year. Additionally, the Fund may make a special distribution annually. All distribution policies will abide by standards required to qualify the Fund as a regulated investment company (“RIC”) under Subchapter M of the Code. The amount of distributions that the Fund may pay, if any, is uncertain. See “Distribution Policy.”
 
Q:
May I reinvest my cash distributions in additional Shares?
 
A:
Yes. We have adopted a dividend reinvestment plan whereby Shareholders may have their cash distributions automatically reinvested in additional Shares unless they elect to receive their distributions in cash. Reinvested distributions for all Shares will be in the respective class of Shares but will not be subject to sales load or other charge for reinvestment. The reinvested Shares will be subject to distribution and/or shareholder servicing fees where applicable.
The dividend reinvestment plan is discussed later in the document. See “Distribution Policy – Automatic Dividend Reinvestment Plan.”
 
Q:
How do I subscribe for Shares?
 
A:
If you meet the suitability standards and choose to purchase Shares in this offering, you should proceed as follows:
 
●
Read this entire prospectus, including the section entitled “Types of Investments and Related Risks,” and all appendices and supplements accompanying this Prospectus.
 
●
Complete and execute a copy of an investor application.
 
●
By submitting an order to purchase Shares and paying the total purchase price for the Shares subscribed for, each investor attests that he or she meets the suitability standards as stated in the prospectus and/or investor application and agrees to be bound by all its terms.
Subscriptions will be effective only upon the Fund’s acceptance, and the Fund reserves the right to reject any subscription in whole or in part. See “Plan of Distribution.”
 
Q:
When can Shares be purchased?
 
A:
This is a continuous offering of Shares without a termination date, as permitted by the federal securities laws. Shares are offered for purchase daily on any day the New York Stock Exchange (“NYSE”) is open for business at a price based upon the Fund’s then current NAV. See “Plan of Distribution.”
 
8
Q:
Is there a minimum size for this offering?
 
A:
The Fund will not hold an initial closing until at least $25,000,000 in subscriptions have been received by the Fund (which subscriptions will be held in a non‑interest‑bearing escrow account by the Fund’s escrow agent). See “Plan of Distribution.”
 
Q:
Can I invest through my IRA, SEP or after‑tax deferred account?
 
A:
Yes, you may invest via those vehicles, subject to the suitability standards and applicable law. An approved trustee must process and forward to us subscriptions made through IRAs, Keogh plans, and 401(k) plans. In the case of investments through IRAs, Keogh plans, and 401(k) plans, our transfer agent will send the confirmation and notice of our acceptance to the trustee. Please be aware that in purchasing Shares, custodians or trustees of employee pension benefit plans or IRAs may be subject to the fiduciary duties imposed by ERISA or other applicable laws and to the prohibited transaction rules prescribed by ERISA and related provisions of the Code. In addition, prior to purchasing Shares, the trustee or custodian of an employee pension benefit plan or an IRA should determine that such an investment would be permissible under the governing instruments of such plan or account and applicable law. See “Eligible Investors” and “ERISA Considerations.”
 
Q:
What is the tax treatment of the Fund and my distributions?
 
A:
The Fund intends to qualify as a RIC under Subchapter M of the Code. For each taxable year that the Fund so qualifies, the Fund will generally not be subject to U.S. federal income tax on its taxable income and gains that it distributes as dividends for U.S. federal income tax purposes to Shareholders. The Fund intends to distribute its income and gains in a manner that it should not be subject to an entity-level income tax. These distributions generally will be taxable as ordinary income or capital gains to the Shareholders, whether or not they are reinvested in Shares. U.S. federally tax‑exempt investors generally will not recognize unrelated business taxable income with respect to an investment in Shares as long as they do not borrow to make such investment. See “Tax Aspects – Distributions.”
 
Q:
What provisions exist for the repurchase, transfer or sale of Shares by Shareholders?
 
A:
The Shares are not a liquid investment. No Shareholder will have the right to require the Fund to repurchase such Shareholder’s Shares or any portion thereof. To provide Shareholders with limited liquidity, the Fund is structured as an interval fund and intends to conduct quarterly offers at NAV to repurchase between 5% and 25% of its outstanding Shares, pursuant to Rule 23c‑3 under the 1940 Act, unless such offer is suspended or postponed in accordance with regulatory requirements (as discussed below). In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5% of its outstanding Shares. In the event that Shareholders in the aggregate tender for repurchase more than the number of Shares that the Fund will offer to repurchase for a given repurchase offer, the Fund will repurchase the shares on a pro rata basis, which may result in the Fund not honoring the full amount of a required minimum distribution requested by a Shareholder. The Fund expects to make its first repurchase offer in December 2023.
 
Q:
Do investors have to pay a fee in association with the repurchase of Shares?
 
A:
An early repurchase fee (the “Early Repurchase Fee”) payable to the Fund will be charged with respect to the repurchase of a Shareholder’s Shares at any time prior to the day immediately preceding the one‑year anniversary of a Shareholder’s purchase of the Shares. The Early Repurchase Fee will equal 2.00% of the NAV of any Shares repurchased less than one year of the purchase. Once Shareholders have held Shares for a year, no fee will be assessed in association with a Share repurchase. Repurchase fees are payable to the Fund and not to the Advisers.
See “Summary of Fees and Expenses” for additional information regarding the Early Repurchase Fee.
 
9
  Q:
Where can I find additional information on the Fund?
 
  A:
Our website, www.stepstonepw.com, is the best source for additional information on the Fund. We regularly post updated information regarding our portfolio and activity in documents such as the most recent Prospectus and Statement of Additional Information, a monthly fact card, an investor presentation, a fund commentary and the portfolio holdings report, along with other news, information and updates. The website also contains a link to our SEC filings. We may change the information posted on the website over time. The information on the website is not incorporated by reference into this Prospectus, and investors should not consider it a part of this Prospectus.
 
  Q:
What will I receive in terms of fund reporting?
 
  A:
The Adviser will prepare, and make available to Shareholders, an audited annual report and an unaudited semi-annual report within 60 days after the close of the period for which the report is being made, or as otherwise required by the 1940 Act. The Adviser will also make available a report on our operations on at least a quarterly basis. See “Reports to Shareholders” located in the “Statement of Additional Information.”
 
  Q:
When will I receive my detailed tax information?
 
  A:
Shareholders can expect to receive tax information via a 1099‑DIV or 1099‑B by the end of January.
 
  Q:
What are the principal risks involved in an investment in the Fund?
 
  A:
An investment in the Fund involves several principal risks. Investing in the Shares may be considered speculative and involves a high degree of risk, including the risk of the loss of your investment. The Shares are illiquid and appropriate only as a long-term investment.
 
  ●  
The Fund’s performance depends upon the performance of its assets and the Investment Managers.
 
  ●  
Underlying investments involve a high degree of business and financial risk, including those relating to pandemics, that can result in substantial losses.
 
  ●  
The securities in which the Fund or an Investment Manager may invest may be among the most junior in a portfolio company’s capital structure and, thus, subject to the greatest risk of loss.
 
  ●  
The Fund will allocate a portion of its assets to multiple Investment Funds, and Shareholders will bear two layers of fees and expenses: management fees and administrative expenses at the Fund level, and asset-based management fees, carried interests, incentive allocations or fees and expenses at the Investment Fund level.
 
  ●  
Shareholders will have no right to receive information about the Investment Funds or Investment Managers, and they will have no recourse against Investment Funds or their Investment Managers.
 
  ●  
Infrastructure Assets will include investments in private operating companies, projects or properties in the early phases of development, which involve a high degree of business and financial risk.
 
  ●  
Infrastructure companies, projects and properties may have limited operating histories by which to assess their ability to achieve, sustain and increase revenues or profitability.
 
  ●  
Private companies, projects or properties may be required to rapidly implement and improve operational, financial and management control systems, and any failure to do so may have a material, adverse effect on their business.
 
  ●  
The Fund intends to qualify as a RIC under the Code but may be subject to substantial tax liabilities if it fails to so qualify.
 
10
  ●  
A significant portion of the Fund’s investments will likely be priced by Investment Funds in the absence of a readily available market and may be priced based on determinations of fair value, which may prove to be inaccurate.
 
  ●  
Although the Fund intends to implement a quarterly share repurchase program, there is no guarantee that an investor will be able to sell all of the Shares that the investor desires to sell. The Fund should therefore be considered to offer limited liquidity. There is no market exchange available for Shares of the Fund, thereby making them difficult to liquidate.
 
  ●  
Our investments, depending upon strategy, may be in companies or other assets whose business models are new or unproven and whose capital structures are highly leveraged.
 
  ●  
Possible utilization of leverage, as limited by the requirements of the 1940 Act, may increase the Fund’s volatility.
Accordingly, the Fund should be considered a speculative investment that entails substantial risks, and a prospective investor should invest in the Fund only if it can sustain a complete loss of its investment. A discussion of the risks associated with an investment in the Fund can be found under “Types of Investments and Related Risks” and “Other Risks.”
 
11
SUMMARY OF FEES AND EXPENSES
The following table illustrates the fees and expenses that the Fund expects to incur, and that Shareholders can expect to bear, directly or indirectly during the 12 months ending June 30, 2024 assuming estimated net assets of the Fund of $400,000,000 on June 30, 2024.
To invest in Class T Shares, Class S Shares or Class D Shares of the Fund, a prospective investor generally must maintain or open a brokerage account with a financial institution where a selling agreement has been established (“Selling Agent”). Any costs associated with opening such an account are not reflected in the following table or the Examples below. Investors should contact their broker or other financial professional for more information about the costs associated with opening such an account.
 
     Class T      Class S      Class D      Class I  
SHAREHOLDER FEES
            
Maximum sales load (percentage of purchase amount)(1)
      3.50%        3.50%        None        None  
Maximum early repurchase fee(2)
      2.00%        2.00%        2.00%        2.00%  
ANNUAL FUND OPERATING EXPENSES
(as a percentage of the Fund’s average net assets)
            
Management Fee
      1.60%        1.60%        1.60%        1.60%  
Acquired Fund Fees and Expenses (3)
      0.75%        0.75%        0.75%        0.75%  
Interest Payments on Borrowed Funds (4)
      0.05%        0.05%        0.05%        0.05%  
Distribution and/or Shareholder Servicing Fees
      0.85%        0.85%        0.25%        0.00%  
Other Expenses (5), (6)
      1.41%        1.41%        1.41%        1.41%  
Total Annual Fund Operating Expenses
     4.67%        4.67%        4.07%        3.82%  
Less Expense Limitation and Reimbursement (7)
      0.25%        0.25%        0.25%        0.25%  
Total Annual Net Expenses (8)
      4.41%        4.41%        3.81%        3.57%  
 
 
(1)
Investors purchasing Class T and Class S Shares may be charged a sales load of up to 3.50% of the investment amount. For Class T Shares, the 3.50% includes a maximum of 3.00% for upfront selling commission and 0.50% for the dealer fee. The table assumes the maximum sales load is charged. A Selling Agent may, in its discretion, waive all or a portion of the sales load for certain investors. See “Plan of Distribution.”
 
(2)
A 2.00% Early Repurchase Fee payable to the Fund will be charged with respect to the repurchase of a Shareholder’s Shares at any time prior to the day immediately preceding the one‑year anniversary of the Shareholder’s purchase of the Shares (on a “first in‑first out” basis). An Early Repurchase Fee payable by a Shareholder may be waived by the Fund, in circumstances where the Board of Trustees determines that doing so is in the best interests of the Fund and in a manner as will not discriminate unfairly against any Shareholder. The Early Repurchase Fee will be retained by the Fund for the benefit of the remaining Shareholders.
 
(3)
The Acquired Fund Fees and Expenses are based on estimated amounts for the Fund’s first 12 months of operations. Some or all of the Investment Funds in which the Fund intends to invest charge carried interests, incentive fees or allocations based on the Investment Funds’ performance. The Investment Funds in which the Fund intends to invest generally charge a management fee of 1.00% to 2.00% based on committed capital, and approximately 15% to 20% of net profits as a carried interest allocation. The Acquired Fund Fees and Expenses disclosed above are based on historic returns of the Investment Funds in which the Fund anticipates investing during the first 12 months of operations, which may change substantially over time, therefore, significantly affect Acquired Fund Fees and Expenses. The 0.75% shown as Acquired Fund Fees and Expenses reflects operating expenses of the Investment Funds (e.g., management fees, administration fees and professional and other direct, fixed fees and expenses of the Investment Funds) after refunds, excluding any performance-based fees or allocations paid by the Investment Funds that are paid solely on the realization and/or distribution of gains, or on the sum of such gains and unrealized appreciation of assets distributed in‑kind, as such fees and allocations for a particular period may be unrelated to the cost of investing in the Investment Funds.
 
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(4)
The Advisers expect to utilize a credit facility in the first twelve months of the Fund’s operations. Expenses may include, but are not limited to, upfront credit facility fees, undrawn fees, and interest payments.
 
(5)
Other Expenses include all other expenses incurred by the Fund, such as its organizational and offering expenses, certain administrative costs and expenses relating to the offering and sale of Shares. Other Expenses are estimated for the first 12 months of operations. For more details regarding the Fund’s estimated organizational and offering expenses, please see “Fund Expenses – Organizational and Offering Expenses.”
 
(6)
Includes amounts paid under an administration agreement (the “Administration Agreement”) between the Fund and StepStone Private Wealth as administrator (the “Administrator”). Under the Administration Agreement, the Fund pays the Administrator an administration fee (the “Administration Fee”) in an amount up to 0.23% on an annualized basis of the Fund’s net assets. From the proceeds of the Administration Fee, the Administrator pays UMB Fund Services, Inc. (the “Sub‑Administrator”) a sub‑administration fee (the “Sub‑Administration Fee”) in an amount up to 0.08% on an annualized basis of the Fund’s net assets, subject to a minimum annual fee. The Sub‑Administration Fee is paid pursuant to a sub‑administration agreement and a fund accounting agreement each between the Administrator and the Sub‑Administrator. The Administration Fee will be accrued daily based on the value of the net assets of the Fund as of the close of business on each business day (including any assets in respect of shares that will be repurchased by the Fund on such date) and payable in arrears within ten business days after the end of the month. The Sub‑Administration Fee is calculated in a manner substantially similar to the Administration Fee and is payable monthly in arrears.
 
(7)
The Adviser has entered into an Expense Limitation and Reimbursement Agreement with the Fund for the one‑year term beginning on the initial closing date for subscriptions for Shares and ending on the one‑year anniversary thereof. The Adviser may extend the Limitation Period for a period of one year on an annual basis. The Expense Limitation and Reimbursement Agreement limits the amount of the Fund’s aggregate ordinary operating expenses, excluding certain Specified Expenses listed below, borne by the Fund during the Limitation Period to an amount not to exceed 1.00% for Class T, S, D and I Shares, on an annualized basis, of the Fund’s daily net assets or the Expense Cap. “Specified Expenses” that are not covered by the Expense Limitation and Reimbursement Agreement include: (i) the Management Fee; (ii) all fees and expenses of Private Market Assets and other investments in which the Fund invests (including the underlying fees of the Private Market Assets and other investments (the Acquired Fund Fees and Expenses)); (iii) transactional costs, including legal costs and brokerage commissions, associated with the acquisition and disposition of Private Market Assets and other investments; (iv) interest payments incurred on borrowing by the Fund; (v) fees and expenses incurred in connection with a credit facility, if any, obtained by the Fund; (vi) distribution and/or shareholder servicing fees, as applicable; (vii) taxes; and (viii) extraordinary expenses resulting from events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or similar proceeding, indemnification expenses, and expenses in connection with holding and/or soliciting proxies for all annual and other meetings of Shareholders. See “Fund Expenses” for additional information. If the Fund’s aggregate ordinary operating expenses, exclusive of the Specified Expenses, in respect of any Class of Shares for any day exceeding the Expense Cap applicable to that Class of Shares, the Adviser will waive its Management Fee and/or reimburse the Fund for expenses to the extent necessary to eliminate such excess. The Adviser may also directly pay expenses on behalf of the Fund and waive reimbursement under the Expense Limitation and Reimbursement Agreement. To the extent that the Adviser waives its Management Fee, reimburses expenses to the Fund or pays expenses directly on behalf of the Fund, it is permitted to recoup from the Fund any such amounts for a period not to exceed three years from the month in which such fees and expenses were waived, reimbursed, or paid, even if such recoupment occurs after the termination of the Limitation Period. However, the Adviser may only recoup the waived fees, reimbursed expenses or directly paid expenses in respect of the applicable Class of Shares if (i) the aggregate ordinary operating expenses have fallen to a level below the relevant Expense Cap and (ii) the recouped amount does not raise the level of aggregate ordinary operating expenses plus waived fees, reimbursed expenses or directly paid expenses in respect of a Class of Shares in the month of recoupment to a level that exceeds any Expense Cap applicable at that time.
 
(8)
Annual Net Expenses include expenses limited by the Fund’s Expense Limitation and Reimbursement Agreement.
 
13
EXAMPLE:
You would pay the following fees and expenses on a $1,000 investment, assuming a 5.00% annual return, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
 
If You SOLD Your Shares
                  
      1 Year        3 Years        5 Years        10 Years  
Class T
    $ 78        $ 164        $ 251        $ 473  
Class S
    $ 78        $ 164        $ 251        $ 473  
Class D
    $ 38        $ 116        $ 196        $ 404  
Class I
    $ 36        $ 109        $ 185        $ 384  
If You HELD Your Shares
      1 Year        3 Years        5 Years        10 Years  
Class T
    $ 78        $ 164        $ 251        $ 473  
Class S
    $ 78        $ 164        $ 251        $ 473  
Class D
    $ 38        $ 116        $ 196        $ 404  
Class I
    $ 36        $ 109        $ 185        $ 384  
The examples should not be considered a representation of future expenses, and actual expenses may be greater or less than those shown. The examples above exclude the Early Repurchase Fee which would apply if your Shares were repurchased within one year of their purchase. If your Shares are repurchased in Year 1, you would incur the 2.00% Early Repurchase Fee. Moreover, the rate of return of the Fund may be greater or less than the hypothetical 5.00% return used in the Example.
The purpose of the table above is to assist investors in understanding the various fees and expenses Shareholders will bear directly or indirectly. For a more complete description of the various fees and expenses of the Fund, see “Fund Expenses,” “Management Fee” and “Purchases of Shares.”
 
14
THE FUND
The Fund is registered under the 1940 Act as a non‑diversified, closed‑end management investment company. The Fund is structured as an interval fund and continuously offers its Shares. The Fund was organized as a Delaware statutory trust on December 2, 2022. The Fund’s principal office is located at 128 S Tryon St., Suite 1600, Charlotte, NC 28202, and its telephone number is (704) 215‑4300. Investment advisory services are provided to the Fund by the Adviser and Sub‑Adviser pursuant to an investment advisory agreement (the “Advisory Agreement”) and an investment sub‑advisory agreement (the “Sub‑Advisory Agreement”), respectively. Responsibility for monitoring and overseeing the Fund’s investment program and its management and operation is vested in the individuals who serve on the Board of Trustees. See “Statement of Additional Information – Management of the Fund.”
USE OF PROCEEDS
Under normal circumstances, the proceeds from the sale of Shares, net of the Fund’s fees and expenses, are invested by the Fund to pursue its investment program and objectives as soon as practicable. It is anticipated that proceeds from the sale of Shares will be invested, as appropriate, in investment opportunities within three months; however, changes in market conditions could result in the Fund’s anticipated investment period extending as long as six months. See “Other Risks — Availability of Investment Opportunities” for a discussion of the timing of Investment Funds’ subscription activities, market conditions, and other considerations relevant to the timing of the Fund’s investments generally.
The Fund will pay the Adviser the full amount of the Management Fee during any period prior to which less than all of the Fund’s assets (including any proceeds received by the Fund from the offering of Shares) are invested in Private Market Assets.
STRUCTURE
The Fund has been organized as a continuously offered, non‑diversified closed‑end management investment company that is operated as an interval fund. Closed‑end funds differ from open‑end funds (commonly known as mutual funds) in that investors in closed‑end funds do not have the right to redeem their shares on a daily basis. Unlike most closed‑end funds, which typically list their shares on a securities exchange, the Fund does not currently intend to list the Shares for trading on any securities exchange, and the Fund does not expect any secondary market to develop for the Shares in the foreseeable future. Therefore, an investment in the Fund, unlike an investment in a typical closed‑end fund, is not a liquid investment. To provide some liquidity to Shareholders, the Fund is structured as an interval fund and conducts quarterly repurchase offers for a limited amount of the Fund’s Shares (at least 5%).
The Fund believes that a closed‑end structure is most appropriate for the long-term nature of the Fund’s strategy. The Fund’s NAV per Share may be volatile. As the Shares are not traded, investors will not be able to dispose of their investment in the Fund, except through repurchases conducted through the share repurchase program, no matter how the Fund performs.
The Fund is a specialized investment vehicle that combines many of the features of an investment fund not registered under the 1940 Act, often referred to as a “private investment fund,” with those of a registered closed‑end investment company. Private investment funds are collective asset pools that typically offer their securities privately, without registering such securities under the Securities Act. The Advisers believe that securities offered by private investment funds are typically sold in large minimum denominations (often at least $5,000,000 to $20,000,000) to a limited number of institutional investors and high‑net‑worth individuals. Compared to private investment funds, registered closed‑end investment companies often impose relatively modest minimum investment requirements and offer their shares to a broader range of investors.
Investors may purchase Shares of the Fund daily based upon the Fund’s daily NAV per Share. Unlike the practices of many private investment funds, the Fund intends to offer Shares without limiting the number of Eligible Investors that can participate in its investment program.
In private investment funds, often organized as limited partnerships, investors usually commit to provide up to a certain amount of capital as and when requested by the fund’s manager or general partner. The general partner then makes private market investments on behalf of the fund, typically over a two‑to‑five‑year period according to a
 
15
pre‑defined investment strategy. The fund’s investments are usually realized, or “exited” after a five‑to‑eight year holding period through a private sale, an initial public offering (IPO) or a recapitalization, and the proceeds are distributed to the fund’s investors. The private investment funds themselves typically have a duration of ten to fifteen years. In contrast, registered closed‑end funds typically reinvest most of the proceeds of realized investments and do not have a stated duration. This attribute provides investors with more consistent exposure to the underlying assets through economic cycles and maintains an investor’s intended allocation to the target asset class, such as private markets.
INVESTMENT PROGRAM
Investment Objectives
The Fund’s investment objectives are to seek current income and long-term capital appreciation by offering investors access to a global investment portfolio of private infrastructure assets.
Investment Strategy
The principal elements of the Fund’s investment strategy include: (i) allocating the assets of the Fund largely among Infrastructure Assets via Secondary Investments, Co‑Investments, and to a modest extent, Primary Investments, including Seasoned Primaries; (ii) seeking to manage the Fund’s investment level and liquidity using a commitment strategy which will balance total returns with reoccurring distributions and liquidity targets; and (iii) managing risk through ongoing monitoring of the Fund’s portfolio and active portfolio construction. Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowing for investment purposes, in Infrastructure Assets. This policy is non‑fundamental and can be changed without Shareholder approval upon 60 days’ prior notice.
Asset Allocation. StepStone employs an asset allocation strategy that seeks to benefit from the spread of the Fund’s investments across infrastructure investments that vary across industry sectors and geographies. Infrastructure investments are generally characterized as core, core plus and value‑add investment strategies, as further described below. The Fund’s Infrastructure Assets will include both core plus and value‑add investment strategies.
 
●
Core: Considered the most stable form of infrastructure equity investing, as these assets tend to be the most essential to society or otherwise largely risk mitigated through a higher degree of cash flow predictability. Returns are derived primarily from income, with limited upside through capital gains, and assets are commonly held for the longer term (more than seven years). Revenues and cash flow are generally governed by either rate regulation or long-term contracts with highly creditworthy counterparties, such as governments, municipalities and major industrial companies.
 
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Core Plus: These assets have some similarities with core infrastructure; however, there is generally more variability associated with the cash flows of core plus assets. Income is still typically a component of overall returns, but there is potential for greater capital appreciation. The holding period for core plus assets is typically more than six years. Core plus infrastructure may involve asset expansion or platform growth but the majority of value is typically derived from a relatively mature asset base. Core plus could also reflect a “build to core” strategy, where the assets would have a higher risk-return profile during a development, construction, and early operations stage, but ultimately qualify as a core asset for the long-term hold period.
 
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Value‑Add: These investments typically include assets that have a material growth, expansion or repositioning orientation. The holding period for most value‑add infrastructure typically ranges from five to seven years. Returns are primarily from capital appreciation rather than ongoing income.
Commitment Strategy. The Advisers plans to manage the Fund’s commitment strategy to reduce the amount of uninvested cash (or “cash drag”) associated with the underlying investments with consideration for the potential liquidity needs of the Fund. The Adviser will balance the ultimate allocation across investment types while seeking to mitigate the “J‑Curve,” the period between the initial investment and the time that meaningful appreciation is expected.
 
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The Fund intends to rely heavily on purchases of Secondary Investments where all or a substantial portion of the capital has already been invested and Co‑Investments where the capital is largely deployed at the time of commitment. Secondary Investments often receive earlier distributions and the returns from these investments generally do not exhibit the same delayed cash flow and return “J‑Curve” performance associated with Primary Investments. In addition, Secondary Investments may enable the Fund to deploy capital more readily with less blind pool risk than investments in typical Primary Investments.
The commitment strategy will aim to keep the Fund substantially invested and to minimize cash drag where possible by making commitments based on anticipated future distributions from investments. The commitment strategy will also take other anticipated cash flows into account, such as those relating to new subscriptions, the redemption of Shares by Shareholders and distributions to Shareholders. To forecast portfolio cash flows, the Advisers will utilize a proprietary model that incorporates historical data, actual portfolio observations, insights, and forecasts by the Advisers.
Risk Management. The long-term nature of infrastructure investments requires a commitment to ongoing risk management. The Advisers seek to monitor the performance of the Fund’s assets and developments at the level of the individual portfolio companies that are material positions held by the Fund. By tracking commitments, capital calls, distributions, valuations, and other pertinent details, the Advisers will seek to use a range of techniques to reduce the risk associated with the commitment strategy. These techniques may include, without limitation:
 
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Investing across assets at different parts of fund lifecycles through the use of Secondary Investments, Co‑Investments and Primary Investments.
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Managing cash and liquid assets to meet the Fund’s liquidity needs.
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Modeling and actively monitoring cash flows to avoid cash drag and maintain maximum appropriate levels of investment and commitment.
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Seeking to establish credit lines to provide backup liquidity to be in the position to satisfy liquidity needs, including redemption requests under the share repurchase program, consistent with the limitations and requirements of the 1940 Act.
To enhance the Fund’s liquidity, particularly in times of possible net outflows through the redemption of Shares by Shareholders, the Advisers may from time to time determine to sell certain of the Fund’s assets. In implementing the Fund’s liquidity management program, so as to minimize cash drag while providing the necessary liquidity to support the Fund’s private markets investment strategies and potential redemption of Shares, the Advisers may invest a portion of the Fund’s assets in securities and vehicles that are intended to provide an investment return while offering better liquidity than typical private markets investments. The liquid assets may include both fixed income and equities as well as public and private vehicles that derive their investment returns from fixed income and equity securities.
The Fund’s strategy involves investing in a range of Infrastructure Assets across multiple sponsors and investment types. The portfolio will consist of Infrastructure Assets that vary across industry sectors and geographies allocated strategically by StepStone.
The Fund intends to make direct and indirect investments in equity and debt interests across a variety of Infrastructure Assets such as:
 
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Communication and digital infrastructure (e.g., towers, data centers and fiber).
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Natural capital (e.g., sustainable agriculture and sustainable forestry).
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Power generation and midstream (e.g., gas generation, fuel transportation and storage).
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Renewables and energy transition investments (e.g., wind and solar, energy storage and distributed energy).
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Social infrastructure (e.g., waste management, healthcare and education).
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Transportation and logistics (e.g., toll roads, airports and seaports).
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Utilities (e.g., electricity distribution and transmission, district heating and cooling and water).
The Fund will look to access attractive industry themes and tailwinds by tracking the evolving market and the emerging strategies of a diverse pool of Investment Managers. Outlined below are examples of current sector
 
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themes expected to support key investment focus areas of the Fund.
Private Infrastructure Themes
 
 
LOGO
In select cases, the Fund may allocate a portion of its investments to other private market asset classes, including but not limited to real estate, private equity and private debt. The Fund will also seek to construct a balanced portfolio across mainly developed economies, with a focus on North America and Europe. While maintaining a generally balanced portfolio across these exposures is a focus of the Fund’s investment strategy, the Advisers will also be continuously assessing the relative attractiveness of the risk / return profile of each Fund opportunity and will look to tactically tilt the portfolio in situations where market dynamics make it attractive to do so, while still seeking to avoid over-concentration. Risks associated with investment in geographical locations, emerging markets and sector concentration are further described in the “Types of Investments and Related Risks” section below.
The Fund’s investment objectives and strategies are non‑fundamental and may be changed without Shareholder approval. For a complete description of the Fund’s fundamental policies, see “Fundamental Policies” and “Other Fundamental Policies” in the Fund’s Statement of Additional Information.
Real Assets Asset Class
The real assets asset class includes infrastructure, natural capital and natural resource investments, among other hard asset categories. A common thread across the sub‑strategies is that investments typically feature hard assets that are often capital intensive, as well as a component of current yield and an expected insulation of the underlying asset’s appreciation against the effects of inflation. The mix of current yield and growth across the underlying assets will vary depending on the specific asset class and stage of development of the underlying assets.
Infrastructure refers to a broad category of investments typically featuring attractive investment characteristics such as essential services or high barriers to entry, relatively durable demand, regulated returns or long term contracted cash flow and long useful lives, with an expected component of current yield as assets mature and often an insulation of the underlying assets against the effects of inflation. Infrastructure assets may include, among other asset types, communication/digital infrastructure, power generation and midstream, renewables & energy transition investments, social infrastructure, transportation and logistics and utilities.
 
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Natural capital is viewed as an attractive complement to the Fund’s other assets, with its focus on sustainable agriculture, sustainable forestry and other sustainable natural assets. Sustainable agriculture consists of investments in farmland and related supply chain assets, along with biological assets (e.g., crops and livestock) that produce food, fiber, and renewable energy feedstocks. These investments focus on sustainably leveraging the productive capacity of the land base, and supply chains to transform and distribute production to processors, retailers, and industrial buyers, as well as related appreciation of farmland and supply chain assets. Sustainable forestry investments focus on safely and sustainably producing raw materials necessary for production of goods while leveraging sustainable business practices. These materials include outputs such as timber products and pulp for the manufacture of paper products. These investments, along with other real asset investments, have often shown historical returns with a positive correlation to inflation, a low or negative correlation to public and private equities and debt, and low volatility in their overall return profile with resilient asset value attributes through economic and financial cycles.5
While most Infrastructure Assets benefit in some way from defensive characteristics, in the form of essential services, barriers to entry, contracted cash flows or regulated returns, the risk and return profile of infrastructure investments does differ across sectors and strategies, and assets are often grouped into a few key categories, reflecting these differences.
Expected Positioning of Select Sectors6
 
 
LOGO
Real Estate Asset Class
Private real estate is a common term for unregistered real estate investments made through privately negotiated transactions. Similar to investments in the infrastructure asset class, real estate investments generally provide investment returns with a mix of current yield and growth across the underlying assets. The ultimate mix will
 
5 According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities with correlation coefficients of 0.0, ‑0.1 and –0.1, respectively. Source: MSCI, Bloomberg, Burgiss, NCREIF, Cliffwater, HFRI, J.P. Morgan Asset Management, May 31, 2022.
6 For illustrative purposes only. Sectors may differ in risk and return from the above. Target gross returns are hypothetical and are neither guarantees nor predictions or projections of future performance. Future performance indications and financial market scenarios are no guarantee of current or future performance. There can be no assurance that such target will be achieved or that the investment will be able to implement its investment strategy, achieve its investment objectives or avoid substantial losses.
 
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vary depending on the stage of development of the underlying assets. Real estate investments are typically equity investments in the underlying real estate property, but in some cases, may also involve the debt/mortgages supporting the properties.
Private Equity Asset Class
Private equity is a common term for investments that are typically made in non‑public companies through bespoke, privately negotiated transactions. Private equity investments may be structured using a range of financial instruments, including common and preferred equity, subordinated debt and warrants, or other instruments, depending on the strategy of the investor and the financing requirements of the company. Investments in private equity have grown significantly over the last 20 years, driven principally by large institutional investors seeking increased returns and portfolio efficiency. Large pension funds, endowments and other sophisticated institutional investors commonly invest a meaningful portion of their overall portfolios in private equity.
The private equity market is diverse and can be divided into several different segments, each of which may exhibit distinct characteristics based on combinations of various factors. These include the type and financing stage of the investment, the geographic region in which the investment is made and the vintage year. The Fund may invest in all segments of private equity on a global basis.
Private Debt Asset Class
Private debt is a common term for loans and similar investments typically made in private companies that are generally negotiated directly with the borrower. Private debt investments may be structured using a range of financial instruments, including but not limited to, first and second lien senior secured loans, unitranche debt, unsecured debt, and structurally subordinated instruments. From time to time these investments might include equity features such as warrants, options, common stock or preferred stock, depending on the strategy of the investor and the financing requirements of the company or asset. The Fund’s private debt investments may be rated below investment grade by rating agencies or would be rated below investment grade if they were rated and are sometimes referred to as “junk.” Below investment grade securities have predominantly speculative characteristics and may carry a greater risk with respect to a borrower’s capacity to pay interest and repay principal. The global capital markets have undergone substantial structural changes since the 2008-2009 global financial crisis. Where once banks were dominant providers of credit, their relative size is in secular decline, thus creating an opportunity for other providers of capital. In addition, a new regulatory regime surrounding bank balance sheets has placed greater emphasis on the private non‑bank lending sector — this capital is increasingly provided by pension funds and insurance companies who maintain an allocation to this asset class. The Fund may invest in all forms of private debt on a global basis.
Why Infrastructure
The Advisers believe investors should consider the following factors when considering an investment in the Fund.
Essential Services are Resilient to Economic Cycles: User demand patterns for Infrastructure Assets tend to be relatively stable given the essential nature of these services. Therefore, we believe they tend to exhibit a lower correlation to economic cycles. According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities.7
Inflation Hedge: Most regulated infrastructure assets, and many non‑regulated infrastructure assets, include inflation-indexed user pricing which effectively passes on the impact of inflation to the end‑user. We believe that infrastructure assets tend to perform better in inflationary environments as inflationary increases in revenue typically outpace inflationary increases in expenses, given the relatively high margins that are typical of infrastructure investments.
 
 
7 According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities with correlation coefficients of 0.0, ‑0.1 and –0.1, respectively. Source: MSCI, Bloomberg, Burgiss, NCREIF, Cliffwater, HFRI, J.P. Morgan Asset Management, May 31, 2022.
 
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Diversified End‑User Base: The ultimate end‑users of infrastructure assets are generally a widely diversified group of individuals, such as local populations and communities and worldwide travelers utilizing essential services which reduces some risks associated with market and customer concentration and variability in demand.
High Barriers to Entry: Infrastructure typically requires a high level of initial capital investment and have relatively long useful lives, and this acts as a significant impediment to potential competitors entering the market. We believe that these assets may enjoy monopolistic or quasi-monopolistic market positioning, and it may be economically unsound, or legally prohibited, to build a competing facility, such as an airport, toll-road or timberland farm.
Long-term Cash Flow Predictability: Regulated and heavily contracted business models often provide long-term revenue visibility to infrastructure investments.
Sustainability Tailwinds: Infrastructure assets are playing an important role in the transition to net zero emissions supporting decarbonization across numerous industries, in particular energy generation and storage, transportation and carbon sequestration through natural capital related opportunities.
Key Trends in Infrastructure
Infrastructure Assets can be broadly described as economic and social necessities that deliver services and products needed to improve society’s quality of life, social well-being, and safety. The U.S. economy, for example, relies on a vast network of transportation, power and communications infrastructure; however, much of the systems currently in place were built decades ago, and economists assert that delays and rising maintenance costs are limiting economic performance. Many are reaching the end of their lifespan and are potentially overstretched. In addition to the threat to human safety, inadequately maintained roads, trains, and waterways substantially limit economic productivity. Similar infrastructure investment opportunities exist in other major economies around the world.
Infrastructure is not only an essential part of healthy and productive communities and economies today but is also one of the most important areas of investment for addressing the challenges of tomorrow. Challenges around climate change, communication, healthcare and urbanization may be addressed through major public and private investment in infrastructure. It is estimated that the world needs approximately $94 trillion of infrastructure investment to support population growth, urbanization, and refurbishments through 2040.8 We believe this substantial need for infrastructure investment is driven by the overall growth of the global economy and by a number of global, secular trends, such as:
Digitalization: Connectivity and data consumption have become essential to everyday life and are fundamental to global economic activity and growth. Data is the core currency of the digital economy, and its consumption continues to grow exponentially, which drives and sustains the need to invest in areas such as mobile towers, data centers, fiber optics and digital services.
 
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Mobile Towers: Telecommunications infrastructure, or wireless and cellular infrastructure, connects all facets of economic activity. A societal desire for mobility is driving wireless carriers to build denser networks in order to meet speed and capacity demands, which in turn require new cell sites, more equipment, more fiber, and higher bandwidth connectivity.
 
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Data Centers: Rapid growth in the demand for data consumption and storage is driving an expansion of data centers worldwide. The Internet of Things (IoT), online gaming, 5G connectivity, autonomous driving capabilities, big data analytics, among others, are key trends driving the need for more reliable, energy-efficient and secure data storage. The amount of data created, captured, copied and consumed globally is expected to double in size by 2026.9 Modern data centers are rapidly evolving from centralized, on‑premise facilities managed by IT departments to hyperscale data centers hosting public cloud services. While investments in data centers require regional strategies, we believe the need for additional data center investment is nearly universal.
 
8 Global Infrastructure Outlook: Infrastructure Investment Needs, June 2018.
9 Worldwide IDC Global Data Sphere Forecast, 2022–2026: Enterprise Organizations Driving Most of the Data Growth, May 2022.
 
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Fiber Optics: Only 63% of the world’s population is connected to the internet.10 As a result of the large unconnected populations, there is significant growth opportunity and investment potential in expanding internet access and increasing adoption, as well as the need to upgrade existing connections to improve reliability and speed. Estimates suggest that the total attainable market size of connecting the next four billion people is upwards of $300 billion annually.11 Building out the fiber optic networks will require substantial investment from private companies.
Decarbonization: The importance of decarbonization has emerged as an essential part of the global economy and will require substantial investment in decarbonization technology.
 
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Renewable Energy Transition: The global energy mix is shifting from fossil fuels to renewables. There is an abundance of both public and private organizations with a commitment to decarbonize the economy or “reach net zero” by 2050. This will require substantial investments in physical infrastructure assets including clean and renewable energy systems such as wind, solar and hydro, energy efficiency, energy storage, clean transportation, green building systems, waste management and recycling, sustainable agriculture and aquaculture along with systems and technology to enable support for biodiversity and ecosystems.
 
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Electrification Revolution: The electrification trend could be one of the biggest growth opportunities in the industrial economy in light of the number of areas that may need to be developed, expanded or modernized. Within two decades, cars, buildings and systems will use clean electricity backed by renewable energy sources. With several new electrification themes converging, residential, commercial and municipal markets may need to revamp their outdated systems, store energy and modernize power grids.
 
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Internet of Things (“IoT”): To increase infrastructure and capacity, while decreasing carbon emissions in cities, we believe that a paradigm shift will occur. Cities will likely use digitization and wireless technology to operate smarter, producing and distributing energy more efficiently and prioritizing renewable energy. By leveraging IoT, municipal assets can be monitored in real-time and controlled remotely, residents can actively track their energy consumption, for example through smart metering infrastructure, and cities can control when and where power is needed.
Demographics: We believe that a substantial portion of U.S. infrastructure is in a state of disrepair, due to years of underinvestment and changing urbanization trends. Suburbs, medium‑sized cities, and even small towns are experiencing significant growth, straining already limited budgets and policymakers are looking to private investment to build and repair critical infrastructure.
 
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Growing Population: By the year 2050, the global population is expected to increase by another 20%, to more than 9.7 billion people.12 An increasing population is likely to increase demand for services, increase infrastructure usage, expand seasons of consumption for certain goods and services and decrease available downtime for maintenance and repairs. The need to accommodate this increase in the global population will drive substantial investment in new and existing infrastructure.
 
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Urbanization: We believe that continued urbanization in advanced economies will be one of the biggest drivers of infrastructure spending over the next few decades. According to the World Economic Forum,13 more than half the global population lives in cities, a figure that is expected to rise to 80% by 2050. Rising urban migration and the continued expansion of mega cities globally may require sustained infrastructure investment in railroads, highways, bridges, ports, airports, water, power, energy and telecommunications.
 
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Changing Generational Preferences: Younger generations often have different expectations for infrastructure than older citizens. Support for mass transit and public transportation is often as much as 10% higher among Millennials than Baby Boomers. Millennials also plan to monitor their consumption more closely and hope to adopt new energy products and services, including renewable sources like solar and wind.
 
10 We Are Social: More Than 5 million People Now Use the Internet, 4/27/2022.
11 USAID: Barriers to Investing in Last-Mile Connectivity, May 2020.
12 United Nations: Department of Economic and Social Affairs, 2017.
13 World Economic Forum: Cities and Urbanization, 4/26/2022.
 
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Changing generational preferences should have a substantial influence over future decisions to not only modernize transportation systems and utilities but also incentivize their use.
Investment Types
The Fund intends to make investments in equity and debt interests in Infrastructure Assets through the various investment types described below.
Secondary Investments
Secondary Investments typically refer to investments in either individual operating companies, projects or properties and existing private investment funds through the acquisition of an existing interest by one investor from another in a negotiated transaction. In so doing, the buyer will acquire the existing interest and take on any future funding obligations in exchange for future returns and distributions. Secondaries include the growing general partner led secondary market, which has evolved toward strip sales and continuation vehicles with general partners structuring a vehicle that allows for continued participation in the growth of the remaining assets, or a specific asset, beyond a fund’s traditional exit time frame. Secondaries may also include newly established private markets funds that are fully funded at the time of the Fund’s acquisition.
Secondary Investments may be acquired at a discount to the Investment Fund’s NAV. As a result, Secondary Investments acquired at a discount may result in unrealized gains at the time the Fund next calculates its daily NAV. Because Secondary Investments are generally made when a Primary Investment is three‑to‑seven years into its investment period and has deployed a significant portion of its capital into portfolio companies, these investments are viewed as more mature. Since its inception, the Firm has invested in Secondary Investments that were 70‑75% deployed on average. Thus, they are not typically expected to exhibit the initial decline in NAV associated with primaries and may reduce the impact of the “J‑Curve” associated with private markets investing.
Open-Ended Funds typically refer to investments in evergreen or long duration structures, where the interest of one or multiple investors is acquired by another investor, or an interest is acquired by an investor through the provision of growth capital, in both cases typically at NAV. For the purposes of the Fund strategy, Open-Ended Funds are considered Secondary Investments, given they are, similarly, the acquisition of an interest in what is typically a mature portfolio, and all, or the majority, of capital is deployed at the time of investment, and therefore the impact of the “J‑Curve” is expected to be mitigated. There can be no assurance that any or all Secondary Investments made by the Fund will exhibit this pattern of investment returns, and realization of later gains is dependent upon the performance of each Investment Fund’s portfolio investments.
The market for purchasing Investment Funds on the secondary market may be very limited and competitive, and the strategies and Investment Funds to which the Fund wishes to allocate capital may not be available for secondary investment at any given time. Purchases of Investment Funds on the secondary market may be heavily negotiated and may create additional transaction costs for the Fund.
The secondary market continues to evolve and expand. Secondaries may include various structures by which the Fund gains exposure to the private markets including those described above and others that share some of the same characteristics. The Fund may invest in the equity or debt of structured transactions such as collateralized fund obligations or similar investment vehicles (“CFOs”) that own existing funds and co‑investments. The Fund may also invest in open‑end or closed‑end funds and similar investment vehicles, which may be evergreen funds with existing assets at the time of the Fund’s investment.
Co‑Investments
Co‑Investments involve directly acquiring an equity or debt interest in an operating company, project or property generally alongside an investment by an Investment Manager or another Investment Manager that leads the transaction. Co‑Investments are generally structured such that the lead and co‑investors collectively hold a controlling interest of the operating company, project or property. Capital committed to a Co‑Investment is typically invested immediately, mitigating J‑Curve and creating a more predictable cash flow dynamic, but equity Co‑Investments may also involve a commitment to fund additional capital under certain circumstances.
 
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Primary Investments
Primary Investments, or “primaries,” refer to investments in newly established private market funds that are early in their lifecycle and have typically not yet begun investing. Primary investments are made during an initial fundraising period in the form of capital commitments, which are then called down by the Fund and utilized to finance its investments in portfolio companies during a predefined period. A private markets fund’s NAV will typically exhibit a “J‑Curve,” undergoing a decline in the early portion of the fund’s lifecycle as investment-related expenses and fees accrue prior to the realization of investment gains from portfolio investments, with the trend typically reversing in the later portion of the fund’s lifecycle as portfolio investments are sold and gains from investments are realized and distributed. There can be no assurance that any or all primary investments made by the Fund will exhibit this pattern of investment returns and realization of later gains is dependent upon the performance and disposition of each Primary Investment’s portfolio investments. Real asset and private equity Primary Investments typically range in duration from ten‑to‑twelve years, including extensions, while private debt primary investments typically range in duration from eight‑to‑ten years. Underlying investments in portfolio investments generally have a three‑to‑six‑year range of duration with potentially shorter periods for private debt or longer for infrastructure investments.
Primary Investments are generally closed‑end funds and only accept new investments during a finite period. Typically, Investment Managers will not launch new funds more frequently than every two‑to‑four years. Market leaders generally offer multiple primary investments each year, but they may not offer funds within a given geography or that pursue a certain strategy in any particular year. Accordingly, many funds managed by top‑tier private market firms will be unavailable for a primary investment at any given time. Because of the limited timeframe of opportunity for investment in any given fund, having a well-established relationship with an Investment Manager is critically important for primary investors.
Primary Investments includes Seasoned Primaries, which are made later in an Investment Fund’s lifecycle than typical primaries, these investments, like secondaries, may receive earlier distributions, and the investment returns from these investments may exhibit less of a delayed cash flow and return “J‑Curve” than other Primary Investments. In addition, Seasoned Primaries may enable the Fund to deploy capital more readily with less blind pool risk than investments in typical primaries.
General Due Diligence
StepStone uses a range of resources to identify and source promising Infrastructure Assets. StepStone’s investment approach is based on the extensive diligence conducted by its research professionals while leveraging the capabilities of the entire StepStone organization and its potential access to superior information.
StepStone focuses on identifying opportunities at the intersection of high-quality opportunities, Investment Manager expertise and the Firm’s informational advantage. StepStone will assess the relative attractiveness of different strategies, sectors and geographies based on durable investment themes that it believes will outperform over the Fund’s long-term investment horizon. Shorter-term opportunistic allocations will also be utilized to seek to capitalize on near-term market trends.
The due diligence process is driven by StepStone’s entire global team, which meets bi‑weekly to review, prioritize and analyze investment opportunities. Investment review typically involves a contribution from StepStone’s sector experts, Investment Manager and/or Investment Manager coverage teams and the assigned deal team. Once a deal has been identified as a potential transaction, the deal team summarizes the opportunity in a report. Each report is reviewed, and the team prioritizes the opportunity accordingly. StepStone’s investment committee, which composes of senior investment professionals responsible for making final investment approvals and ensuring that there is consistency across investment decisions and client portfolios, will conduct a detailed review of each investment that has advanced into the due diligence stage, with the due diligence report serving as a framework for these discussions. Through this process, StepStone can identify the most attractive opportunities and focus their resources on the most promising transactions
The Fund’s investment due diligence process generally is expected to include these elements:
 
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Secondary Investments
 
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Independent financial modeling on an asset‑by‑asset basis (each underlying portfolio company), where applicable, to validate both projected multiple and internal rate of return assumptions.
 
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Research and analysis of the assets, sectors and strategies related to the Investment Fund, and the effect on underlying portfolio positions.
 
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Assessment of the managerial capability of the Investment Manager and the quality of the Investment Fund, including the Investment Manager’s ability and bandwidth for managing the existing portfolio towards liquidity.
 
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ESG and Operational Due Diligence.
Co‑Investments
 
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Independent financial modeling as a means of testing and validating the business plan assumptions and projections, exit returns and valuations.
 
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Comparative analysis through review and the assigning of a risk score, considering key quantitative and qualitative risk factors including, but not limited to, regulatory risk, technology risk and market risk.
 
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Industry research (including evaluation of market size, potential growth and competitive dynamics).
 
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Assessment of the Investment Manager’s suitability for the investment and the managerial capability and depth at the underlying asset level.
 
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ESG and Operational Due Diligence.
Primary Investments
 
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Evaluation of the Investment Manager’s experience and resources to establish their ability to implement its investment strategy, through team, platform and performance assessments, discussions with third party references (including the Investment Manager community, limited partner community, and portfolio company founders), Investment Manager interviews, and other fund manager meetings.
 
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Evaluation of the proposed investment strategy for appropriateness to the investment environment.
 
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Detailed review of the Investment Managers prior track record, including individual investment partner level attribution, and projection modeling for historical funds.
 
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Assessment of operational support and bandwidth for managing the existing portfolio.
 
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ESG and Operational Due Diligence.
 
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Evaluation of fund terms with a particular focus on alignment of interests between the Investment Manager and limited partners.
For each transaction, the assigned investment team gathers and reviews available information on the historical track record and all underlying assets. To facilitate this process, StepStone utilizes the SPI platform, which tracks over 16,000 general partners across 42,000 Investment Funds garnered from the over 4,700 annual Investment Manager meetings the Firm holds per year. This database is populated with information StepStone has gathered from Investment Manager partner meetings, due diligence materials, quarterly reports, annual meetings, marketing materials and other sources. Through these sources, StepStone believes that it has access to significantly more information than most investors and provides a distinctive advantage when evaluating a potential investment.
The Advisers also continue to monitor the assets by meeting with Investment Managers, attending annual meetings, serving on portfolio companies’ investment boards, reviewing financial reports and meeting with portfolio
 
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companies’ management teams. Based on these interactions, the Advisers will periodically update expectations of return and liquidity of each asset of the Fund.
ESG Due Diligence
As demonstration of its commitment to responsible investing (“RI”), the Firm became a signatory to the United Nations Principles for Responsible Investment (“UN PRI”) in 2013, adopted a responsible investment policy (“Responsible Investment”) in 2014 and joined the Task Force on Climate-related Financial Disclosures (“TCFD”) in 2019. The Firm’s RI policy is approved by the (“RI Committee”) under delegated authority from the Board of the Firm. It is enforced by the Firm’s Investment Committees (“Investment Committee” or “IC”) and applies to the Firm’s various private markets asset classes and investment strategies. This policy encompasses a comprehensive assessment at both the general partner and asset level of non‑financial factors across environmental, social, governance dimensions. The Firm’s RI Policy is available upon request.
Process Overview. The Firm has fully integrated an RI process into its investment due diligence and decision-making across all asset classes and strategies at the Firm. Every investment due diligence conducted by the Firm undergoes an ESG evaluation at multiple levels. Each investment memo presented to the relevant Investment Committee must contain a dedicated RI section that has been completed by the investment due diligence team, with the disclosure and analysis approved by the RI Committee. Investments may fail to progress as a result of ESG considerations at varied points in the process, including at the Investment Committee. Post-investment, the Firm also seeks engagement with investment managers to advocate for and support their ESG process improvements as well as their specific RI initiatives with respect to individual assets and positioning them for exit. The Firm seeks to be engaged on RI issues where it has a board seat or limited partner advisory committee membership.
Responsible Investment Integrated in the Due Diligence Process. The Firm’s has established an RI due diligence process that applies across the Firm tailored for each asset class and strategy (i.e., private equity, real estate, private credit and infrastructure, along with a distinct approach for co‑investments and secondaries). This RI due diligence is integrated into the Firm’s investment due diligence process and sits alongside the Firm’s comprehensive operational due diligence process. The Firm’s teams evaluate each fund manager and/or investee company on their RI policy, implementation and monitoring framework using a variety of tools from its due diligence questionnaire and onsite interviews, to reference checking and evaluation of the historical track record at the general partner and at the asset level where relevant. For the final Investment Committee materials, investment teams include a comprehensive ESG analysis, which includes specific examples from the manager’s investment process and portfolio. The Firm has been utilizing an RI general partner scorecard since 2018. In May 2019, this scorecard became a mandatory component of all primary fund underwriting across all asset classes. The ESG score focuses on (i) commitment, (ii) accountability, (iii) investment process, from screening through ownership, (iv) training, and (v) reporting and transparency. Specific information is collected and analyzed with regard to climate, modern slavery, and diversity through the scoring process for all investments. With regard to infrastructure investments, there is a specific focus on environmental considerations and labor practices, among other topics. These topics are incorporated into the investment decision process, ongoing monitoring and management of investments but are not solely determinative of investment decisions. As a result, the Fund may make investments that do not have favorable ESG characteristics or high ESG ratings.
Portfolio Allocation
In allocating the Fund’s capital, the Advisers will seek to maximize the risk adjusted returns to the Shareholders. The overall portfolio construction seeks to achieve targeted returns while also being able to provide 5% quarterly liquidity, and also minimizing volatility for investors. Capital is allocated within differing types of infrastructure investments to optimize risk, return, volatility, correlation and liquidity using equity and debt investments with varying levels of duration. Portfolio allocations are achieved through using a combination of Secondary Investments, Co‑Investments and Primary Investments. Existing and new investments are dynamically evaluated to assess the blended risk, return and liquidity profile of the Fund.
In allocating the Fund’s capital, the Advisers will seek to use the resources and capabilities they have assembled to build a diversified portfolio of investments that will seek to mitigate the effects of the J‑Curve to maximize risk adjusted returns to the Shareholders. Portfolio construction is the first level of the risk management process. At a high level, the planning for portfolio construction is intended to consider medium- to long-term secular and macroeconomic risks, and how they are likely to impact the infrastructure market. A fundamental premise of the
 
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Fund’s investment strategy is to prioritize a proactive sourcing approach for all forms of Infrastructure Assets, driven by a thoughtful portfolio construction plan.
The projected asset allocation targets reflect the current assessment of sub‑sectors within the context of an appropriately diversified portfolio. Over shorter periods, the portfolio composition may reflect the allocation of capital more opportunistically in accordance with the Fund’s investment objectives. The Advisers currently expect that the Fund’s asset allocation will tilt more heavily toward Secondary Investments and Co‑Investments.
Asset Allocation Targets
 
Investment Type
Target Range
Secondary Investments
 40‑80%
Co‑Investments
 20‑50%
Primary Investments
 0‑10%
Asset Class
Target Range
Infrastructure Assets
 90‑100%
Other Assets
 0‑10%
Geographic Region
Target Range
North America
 40‑70%
Europe
 20‑50%
Rest of World
 5‑15%
The Fund’s assets will be global, although the Fund expects to invest principally in North America-domiciled and European-domiciled investments. Over time, the Fund may have exposure to developing or emerging markets. There can be no assurance that all investment types will be available, will be consistent with the Fund’s investment objectives, will satisfy the Advisers’ pricing and due diligence considerations or will be selected for the Fund.
While the Fund will actively pursue Co‑Investments, the Fund’s allocations to Investment Funds may be made in the form of capital commitments which are called down by an Investment Fund over time. Thus, in general, the Fund’s private markets allocation will consist of both funded and unfunded commitments. Only the funded private market commitments are reflected in the Fund’s NAV. Over time, the allocation ranges and commitment strategy may be adjusted based on the Advisers’ analysis of the private markets, the Fund’s existing portfolio at the relevant time, and other pertinent factors.
The Firm’s Allocation Policy
Allocation decisions may arise when there is more demand from the Fund and other clients of the Firm for a particular investment opportunity, such as the capacity in an Investment Fund or a Co‑Investment, than supply. The Firm employs an allocation policy designed to ensure that all of its clients will be treated fairly and equitably over time. The Fund’s portfolio manager has discretion to lower the allocation as appropriate for portfolio construction purposes.
With respect to Primary Investments, the Firm uses its best efforts to defer the allocation decision to the relevant Investment Manager, mitigating the potential conflict. With regard to secondary purchases of Investment Funds, the Firm typically manages the allocation of the transactions across its clients. Under the Firm’s allocation policy, if clients are similarly situated, considering all relevant facts and circumstances, allocations will be made pro rata based on the deployment pace for each client determined in accordance with the Firm’s standard operational processes and specified in each client’s annual portfolio plan. Allocation of Co‑Investments is a hybrid of the Firm’s approach on Investment Funds; in certain cases, Co‑Investments are allocated by the Investment Manager leading the transaction, while in others, the Firm has the ability to allocate the transaction across its clients, in which case the allocation method outlined with respect to secondaries is used. Due to these processes, the Firm does not believe there
 
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is a material risk of a conflict arising in the area of allocations that would disadvantage the Fund relative to another client. With respect to evergreen funds such as the Fund, the Firm may evaluate the deployment pace, investment budget and portfolio plan of such client more frequently than annually.
Importantly, the Firm’s allocation process is managed independently by the Finance team and ratified by the Firm’s Legal and Compliance department.
Leverage
In the near term, leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares.
The 1940 Act requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time the investment company incurs the indebtedness (the “Asset Coverage Requirement”). This requirement means that the value of the investment company’s total indebtedness may not exceed one third the value of its total assets (including the indebtedness). The 1940 Act also requires that dividends may not be declared if this Asset Coverage Requirement is breached. The Fund’s borrowings will at all times be subject to the Asset Coverage Requirement.
The Fund’s assets may also utilize leverage in their investment activities. Borrowings at the individual investment level are not subject to the Asset Coverage Requirement. Accordingly, the Fund’s portfolio may be exposed to the risk of highly leveraged investment programs of certain assets and the volatility of the value of Shares may be great, especially during times of a “credit crunch” and/or general market turmoil, such as that experienced during late 2008 or the current global pandemic. In general, the use of leverage by the Fund’s assets may increase the volatility of their values and of the value of the Shares. See “Types of Investments and Related Risks — Investment Related Risks — Leverage Utilized by the Fund.”
TYPES OF INVESTMENTS AND RELATED RISKS
General
The value of the Fund’s total net assets may be expected to fluctuate in response to fluctuations in the value of the Infrastructure Assets in which the Fund invests. Discussed below are the investments generally made by Investment Funds and the principal risks that the Advisers and the Fund believe are associated with those investments. These principal risks will, in turn, have an effect on the Fund. In addition, the Fund may also make these types of investments pending the investment of assets in Infrastructure Assets or to maintain the liquidity necessary to effect repurchases of Shares. When the Fund takes a defensive position or otherwise makes these types of investments, it may not achieve its investment objectives.
Principal Investment Related Risks
General Economic and Market Conditions. The value of the Fund’s total net assets should be expected to fluctuate. To the extent that the Fund’s portfolio is concentrated in securities of a single issuer or issuers in a single sector, the risk of any investment decision is increased. The use of leverage is likely to cause the Fund’s average net assets to appreciate or depreciate at a greater rate than if leverage were not used.
An investment in the Fund involves a high degree of risk, including the risk that the Shareholder’s entire investment may be lost. The Fund’s performance depends largely upon the Advisers’ selection of Infrastructure Assets, the allocation of offering proceeds thereto and the performance of the Infrastructure Assets. The Fund’s investment activities involve the risks associated with private market investments generally. Risks include adverse changes in national or international economic conditions, adverse local market conditions, the financial conditions of portfolio companies, changes in the availability or terms of financing, changes in interest rates, exchange rates, corporate tax rates and other operating expenses, environmental laws and regulations, and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of certain industries or the availability of purchasers to acquire companies, and dependence on cash flow, as well as acts of God, uninsurable losses, war, terrorism, earthquakes, hurricanes or floods and other factors which are beyond the control of the Fund or the Private Market
 
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Assets. Unexpected volatility or lack of liquidity, such as the general market conditions that had prevailed in 2008, could impair the Fund’s profitability or result in its suffering losses.
No Operating History. The Fund is a newly formed non‑diversified, closed‑end management investment company with no performance history that Shareholders can use to evaluate the Fund’s investment performance. The initial operating expenses for a newly formed fund, including start‑up costs, which may be significant, may be higher than the expenses of an established fund. In addition, Infrastructure Assets may, in some cases, be newly organized with limited operating histories upon which to evaluate their performance.
Closed‑end Interval Fund. The Fund is a non‑diversified, closed‑end management investment company structured as an “interval fund” and designed primarily for long-term investors. The Fund is not intended to be a typical traded investment. There is no secondary market for the Fund’s Shares and the Fund expects that no secondary market will develop in the foreseeable future. An investor should not invest in the Fund if the investor needs a liquid investment. Closed‑end funds differ from open‑end management investment companies, commonly known as mutual funds, in that investors in a closed‑end fund do not have the right to redeem their shares on a daily basis at a price based on NAV. Although the Fund, as a fundamental policy, will make quarterly offers to repurchase between 5% and 25% of its outstanding Shares at NAV, the number of Shares tendered in connection with a repurchase offer may exceed the number of Shares the Fund has offered to repurchase, in which case not all of your Shares tendered in that offer will be repurchased. In connection with any given repurchase offer, it is likely that the Fund may offer to repurchase only the minimum amount of 5% of its outstanding Shares. Hence, you may not be able to sell your Shares when and/or in the amount that you desire.
Availability of Investment Opportunities. The business of identifying and structuring investments of the types contemplated by the Fund is competitive and involves a high degree of uncertainty. The availability of investment opportunities generally is subject to market conditions as well as, in some cases, the prevailing regulatory or political climate. No assurance can be given that the Fund will be able to identify and complete attractive investments in the future or that it will be able to fully invest its subscriptions.
Similarly, identification of attractive investment opportunities by Investment Managers is difficult and involves a high degree of uncertainty. Even if an attractive investment opportunity is identified by an Investment Manager, it may not be permitted to take advantage of the opportunity to the fullest extent desired. Other investment vehicles sponsored, managed or advised by the Advisers and their affiliates may seek investment opportunities similar to those the Fund may be seeking. The Advisers will allocate fairly between the Fund and such other investment vehicles any investment opportunities that may be appropriate for the Fund and such other investment vehicles. See “Conflicts of Interest — The Advisers.”
Leverage Utilized by the Fund. The Fund may borrow money in connection with its investment activities and to otherwise provide the Fund with liquidity — i.e., the Fund may utilize leverage. Specifically, the Fund may borrow money through a credit facility or other arrangements to fund investments in Infrastructure Assets up to the limits of the Asset Coverage Requirement. Leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares. The Fund is expected to enter into the credit agreement for such purposes. See “Investment Program—Leverage.”
The use of leverage is speculative and involves certain risks. Although leverage will increase the Fund’s investment return if the Fund’s interest in an asset purchased with borrowed funds earns a greater return than the interest expense the Fund pays for the use of those funds, the use of leverage will decrease the return on the Fund if the Fund fails to earn as much on its investment purchased with borrowed funds as it pays for the use of those funds. The use of leverage will in this way magnify the volatility of changes in the value of an investment in the Fund, especially in times of a “credit crunch” or during general market turmoil, such as that experienced during late 2008. The Fund may be required to maintain minimum average balances in connection with its borrowings or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate. In addition, a lender to the Fund may terminate or refuse to renew any credit facility into which the Fund has entered. If the Fund is unable to access additional credit, it may be forced to sell its interests in Investment Funds at inopportune times, which may further depress the returns of the Fund.
 
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The 1940 Act’s Asset Coverage Requirement requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time the investment company incurs the indebtedness. This requirement means that the value of the investment company’s total indebtedness may not exceed one third of the value of its total assets (including the indebtedness). The 1940 Act also requires that dividends may not be declared if this Asset Coverage Requirement is breached. The Fund’s borrowings will at all times be subject to the Asset Coverage Requirement.
Private Equity Investments. Private equity is a common term for investments that are typically made in private or public companies through privately negotiated transactions, and generally involve equity-related finance intended to bring about some kind of change in an operating company (e.g., providing growth capital, recapitalizing a company or financing an acquisition). Private equity funds, often organized as limited partnerships, are the most common vehicles for making private equity investments, although the Fund may also invest directly in an operating company as a lead investor or syndicate partner to an Investment Manager. The investments held by Investment Funds and Primary Investments made by the Fund involve the same types of risks associated with an investment in any operating company. However, securities of private equity funds, as well as the underlying companies these funds invest in, tend to be more illiquid, and highly speculative. Private equity has generally been dependent on the availability of debt or equity financing to fund the acquisitions of their investments. Depending on market conditions, however, the availability of such financing may be reduced dramatically, limiting the ability of private equity funds to obtain the required financing or reducing their expected rate of return.
The regulatory environment for private investment funds continues to evolve, and changes in the regulation of private investment funds may adversely affect the value of the Fund’s investments and the ability of the Fund to implement its investment strategy (including the use of leverage). The financial services industry generally and the activities of private investment funds and their investment advisers, in particular, have been the subject of increasing legislative and regulatory scrutiny. Such scrutiny may increase the Fund’s and/or the Advisers’ legal, compliance, administrative and other related burdens and costs as well as regulatory oversight or involvement in the Fund and/or the Advisers’ business. There can be no assurances that the Fund or the Advisers will not in the future be subject to regulatory review or discipline. The effects of any regulatory changes or developments on the Fund may affect the manner in which it is managed and may be substantial and adverse.
Investments in the Debt Securities of Small or Middle-Market Portfolio Companies. Our investments may consist of loans to small and/or less well-established privately held companies. While smaller private companies may have potential for rapid growth, investments in private companies pose significantly greater risks than investments in public companies. For example, private companies:
 
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have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress;
 
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may have limited financial resources and may be unable to meet their obligations under their debt securities, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of realizing any guarantees that may have obtained in connection with the investment;
 
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may have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
 
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generally, are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on the Investment Fund that has invested in the portfolio company; and
 
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generally, have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
 
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Investments in smaller capitalization companies often involve significantly greater risks than the securities of larger, better-known companies because they may lack the management expertise, financial resources, product diversification and competitive strengths of larger companies. The prices of the securities of smaller companies may be subject to more abrupt or erratic market movements than those of larger, more established companies, as these securities typically are less liquid, traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. In addition, when selling large positions in small capitalization securities, the seller may have to sell holdings at discounts from quoted prices or may have to make a series of small sales over a period of time. Further, smaller capitalization companies may be particularly affected by interest rate increases, as they may find it more difficult to borrow money to continue or expand operations or may have difficulty in repaying any loans.
In addition, investments in private companies tend to be less liquid. The securities of many of the companies in which we invest are not publicly traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over‑the‑counter secondary market for institutional investors only. Such securities may be subject to legal and other restrictions on resale. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of target portfolio companies may affect our investment returns.
Infrastructure Sector Risk. The Fund will invest, directly or indirectly, in infrastructure. Because the Fund concentrates (i.e., invests more than 25% of its assets) its investments in Infrastructure Assets, the Fund may be subject to greater risks and market fluctuations than a fund whose portfolio has exposure to a broader range of industries. Infrastructure Assets may be subject to a variety of risks, not all of which can be foreseen or quantified, including: (i) the burdens of ownership of infrastructure: (ii) local, national and international political and economic conditions; (iii) the supply and demand for services from and access to infrastructure; (iv) the financial condition of users and suppliers of Infrastructure Assets; (v) changes in interest rates and the availability of funds which may render the purchase, sale or refinancing of Infrastructure Assets difficult or impracticable; (vi) changes in regulations, planning laws and other governmental rules; (vii) changes in fiscal and monetary policies; (viii) under-insured or uninsurable losses, such as force majeure acts and terrorist events; (ix) reduced investment in public and private infrastructure projects; and (x) other factors which are beyond the reasonable control of the Fund. Many of the foregoing factors could cause fluctuations in usage, expenses and revenues, causing the value of investments to decline and a material adverse effect on an Investment Fund’s or Co‑Investment’s performance.
Specific Infrastructure Assets in which the Fund invests may be subject to the following additional risks:
 
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Communication infrastructure companies are subject to risks involving changes in government regulation, competition, dependency on patent protection, equipment incompatibility, changing consumer preferences, technological obsolescence and large capital expenditures and debt burdens.
 
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Energy infrastructure companies are subject to adverse changes in fuel prices, the effects of energy conservation policies and other risks, such as increased regulation, negative effects of economic slowdowns, reduced demand, cleanup and litigation costs as a result of environmental damage, changing and international politics and regulatory policies of various governments. Natural disasters or terrorist attacks damaging sources of energy supplies will also negatively impact energy infrastructure companies.
 
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Social infrastructure companies/issuers are subject to government regulation and the costs of compliance with such regulations and delays or failures in receiving required regulatory approvals. The enactment of new or additional regulatory requirements may negatively affect the business of a social infrastructure company.
 
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Transportation infrastructure companies can be significantly affected by economic changes, fuel prices, labor relations, insurance costs and government regulations. Transportation infrastructure companies will also be negatively impacted by natural disasters or terrorist attacks.
 
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Utilities company revenues and costs are subject to regulation by states and other regulators. Regulatory authorities also may restrict a company’s access to new markets. Utilities companies may incur unexpected increases in fuel and other operating costs. Utilities companies are also subject to
 
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considerable costs associated with environmental compliance, nuclear waste clean‑up and safety regulation.
Real Estate Investments. The Fund will invest, directly or indirectly, in real estate. The decline in the broader credit markets following the market turmoil in 2008 related to the sub‑prime mortgage dislocation caused the global financial markets to become more volatile and the United States real estate market was dramatically impacted as a result. Future dislocations in the real estate credit markets with the broad-based stress in the global real estate industry could create a difficult operating environment for owners of real estate in the near term and investors should be aware that the general risks of investing in real estate may be magnified.
Real estate is subject to risks associated with the ownership of real estate, including (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing and (ix) changes in interest rates. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company’s operations and market value in periods of rising interest rates. The value of securities of companies in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.
There are also special risks associated with particular real estate sectors, or real estate operations generally, as described below:
 
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Retail Properties. Retail properties are affected by the overall health of the economy and may be adversely affected by, among other things, the growth of alternative forms of retailing, bankruptcy, departure or cessation of operations of a tenant, a shift in consumer demand due to demographic changes, changes in spending patterns and lease terminations.
 
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Office Properties. Office properties are affected by the overall health of the economy, and other factors such as a downturn in the businesses operated by their tenants, obsolescence and non‑competitiveness.
 
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Industrial Properties. Industrial properties are affected by the overall health of the economy and other factors such as downturns in the manufacture, processing and shipping of goods.
 
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Hospitality Properties. The risks of hotel, motel and similar hospitality properties include, among other things, the necessity of a high level of continuing capital expenditures, competition, increases in operating costs which may not be offset by increases in revenues, dependence on business and commercial travelers and tourism, increases in fuel costs and other expenses of travel, and adverse effects of general and local economic conditions. Hotel properties tend to be more sensitive to adverse economic conditions and competition than many other commercial properties.
 
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Healthcare Properties. Healthcare properties and healthcare providers are affected by several significant factors, including federal, state and local laws governing licenses, certification, adequacy of care, pharmaceutical distribution, rates, equipment, personnel and other factors regarding operations, continued availability of revenue from government reimbursement programs and competition on a local and regional basis. The failure of any healthcare operator to comply with governmental laws and regulations may affect its ability to operate its facility or receive government reimbursements.
 
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Multifamily Properties. The value and successful operation of a multifamily property may be affected by a number of factors such as the location of the property, the ability of the management team, the level of mortgage interest rates, the presence of competing properties, adverse economic conditions in the locale, oversupply and rent control laws or other laws affecting such properties.
 
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Residential Properties. Residential properties can be significantly affected by the national, regional and local real estate markets. This segment of the real estate industry also is sensitive to interest rate
 
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fluctuations which can cause changes in the availability of mortgage capital and directly affect the purchasing power of potential homebuyers. Thus, residential properties can be significantly affected by changes in government spending, consumer confidence, demographic patterns and the level of new and existing home sales.
 
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Shopping Centers. Shopping center properties are dependent upon the successful operations and financial condition of their tenants, particularly certain of their major tenants, and could be adversely affected by bankruptcy of those tenants. In some cases, a tenant may lease a significant portion of the space in one center, and the filing of bankruptcy could cause significant revenue loss, including the loss of revenue from smaller tenants with co‑tenancy rights. Like others in the commercial real estate industry, community centers are subject to environmental risks and interest rate risk. They also face the need to enter into new leases or renew leases on favorable terms to generate rental revenues. Community center properties could be adversely affected by changes in the local markets where their properties are located, as well as by adverse changes in national economic and market conditions.
 
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Self-Storage Properties. The value and successful operation of a self-storage property may be affected by a number of factors, such as the ability of the management team, the location of the property, the presence of competing properties, changes in traffic patterns and effects of general and local economic conditions with respect to rental rates and occupancy levels.
Other factors may contribute to the risk of real estate investments:
 
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Development Issues. Real estate property development creates exposure to risks, such as the risk that there will be insufficient tenant demand to occupy newly developed properties, and the risk that prices of construction materials or construction labor may rise materially during the development.
 
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Lack of Insurance. Real estate investments may fail to carry comprehensive liability, fire, flood, earthquake extended coverage and rental loss insurance, or insurance in place may be subject to various policy specifications, limits and deductibles. Should any type of uninsured loss occur, the real estate investments could lose its investment in, and anticipated profits and cash flows from, a number of properties and, as a result, adversely affect the Fund’s investment performance.
 
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Dependence on Tenants. The value of real estate investments’ properties and the ability of these investments to make distributions to their shareholders depends upon the ability of the tenants at the properties to generate enough income in excess of their tenant operating expenses to make their lease payments. Changes beyond the control of the real estate investments may adversely affect their tenants’ ability to make their lease payments and, in such event, would substantially reduce both their income from operations and ability to make distributions that directly or indirectly impact the Fund.
 
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Financial Leverage. Real estate investments may be highly leveraged and financial covenants may affect the ability of real estate investments to operate effectively.
 
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Environmental Issues. In connection with the ownership (direct or indirect), operation, management and development of real properties that may contain hazardous or toxic substances, a real estate investment may be considered an owner, operator or responsible party of such properties and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines and liabilities for injuries to persons and property. The existence of any such material environmental liability could have a material adverse effect on the results of operations and cash flow of any such real estate investment and, as a result, the amount available to make distributions on shares of the Fund could be reduced.
Energy Sector Risk. The Fund’s assets may include energy sector investments, thereby exposing the Fund to risks associated with this sector. Increases or decreases in the commodity supply or demand and resulting changes in pricing related to natural gas, natural gas liquids, crude oil, coal or other energy commodities, may have a significant
 
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impact on the assets focused on this sector. Additionally, the energy sector is a highly regulated industry both domestically and internationally which can also have a material impact on the investments in this sector. Other factors that may adversely affect the value of securities of companies in the energy sector include operational risks, challenges to exploration and production, competition, inability to make accretive acquisitions, significant accident or event that is not fully insured at a company, natural depletion of reserves, and other unforeseen natural disasters.
Energy sector investments are affected by worldwide energy prices and costs related to energy production. These investments may have significant operations in areas at risk for natural disasters, social unrest and environmental damage. These investments may also be at risk for increased government regulation and intervention, energy conservation efforts, litigation and negative publicity and perception.
Utilities Sector. The Fund’s assets may include utilities sector investments, thereby exposing the Fund to risks associated with this sector. Rates charged by traditional regulated utility companies are generally subject to review and limitation by governmental regulatory commissions, and the timing of rate changes will adversely affect such companies’ earnings and dividends when costs are rising. Other factors that may adversely affect the value of securities of companies in the utilities sector include interest rate changes, supply and demand fluctuations, technological developments, natural resources conservation, and changes in commodity prices, which may be caused by supply and demand fluctuations or other market forces.
Special Situations and Distressed Investments. We may, directly or indirectly, invest in securities and other obligations of companies that are in special situations involving significant financial or business distress, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant returns, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful investment in distressed assets is unusually high. There is no assurance that we or an Investment Manager will correctly evaluate the value of the assets securing these debt investments or the prospects for a successful reorganization or similar action in respect of any company. In any reorganization or liquidation proceeding relating to such companies, the Fund may lose its entire investment, may be required to accept cash or securities with a value less than the original investment and/or may be required to accept payment over an extended period of time. Troubled company investments and other distressed asset-based investments require active monitoring.
Venture Capital and Growth Equity. We may invest in venture capital and growth equity. Venture capital is usually classified by investments in private companies that have a limited operating history, are attempting to develop or commercialize unproven technologies or implement novel business plans or are not otherwise developed sufficiently to be self-sustaining financially or to become public. Although these investments may offer the opportunity for significant gains, such investments involve a high degree of business and financial risk that can result in substantial losses.
Growth equity is usually classified by investments in private companies that have achieved product-market fit but may still need capital to achieve the desired level of scale before having access to the public markets for financing. As a result of the risks associated with advancing the company’s growth plan, investors can expect a higher return than might be available in the public markets, but also need to recognize the business and financial risks that remain in advancing the company’s commercial aspirations. For both venture capital and growth equity companies, the risks are generally greater than the risks of investing in public companies that may be at a later stage of development.
Agriculture and Forestry Sector Risk. Investments in agriculture/farmland are subject to various risks, including adverse changes in national or international economic conditions, adverse local market conditions, adverse natural conditions such as storms, floods, drought, windstorms, hail, temperature extremes, frosts, soil erosion, infestations and blights, failure of irrigation or other mechanical systems used to cultivate the land, financial conditions of tenants, marketability of any particular kind of crop that may be influenced, among other things, by changing consumer tastes and preferences, import and export restrictions or tariffs, casualty or condemnation losses, government subsidy or production programs, buyers and sellers of properties, availability of excess supply of property relative to demand, changes in availability of debt financing, changes in interest rates, real estate tax rates and other
 
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operating expenses, environmental laws and regulations, governmental regulation of and risks associated with the use of fertilizers, pesticides, herbicides and other chemicals used in commercial agriculture, zoning laws and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of properties, risk due to dependence on cash flow, as well as acts of God, uninsurable losses and other factors which are beyond the control of the Fund or an Investment Fund.
In addition, the forestry and timber industry is highly cyclical and the market value of timber investments is strongly affected by changes in international economic conditions, interest rates, weather cycles, changing demographics, environmental conditions and government regulations, among other factors. For example, the volume and value of timber that can be harvested from timberlands is limited by natural disasters, fire, volcanic eruptions, insect infestation, disease, ice storms, windstorms, flooding and other events and weather conditions and changes in climate conditions could intensify the effects of any of these factors. Many companies in the timber and forestry industry do not insure against damages to their timberlands. This industry is also subject to stringent U.S. federal, state and local environmental, health and safety laws and regulations. Significant timber deposits are located in emerging markets countries where corruption and security may raise significant risks.
Financial Institutions Risk. Financial institutions in which the Fund may invest, directly or indirectly, are subject to extensive government regulation. This regulation may limit both the amount and types of loans and other financial commitments a financial institution can make, and the interest rates and fees it can charge. In addition, interest and investment rates are highly sensitive and are determined by many factors beyond a financial institution’s control, including general and local economic conditions (such as inflation, recession, money supply and unemployment) and the monetary and fiscal policies of various governmental agencies such as the Federal Reserve Board. These limitations may have a significant impact on the profitability of a financial institution since profitability is attributable, at least in part, to the institution’s ability to make financial commitments such as loans. Profitability of a financial institution is largely dependent upon the availability and cost of the institution’s funds and can fluctuate significantly when interest rates change.
U.S. and global markets recently have experienced increased volatility, including as a result of the recent failures of certain U.S. and non‑U.S. banks, which could be harmful to a Fund and issuers in which it invests. For example, if a bank in which the Fund or issuer has an account fails, any cash or other assets in bank accounts may be temporarily inaccessible or permanently lost by the Fund or issuer. If a bank that provides a subscription line credit facility, asset-based facility, other credit facility and/or other services to an issuer fails, the issuer could be unable to draw funds under its credit facilities or obtain replacement credit facilities or other services from other lending institutions with similar terms. Even if banks used by issuers in which the Fund invests remain solvent, continued volatility in the banking sector could cause or intensify an economic recession, increase the costs of banking services or result in the issuers being unable to obtain or refinance indebtedness at all or on as favorable terms as could otherwise have been obtained. Conditions in the banking sector are evolving, and the scope of any potential impacts to the Fund and issuers, both from market conditions and also potential legislative or regulatory responses, are uncertain. Continued market volatility and uncertainty and/or a downturn in market and economic and financial conditions, as a result of developments in the banking industry or otherwise (including as a result of delayed access to cash or credit facilities), could have an adverse impact on the Fund and issuers in which it invests.
Geographic Concentration Risks. Our investments may be concentrated in specific geographic regions. This focus may constrain the liquidity and the number of portfolio companies available for investment. In addition, our investments will be disproportionately exposed to the risks associated with the region of concentration.
Emerging Markets. We may invest, directly and indirectly, in companies located in emerging industrialized or less developed countries or that derive their revenues principally from such countries. Risks particularly relevant to such emerging markets may include greater dependence on exports and the corresponding importance of international trade, higher risk of inflation, more extensive controls on foreign investment and limitations on repatriation of invested capital, increased likelihood of governmental involvement in, and control over, the economies, decisions by the relevant government to cease its support of economic reform programs or to impose restrictions, and less established laws and regulations regarding fiduciary duties of officers and directors and protection of investors.
 
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China is an emerging market and has demonstrated significantly higher volatility from time to time in comparison to developed markets. Investments in Chinese securities, including certain Hong Kong-listed and U.S.-listed securities, subject the Fund to risks specific to China. These risks include: (i) the risk of more frequent (and potentially widespread) trading suspensions and government interventions with respect to Chinese issuers, resulting in liquidity risk, price volatility, greater market execution risk, and valuation risk; (ii) the risk of currency fluctuations, currency non‑convertibility, currency revaluations and other currency exchange rate fluctuations or blockage; (iii) the risk of intervention by the Chinese government in the Chinese securities markets; (iv) the risk of nationalization or expropriation of assets; (v) the risk that the Chinese government may decide not to continue to support economic reform programs; (vi) the risk of limitations on the use of brokers; (vii) the risk of interest rate fluctuations and higher rates of inflation; (viii) the risk that the U.S. government or other governments may sanction Chinese issuers or otherwise prohibit U.S. persons (such as the Fund) from investing in certain Chinese issuers; and (ix) the risk of market volatility caused by any potential regional or territorial conflicts, including military conflicts, or natural or other disasters. Recent developments in relations between the United States and China have heightened concerns of increased tariffs and restrictions on trade between the two countries. It is unclear whether further tariffs and sanctions may be imposed or other escalating actions may be taken in the future, which could negatively impact the Fund. In addition, China is alleged to have participated in state-sponsored cyberattacks against foreign companies and foreign governments. Actual and threatened responses to such activity and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers of securities in which the Fund may invest. As a result of different legal standards, the Fund faces the risk of being unable to enforce its rights with respect to holdings in Chinese securities and the information about the Chinese securities in which the Fund may invest may be less reliable or complete. Chinese companies with securities listed on U.S. exchanges may be delisted if they do not meet U.S. accounting standards and auditor oversight requirements, which could significantly decrease the liquidity and value of the securities.
Sector Concentration. We may invest in an Investment Fund that concentrates its investments in specific industry sectors. This focus may constrain the liquidity and the number of portfolio companies available for investment by an Investment Fund. In addition, the investments of such an Investment Fund will be disproportionately exposed to the risks associated with the industry sectors of concentration.
Technology Sector. Certain technology companies may have limited product lines, markets or financial resources, or may depend on a limited management group. In addition, these companies are strongly affected by worldwide technological developments, and their products and services may not be economically successful or may quickly become outdated.
Financial Sector. Financial services companies are subject to extensive governmental regulation that may limit the amounts and types of loans and other financial commitments they can make, and the interest rates and fees they can charge. Profitability of such companies is generally dependent on the availability and cost of capital, and it can fluctuate as a result of increased competition or changing interest rates. In addition, events in the financial sector over the past several years have resulted in reduced liquidity in credit and a high degree of volatility in the financial markets. This situation has negatively affected many financial services companies, such as by causing such companies’ values to decline.
Currency Risk. Infrastructure Assets may include direct and indirect investments in a number of different currencies. Any returns on, and the value of such investments may, therefore, be materially affected by exchange rate fluctuations, local exchange control, limited liquidity of the relevant foreign exchange markets, the convertibility of the currencies in question and/or other factors. A decline in the value of the currencies in which the Infrastructure Assets are denominated against the U.S. dollar may result in a decrease in the Fund’s NAV. The Advisers will not elect to hedge the value of investments made by the Fund against currency fluctuations. Accordingly, the performance of the Fund could be adversely affected by such currency fluctuations.
Non‑U.S. Risk. Certain Infrastructure Assets may include assets outside of the United States. Non‑U.S. securities or instruments involve certain factors not typically associated with investing in U.S. securities or instruments, including risks relating to (i) currency exchange matters, including fluctuations in the rate of exchange between the U.S. dollar and the various non‑U.S. currencies in which the Fund’s non‑U.S. investments are denominated, and costs associated with conversion of investment principal and income from one currency into another; (ii) differences in conventions relating to documentation, settlement, corporate actions, stakeholder rights and
 
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other matters; (iii) differences between the U.S. and non‑U.S. securities markets, including higher rates of inflation, higher transaction costs and potential price volatility in, and relative illiquidity of, some non‑U.S. securities markets; (iv) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less governmental supervision and regulation in some countries; (v) certain economic, social and political risks, including potential exchange control regulations and restrictions on non‑U.S. investment and repatriation of capital, the risks of political, economic or social instability, including the risk of sovereign defaults, and the possibility of expropriation or confiscatory taxation and adverse economic and political development; (vi) the possible imposition of non‑U.S. taxes on income and gains recognized with respect to such securities or instruments; (vii) differing, and potentially less well developed or well-tested laws regarding creditor’s rights (including the rights of secured parties), corporate governance, fiduciary duties and the protection of investors; (viii) difficulty in enforcing contractual obligations; (ix) differences in the legal and regulatory environment or enhanced legal and regulatory compliance; (x) reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; (xi) political hostility to investments by foreign or private investment fund investors; and (xii) less publicly available information.
Additionally, certain Infrastructure Assets may include or invest in foreign portfolio companies that do not maintain internal management accounts or adopt financial budgeting, internal audit or internal control procedures to standards normally expected of companies in the United States. Accordingly, information supplied regarding the Private Market Assets may be incomplete, inaccurate and/or significantly delayed. The Fund and the Investment Funds may therefore be unable to take or influence timely actions necessary to rectify management deficiencies in such portfolio companies, which may ultimately have an adverse impact on the NAV of the Fund.
The Fund’s Infrastructure Assets could be negatively impacted by the current hostilities in Eastern Europe, including direct and indirect effects on their operations and financial condition. In the event these hostilities escalate, the impact could more significant. Certain of the Infrastructure Assets in which the Fund may invest may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, as a result of recent events involving Ukraine and Russia, the United States and other countries have imposed economic sanctions on Russian sovereign debt and on certain Russian individuals, financial institutions, and others. Sanctions could result in Russia taking counter measures or retaliatory actions which may further impair the value and liquidity of Russian securities. These sanctions could also impair the Fund’s ability to meet its investment objectives. For example, the Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, the sanctions may require the Fund to freeze its existing investments in companies operating in or having dealings with sanctioned countries, prohibiting the Fund from selling or otherwise transacting in these investments. This could impact the Fund’s ability to sell securities or other financial instruments as needed to meet shareholder redemptions. The Fund could seek to suspend redemptions in the event that an emergency exists in which it is not reasonably practicable for the Fund to dispose of its securities or to determine the value of its net assets.
Illiquidity of Infrastructure Assets. There is no regular market for interest in Infrastructure Assets, which typically must be sold in privately negotiated transactions. Any such sales would likely require the consent of the applicable Investment Manager or portfolio company and could occur at a discount to the stated NAV. If the Advisers determine to cause the Fund to sell its interests in an Infrastructure Asset, the Fund may be unable to sell such interests quickly, if at all, and could therefore be obligated to continue to hold such interests for an extended period of time.
Investments in Non‑Voting Stock; Inability to Vote. Under certain circumstances, the Fund may hold its interests in the Infrastructure Assets in non‑voting form or limit its voting rights to a certain percentage. In such cases, where only voting securities are available for purchase, the Fund will generally seek to create by contract the same result as owning a non‑voting security by agreeing to relinquish or limit the right to vote in respect of its investment. The Fund will not receive any consideration in return for entering into a voting waiver arrangement. To the extent that the Fund contractually foregoes the right to vote the relevant securities, the Fund will not be able to vote or may be able to vote only to a limited extent on matters that may be adverse to the Fund’s interests. As a result, the Fund’s influence on a Infrastructure Assets could be diminished, which may consequently adversely affect the Fund and its Shareholders.
Nature of Portfolio Companies. Infrastructure Assets will include direct and indirect investments in various companies, projects, and businesses. This may include portfolio companies in the early phases of development, which can be highly risky due to the lack of a significant operating history, fully developed product lines, experienced
 
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management, or a proven market for their products. The Fund’s investments may also include portfolio companies that are in a state of distress or which have a poor record and which are undergoing restructuring or changes in management, and there can be no assurances that such restructuring or changes will be successful. The management of such portfolio companies may depend on one or two key individuals, and the loss of the services of any of such individuals may adversely affect the performance of such portfolio companies.
Investments in the Debt Securities of Small or Middle-Market Portfolio Companies. Our investments may consist of loans to small and/or less well-established privately held companies. While smaller private companies may have potential for rapid growth, investments in private companies pose significantly greater risks than investments in public companies. For example, private companies:
 
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have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress;
 
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may have limited financial resources and may be unable to meet their obligations under their debt securities, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of realizing any guarantees that may have obtained in connection with the investment;
 
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may have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
 
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generally, are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on the Investment Fund that has invested in the portfolio company; and
 
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generally, have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
Investments in smaller capitalization companies often involve significantly greater risks than the securities of larger, better-known companies because they may lack the management expertise, financial resources, product diversification and competitive strengths of larger companies. The prices of the securities of smaller companies may be subject to more abrupt or erratic market movements than those of larger, more established companies, as these securities typically are less liquid, traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. In addition, when selling large positions in small capitalization securities, the seller may have to sell holdings at discounts from quoted prices or may have to make a series of small sales over a period of time.
In addition, investments in private companies tend to be less liquid. The securities of many of the companies in which we invest are not publicly traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over‑the‑counter secondary market for institutional investors only. Such securities may be subject to legal and other restrictions on resale. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of target portfolio companies may affect our investment returns.
First Lien Senior Secured Loans, Second Lien Senior Secured Loans and Unitranche Debt. When we invest, directly or indirectly, in first lien senior secured loans, second lien senior secured loans, and unitranche debt of portfolio companies, we will generally seek to take a security interest in the available assets of those portfolio companies, including the equity interests of the portfolio companies’ subsidiaries. There is a risk that the collateral securing these loans may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. To the extent a debt investment is collateralized by the securities of a portfolio company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency of the portfolio company. Also, in some circumstances, the Fund’s lien may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a
 
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portfolio company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Loans that are under- collateralized involve a greater risk of loss. Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should the remedies be enforced. Finally, particularly with respect to a unitranche debt structure, unitranche debt will generally have higher leverage levels than a standard first lien term loan.
Mezzanine Investments. We may, directly or indirectly, invest in mezzanine loans. Structurally, mezzanine loans usually rank subordinate in priority of payment to senior debt, such as senior bank debt, and are often unsecured. However, mezzanine loans rank senior to common and preferred equity in a borrower’s capital structure. Mezzanine debt is often used in leveraged buyout and real estate finance transactions. Typically, mezzanine loans have elements of both debt and equity instruments, offering the fixed returns in the form of interest payments associated with senior debt, while providing lenders an opportunity to participate in the capital appreciation of a borrower, if any, through an equity interest. This equity interest typically takes the form of warrants. Due to their higher risk profile and often less restrictive covenants as compared to senior loans, mezzanine loans generally earn a higher return than senior secured loans. The warrants associated with mezzanine loans are typically detachable, which allows lenders to receive repayment of their principal on an agreed amortization schedule while retaining their equity interest in the borrower. Mezzanine loans also may include a “put” feature, which permits the holder to sell its equity interest back to the borrower at a price determined through an agreed-upon formula. Mezzanine investments may be issued with or without registration rights. Similar to other high yield securities, maturities of mezzanine investments are typically seven to ten years, but the expected average life is significantly shorter at three to six years. Mezzanine investments are usually unsecured and subordinate to other debt obligations of an issuer.
Risks Associated with Covenant-Lite Loans. A significant number of leveraged loans in the market may consist of loans that do not contain financial maintenance covenants (“Covenant-Lite Loans”). While the Fund does not intend to invest in Covenant-Lite Loans as part of its principal investment strategy, it is possible that such loans may comprise a small portion of the Fund’s portfolio. Such loans do not require the borrower to maintain debt service or other financial ratios. Ownership of Covenant-Lite Loans may expose the Fund to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation than is the case with loans that also contain financial maintenance covenants.
High Yield Securities and Distressed Securities. Our Private Market Assets may include investments in fixed income securities rated investment grade or non‑investment grade (commonly referred to as high yield securities or “junk” securities) and may include investments in unrated fixed income securities. Non‑investment grade securities are fixed income securities rated below Baa by Moody’s Investors Service, Inc. (“Moody’s”) or below BBB by Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies, Inc. (“S&P”), or if unrated considered by an Investment Manager to be equivalent quality. Non‑investment grade debt securities in the lowest rating categories or unrated debt securities determined to be of comparable quality may involve a substantial risk of default or may be in default. Private Market Assets in non‑investment grade securities expose it to a substantial degree of credit risk. Non‑investment grade securities may be issued by companies that are restructuring, are smaller and less creditworthy or are more highly indebted than other companies, and therefore they may have more difficulty making scheduled payments of principal and interest. Non‑investment grade securities are subject to greater risk of loss of income and principal than higher rated securities and may be considered speculative. Non‑investment grade securities may experience reduced liquidity, and sudden and substantial decreases in price. An economic downturn affecting an issuer of non‑investment grade debt securities may result in an increased incidence of default. In the event of a default, an Investment Fund or the Fund may incur additional expenses to seek recovery. In addition, the market for lower grade debt securities may be thinner and less active than for higher grade debt securities.
Certain Infrastructure Assets may be in transition, out of favor, financially leveraged or troubled, or potentially troubled, and may be or have recently been involved in major strategic actions, restructurings, bankruptcy, reorganization or liquidation. The characteristics of these companies can cause their securities to be particularly risky, although they also may offer the potential for high returns. These companies’ securities may be considered speculative, and the ability of the companies to pay their debts on schedule could be affected by adverse interest rate movements, changes in the general economic climate, economic factors affecting a particular industry or specific developments within the companies. These securities may also present a substantial risk of default. An Investment Fund’s or the Fund’s investment in any instrument is subject to no minimum credit standard and a significant portion of the
 
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obligations and preferred stock in which an Investment Fund or the Fund may invest may be non‑investment grade (commonly referred to as junk securities), which may result in the Investment Fund or the Fund experiencing greater risks than it would if investing in higher rated instruments.
Primary Investments. The market for Primary Investments may be very limited and competitive, and the Primary Investments to which the Fund wishes to allocate capital may not be available at any given time. Primary Investments may be heavily negotiated and may create additional transaction costs for the Fund. Primary Investments are more concentrated than investments in Investment Funds, which hold multiple portfolio companies.
LIBOR Risk. The Fund’s investments, payment obligations and financing terms may be based on floating rates, such as certain London Interbank Offer Rates (collectively, “LIBOR”), Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). Certain LIBORs were generally phased out by the end of 2021, and some regulated entities have ceased to enter into new LIBOR-based contracts beginning January 1, 2022. There remains uncertainty regarding the future use of LIBOR, and the nature of any replacement rate. However, it is possible that the most widely used LIBORs may continue until mid‑2023. As such, the potential effect of a transition away from LIBOR on the Fund or the LIBOR-based instruments in which the Fund invests cannot yet be determined, and it is not possible to completely identify or predict any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere.
The termination of certain Reference Rates presents risks to the Fund. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by the Fund or on its overall financial condition or results of operations. In addition, any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect the Fund’s performance and/or NAV. The transition process away from LIBOR may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. The transition process may also result in a reduction in the value of certain instruments held by the Fund or reduce the effectiveness of related Fund transactions. While some instruments in which the Fund invests may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate setting methodology, not all instruments in which the Fund invests may have such provisions and there is significant uncertainty regarding the effectiveness of any such alternative methodologies. Any potential effects of the transition away from LIBOR on the Fund or on financial instruments in which the Fund invests, as well as other unforeseen effects, could result in losses to the Fund. Since the usefulness of LIBOR as a benchmark or reference rate could deteriorate during the transition period, these effects could occur prior to and/or subsequent to mid‑2023.
The risks set out above are heightened with respect to investments in LIBOR-based products that do not include a fall back provision that addresses how interest rates will be determined if LIBOR stops being published. Other important factors include the pace of the transition, the specific terms of alternative Reference Rates accepted in the market, the depth of the market for investments based on alternative reference rates, and the Advisers’ ability to develop appropriate investment and compliance systems capable of addressing alternative Reference Rates.
Force Majeure Risk. Issuers may be affected by force majeure events (i.e., events beyond the control of the party claiming that the event has occurred, including, without limitation, acts of God, fire, flood, earthquakes, outbreaks of an infectious disease, pandemic or any other serious public health concern, war, terrorism and labor strikes). Some force majeure events may adversely affect the ability of a party (including an issuer or a counterparty to the Fund or an issuer) to perform its obligations until it is able to remedy the force majeure event. In addition, the cost to an issuer or the Fund of repairing or replacing damaged assets resulting from such force majeure event could be considerable. Certain force majeure events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy and international business activity generally, or in any of the countries in which the Fund may invest specifically. Additionally, a major governmental intervention into industry, including the nationalization of an industry or the assertion of control over one or more issuers or its assets, could result in a loss to the Fund, including if its investment in such issuer is canceled, unwound or acquired (which could be without what the Fund considers to be adequate compensation). Any of the foregoing may therefore adversely affect the performance of the Fund and its investments.
The outbreak of a novel coronavirus (“SARS‑CoV‑2”) and related respiratory disease (“COVID‑19”) has recently led, and for an unknown period of time will continue to lead, to disruptions in local, regional, national and
 
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global markets and economies affected thereby. The COVID‑19 outbreak has resulted in numerous deaths and the imposition of both local and more widespread “work from home” and other quarantine measures, mandatory closures of businesses deemed “non‑essential,” border closures and other travel restrictions, labor shortages, a decline in consumer demand for certain goods and services, commercial disruption on a global scale, and general concern and uncertainty, all of which have caused social unrest and significant volatility in financial markets. The future impact of COVID‑19 is currently unknown. The effects to public health, business and market conditions resulting from the COVID‑19 pandemic may have a significant negative impact on the performance of the Fund’s investments, including exacerbating other pre‑existing political, social and economic risks.
Similar consequences could arise with respect to other infectious diseases.
Principal Risks Related to Infrastructure Assets
Infrastructure Investments Generally. The Fund seeks to generate above-market risk-adjusted returns through co‑investments with third-party sponsors, merchant banks, institutional investors or strategic acquirers, some or all of which may have more resources than the Fund, and which may have investment in infrastructure and infrastructure-related assets.
Investments will be subject to the risks incidental to the indirect ownership and operation of infrastructure assets, including risks associated with the general economic climate, geographic or market concentration, climatic risks, the ability of the third-party sponsors to manage the investment, government regulations, national and international political circumstances and fluctuations in interest rates, rates of inflation or commodities’ prices such as oil. Since investments in infrastructure and similar assets, like many other types of long-term investments, have historically experienced significant fluctuations and cycles in value, specific market conditions may result in temporary or permanent reductions in the value of an investment.
In addition, general economic conditions in relevant jurisdictions, as well as conditions of domestic and international financial markets, may adversely affect operations of the third-party co‑investors and in turn, the Fund. In particular, because of the long time‑lag between the approval of a project and its actual funding, a well-conceived project may, as a result of changes in investor sentiment, the financial markets, economic, or other conditions prior to its completion, become an economically unattractive investment.
There can be no assurance that the Investments will be profitable or generate cash flow sufficient to provide a return on or recovery of amounts invested therein.
Sector Risks. Portfolio companies may operate in highly competitive markets dominated by firms with substantially greater financial and possibly better technical resources than the portfolio companies in which the Fund invests. Portfolio companies in which the Fund invests may also be subject to additional infrastructure sector risks, including (i) the risk that technology employed will be not be effective or efficient, (ii) the risk of equipment failures, failure to perform according to design specifications, failure to meet expected levels of efficiency, fuel interruptions, loss of sale and supply contracts; (iii) changes in power or fuel contract prices, bankruptcy of or defaults by key customers, suppliers or other counterparties, and tort liability; (iv) risk of changes of values of infrastructure sector companies; (v) risks associated with employment of personnel and unionized labor; (vi) political and regulatory considerations and popular sentiments that could affect the ability of the Fund to buy or sell investments on favorable terms; and (vii) other unanticipated events which adversely affect operations.
The occurrence of events related to any of the foregoing could have a material adverse effect on the Fund and its Co‑Investments. These and other inherent business risks could affect the performance and value of Co‑Investments.
Environmental, Health and Safety Risks. Infrastructure assets are typically subject to numerous statutes, rules and regulations relating to protection of the environment and worker and public health and safety. Certain statutes, rules and regulations might require Co‑Investments to address environmental contamination, including soil and groundwater contamination, resulting from the release of fuel, hazardous materials or other pollutants, to control other forms of environmental pollution such as air, surface water, wastewater, and noise pollution, or otherwise to incur significant capital or operating expenditures to comply with environmental, health, and safety requirements. Any current or past non‑compliance with such requirements could subject the underlying assets of a Co‑Investment to
 
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material administrative, civil, or criminal penalties or other liabilities. Further, under various statutes, rules and regulations of certain jurisdictions, a current or previous owner or operator of real property may be liable for the costs of investigation, monitoring, removal or remediation of hazardous materials, in some cases whether or not the owner or operator knew of or was responsible for the presence of hazardous materials. The presence of hazardous materials on a property could also result in personal injury or property damage or similar claims by private parties. Persons who arrange for the disposal or treatment of hazardous materials may also be liable for the costs of removal or remediation of these materials at the disposal or treatment facility, whether or not that facility is or ever was owned or operated by that person.
The long-term trend toward increasingly stringent environmental, health, and safety regulation could continue in the future, resulting in substantial additional costs on Co‑Investments to comply with new requirements. In addition, because infrastructure assets can have a substantial environmental impact, community and environmental groups may protest about the development or operation of a Co‑Investment, and these protests may induce government action to the detriment of performance of the Co‑Investment. Further, ordinary operation or occurrence of an accident with respect to a Co‑Investment could cause significant damage to the environment or harm to public health or safety, which may result in significant financial distress to the particular asset and ultimately affect the return on the Fund’s investment therein.
While StepStone and the Investment Manager intend to exercise reasonable care to select Co‑Investments that have underlying assets that do not present a material risk of current or future environmental, health, or safety liabilities, StepStone and the Investment Manager cannot rule the possibility that such liabilities may arise as a result of a large number of factors, including changes in laws or regulations and the existence of conditions that were unknown at the time of acquisition. Environmental, health, or safety liabilities could have a material adverse effect on the results of operations, financial condition, liquidity and prospects of the Co‑Investments, and on the overall value of such Co‑Investments.
Terrorism Risk. The Fund may invest directly or indirectly in significant strategic assets. Strategic assets are assets that have a national or regional profile and may have monopolistic or oligopolistic characteristics. The very nature of these assets could generate additional risk not common in other industry sectors and could expose them to a greater risk of being the subject of a terrorist attack than other assets or businesses. Any terrorist attacks that occur at or near infrastructure facilities would likely cause significant harm to employees, assets and, potentially, the surrounding community. Insurers may offer a limited amount of or no insurance coverage for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. A terrorist attack involving the property of an infrastructure asset, or property under control of a portfolio company, may result in liability far in excess of available insurance coverage. A terrorist attack on an infrastructure asset may also have adverse consequences for all assets of that type, including the underlying assets in a Co‑Investment. For example, as a result of a terrorist attack in the vicinity of an infrastructure asset, the infrastructure asset may be forced to increase preventative security measures or expand its insurance coverage, adversely affecting the profitability of investment in that asset. Similarly, a terrorist attack could cause reduced patronage, usage and demand for an entire class of infrastructure assets or for infrastructure investments in the region of the terrorist attack, which could adversely affect the profitability of the Co‑Investments.
Climate Risk. Global climate change is widely considered to be a significant threat to the global economy. Infrastructure assets in particular may face risks from the physical effects of climate change, such as risks posed by increasing frequency or severity of extreme weather events and rising sea levels and temperatures. Additionally, the Paris Agreement and other initiatives by international, U.S. federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose infrastructure assets to so‑called “transition risks” in addition to physical risks, such as: (i) regulatory and litigation risk (e.g., changing legal requirements that could result in increased permitting and compliance costs, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to climate impacts); (ii) technology and market risk (e.g., declining market for products and services seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions); and (iii) reputational risk (e.g., risks tied to changing customer or community perceptions of an asset’s relative contribution to greenhouse gas emissions). StepStone and the Investment Manager cannot rule out the possibility that climate risks could result in unanticipated delays or expenses and, under certain circumstances, could prevent completion of investment activities once undertaken, any of which could have a material adverse effect on a Co‑Investment or the Fund.
 
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Regulatory and Legal Risks. Certain of the Co‑Investments may be in entities that are subject to substantial regulation by governmental agencies. The nature of this regulation exposes the owners of infrastructure assets to a higher level of regulatory control than typically imposed on other businesses. In addition, their operations may often rely on governmental licenses, concessions, leases or contracts that are generally very complex and may result in disputes over interpretation or enforceability. Even though most permits and licenses are obtained prior to the commencement of full project operations, many of these licenses and permits have to be maintained over the project’s life. If the Fund or portfolio companies fail to comply with these regulations or contractual obligations, they could be subject to monetary penalties or they may lose their rights to operate the underlying infrastructure assets, or both. Where their ability to operate an infrastructure asset is subject to a concession or lease from the government, the concession or lease may restrict their ability to operate the asset in a way that maximizes cash flows and profitability. Government entities generally have significant influence over such companies in respect of the various contractual and regulatory relationships they may have, and these government entities may exercise their authority in a manner that causes delays in the operation of the business of the infrastructure investments, obstacles to pursuit of the infrastructure investments’ strategy or increased administrative expenses. In this regard, the nature and extent of government regulation can also be a key driver of value and returns. Furthermore, permits or special rulings may be required on taxation, financial and regulatory related issues.
The concessions of certain Co‑Investments are granted by government bodies and are subject to special risks, including the risk that the relevant government bodies will exercise sovereign rights and take actions contrary to the rights of the Fund or the relevant portfolio company under the relevant concession agreement. Indeed, to the extent that Fund invests in assets that are governed by lease or concession agreements with governmental authorities, there is a risk that these authorities may not be able to honor their obligations under the agreement, especially over the long term. The lease or concession may also contain clauses more favorable to the government counterparty than a typical commercial contract. For instance, the lease or concession may enable the government to terminate the lease or concession in certain circumstances (such as default by the Fund or by a portfolio company) without requiring the government counterparty to pay adequate compensation. In addition, there can be no assurance that the relevant government bodies will not legislate, impose regulations or taxes or change applicable laws or act contrary to the law in a way that would materially and adversely affect the business of the Co‑Investments. Indeed, government counterparties may have the discretion to change or increase regulation of the operations of the Co‑Investments or to implement laws, regulations or policies affecting their operations, separate from any contractual rights that the government counterparties may have. Governments have considerable discretion in implementing regulations and policies that could impact Co‑Investments, and because infrastructure assets provide basic, everyday services, and face limited competition, governments may be influenced by political considerations and make decisions that adversely affect Co‑Investments and their operations. Activities not currently regulated may in the future be regulated.
In addition, infrastructure investments may be subject to rate regulation by government agencies because of their unique position as the sole or predominant providers of services that are often essential to the community. As a result, certain infrastructure investments might be subject to unfavorable price regulation by government agencies. Political oversight of the sector is also likely to remain pervasive and unpredictable and, for political reasons, governments may attempt to take actions which may negatively affect the operations, revenue, profitability or contractual relationships of infrastructure investments, including through expropriation.
Certain infrastructure investments may need to use public ways or may operate under easements. Under the terms of agreements governing the use of public ways or easements, government authorities may retain the right to restrict the use of such public ways or easements or to require portfolio companies to remove, modify, replace or relocate their facilities at the portfolio company’s expense. If a government authority exercises these rights, the portfolio company could incur significant costs and its ability to provide service to its customers could be disrupted, which could adversely impact the performance of the relevant Co‑Investment.
Infrastructure assets are often governed by highly complex legal contracts and documents. As a result, the risks of a dispute over interpretation or enforceability of the legal contracts and documentation and consequent costs and delays may be higher than for other types of investments. Such risks may be increased by the uncertainty of laws and their application in certain jurisdictions in which the Fund will invest. The Fund may be adversely affected by future changes in laws and regulations.
Other legal risks relate to environmental issues and industrial actions or to actions by special interest groups and actions or litigation relating to the acquisition, ownership, operation and disposition of the Co‑Investments that
 
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may adversely affect the Co‑Investment or the value thereof. The risk of such actions or litigation may be higher with regard to infrastructure investments (which may be of a public and/or quasi-monopoly nature) compared to other investments.
Demand and Usage Risk. The Fund may directly or indirectly invest in assets with demand, usage and throughput risk. Residual demand, usage and throughput risk can affect the performance of Co‑Investments. For example, some of the Co‑Investments may be subject to seasonal variations, and accordingly, the Fund’s operating results for any such Co‑Investment in any particular quarter may not be indicative of the results that can be expected for such Co‑Investment throughout the entire year. To the extent that StepStone’s and the Investment Manager’s assumptions regarding the demand, usage and throughput of assets prove incorrect, returns to the Fund could be adversely affected.
Users of the infrastructure operated by Co‑Investments may react negatively to any adjustments to applicable tolls or other usage-related fee rates, or public pressure may cause relevant government authorities to challenge the tolls or other usage-related fee rates. Users of infrastructure may react adversely to tolls or other usage-related fee rates, for example, by avoiding using the infrastructure or refusing to pay the tolls or other usage-related fee, resulting in lower volumes and reduced usage revenues. In addition, adverse public opinion, or lobbying efforts by specific interest groups, could result in governmental pressure on Co‑Investments to reduce their tolls or other usage-related fee rates, or to forego planned tolls or other usage-related fee rate increases. StepStone and the Investment Manager cannot guarantee that government bodies with which Co‑Investments have concession agreements will not try to exempt certain users’ categories from tolls or other usage-related fees or negotiate lower tolls or other usage-related fee rates. If public pressure or government action forces Co‑Investments to restrict their tolls or other usage-related fee rate increases or to reduce their tolls or other usage-related fee rates, and they are not able to secure adequate compensation to restore the economic balance of the relevant concession agreement, the Fund’s business, financial condition and results of operations could be materially and adversely affected.
The Fund may invest in Co‑Investments that derive substantially all of their revenues from collecting tolls or other usage-related fees from users of such infrastructure. The tolls or other usage-related fees that are applicable to such infrastructure are set forth in the respective concession agreements entered into by or on behalf of the Fund or the relevant portfolio company and the relevant government body.
After execution of a concession agreement, the relevant government bodies may seek to limit such Co‑Investments’ ability to increase, or may seek to reduce, tolls or other usage-related fee rates outside the scope of the respective concession agreements, as a result of factors such as general economic conditions, negative consumer perceptions of increases in tolls or other usage-related fee rates, the prevailing rate of inflation, volume and public sentiment about prevailing tolls or other usage-related fee rates.
Valuation of the Fund’s Interests in Investment Funds. The valuation of the Fund’s investments in Investment Funds is ordinarily determined based upon valuations provided by the Investment Managers on a quarterly basis. Although such valuations are provided on a quarterly basis, the Fund will provide valuations, and will issue Shares, on a daily basis. A large percentage of the securities in which the Fund invests will not have a readily ascertainable market price and will be fair valued by the Investment Manager. In this regard, an Investment Manager may face a conflict of interest in valuing the securities, as their value may affect the Investment Manager’s compensation or its ability to raise additional funds. No assurances can be given regarding the valuation methodology or the sufficiency of systems utilized by any Investment Manager, the accuracy of the valuations provided by the Investment Managers, that the Investment Managers will comply with their own internal policies or procedures for keeping records or making valuations, or that the Investment Managers’ policies and procedures and systems will not change without notice to the Fund. As a result, an Investment Manager’s valuation of the securities may fail to match the amount ultimately realized with respect to the disposition of such securities.
An Investment Manager’s information could also be inaccurate due to fraudulent activity, mis‑valuation or inadvertent error. The Fund may not uncover errors in valuation for a significant period of time, if ever.
Valuations Subject to Adjustment. The Fund determines its NAV daily based upon the quarterly valuations reported by the Investment Managers, which may not reflect market or other events occurring subsequent to the quarter‑end. The Fund will fair value its holdings in Investment Funds to reflect such events, consistent with its valuation policies; however, there is no guarantee the Fund will correctly fair value such investments. Additionally,
 
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the valuations reported by Investment Managers may be subject to later adjustment or revision. For example, fiscal year‑end NAV calculations of the Investment Funds may be revised as a result of audits by their independent auditors. Other adjustments may occur from time to time. Because such adjustments or revisions, whether increasing or decreasing the NAV of the Fund, and therefore the Fund, at the time they occur, relate to information available only at the time of the adjustment or revision, the adjustment or revision may not affect the amount of the repurchase proceeds of the Fund received by Shareholders who had their Shares repurchased prior to such adjustments and received their repurchase proceeds. As a result, to the extent that such subsequently adjusted valuations from the Investment Managers or revisions to the NAV of an Investment Fund adversely affect the Fund’s NAV, the remaining outstanding Shares may be adversely affected by prior repurchases to the benefit of Shareholders who had their Shares repurchased at a NAV higher than the adjusted amount. Conversely, any increases in the NAV resulting from such subsequently adjusted valuations may be entirely for the benefit of the outstanding Shares and to the detriment of Shareholders who previously had their Shares repurchased at a NAV lower than the adjusted amount. The same principles apply to the purchase of Shares. New Shareholders may be affected in a similar way.
Termination of the Fund’s Interest in an Investment Fund. An Investment Fund may, among other things, terminate the Fund’s interest in that Investment Fund (causing a forfeiture of all or a portion of such interest) if the Fund fails to satisfy any capital call by that Investment Fund or if the continued participation of the Fund in the Investment Fund would have a material adverse effect on the Investment Fund or its assets. The Fund’s over-commitment strategy may increase the risk that the Fund is unable to satisfy a capital call from an Investment Fund.
General Risks of Secondary Investments. The overall performance of the Fund’s Secondary Investments will depend in part on the acquisition price paid, which may be negotiated based on incomplete or imperfect information. There is a risk that investors exiting a Co‑Investment or an Investment Fund through a secondary transaction may possess superior knowledge regarding the value of their investment, and the Fund may pay more for a secondary investment than it would have if it were also privy to such information. Certain Secondary Investments may be purchased as a portfolio, and in such cases the Fund may not be able to carve out from such purchases those investments that the Advisers consider (for commercial, tax, legal or other reasons) less attractive. Where the Fund acquires a secondary Investment Fund, the Fund will generally not have the ability to modify or amend such secondary Investment Fund’s constituent documents (e.g., limited partnership agreements) or otherwise negotiate the economic terms of the interests being acquired. In addition, the costs and resources required to investigate the commercial, tax and legal issues relating to secondary investments may be greater than those relating to primary investments.
Where the Fund acquires a secondary Investment Fund, the Fund may acquire contingent liabilities associated with such interest. Specifically, where the seller has received distributions from the relevant secondary Investment Fund and, subsequently, that secondary Investment Fund recalls any portion of such distributions, the Fund (as the purchaser of the interest to which such distributions are attributable) may be obligated to pay an amount equivalent to such distributions to such secondary Investment Fund. While the Fund may be able, in turn, to make a claim against the seller of the interest for any monies so paid to the secondary Investment Fund, there can be no assurance that the Fund would have such right or prevail in any such claim.
The Fund may acquire Secondary Investments as a member of a purchasing syndicate, in which case the Fund may be exposed to additional risks including, among other things: (i) counterparty risk, (ii) reputation risk, (iii) breach of confidentiality by a syndicate member, and (iv) execution risk.
Additionally, the Fund may acquire interests in Secondary Investments through structured transactions such as collateralized fund obligations (“CFOs”) or similar investment vehicles that own existing secondaries and co‑investments. These structures may impose additional administrative costs that the Fund would not have incurred had it invested in Secondary Investments directly. Secondary Investments held inside of a CFO may be subject to the risks and benefits of leverage at the CFO level. If the Fund acquires interests in a secondary Investment Fund through a CFO, the Fund may be limited in its ability to enforce its rights against such secondary Investment Fund.
Commitment Strategy. The Fund may maintain a sizeable cash position in anticipation of funding capital calls. The Fund will be required to make incremental contributions pursuant to capital calls issued from time to time by Investment Funds. The overall impact on performance due to holding a portion of the investment portfolio in cash or cash equivalents could be negative.
 
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The Fund will employ an “over-commitment” strategy, which could result in an insufficient cash supply to fund unfunded commitments to Investment Funds. Such a short fall would have negative impacts on the Fund, including an adverse impact on the Fund’s ability to pay for redemptions of Shares by Shareholders, pay distributions or to meet expenses generally. Moreover, if the Fund defaults on its unfunded commitments or fails to satisfy capital calls in a timely manner then, generally, it will be subject to significant penalties, including the complete forfeiture of the Fund’s investment in the Investment Fund. Any failure by the Fund to make timely capital contributions in respect of its unfunded commitments may (i) impair the ability of the Fund to pursue its investment program, (ii) force the Fund to borrow, indirectly cause the Fund, and, indirectly, the Shareholders to be subject to certain penalties from the Investment Funds (including the complete forfeiture of the Fund’s investment in an Investment Fund), or (iv) otherwise impair the value of the Fund’s investments (including the devaluation of the Fund).
Allocation Risk. The Firm advises clients and sponsors, administers, manages and/or advises traditional and non‑traditional investment funds and investment programs, accounts and businesses (collectively, together with any new or successor funds, programs, accounts or businesses, the “Related Investment Accounts”). Certain Related Investment Accounts may have investment objectives and/or utilize investment strategies that are similar or comparable to those of the Fund (the “Related Funds”). As a result, certain investments may be appropriate for the Fund and also for other Related Investment Accounts.
Decisions as to the allocation of investment opportunities among the Fund and other Related Investment Accounts present numerous inherent conflicts of interest, particularly where an investment opportunity has limited availability. In order to address these conflicts of interest, the Firm adopted allocation policies and procedures that were designed to require that all investment allocation decisions made by the investment team are being made fairly and equitably among Related Investment Accounts over time.
Subject to applicable law, the Firm will allocate opportunities among the Fund and the Related Investment Accounts in its sole discretion. The Firm will determine such allocations among its Related Investment Accounts in its sole discretion in accordance with their respective guidelines and based on such factors and considerations as it deems appropriate. Subject to the foregoing and the paragraph below, available capacity with respect to each investment opportunity generally will be allocated among the various Related Investment Accounts for which the investment has been approved pro rata.
The 1940 Act imposes significant limits on co‑investments with affiliates of the Fund. The Advisers and the Fund have obtained an exemptive order from the SEC that permits the Fund to co‑invest alongside its affiliates in privately negotiated investments. However, the SEC exemptive order contains certain conditions that limit or restrict the Fund’s ability to participate in such transactions, including, without limitation, where the Firm’s advised funds have an existing investment in the operating company or Investment Fund. Additionally, third parties, such as the Investment Managers of Primary Investments, may not prioritize an allocation to the Fund when faced with a more established pool of capital also competing for allocation. Ultimately, an inability to receive the desired allocation to certain Infrastructure Assets could represent a risk to the Fund’s ability to achieve the desired investment returns. See “Investment Program — The Firm’s Allocation Policy.”
Non‑Diversified Status. The Fund is a “non‑diversified” investment company for purposes of the 1940 Act, which means that it is not subject to percentage limitations under the 1940 Act on the percentage of its assets that may be invested in the securities of any one issuer. The Fund’s NAV may therefore be subject to greater volatility than that of an investment company that is subject to such a limitation on diversification. In addition, while the Fund is a “non‑diversified” fund for purposes of the 1940 Act, the Fund intends to maintain its qualification to be treated as a RIC under the Code. To qualify as a RIC under the Code, the Fund must, among other things, diversify its holdings so that, at the end of each quarter of each taxable year, (A) at least 50% of the market value of the Fund’s assets is represented by cash, cash items, U.S. government securities, securities of other regulated investment companies and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and 10% of the outstanding voting securities of such issuer and (B) not more than 25% of the market value of the Fund’s total assets is invested in the securities (other than U.S. government securities and the securities of other regulated investment companies) of (1) any one issuer, (2) any two or more issuers that the Fund controls and that are determined to be engaged in the same business or similar or related trades or businesses, or (3) any one or more “qualified publicly traded partnerships.” As such, the Advisers typically endeavor to limit the Fund’s investments in any one Investment Fund to no more than 25% of the Fund’s gross assets (measured at the time of purchase).
 
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“J‑Curve” Performance Risk. Investment Funds typically exhibit “J‑Curve” performance, such that an Investment Fund’s NAV typically declines moderately or flattens during the early portion of the Investment Fund’s lifecycle as investment-related fees and expenses accrue prior to the realization of investment gains. As the Investment Fund matures and as assets are sold, the Advisers believe that the pattern typically reverses with increasing NAV and distributions. There can be no assurance, however, that any or all of the Investment Funds in which the Fund invests will exhibit this pattern of investment returns.
LIMITS OF RISK DISCLOSURES
The above discussions of the various risks associated with the Fund and the Shares are not, and are not intended to be, a complete enumeration or explanation of the risks involved in an investment in the Fund. Prospective investors should read this entire Prospectus and consult with their own advisors before deciding whether to invest in the Fund. In addition, as the Fund’s investment program changes or develops over time, an investment in the Fund may be subject to risk factors not described in this Prospectus. The Fund will update this Prospectus to account for any material changes in the risks involved with an investment in the Fund.
MANAGEMENT OF THE FUND
General
The Fund’s Board of Trustees provides broad oversight over the operations and affairs of the Fund. A majority of the Fund’s Board of Trustees is comprised of persons who are independent trustees. StepStone Private Wealth serves as the Fund’s Adviser, and StepStone serves as the Fund’s Sub‑Adviser.
The Adviser, StepStone Private Wealth, is an investment platform designed to expand access to the private markets for high‑net‑worth investors. The Adviser intends to create innovative solutions for investors by focusing on convenience, efficiency and transparency. The Adviser’s mission is to convert the private market advantages enjoyed by institutional investors into opportunities for individual investors. The Adviser is registered as an investment adviser under the Investment Advisers Act of 1940. The Adviser, established in 2019, is based in Charlotte, North Carolina. Please see StepStone Private Wealth’s website at www.stepstonepw.com for the most up‑to‑date information.
StepStone was formed in 2014 and is the infrastructure and real assets business group of StepStone Group LP. StepStone oversees $75 billion in “private market allocations” which is composed of $27 billion in assets under management and $48 billion in assets under advisement14, including $14 billion of investments approved in 2022. Led by 11 partners with an average of 21 years of infrastructure and real assets experience and supported by a team of dedicated professionals, StepStone provides clients with an “on‑the‑ground” presence in Australia, Europe, the United Kingdom and North America with deep experience in infrastructure, energy, agriculture and natural resources. StepStone is owned 49% by StepStone Group LP and 51% by full-time investment professionals of the StepStone team.
As an affiliate of StepStone Group LP, StepStone benefits from the organization’s scale and depth across the private markets. StepStone Group LP is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. StepStone Group LP’s clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients. StepStone Group LP partners with its clients to develop and build portfolios designed to meet their specific objectives across private infrastructure, private equity, private real estate and private debt asset classes. As of December 31, 2022, StepStone Group LP was responsible for $602 billion of “private market allocations” which includes $134 billion of assets under management and $468 billion of assets under advisement. StepStone Group LP has 920 professionals across 25 cities in 15 countries.
 
 
14 “Private market allocations” means the total amount of assets under management and assets under advisement. StepStone classifies assets under management if the StepStone has full discretion over the investment decisions in an account or has responsibility or custody of assets. Assets under advisement consists of client assets for which StepStone does not have full discretion to make investment decisions but plays a role in advising the client or monitoring their investments.
 
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StepStone Group Inc. is the sole managing member of StepStone Group Holdings LLC, which in turn is the general partner of StepStone Group LP. StepStone Group Inc. is listed and trades on the Nasdaq Global Select Market under the trading symbol STEP. Please see StepStone Group Inc.’s website at www.stepstonegroup.com for additional information.
StepStone advises and/or manages accounts other than that of the Fund, which may give rise to certain conflicts of interest. See “Conflicts of Interest.”
Under the terms of the Advisory Agreement, the Adviser is responsible for the overall management of the Fund’s activities. The Adviser is responsible for formulating and updating (as needed) the overall investment strategy of the Fund. The Adviser is also responsible for the structuring and distribution functions for the Fund. In addition, the Adviser is responsible for the operational and governance aspects of the Fund, including the selection and management of the Fund’s service providers and the management of the Fund’s repurchase offers and distributions and dividend reinvestment plan. The Adviser is also responsible for the Fund’s SEC and other regulatory reporting obligations. The Adviser is subject to the ultimate supervision of, and any policies established by, the Board of Trustees.
The Adviser has entered into a Sub‑Advisory Agreement with StepStone. The Sub‑Adviser will be responsible for the day‑to‑day management of the Fund’s assets and activities. The Sub‑Adviser will provide ongoing research, recommendations, and portfolio management regarding the Fund’s investment portfolio subject to the overall supervision of the Adviser and the Fund’s officers and Board of Trustees.
A description of the factors considered by the Fund’s Board of Trustees in approving the Advisory Agreement and the Sub‑Advisory Agreement will included in either the Fund’s first annual or semi-annual report following the commencement of operations.
Management Team
The personnel of the Advisers principally responsible for management of the Fund are experienced and educated investment professionals with a long performance record in private market investments. They have identified, evaluated, structured, managed and monitored billions of dollars in a wide range of private market investments globally and maintain a strong network within the private markets investment community as a result of their prior and ongoing experience. The Advisers believe that, as a result of these relationships, the Fund should have access to a large number of Infrastructure Assets from which to select.
StepStone Private Wealth Team
Bob Long
Bob Long is the Chief Executive Officer of StepStone Private Wealth. Mr. Long has three decades of experience in the private markets and has served as the CEO of two publicly traded companies focused on expanding access for high‑net‑worth investors. He is a founding Director of the Defined Contribution Alternatives Association and chairs its Public Policy Committee.
Mr. Long has served as the CEO of a Nasdaq-listed business development company managed by Oak Hill Advisors, a leading global credit investment firm. He was the co‑founder and CEO of Conversus Capital, and along with Mr. Smith, led the $2 billion IPO of this innovative permanent capital vehicle that was the largest publicly traded fund of private equity funds. Mr. Long also ran Bank of America’s $7 billion AUM Strategic Capital Division, which held investments in over 1,000 private market funds and co‑investments.
Early in his career, Mr. Long served as the lead in‑house counsel for a large portion of Bank of America’s Investment Banking Division and worked as a securities lawyer for a major law firm. He graduated from UNC‑Chapel Hill and the University of Virginia School of Law.
A frequent commentator on private market topics, Mr. Long was named one of 50 Game Changers by Private Equity International, has been profiled in the Wall Street Journal, and guest hosted CNBC Squawk Box Europe on
 
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numerous occasions. He currently serves on the Gift of Adoption Strategic Advisory Council and previously served on the board of the Children’s Home Society of North Carolina.
Tom Sittema
Tom Sittema is the Executive Chairman of StepStone Private Wealth. In his four decades of capital markets experience, Mr. Sittema has served as the CEO of an industry-leading private markets asset manager and the Chairman of the Board of numerous publicly registered funds designed for individual investors. He serves on the Board of the Institute for Portfolio Alternatives, a private markets industry group, and during his term as Chairman, led several of its strategic initiatives.
Mr. Sittema served as the CEO of CNL Financial Group, a $10 billion asset manager providing access for individual investors to the private markets where he recruited Mr. Menard. Mr. Sittema held a variety of leadership roles at Bank of America Merrill Lynch / Bank of America over a 27‑year career, including the U.S. Head of Real Estate Investment Trusts and Lodging Investment Banking, and worked closely with Mr. Long for over 10 years.
Mr. Sittema graduated from Dordt College and Indiana University Kelley School of Business. He serves as Board Chair of Advent Health’s Consumer Innovation Advisory Board and is the co‑founder and board chair of LIFT Orlando, an organization established to break the cycle of generational concentrated poverty in a community in Central Florida. Mr. Sittema is Director of the Florida Council of 100 and has received numerous economic development and civic awards, including Central Florida Social Entrepreneur of the Year.
Neil Menard
Neil Menard is the President of Distribution for StepStone Private Wealth. Mr. Menard is a seasoned distribution leader with over 30 years of experience in the financial services industry. Over his career, he has built a broad and deep network within the financial advisor and broker dealer communities. He has led sales teams distributing billions of dollars of private capital to hundreds of advisory firms, including the largest players in several verticals.
Mr. Menard served as the President of CNL Securities Corporation and CNL Capital Markets where he oversaw the capital raising efforts of the firm then led by Mr. Sittema. Previously, he served as senior vice president of Franklin Square Capital Partners, where he was responsible for creating a new business unit to sell business development companies to registered investment advisors (RIAs), strategically setting a vision for the products and executing that vision in the marketplace. Additionally, he sat on the firm’s management committee where he led the firm’s initiatives in building relationships, as well as creating its RIA team and growing market share in the RIA space.
Mr. Menard spent nine years at Steben & Company Inc., a leading provider of managed futures to independent broker-dealers and RIAs. He was responsible for the day‑to‑day operation of the firm, and he was the head of distribution.
Mr. Menard has served on the board of the Institute for Portfolio Alternatives, a private markets industry group. He is on the board of the Florida Hospital Cardiovascular Institute and graduated from Colby College.
Tim Smith
Tim Smith is the Chief Operating Officer and Chief Financial Officer of StepStone Private Wealth. Mr. Smith brings over 30 years of operational experience working in private equity, private markets distribution and asset management businesses. During that time, he has served as the CFO and CEO of two publicly traded companies.
Mr. Smith co‑founded Carolon Capital UK Limited, a U.K. based distribution firm focusing on long-only strategies for asset managers. He also co‑founded Carolon Investment Funds headquartered in Dublin, Ireland to assist asset managers with fund structuring and regulatory oversight.
Mr. Smith worked with Mr. Long to launch Conversus Capital and was the CFO of the publicly traded entity. Mr. Smith led all facets of Conversus’ operations, finance, treasury and investor relations activities and led the sale of Conversus’ $2 billion portfolio in 2012.
 
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Mr. Smith is a Certified Public Accountant, has an undergraduate degree from the University of Virginia and a graduate degree from the University of Richmond. Mr. Smith is active with the Loaves and Fishes Food Pantry and serves on the board of the Emergency Medical Center at the University of Virginia.
StepStone Team
As portfolio manager, Adam Reisler has primary responsibility for ongoing research, recommendations, and portfolio management regarding the Fund’s investment portfolio.
Adam Reisler
Mr. Reisler is a Partner of StepStone and member of the infrastructure and real assets team. Prior to joining StepStone, Mr. Reisler was a vice president in KPMG’s infrastructure investment advisory and asset management business, which was merged with StepStone in May 2016. Mr. Reisler has also held roles at RBC and start‑ups.
Mr. Reisler received a Bachelor of Commerce (Hons) from McGill University and an MBA (Hons) and Diploma in Infrastructure and Real Estate from the Schulich School of Business in Canada.
The SAI provides additional information about the portfolio manager’s compensation, other managed accounts and ownership of Shares in the Fund.
Control Persons
A control person generally is a person who beneficially owns more than 25% of the voting securities of a company or has the power to exercise control over the management or policies of such company. StepStone has provided the initial investment for the Fund. For so long as StepStone has a greater than 25% interest in the Fund, it may be deemed to be a “control person” of the Fund for purposes of the 1940 Act.
Administrator
StepStone Private Wealth serves as the Fund’s Administrator under an Administration Agreement with the Fund, and performs certain administrative, accounting and other services for the Fund. In consideration of these administrative services, the Fund pays the Administrator the Administration Fee in an amount up to 0.23% on an annual basis of the Fund’s net assets. The Administration Fee will be accrued daily based on the value of the net assets of the Fund as of the close of business on each business day (including any assets in respect of shares that will be repurchased by the Fund on such date). The Administration Fee is due and payable in arrears within ten business days after the end of the month. The Administration Fee is an expense paid out of the Fund’s net assets. The Administrator’s principal business address is 128 S Tryon St., Suite 1600, Charlotte, NC 28202. The Administrator may delegate or sub‑contract certain of its services to other entities, including a sub‑administrator, and has done so as described below.
Sub‑Administrator
UMB Fund Services, Inc. serves as the Fund’s Sub‑Administrator to provide certain sub‑administration and sub‑accounting services for the Fund. Pursuant to a sub‑administration agreement and a fund accounting agreement, the Administrator pays the Sub‑Administration Fee to the Sub‑Administrator from the proceeds of the Administration Fee in an amount up to 0.08% on an annual basis of the Fund’s net assets, subject to a minimum annual fee. The Sub‑Administration Fee is calculated in a manner substantially similar to the Administration Fee and is payable monthly in arrears. The Sub‑Administrator’s principal business address is 235 West Galena Street, Milwaukee, Wisconsin 53212.
Custodian and Transfer Agent
UMB Bank, N.A. (the “Custodian”) serves as the custodian of the Fund’s assets. The Custodian’s principal business address is 928 Grand Blvd., 5th Floor, Kansas City, Missouri 64106.
UMB Fund Services, Inc. (the “Transfer Agent”) serves as transfer agent with respect to maintaining the registry of the Fund’s Shareholders and processing matters relating to subscriptions for, and repurchases of, Shares. The Transfer Agent’s principal business address is 235 West Galena Street, Milwaukee, Wisconsin 53212.
 
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FUND EXPENSES
The Advisers bear all of their own costs incurred in providing investment advisory services to the Fund. As described below, however, the Fund bears all other expenses related to its investment program. The Administrator provides or arranges for certain administrative services to be provided to the Fund, among those services are: providing office space, adequate personnel, and communications and other facilities necessary for administration of the Fund, performing certain administrative functions to support the Fund and its service providers, supporting the Fund’s Board and providing it with information, providing accounting and legal services in support of the Fund, compliance testing services, analyzing the value of the Fund’s assets, and reviewing and arranging for payment of the Fund’s expenses and other support services. Such administrative services are included in the Administration Fee. In addition to the services above, the Administrator is responsible for overseeing the Sub‑Administrator.
Expenses borne by the Fund (and thus indirectly by Shareholders) include:
 
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all expenses related to its investment program, including, but not limited to, expenses borne indirectly through the Fund’s investments in the underlying assets, including any fees and expenses charged by the Investment Managers (including management fees, carried interest or incentive fees and redemption or withdrawal fees, however titled or structured), all costs and expenses directly related to due diligence of portfolio transactions for the Fund such as direct and indirect expenses associated with the Fund’s investments (whether or not consummated), and enforcing the Fund’s rights in respect of such investments, transfer taxes and premiums, taxes withheld on non‑U.S. dividends, fees for data and software providers, research expenses, professional fees (including, without limitation, the fees and expenses of consultants, attorneys and experts) and, if applicable, brokerage commissions, interest and commitment fees on loans and debit balances, borrowing charges on securities sold short, dividends on securities sold but not yet purchased and margin fees;
 
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attorneys’ fees and disbursements associated with preparing and updating the Fund’s registration statement and other regulatory filings, and with reviewing potential investments to be made and executing the Fund’s investments;
 
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fees and disbursements of all accountants or auditors engaged by the Fund, expenses related to the annual audit of the Fund, expenses related to the unaudited financial statements of the Fund and expenses related to the preparation, review, approval and filing of the Fund’s tax information;
 
  ●  
recordkeeping, custody and transfer agency fees and expenses;
 
  ●  
the costs of errors and omissions/Trustees’ and officers’ liability insurance and a fidelity bond;
 
  ●  
the Management Fee and the Administration Fee;
 
  ●  
fees paid to third-party consultants or service providers relating to the Fund’s establishment or operations and fees paid to third-party providers for due diligence and valuation services;
 
  ●  
the costs of preparing and mailing reports and other communications, including proxy, repurchase offer correspondence, annual reports or similar materials, to Shareholders;
 
  ●  
fees of Trustees who are not “interested persons” and travel and administrative expenses of Trustees who are not “interested persons” relating to meetings of the Board of Trustees and committees thereof;
 
  ●  
costs and charges related to electronic or other platforms through which investors may access, complete and submit subscription and other fund documents or otherwise facilitate activity with respect to their investment in the Fund;
 
  ●  
costs and charges related to purchasing, holding, selling or trading cryptocurrencies, digital assets or other investments or instruments which utilize blockchain or related distributed ledger technology, including but not limited to costs associated with specialized software and hardware solutions, additional custodial and settlement expenses and additional professional services as required from time to time;
 
51
  ●  
costs of administrative, sub‑accounting, recordkeeping or investor related services charged by financial intermediaries in conjunction with processing through the National Securities Clearing Corporation’s Fund/SERV and Networking or similar systems;
 
  ●  
all costs and charges for equipment or services used in communicating information regarding the Fund’s transactions among the Adviser and any custodian or other agent engaged by the Fund;
 
  ●  
any extraordinary expenses (as defined below), including indemnification expenses as provided for in the Fund’s organizational documents; and
 
  ●  
other expenses not explicitly borne by the Adviser or Administrator associated with the investment operations of the Fund; and all reasonable costs and expenses incurred in connection with the formation and organization of, and offering and sale of Shares in, the Fund, as determined by the Adviser, including all out‑of‑pocket legal, accounting, registration and filing fees and expenses will be borne by the Fund. The Fund will also bear certain administrative costs.
The Adviser and Administrator will be reimbursed by the Fund for any of the above expenses that it pays on behalf of the Fund, except as otherwise provided above.
Expense Limitation Agreement
The Adviser has entered into an Expense Limitation and Reimbursement Agreement with the Fund for a one‑year term beginning on the initial closing date for subscriptions for Shares and ending on the one‑year anniversary thereof. The Adviser may extend the Limitation Period for a period of one year on an annual basis. The Expense Limitation and Reimbursement Agreement limits the Specified Expenses borne by the Fund in respect of each Class of Shares during the Limitation Period to an amount not to exceed 1.00% for Class T, S D and I Shares, on an annualized basis, of the Fund’s daily net assets.
“Specified Expenses” include all expenses incurred in the business of the Fund, provided that the following expenses are excluded from the definition of Specified Expenses: (i) the Management Fee; (ii) all fees and expenses of Private Market Assets and other investments in which the Fund invests (including the Acquired Fund Fees and Expenses); (iii) transactional costs, including legal costs and brokerage commissions, associated with the acquisition and disposition of Private Market Assets and other investments; (iv) interest payments incurred on borrowing by the Fund; (v) fees and expenses incurred in connection with a credit facility, if any, obtained by the Fund; (vi) distribution and/or shareholder servicing fees, as applicable; (vii) taxes; and (viii) extraordinary expenses resulting from events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or similar proceeding, indemnification expenses, and expenses in connection with holding and/or soliciting proxies for all annual and other meetings of Shareholders.
If the Fund’s aggregate ordinary operating expenses, exclusive of the Specified Expenses, in respect of any Class of Shares for any day exceed the Expense Cap applicable to that Class of Shares, the Adviser will waive its Management Fee and/or reimburse the Fund for expenses to the extent necessary to eliminate such excess. The Adviser may also directly pay expenses on behalf of the Fund and waive reimbursement under the Expense Limitation and Reimbursement Agreement. To the extent that the Adviser waives its Management Fee, reimburses expenses to the Fund or pays expenses directly on behalf of the Fund, it is permitted to recoup from the Fund any such amounts for a period not to exceed three years from the month in which such fees and expenses were waived, reimbursed or paid, even if such recoupment occurs after the termination of the Limitation Period. However, the Adviser may only recoup the waived fees, reimbursed expenses or directly paid expenses in respect of the applicable Class of Shares if the aggregate ordinary operating expenses have fallen to a level below the Expense Cap and the recouped amount does not raise the level of aggregate ordinary operating expenses plus waived fees, reimbursed expenses or directly paid expenses in respect of a Class of Shares in the month of recoupment to a level that exceeds any Expense Cap applicable at that time.
 
52
Expenses of Fund Investments
The Fund’s investments bear various expenses in connection with their operations similar to those incurred by the Fund. Investment Managers generally assess asset-based fees to, and receive performance or incentive-based fees from, the Investment Funds (or their investors), which effectively will reduce the investment returns of the Fund’s investments. These expenses and fees will be in addition to those incurred by the Fund itself. As an investor in the private assets, the Fund will bear its proportionate share of their expenses and fees and will also be subject to incentive fees to the Investment Managers.
Organizational and Offering Costs
The initial operating expenses for a new fund, including start‑up costs, which may be significant, may be higher than the expenses of an established fund. The Fund is expected to incur organizational and offering expenses of approximately $400,000 in connection with the initial offering of Shares.
Organizational costs include, among other things, the cost of organizing as a Delaware statutory trust, including the cost of legal services and other fees pertaining to the Fund’s organization. These costs are expensed as incurred by the Fund and will be paid by the Adviser on behalf of the Fund.
The Fund’s initial offering costs include, among other things, legal, printing and other expenses pertaining to this offering. Any offering costs paid by the Adviser on behalf of the Fund will be recorded as a payable for offering costs in the Statement of Assets and Liabilities and accounted for as a deferred charge until commencement of operations. Thereafter, these initial offering costs will be amortized over twelve months on a straight-line basis. Ongoing offering costs will be expensed as incurred.
All organizational and offering costs of the Fund paid by the Adviser shall be subject to recoupment by the Adviser.
MANAGEMENT FEE
In consideration of the advisory and other services provided by the Adviser to the Fund, the Fund will pay the Adviser a Management Fee equal to 1.60% on an annualized basis of the Fund’s daily net assets. The Management Fee will be accrued daily and payable monthly in arrears within ten (10) business days after the end of the month. The Management Fee is an expense paid out of the Fund’s net assets. For the avoidance of doubt, the Management Fee is applied to any assets in respect of Shares that will be repurchased by the Fund on such date.
The Adviser will pay 50% of the Management Fee proceeds to the Sub‑Adviser on a monthly basis.
CALCULATION OF NET ASSET VALUE
The Fund will calculate its NAV as of the close of business on each business day, in accordance with the procedures described below or as may be determined from time to time in accordance with policies approved by the Board (each, a “Determination Date”). In determining the Fund’s NAV, the Adviser will value the Fund’s investments as of the relevant Determination Date. The NAV of the Fund will equal, unless otherwise noted, the value of the total assets of the Fund, less all of its liabilities, including accrued fees and expenses, each determined as of the relevant Determination Date.
The Class T Shares’ NAV plus the Class S Shares’ NAV plus the Class D Shares’ NAV plus the Class I Shares’ NAV equals the total value of the net assets of the Fund. The different share NAVs will be calculated separately based on the fees and expenses applicable to each class. Because of differing class fees and expenses, the per share NAV of the classes will vary over time.
The Board has designated the Adviser as the Fund’s valuation designee for purposes of Rule 2a‑5 under the 1940 Act. The Board has approved valuation procedures for the Fund and the Adviser (the “Valuation Procedures”).
The Valuation Procedures provide that the Fund will value its investments in Private Market Assets at fair value. The fair value of such investments as of each Determination Date ordinarily will be the capital account value
 
53
of the Fund’s interest in such investments as provided by the relevant Investment Manager as of or prior to the relevant Determination Date; provided that such values will be adjusted for any other relevant information available at the time the Adviser values the Fund’s portfolio, including capital activity and material events occurring between the reference dates of the Investment Manager’s valuations and the relevant Determination Date. In fair valuing certain co‑investments, the Adviser may consider a number of factors such as the Fund’s cost, latest round of financing, company operating performance, market-based performance multiples, announced capital markets activity and any other relevant information will be considered at the time the Adviser values the Fund’s portfolio.
The Adviser has developed a proprietary, predictive analytics tool that is intended to track the performance of the private markets and produce a current estimate of the value of the portion of the Fund’s investment portfolio that is invested in Investment Funds. The analytics tool considers several data points from broad securities indices. The application of these factors results in a daily adjustment factor that is applied to the portion of the Fund invested in certain Investment Funds and is intended to minimize the potential deviation of the value of the Investment Funds as reflected in the books and records of the Fund as compared to the net asset value of each Investment Fund provided on a quarterly basis by the Investment Manager. As appropriate, the Adviser will use the analytics tool to adjust the value of its Investment Funds as part of its determination of fair value.
The valuation of the Fund’s investments in Private Market Assets is performed in accordance with Topic 820 — Fair Value Measurements and Disclosures. Generally, Investment Managers value investments at their market price if market quotations are readily available. In the absence of observable market prices, Investment Managers value investments using valuation methodologies applied on a consistent basis. For some investments little market activity may exist. The Investment Managers’ determination of fair value is then based on the best information available in the circumstances and may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration a combination of internal and external factors, including the appropriate risk adjustments for nonperformance and liquidity risks. Investments for which market prices are not observable include private investments in the equity of operating companies, projects, properties or certain debt positions. Market quotations will not be readily available for most of the Fund’s investments.
The actual realized returns on the Investment Managers’ unrealized investments will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which the Investment Managers’ valuations are based. Neither the Fund nor the Adviser has oversight or control over the implementation of the Investment Managers’ valuation process.
In reviewing the valuations provided by Investment Managers, the Valuation Procedures require the consideration of all relevant information reasonably available at the time the Adviser values the Fund’s portfolio, including the output of the predictive analytics tool. The Adviser will consider such information and may conclude in certain circumstances that the information provided by the Investment Manager does not represent the fair value of a particular Private Market Asset. In accordance with the Valuation Procedures, the Adviser will consider whether it is appropriate, in light of all relevant circumstances, to value such interests based on the NAV reported or expected to be reported by the relevant Investment Manager, or whether to adjust such value to reflect a premium or discount to such NAV.
For example, Investment Managers may value investments in portfolio companies and direct private equity investments at cost. The Valuation Procedures provide that, where cost is determined to best approximate the fair value of the particular security under consideration, the Adviser may approve such valuations. In other cases, the Adviser may be aware of sales of similar securities to third parties at materially different prices, or of other circumstances indicating that cost may not approximate fair value (which could include situations where there are no sales to third parties). In such cases, the Fund’s investment will be revalued in a manner that the Adviser, in accordance with the Valuation Procedures, determine in good faith best approximates fair value. The Board of Trustees will be responsible for ensuring that the Valuation Procedures are fair to the Fund and consistent with applicable regulatory guidelines.
Notwithstanding the above, Investment Managers unaffiliated with the Fund may adopt a variety of valuation bases and provide differing levels of information concerning Private Market Assets, and there will generally be no liquid markets for such investments. Consequently, there are inherent difficulties in determining the fair value that
 
54
cannot be eliminated. Neither the Board nor the Adviser will be able to confirm independently the accuracy of valuations provided by any Investment Managers (which are generally unaudited).
To the extent the Fund holds securities or other instruments that are not investments in Private Market Assets, the Adviser will generally value such assets as described below. Securities traded or dealt in upon one or more securities exchanges (whether domestic or foreign) for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid and ask prices on the primary exchange. Securities primarily traded in the National Association of Securities Dealers’ Automated Quotation System (“Nasdaq”) National Market System for which market quotations are readily available shall be valued using the Nasdaq Official Closing Price. If market quotations are not readily available, or deemed unreliable for a security, or if a security’s value may have been materially affected by events occurring after the close of a securities market on which the security principally trades, but before the Fund calculates its NAV, securities will be valued at the last sale price or, in the absence of a sale, at the mean between the current bid and ask prices.
In cases where a fair valuation of securities is applied, the Fund’s NAV will reflect certain portfolio securities’ fair value rather than their market price. Fair value pricing involves subjective judgments, and it is possible that the fair value determined for a security is materially different than the value that could be realized upon the sale of that security. This fair value may also vary from valuations determined by other funds using their own fair valuation procedures. The fair value prices can differ from market prices when they become available or when a price becomes available.
The Adviser may use independent pricing services to assist in calculating the value of the Fund’s securities. In addition, market prices for foreign securities are not determined at the same time of day as the NAV for the Fund. In computing the NAV, the Adviser values foreign securities held by the Fund at the latest closing price on the exchange in which they are traded immediately prior to closing of the New York Stock Exchange (the “NYSE”). Prices of foreign securities quoted in foreign currencies are translated into U.S. dollars at current rates. If events materially affecting the value of a security in the Fund’s portfolio, particularly foreign securities, occur after the close of trading on a foreign market but before the Adviser prices the Fund’s Shares, the security will be valued at fair value. For example, if trading in a portfolio security is halted and does not resume before the Adviser calculates the Fund’s NAV, the Adviser may need to price the security using the Fund’s fair value pricing guidelines.
With respect to any portion of the Fund’s assets that are invested in one or more open‑end management investment companies registered under the 1940 Act, the Fund’s NAV is calculated based upon the NAVs of those open‑end management investment companies, and the prospectuses for these companies explain the circumstances under which those companies will use fair value pricing and the effects of using fair value pricing.
As a result of investments by the Fund or other investment vehicles accessed by the Fund, if any, in foreign securities or other instruments denominated in currencies other than the U.S. dollar, the NAV of the Fund’s Shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of these instruments denominated in currencies other than the U.S. dollar may be affected significantly on a day that the NYSE is closed, and an investor is not able to purchase, redeem or exchange Shares.
The Adviser or its affiliates act as investment advisers to other clients that may invest in securities for which no public market price exists. Valuation determinations by the Adviser or its affiliates for other clients may result in different values than those ascribed to the same security owned by the Fund. Consequently, the fees charged to the Fund may be different than those charged to other clients, since the method of calculating the fees takes the value of all assets, including assets carried at different valuations, into consideration.
Expenses of the Fund, including the Management Fee and Administration Fees are accrued on a daily basis and taken into account for the purpose of determining the Fund’s NAV on a Determination Date.
Prospective investors should be aware that situations involving uncertainties as to the value of portfolio positions could have an adverse effect on the Fund’s NAV if the judgments of the Adviser or the Investment Managers regarding appropriate valuations, should prove incorrect.
 
55
CONFLICTS OF INTEREST
The Advisers
The Advisers or their affiliates provide or may provide investment advisory and other services to various entities. The Advisers and certain of their investment professionals and other principals, may also carry‑on substantial investment activities for their own accounts, for the accounts of family members and for other accounts (collectively, with the other accounts advised by the Advisers and their affiliates, “Other Accounts”). The Fund has no interest in these activities. The Adviser and its affiliates may receive payments from Investment Managers in connection with such activities. As a result of the foregoing, the Adviser and the investment professionals who, on behalf of the Adviser, will manage the Fund’s investment portfolio will be engaged in substantial activities other than on behalf of the Fund, may have differing economic interests in respect of such activities, and may have conflicts of interest in allocating their time and activity between the Fund and Other Accounts. Such persons will devote only so much of their time as in their judgment is necessary and appropriate.
There also may be circumstances under which the Advisers will cause one or more Other Accounts to commit a larger percentage of its assets to an investment opportunity than to which the Advisers will commit the Fund’s assets. There also may be circumstances under which the Advisers will make investments for Other Accounts in which the Advisers do not invest on behalf of the Fund, or vice versa.
Investment opportunities are made available to the Fund and other clients of the Firm where the investment is within the parameters of the applicable strategy. Further, investment opportunities may arise where there is more demand from the Fund and other clients of the Firm for a particular investment opportunity than supply. The Firm has adopted an Allocation Policy designed to reasonably ensure that all of its clients will be treated fairly and equitably over time. See “Investment Program — The Firm’s Allocation Policy.”
The 1940 Act imposes significant limits on co‑investments with affiliates of the Fund. The Advisers and the Fund have obtained an exemptive order from the SEC that permits the Fund to co‑invest alongside its affiliates in Infrastructure Assets. However, the SEC exemptive order contains certain conditions that limit or restrict the Fund’s ability to participate in such transactions, including, without limitation, where the Firm’s advised funds have an existing investment in the operating company or Investment Fund.
The Adviser also intends to compensate, from its own resources, third-party securities dealers, other industry professionals and any affiliates thereof (“financial intermediaries”) in connection with the distribution of Shares in the Fund or for their ongoing servicing of Shares acquired by their clients. Such compensation may take various forms, including a fixed fee, a fee determined by a formula that considers the amount of client assets invested in the Fund, the timing of investment or the overall NAV of the Fund, or a fee determined in some other method by negotiation between the Adviser and such financial intermediaries. Financial intermediaries may also charge investors, at the financial intermediaries’ discretion, a placement fee based on the purchase price of Shares purchased by the investor. As a result of the various payments that financial intermediaries may receive from investors and the Adviser, the amount of compensation that a financial intermediary may receive in connection with the sale of Shares in the Fund may be greater than the compensation it may receive for the distribution of other investment products. This difference in compensation may create an incentive for a financial intermediary to recommend the Fund over another investment product.
Financial intermediaries may be subject to certain conflicts of interest with respect to the Fund. For example, the Fund, the Advisers, Investment Funds or portfolio companies or investment vehicles managed or sponsored by the Advisers or Investment Managers may (i) purchase securities or other assets directly or indirectly from, (ii) enter into financial or other transactions with or (iii) otherwise convey benefits through commercial activities to a financial intermediary. As such, certain conflicts of interest may exist between such persons and a financial intermediary. Such transactions may occur in the future and generally there is no limit to the amount of such transactions that may occur.
Financial intermediaries may perform investment advisory and other services for other investment entities with investment objectives and policies similar to those of the Fund or an Investment Fund. Such entities may compete with the Fund or the Investment Fund for investment opportunities and may invest directly in such investment
 
56
opportunities. Financial intermediaries that invest in an Investment Fund or a portfolio company may do so on terms that are more favorable than those of the Fund.
Financial intermediaries that act as selling agents for the Fund also may act as distributor for an Investment Fund in which the Fund invests and may receive compensation in connection with such activities. Such compensation would be in addition to the placement fees described above. Financial intermediaries may pay all or a portion of the fees paid to it to certain of their affiliates, including, without limitation, financial advisors whose clients purchase Shares of the Fund. Such fee arrangements may create an incentive for a financial intermediary to encourage investment in the Fund, independent of a prospective Shareholder’s objectives.
A financial intermediary may provide financing, investment banking services or other services to third parties and receive fees therefore in connection with transactions in which such third parties have interests which may conflict with those of the Fund or an Investment Fund. A financial intermediary may give advice or provide financing to such third parties that may cause them to take actions adverse to the Fund, an Investment Fund or a portfolio company. A financial intermediary may directly or indirectly provide services to, or serve in other roles for compensation for, the Fund, an Investment Fund or a portfolio company. These services and roles may include (either currently or in the future) managing trustee, managing member, general partner, investment manager or advisor, investment sub‑advisor, distributor, broker, dealer, selling agent and investor servicer, custodian, transfer agent, fund administrator, prime broker, recordkeeper, shareholder servicer, interfund lending servicer, Fund accountant, transaction (e.g., a swap) counterparty and/or lender. A financial intermediary is expected to provide certain such services to the Fund in connection with the Fund obtaining a credit facility, if any such facility is obtained.
In addition, issuers of securities held by the Fund or its underlying Investment Funds may have publicly or privately traded securities in which a financial intermediary is an investor or makes a market. The trading activities of financial intermediaries generally will be carried out without reference to positions held by the Fund or its underlying Investment Funds and may have an effect on the value of the positions so held, or may result in a financial intermediary having an interest in the issuer adverse to the Fund or the underlying Investment Fund. No financial intermediary is prohibited from purchasing or selling the securities of, otherwise investing in or financing, issuers in which the Fund or its underlying Investment Funds has an interest.
A financial intermediary may sponsor, organize, promote or otherwise become involved with other opportunities to invest directly or indirectly in the Fund or an Investment Fund. Such opportunities may be subject to different terms than those applicable to an investment in the Fund or the Investment Fund, including with respect to fees and the right to receive information.
Set out below are practices that the Advisers may follow. Although the Advisers anticipate that the Investment Managers will follow practices similar to those described below, no guarantee or assurances can be made that similar practices will be followed or that an Investment Manager will abide by, and comply with, its stated practices. An Investment Manager may provide investment advisory and other services, directly or through affiliates, to various entities and accounts other than Infrastructure Assets.
Participation in Investment Activities
Directors, principals, officers, employees and affiliates of the Advisers may buy and sell securities or other investments for their own accounts and may have actual or potential conflicts of interest with respect to investments made on behalf of the Fund or its underlying investments. As a result of differing trading and investment strategies or constraints, positions may be taken by directors, principals, officers, employees and affiliates of the Advisers, or by the Advisers for the Other Accounts, or any of their respective affiliates on behalf of their own other accounts (“Investment Manager Accounts”) that are the same as, different from or made at a different time than, positions taken for the Fund or an Infrastructure Asset.
Other Matters
An Investment Manager may, from time to time, cause an Investment Fund to effect certain principal transactions in securities with one or more Investment Manager Accounts, subject to certain conditions. Future investment activities of the Investment Managers, or their affiliates, and the principals, partners, directors, officers or employees of the foregoing, may give rise to additional conflicts of interest.
 
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The Advisers and their affiliates will not purchase securities or other property from, or sell securities or other property to the Fund, except that the Fund may, in accordance with rules under the 1940 Act, engage in transactions with accounts that are affiliated with the Fund as a result of common officers, directors, advisers, members or managing general partners. These transactions would be effected in circumstances in which the Advisers determined that it would be appropriate for the Fund to purchase and another client to sell, or the Fund to sell and another client to purchase, the same security or instrument on the same day.
Future investment activities of the Advisers and their affiliates and their principals, partners, members, directors, officers or employees may give rise to conflicts of interest other than those described above.
PURCHASES OF SHARES
Purchase Terms
The Fund offers four classes of Shares. Investors purchasing Class T Shares in the Fund may be charged a sales load of up to 3.00% and a maximum dealer fee of 0.50% of the investment amount. Investors purchasing Class S Shares in the Fund may be charged a sales load of up to 3.50% of the investment amount. Class D Shares and Class I Shares do not have a sales load.
The minimum initial investment for Class T Shares, Class S Shares, and Class D Shares in the Fund from each investor is at least $25,000, and the minimum additional investment in the Fund is $5,000. The minimum initial and additional investments may be reduced at the Adviser’s discretion. The minimum initial investment for any individual investor will not be reduced below $25,000. The Fund reserves the right to repurchase all of the Shares held by a Shareholder if the Shareholder’s account balance in the Fund, as a result of repurchase or transfer requests by the Shareholder, is less than $5,000.
The minimum initial investment for Class I Shares in the Fund from each investor is at least $1,000,000, and the minimum additional investment in the Fund is $100,000, except for additional purchases pursuant to our dividend reinvestment plan. The minimum initial and additional investments may be reduced at the Adviser’s discretion. The minimum initial investment for any individual investor will not be reduced below $25,000. The Fund reserves the right to repurchase all of the Shares held by a Shareholder if the Shareholder’s account balance in the Fund, as a result of repurchase or transfer requests by the Shareholder, is less than $5,000.
Shares will generally be offered for purchase on each business day, except that Shares may be offered more or less frequently as determined by the Fund in its sole discretion. The Board may also suspend or terminate offerings of Shares at any time.
Initial and any additional purchases of Shares of the Fund by any Shareholder must be made via wire transfer of funds or another method of immediately available funds. Payment for each initial or subsequent additional purchases of Shares must be made in one installment. Except as otherwise permitted by the Board, initial and subsequent purchases of Shares will be payable in cash. Orders will be priced at the appropriate price next computed after the order is received by the Administrator. The Fund reserves the right, in its sole discretion, to accept or reject any subscription to purchase Shares in the Fund at any time. In the event that cleared funds and/or a properly completed investor application are not received from a prospective investor prior to the cut‑off times pertaining to a particular offering, the Fund may hold the relevant funds and investor application for processing in the next offering.
In general, an investment will be accepted if a completed investor application or order submission and funds are received in good order in advance of the cut‑off dates identified in a particular offering. The Fund reserves the right to reject, in its sole discretion, any request to purchase Shares in the Fund at any time.
Eligible Investors
Shares are sold to investors who represent that they are an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. The criteria for qualifying as an “accredited investor” are set forth in the investor application that must be completed by each prospective investor. Investors who are “accredited investors” are referred to in this Prospectus as “Eligible Investors.” Existing Shareholders who subscribe for additional Shares will be required to qualify as Eligible Investors at the time of each additional purchase. Qualifications that must be
 
58
met in becoming a Shareholder are set out in the application form that must be completed by each prospective investor. The Distributor and/or any Selling Agent may impose additional eligibility requirements for investors who purchase Shares through the Distributor or such Selling Agent. The Distributor or any registered investment adviser (a “RIA”) who offers Class I Shares may impose additional eligibility requirements on investors who purchase Class I Shares from the Distributor through such RIA. See “Plan of Distribution.”
Outstanding Securities
The following table sets forth information about the Fund’s outstanding Shares as of July 11, 2023:
 
     Amount Authorized   
Amount Held by the
Fund for its Own
Account
 
            Amount Outstanding        
Class T Shares
    Unlimited    None    -
Class S Shares
    Unlimited    None    -
Class D Shares
    Unlimited    None    -
Class I Shares
    Unlimited    None    10,000
PLAN OF DISTRIBUTION
The Fund is offered on a continuous basis. UMB Distribution Services, LLC acts as the Distributor of the Fund, subject to various conditions. The minimum initial investment is $25,000 for Class T Shares, Class S Shares, and Class D Shares. The minimum initial investment for Class I Shares is $1,000,000. The minimum initial investment may be reduced at the Adviser’s discretion, but not below $25,000 for any individual investor. Subscriptions will be effective only upon the Fund’s acceptance, and the Fund reserves the right to reject any subscription in whole or in part in certain limited circumstances (including, without limitation, when it has reason to believe that a purchase of Shares would be unlawful). Shares will be sold only to Eligible Investors (as defined herein). Shares will not be listed on any national securities exchange. See “Fund Expenses.” Shares are not available in certificated form.
The Fund will not sell any Shares unless the Fund raises net offering proceeds of at least $25,000,000 (the “Minimum Offering Requirement”). Pending satisfaction of the Minimum Offering Requirement, all subscription payments will be placed in an account held by UMB Bank, N.A., acting as the escrow agent, in trust for the subscribers’ benefit, pending release to the Fund. While an investor cannot revoke its subscription prior to the Fund’s meeting the Minimum Offering Requirement, subscriptions will be effective only upon the Fund’s acceptance, and the Fund reserves the right to reject any subscription in whole or in part. Some or all of the Minimum Offering Requirement may be met by subscriptions made by the Advisers, their employees or their affiliates, all of which would have an interest in the completion of the offering. There is no assurance when or if such the Minimum Offering Requirement will be satisfied. If the Minimum Offering Requirement is not satisfied by the date that is six months following the effective date of the registration statement of which this Prospectus is a part, the Fund will promptly return all funds in the escrow account and the Fund will stop offering Shares. The Fund will not deduct any fees or expenses if the Fund returns funds from the escrow account, and the Advisers will not earn fees prior to the satisfaction of the Minimum Offering Requirement.
The Fund has entered into a Distribution Agreement under which the Distributor, with principal offices at 235 West Galena Street, Milwaukee, Wisconsin 53212, distributes the Shares of the Fund. The Distributor is authorized to enter into Sub‑Distribution Agreements with brokers, dealers and certain RIAs and other financial intermediaries to effect the distribution of Shares of the Fund. To operate in a manner consistent with Rule 12b‑1 under the 1940 Act, the Fund will pay a distribution and/or shareholder servicing fee out of the net assets of Class T Shares and Class S Shares at the annual rate of 0.85% of the aggregate NAV of Class T Shares and Class S Shares, respectively, determined and accrued on each business day (before any repurchases of Shares). To operate in a manner consistent with Rule 12b‑1 under the 1940 Act, the Fund will pay a distribution and/or shareholder servicing fee out of the net assets of Class D Shares at the annual rate of 0.25% of the aggregate NAV of Class D Shares. Class I Shares are not subject to any distribution and/or shareholder servicing fee.
Selling Agents may receive the shareholder servicing fee which they will use to compensate their brokerage representatives for Class T Shares, Class S Shares or Class D Shares sales and support. Sales loads may be assessed at the time of purchase, on Class T Shares, up to a maximum of 3.00% of the investment amount, on Class S Shares,
 
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up to a maximum of 3.50% of the investment amount. On Class T Shares, a dealer fee of up to 0.50% of the investment amount may be charged. Class D Shares and Class I Shares are not subject to any sales load at the time of purchase.
Class I Shares may be purchased through an RIA that has entered into an arrangement with the Distributor for such RIA to offer Shares in conjunction with a “wrap” fee, asset allocation or other managed asset program sponsored by such RIA.
The Fund and/or the Adviser may also enter into agreements with certain financial intermediaries under which payments are made to the intermediaries in recognition of the transfer agency costs avoided by the Fund associated with the intermediaries’ maintenance of investor accounts or in recognition of the services provided by intermediaries through fund or similar platforms. Payments made by the Fund under such agreements are generally based on either (1) a percentage of the average daily net asset value of the Shares serviced by the intermediary, often up to a set maximum, or (2) a per account fee assessed against each account serviced by such intermediary, often up to a set maximum. These payments may be in addition to other payments described herein.
The Adviser may pay additional compensation out of its own resources (i.e., not Fund assets) to certain brokers, dealers or other financial intermediaries that have agreed to participate in the distribution of the Fund’s Shares, including the Distributor, for sales and wholesaling support, and also for other services including due diligence support, account maintenance, provision of information and support services.
Shares may be purchased daily at the then current NAV per share for the relevant Class. See “Purchases of Shares.”
SHARE REPURCHASE PROGRAM
The Fund does not currently intend to list its Shares on any securities exchange and does not expect any secondary market for them to develop in the foreseeable future. Therefore, Shareholders should expect that they will be unable to sell their Shares for an indefinite time or at a desired price. No Shareholder will have the right to require the Fund to repurchase such Shareholder’s Shares or any portion thereof. Shareholders may not transfer their investment from the Fund to any other registered investment company. Because no public market exists for the Shares, and none is expected to develop in the foreseeable future, Shareholders will not be able to liquidate their investment, other than through the Fund’s share repurchase program, or, in limited circumstances, as a result of transfers of Shares to other investors. Thus, the Shares are appropriate only as a long-term investment. Shareholders who require minimum annual distributions from a retirement account through which they hold Shares should consider the Fund’s schedule for repurchase offers and submit repurchase requests accordingly.
To provide Shareholders with limited liquidity, the Fund is structured as an interval fund and intends to conduct quarterly offers at NAV to repurchase between 5% and 25% of outstanding Shares, pursuant to Rule 23c‑3 under the 1940 Act, unless such offer is suspended or postponed in accordance with regulatory requirements (as discussed below). In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5% of its outstanding Shares.
The timeline below summarizes the key dates in the repurchase process:
            (21 to 42 days)                           (No more than 14 days)            (No more than 7 days)
|_______________________________________|___________________|_____________________________|
  Shareholder Notification
   
Repurchase
   
Repurchase
    Repurchase
     Request    Pricing Date    Payment
     Deadline    (determine NAV    Deadline
          at which shares will     
          be repurchased)     
Quarterly repurchases will occur in the months of March, June, September and December. The offer to purchase Shares is a fundamental policy that may not be changed without the vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the 1940 Act). A Shareholder Notification (as defined below) will
 
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be made available to Shareholders at least 21 calendar days before the “Repurchase Request Deadline” (typically March 15, June 15, September 15, or December 15); however, the Fund will provide such written notification earlier but no more than 42 calendar days before the “Repurchase Request Deadline.” The NAV will be calculated no later than the “Repurchase Pricing Date,” which will be no later than 14 calendar days after the Repurchase Request Deadline, or the next business day if the fourteenth day is not a business day. The Fund will distribute payment to Shareholders within seven calendar days after the Repurchase Pricing Date. The Fund’s repurchase offers may subject the Fund and Shareholders to special risks.
Determination of Repurchase Offer Amount
The Board, in its sole discretion, will determine the number of Shares that the Fund will offer to repurchase (the “Repurchase Offer Amount”) for a given Repurchase Request Deadline. The Repurchase Offer Amount, however, will be between 5% and 25% of the total number of Shares outstanding on the Repurchase Request Deadline. In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5% of its outstanding Shares.
Notice to Shareholders
No less than 21 days and no more than 42 days before each Repurchase Request Deadline, the Fund shall make available to each Shareholder of record and to each beneficial owner of the Shares that are the subject of the repurchase offer a notification (“Shareholder Notification”). The Shareholder Notification will contain information Shareholders should consider in deciding whether to tender their Shares for repurchase.
The notice also will include detailed instructions on how to tender Shares for repurchase, state the Repurchase Offer Amount and identify the dates of the Repurchase Request Deadline, the scheduled Repurchase Pricing Date, and the date the repurchase proceeds are scheduled for payment (the “Repurchase Payment Deadline”). The notice also will set forth the NAV that has been computed no more than seven days before the date of notification, and how Shareholders may ascertain the NAV after the notification date.
Repurchase Price
The repurchase price of the Shares will be the Fund’s NAV as of the close of regular trading on the NYSE on the Repurchase Pricing Date. You may call 877‑772‑7724 to learn the NAV. The notice of the repurchase offer also will provide information concerning the NAV, such as the NAV as of a recent date or a sampling of recent NAVs, and a toll-free number for information regarding the repurchase offer.
Repurchase Amounts and Payment of Proceeds
Shares tendered for repurchase by Shareholders prior to any Repurchase Request Deadline will be repurchased subject to the aggregate Repurchase Offer Amount established for that Repurchase Request Deadline. Payment pursuant to the repurchase offer will be made to the Shareholder’s address of record or credited directly to a predetermined bank account on the Purchase Payment Date, which will be no more than seven calendar days after the Repurchase Pricing Date. The Board may establish other policies for repurchases of Shares that are consistent with the 1940 Act, regulations thereunder and other pertinent laws.
If Shareholders tender for repurchase more than the Repurchase Offer Amount for a given repurchase offer, the Fund may, but is not required to, repurchase an additional amount of Shares not to exceed 2% of the outstanding Shares of the Fund on the Repurchase Request Deadline. If the Fund determines not to repurchase more than the Repurchase Offer Amount, or if Shareholders tender Shares in an amount exceeding the Repurchase Offer Amount plus 2% of the outstanding Shares on the Repurchase Request Deadline, the Fund will repurchase the Shares on a pro rata basis. However, the Fund may accept all Shares tendered for repurchase by Shareholders who own less than one hundred Shares and who tender all of their Shares, before prorating other amounts tendered. With respect to any required minimum distributions from an IRA or other qualified retirement plan, it is the obligation of the shareholder to determine the amount of any such required minimum distribution and to otherwise satisfy the required minimum. In the event that shareholders in the aggregate tender for repurchase more than the Repurchase Offer Amount for a
 
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given repurchase offer, the Fund will repurchase the shares on a pro rata basis, which may result in the Fund not honoring the full amount of a required minimum distribution requested by a shareholder.
 
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DISTRIBUTION POLICY
As required in connection with the Fund’s intention to qualify as a RIC under Subchapter M of the Code, the Fund will, at a minimum, make distributions annually in amounts that represent substantially all of the net investment income and net capital gains, if any, earned each year. The NAV of each Share that you own will be reduced by the amount of the distributions or dividends that you receive from that Share.
It is likely that many of the assets in which the Fund invests will not pay any dividends, and this, together with the Fund’s expenses, means that there can be no assurance the Fund will have substantial income or pay dividends. The Fund is not a suitable investment for any investor who requires regular dividend income.
Automatic Dividend Reinvestment Plan
Pursuant to the dividend reinvestment plan established by the Fund (the “DRIP”), each Shareholder whose Shares are registered in its own name will automatically be a participant under the DRIP and have all income dividends and/or capital gains distributions automatically reinvested in additional Shares unless such Shareholder specifically elects to receive all income, dividends and/or capital gain distributions in cash. A Shareholder is free to change this election at any time. If, however, a Shareholder requests to change its election within 30 days prior to a distribution, the request will be effective only with respect to distributions after the 30‑day period. A Shareholder whose Shares are registered in the name of a nominee must contact the nominee regarding its status under the DRIP, including whether such nominee will participate on such Shareholder’s behalf.
A Shareholder may elect to:
 
  ●  
reinvest both dividends and capital gain distributions; or
 
  ●  
receive both dividends and capital gain distributions in cash.
Generally, for U.S. federal income tax purposes, Shareholders receiving Shares under the DRIP will be treated as having received a distribution equal to the amount payable to them in cash as a distribution had the Shareholder not participated in the DRIP.
Shares will be issued pursuant to the DRIP at their NAV determined on the relevant Determination Date. There is no sales load or other charge for reinvestment, but distribution and/or shareholder servicing fees will be charged where applicable. The Fund may terminate the DRIP at any time. Any expenses of the DRIP will be borne by the Fund. The reinvestment of dividends and distributions pursuant to the DRIP will increase the Fund’s net assets on which the Management Fee and Administration Fee are payable.
VOTING
Each Shareholder has the right to cast a number of votes equal to the number of Shares held by such Shareholder at a meeting of Shareholders called by the Fund’s Board of Trustees. Shareholders will be entitled to vote on any matter on which shareholders of a registered investment company organized as a corporation would be entitled to vote, including certain elections of a Trustee and approval of the Advisory Agreement, in each case to the extent that voting by shareholders is required by the 1940 Act. Notwithstanding their ability to exercise their voting privileges, Shareholders in their capacity as such are not entitled to participate in the management or control of the Fund’s business and may not act for or bind the Fund.
TAX ASPECTS
The following is a summary of certain U.S. federal income tax considerations relevant to the acquisition, holding and disposition of Shares. This discussion offers only a brief outline of the U.S. federal income tax consequences of investing in the Fund and is based upon present provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, which change may be retroactive. The discussion is limited to persons who hold their Shares as capital assets (generally, property held for investment) for U.S. federal income tax purposes. This summary does not address all of the U.S. federal income tax consequences that may be relevant to a particular Shareholder or
 
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to Shareholders who may be subject to special treatment under U.S. federal income tax laws, such as U.S. financial institutions, insurance companies, broker-dealers, traders in securities that have made an election for U.S. federal income tax purposes to mark‑to‑market their securities holdings, tax‑exempt organizations, partnerships, Shareholders who are not “United States Persons” (as defined in the Code), Shareholders liable for the alternative minimum tax, persons holding Shares through partnerships or other pass-through entities, or persons that have a functional currency (as defined in Section 985 of the Code) other than the U.S. dollar. No ruling has been or will be obtained from the Internal Revenue Service (“IRS”) regarding any matter relating to the Fund or the Shares. No assurance can be given that the IRS would not assert a position contrary to any of the tax aspects described below. The discussion set forth herein does not constitute tax advice. Prospective Shareholders and Shareholders are urged to consult their own tax advisors as to the U.S. federal income tax consequences of the acquisition, holding and disposition of Shares of the Fund, as well as the effects of state, local and non‑U.S. tax laws.
UNLESS OTHERWISE INDICATED, REFERENCES IN THIS DISCUSSION TO THE FUND’S INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS, INCLUDE THE CO‑INVESTMENTS OR CO‑INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS OF THE FUND, AS WELL AS THOSE INDIRECTLY ATTRIBUTABLE TO THE FUND AS A RESULT OF THE FUND’S INVESTMENT IN ANY INVESTMENT FUND (OR OTHER ENTITY) THAT IS PROPERLY CLASSIFIED AS A PARTNERSHIP OR DISREGARDED ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES (AND NOT AN ASSOCIATION OR PUBLICLY TRADED PARTNERSHIP TAXABLE AS A CORPORATION).
Qualification as a Regulated Investment Company; Tax Treatment
It is expected that the Fund will qualify for treatment as a RIC under the Code. If the Fund so qualifies and distributes (or is deemed to have distributed) each taxable year to Shareholders dividends for U.S. federal income tax purposes of an amount at least equal to the sum of 90% of its investment company taxable income (which includes, among other items, dividends, interest and net short-term capital gains in excess of net long-term capital losses, but determined without regard to the deduction for dividends paid) plus 90% of any net tax‑exempt income for the Fund’s taxable year, the Fund will not be subject to U.S. federal corporate income taxes on any amounts it distributes as dividends for U.S. federal income tax purposes, including distributions (if any) derived from the Fund’s net capital gain (i.e., the excess of the net long-term capital gains over net short-term capital losses) to Shareholders. The Fund intends to distribute to its Shareholders, at least annually, substantially all of its investment company taxable income, net tax‑exempt income, and net capital gains.
In addition, amounts not distributed on a timely basis in accordance with a separate calendar year distribution requirement are subject to a nondeductible 4% excise tax. To prevent imposition of the excise tax, the Fund generally must be considered to have distributed dividends for U.S. federal income tax purposes in respect of each calendar year an amount at least equal to the sum of (1) 98% of its ordinary income (not taking into account any capital gains or losses), determined on a calendar year basis, (2) 98.2% of its capital gain net income, determined under prescribed rules for this purpose (which is generally determined on the basis of the one‑year period ending on October 31st of such calendar year, and adjusted for certain ordinary losses), and (3) any ordinary income and capital gain net income from previous years that was not distributed during those years and on which the Fund incurred no U.S. federal income tax. For U.S. federal income tax purposes, dividends declared by the Fund in October, November or December to Shareholders of record on a specified date in such a month and paid during January of the following calendar year are taxable to such Shareholders, and deductible by the Fund, as if paid on December 31 of the calendar year declared. The Fund generally intends to make distributions sufficient to avoid imposition of the excise tax, although there can be no assurance that it will be able to do so.
In order to qualify as a RIC, the Fund must, among other things: (a) derive in each taxable year (the “gross income test”) at least 90% of its gross income from (i) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stocks, securities or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stocks, securities or currencies, and (ii) net income from interests in “qualified publicly traded partnerships” (as defined in the Code) (all such income items, “qualifying gross income”); and (b) diversify its holdings (the “asset diversification test”) so that, at the end of each quarter of the taxable year, (i) at least 50% of the value of the Fund’s total assets is represented by cash and cash items (including receivables), U.S. Government securities, the securities of other RICs and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and not greater than 10% of the
 
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outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities (other than U.S. Government securities or the securities of other RICs) of a single issuer, two or more issuers that the Fund controls and that are engaged in the same, similar or related trades or businesses or one or more “qualified publicly traded partnerships” (as defined in the Code).
For the purpose of determining whether the Fund satisfies the gross income test, the character of the Fund’s distributive share of items of income, gain and loss derived through any Investment Funds that are properly treated as partnerships for U.S. federal income tax purposes (other than certain publicly traded partnerships) generally will be determined as if the Fund realized such tax items in the same manner as realized by those Investment Funds. Similarly, for the purpose of the asset diversification test, the Fund, in appropriate circumstances, will “look through” to the assets held by such Investment Funds.
A RIC that fails the gross income test for a taxable year shall nevertheless be considered to have satisfied the test for such taxable year if (i) the RIC satisfies certain procedural requirements, and (ii) the RIC’s failure to satisfy the gross income test is due to reasonable cause and not due to willful neglect. However, in such case, a tax is imposed on the RIC for the taxable year in which, absent the application of the above cure provision, it would have failed the gross income test equal to the amount by which the RIC’s non‑qualifying gross income exceeds one‑ninth of the RIC’s qualifying gross income, each as determined for purposes of applying the gross income test for such taxable year.
Additionally, a RIC that fails the asset diversification test as of the end of a quarter of a taxable year shall nevertheless be considered to have satisfied the test as of the end of such quarter in the following circumstances. If the RIC’s failure to satisfy the asset diversification test at the end of the quarter is due to the ownership of assets the total value of which does not exceed the lesser of (i) one percent of the total value of the RIC’s assets at the end of such quarter and (ii) $10,000,000 (a “de minimis failure”), the RIC shall be considered to have satisfied the asset diversification test as of the end of such quarter if, within six months of the last day of the quarter in which the RIC identifies that it failed the asset diversification test (or such other prescribed time period), the RIC either disposes of assets in order to satisfy the asset diversification test, or otherwise satisfies the asset diversification test.
In the case of a failure to satisfy the asset diversification test at the end of a quarter of a taxable year under circumstances that do not constitute a de minimis failure, a RIC shall nevertheless be considered to have satisfied the asset diversification test as of the end of such quarter if (i) the RIC satisfies certain procedural requirements; (ii) the RIC’s failure to satisfy the asset diversification test is due to reasonable cause and not due to willful neglect; and (iii) within six months of the last day of the quarter in which the RIC identifies that it failed the asset diversification test (or such other prescribed time period), the RIC either disposes of the assets that caused the asset diversification failure in order to satisfy the asset diversification test, or otherwise satisfies the asset diversification test. However, in such case, a tax is imposed on the RIC, at the highest stated corporate income tax rate, on the net income generated by the assets that caused the RIC to fail the asset diversification test during the period for which the asset diversification test was not met. In all events, however, such tax will not be less than $50,000.
If before the end of any taxable quarter of its taxable year, the Fund believes that it may fail the asset diversification test, the Fund may seek to take certain actions to avert such a failure. However, the action typically taken by RICs to avert such a failure (e.g., the disposition of assets causing the asset diversification discrepancy) may be difficult for the Fund to pursue because of the limited liquidity of the interests in the private markets. While the Code generally affords the Fund a 30‑day period after the end of the relevant quarter in which to cure a diversification failure by disposing of non‑diversified assets, the constraints on the Fund’s ability to do so may limit utilization of this statutory 30‑day cure period and, possibly, the extended cure period provided by the Code as discussed above.
If the Fund does not qualify as a RIC, it will be treated for tax purposes as an ordinary corporation. In that case, all of its taxable income would be subject to U.S. federal income tax at regular corporate rates without any deduction for distributions made to Shareholders. In addition, all distributions (including distributions of net capital gain) made to Shareholders generally would be characterized as dividend income to the extent of the Fund’s current and accumulated earnings and profits.
The Fund’s use of cash to repurchase shares could adversely affect its ability to satisfy the distribution requirements for treatment as a RIC. The Fund could also recognize income in connection with its liquidation of portfolio securities to fund Share repurchases. Any such income would be taken into account in determining whether the distribution requirements are satisfied, and to the extent that additional distributions are required, could generate
 
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additional taxable income for those Shareholders receiving such additional distributions. Furthermore, if the Fund is unable to liquidate portfolio securities in a manner that would enable the Fund to meet the income and asset diversification tests, the Fund could fail to qualify as a RIC, with the adverse consequences as set forth above.
Distributions
The Fund will ordinarily declare and pay distributions from its net investment income and distribute net realized capital gains, if any, at least once a year. The Fund, however, may make distributions on a more frequent basis to comply with the distribution requirements of the Code, in all events in a manner consistent with the provisions of the 1940 Act. After the end of each calendar year, Shareholders will be provided a Form 1099, containing information regarding the amount and character of distributions received from the Fund during the calendar year.
Shareholders normally will be subject to U.S. federal income taxes, and any state and/or local income taxes, on any distributions that they receive from the Fund. Distributions from net investment income and net short-term capital gain generally will be characterized as ordinary income (which generally cannot be offset with capital losses from other sources), and, to the extent attributable to dividends from U.S. corporations, may be eligible for a dividends-received deduction for Shareholders that are corporations. Further, to the extent the dividends are attributable to dividends from U.S. corporations and certain foreign corporations, such dividends may, in certain cases, be eligible for treatment as “qualified dividend income,” which is generally subject to tax at rates equivalent to long-term capital gain tax rates, by Shareholders that are individuals. Distributions from net capital gain (typically referred to as a “capital gain dividend”) will be characterized as long-term capital gain, regardless of how long Shares have been held by the Shareholder and will not be eligible for the dividends-received deduction or treatment as “qualified dividend income.” However, if the Shareholder received any long-term capital gain distributions in respect of the repurchased Shares (including, for this purpose, amounts credited as undistributed capital gains in respect of those Shares) and held the repurchased Shares for six months or less, any loss realized by the Shareholder upon the repurchase will be treated as long-term capital loss to the extent that it offsets the long-term capital gain distributions. Distributions by the Fund that are or are considered to be in excess of the Fund’s current and accumulated earnings and profits for the relevant period will be treated as a tax‑free return of capital to the extent of (and in reduction of) a Shareholder’s tax basis in its Shares and any such amount in excess of such tax basis will be treated as gain from the sale of Shares, as discussed below. Similarly, as discussed below at “Income from Repurchases and Transfers of Shares,” if a repurchase of a Shareholder’s Shares does not qualify for sale or exchange treatment, the Shareholder may, in connection with such repurchase, be treated as having received, in whole or in part, a taxable dividend, a tax‑free return of capital or taxable capital gain, depending on (i) whether the Fund has sufficient earnings and profits to support a dividend and (ii) the Shareholder’s tax basis in the relevant Shares repurchased. In such case, the tax basis in the Shares repurchased by the Fund, to the extent remaining after any dividend and return of capital distribution with respect to those Shares, will be transferred to any remaining Shares held by the Shareholder.
The tax treatment of the Fund’s distributions from net investment income and capital gains generally will be the same whether the Shareholder takes such distributions in cash or reinvests them to buy additional Shares.
The Fund may elect to retain its net capital gain or a portion thereof for investment and be subject to tax at corporate rates on the amount retained. In such case, the Fund may report the retained amount as undistributed capital gains to its Shareholders, who will be treated as if each Shareholder received a distribution of his or her pro rata share of such gain, with the result that each Shareholder will (i) be required to report his or her pro rata share of such gain on his or her tax return as long-term capital gain, (ii) receive a refundable tax credit for his or her pro rata share of tax paid by the Fund on the gain, and (iii) increase the tax basis for his or her Shares by an amount equal to the deemed distribution less the tax credit.
For taxable years beginning before January 1, 2026, individuals (and certain other non‑corporate entities) are generally eligible for a 20% deduction with respect to taxable ordinary real estate investment trust (“REIT”) dividends. Applicable Treasury regulations allow RICs to pass through to shareholders such taxable ordinary REIT dividends. Accordingly, individual (and certain other non‑corporate) Shareholders of the Fund that have received such taxable ordinary REIT dividends may be able to take advantage of this 20% deduction with respect to any such amounts passed through.
Certain distributions reported by the Fund as section 163(j) interest dividends may be treated as interest income by Shareholders for purposes of the tax rules applicable to interest expense limitations under Section 163(j)
 
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of the Code. Such treatment by the Shareholder is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that the Fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the Fund’s business interest income over the sum of the Fund’s (i) business interest expense and (ii) other deductions properly allocable to the Fund’s business interest income.
An additional 3.8% tax will be imposed in respect of the net investment income of certain individuals and on the undistributed net investment income of certain estates and trusts to the extent such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts. For these purposes, “net investment income” will generally include, among other things, dividends (including dividends paid with respect to the Shares to the extent paid out of the Fund’s current or accumulated earnings and profits as determined under U.S. federal income tax principles) and net gain attributable to the disposition of property not held in a trade or business (which could include net gain from the sale, exchange or other taxable disposition of Shares), but will be reduced by any deductions properly allocable to such income or net gain.
Shareholders are advised to consult their own tax advisors regarding the additional taxation of net investment income.
Income from Repurchases and Transfers of Shares
A repurchase or transfer of Shares by the Fund generally will be treated as a taxable transaction for U.S. federal income tax purposes, either as a “sale or exchange,” or, under certain circumstances, as a “dividend.” In general, the transaction should be treated as a sale or exchange of the Shares if the receipt of cash results in a meaningful reduction in the Shareholder’s proportionate interest in the Fund or results in a “complete redemption” of the Shareholder’s Shares, in each case applying certain constructive ownership rules in the Code. Alternatively, if a Shareholder does not tender all of his or her Shares, such repurchase may not be treated as a sale or exchange for U.S. federal income tax purposes, and the gross amount of such repurchase may constitute a dividend to the Shareholder to the extent of such Shareholder’s pro rata share of the Fund’s current and accumulated earnings and profits.
If the repurchase or transfer of a Shareholder’s Shares qualifies for sale or exchange treatment, the Shareholder will recognize gain or loss equal to the difference between the amount received in exchange for the repurchased or transferred Shares and the adjusted tax basis of those Shares. Such gain or loss will be capital gain or loss if the repurchased or transferred Shares were held by the Shareholder as capital assets, and generally will be treated as long-term capital gain or loss if the repurchased or transferred Shares were held by the Shareholder for more than one year, or as short-term capital gain or loss if the repurchased or transferred Shares were held by the Shareholder for one year or less.
Notwithstanding the foregoing, any capital loss realized by a Shareholder will be disallowed to the extent the Shares repurchased or transferred by the Fund are replaced (including through reinvestment of dividends) either with Shares or substantially identical securities within a period of 61 days beginning 30 days before and ending 30 days after the repurchase or transfer of the Shares. If disallowed, the loss will be reflected in an upward adjustment to the basis of the Shares acquired. The deductibility of capital losses may be subject to statutory limitations.
If the repurchase or transfer of a Shareholder’s Shares does not qualify for sale or exchange treatment, the Shareholder may be treated as having received, in whole or in part, a taxable dividend, a tax‑free return of capital or taxable capital gain, depending on (i) whether the Fund has sufficient earnings and profits to support a dividend and (ii) the Shareholder’s tax basis in the relevant Shares. The tax basis in the Shares repurchased or transferred by the Fund, to the extent remaining after any dividend and return of capital distribution with respect to those Shares, will be transferred to any remaining Shares held by the Shareholder. In such a case, there is a risk that Shareholders who are not seeking to have their Shares repurchased, and Shareholders who seek to have some but not all of their Shares or fewer than all of whose Shares are repurchased, in each case whose percentage interests in the Fund increase as a result of such repurchase offer, will be treated as having received a taxable distribution from the Fund. The extent of such risk will vary depending upon the particular circumstances of the share repurchase program, and in particular whether such program is a single and isolated event or is part of a plan for periodically repurchasing Shares of the Fund.
 
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The Fund generally will be required to report to the IRS and each Shareholder the cost basis and holding period for each respective Shareholder’s Shares repurchased or transferred by the Fund. The Fund has elected the average cost method as the default cost basis method for purposes of this requirement. If a Shareholder wishes to accept the average cost method as its default cost basis calculation method in respect of Shares in its account, the Shareholder does not need to take any additional action. If, however, a Shareholder wishes to affirmatively elect an alternative cost basis calculation method in respect of its Shares, the Shareholder must contact the Administrator to obtain and complete a cost basis election form. The cost basis method applicable to a particular Share repurchase or transfer may not be changed after the valuation date established by the Fund in respect of that repurchase or transfer. Shareholders should consult their tax advisors regarding their cost basis reporting options and to obtain more information about how the cost basis reporting rules apply to them.
A sale of Shares, other than in the context of a repurchase or transfer of Shares by the Fund, generally will have the same tax consequences as described above in respect of a Share repurchase that qualifies for “sale or exchange” treatment.
If a Shareholder recognizes a loss with respect to Shares in excess of certain prescribed thresholds (generally, $2,500,000 or more for an individual Shareholder or $10,000,000 or more for a corporate Shareholder), the Shareholder must file with the IRS a disclosure statement on an IRS Form 8886. Direct investors of portfolio securities are in many cases excepted from this reporting requirement, but, under current guidance, equity owners of RICs are not excepted. The fact that a loss is reportable as just described does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of this reporting requirement in light of their particular circumstances.
Other Considerations
Unless and until the Fund is considered under the Code to be a “publicly offered regulated investment company,” for purposes of computing the taxable income of U.S. Shareholders that are individuals, trusts or estates, (1) the Fund’s earnings will be computed without taking into account such U.S. Shareholders’ allocable shares of the Management Fees and certain other expenses, (2) each such U.S. Shareholder will be treated as having received or accrued a dividend from the Fund in the amount of such U.S. Shareholder’s allocable share of these fees and expenses for such taxable year, (3) each such U.S. Shareholder will be treated as having paid or incurred such U.S. Shareholder’s allocable share of these fees and expenses for the calendar year and (4) each such U.S. Shareholder’s allocable share of these fees and expenses will be treated as miscellaneous itemized deductions by such U.S. stockholder. For taxable years beginning before 2026, miscellaneous itemized deductions generally are not deductible by a U.S. Shareholder that is an individual, trust or estate. For taxable years beginning in 2026 or later, miscellaneous itemized deductions generally are deductible by a U.S. Shareholder that is an individual, trust or estate only to the extent that the aggregate of such U.S. Shareholder’s miscellaneous itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under Section 68 of the Code. In addition, if the Fund is not treated as a “publicly offered regulated investment company,” the Fund will be subject to limitations on the deductibility of certain “preferential dividends” that are distributed to U.S. stockholders on a non‑pro‑rata basis. A “publicly offered regulated investment company” is a RIC whose equity interests are (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market, or (iii) held by at least 500 persons at all times during the RIC’s taxable year.
Fund Investments
It is intended that the Fund will invest a portion of its assets in Investment Funds, some of which may be classified as partnerships for U.S. federal income tax purposes. An entity that is properly classified as a partnership (and not an association or publicly traded partnership taxable as a corporation) generally is not subject to an entity-level U.S. federal income tax. Instead, each partner of the partnership is required to take into account its distributive share of the partnership’s net capital gain or loss, net short- term capital gain or loss, and its other items of ordinary income or loss (including all items of income, gain, loss and deduction allocable to that partnership from investments in other partnerships) for each taxable year of the partnership ending with or within the partner’s taxable year. Each such item will have the same character to a partner and will generally have the same source (either United States or foreign), as though the partner realized the item directly. Partners of a partnership must report these items regardless of the extent to which, or whether, the partnership or the partners receive cash distributions for such taxable year.
 
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Accordingly, the Fund may be required to recognize items of taxable income and gain prior to the time that any corresponding cash distributions are made to or by the Fund and certain Investment Funds (including in circumstances where investments by the Investment Funds generate income prior to a corresponding receipt of cash). In such case, the Fund may have to dispose of interests in Investment Funds that it would otherwise have continued to hold, or devise other methods of cure, to the extent certain Investment Funds earn income of a type that is not qualifying gross income for purposes of the gross income test or hold assets that could cause the Fund not to satisfy the RIC asset diversification test.
Some of the income that the Fund may earn directly or through an Investment Fund, such as income recognized from an equity investment in an operating partnership, may not satisfy the gross income test. To manage the risk that such income might jeopardize the Fund’s tax status as a RIC resulting from a failure to satisfy the gross income test, one or more subsidiary entities treated as U.S. corporations for U.S. federal income tax purposes may be employed to earn such income and (if applicable) hold the related investment. Such subsidiary entities generally will be required to incur entity-level income taxes on their earnings, which ultimately will reduce the return to Shareholders.
UNLESS OTHERWISE INDICATED, REFERENCES IN THIS DISCUSSION TO THE FUND’S INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS, INCLUDE THE CO‑INVESTMENTS OR CO‑INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS OF BOTH THE FUND, AS WELL AS THOSE INDIRECTLY ATTRIBUTABLE TO THE FUND AS A RESULT OF THE FUND’S INVESTMENT IN ANY INVESTMENT FUND (OR OTHER ENTITY) THAT IS PROPERLY CLASSIFIED AS A PARTNERSHIP OR DISREGARDED ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES (AND NOT AN ASSOCIATION OR PUBLICLY TRADED PARTNERSHIP TAXABLE AS A CORPORATION).
Ordinarily, gains and losses realized from portfolio transactions will be characterized as capital gains and losses. However, because the functional currency of the Fund for U.S. federal income tax purposes is the U.S. dollar, a portion of the gain or loss realized from the disposition of foreign currencies (including foreign currency denominated bank deposits) and non‑U.S. dollar denominated securities (including debt instruments, certain futures or forward contracts and options, and similar financial instruments) is generally characterized as ordinary income or loss under Section 988 of the Code. Section 988 of the Code similarly provides that gains or losses attributable to fluctuations in exchange rates that occur between the time the Fund accrues interest or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time such receivables are collected or the time that the liabilities are paid would be generally characterized as ordinary income or loss. In addition, all or a portion of any gains realized from the sale or other disposition of certain market discount bonds will be characterized as ordinary income. Finally, all or a portion of any gain realized from engaging in “conversion transactions” (as defined in the Code to generally include certain transactions designed to convert ordinary income into capital gain) may be characterized as ordinary income.
Hedging and Derivative Transactions
Gain or loss, if any, realized from certain financial futures or forward contracts and options transactions (“Section 1256 Contracts”) generally is treated as 60% long-term capital gain or loss and 40% short-term capital gain or loss. Gain or loss will arise upon exercise or lapse of Section 1256 Contracts. In addition, any Section 1256 Contracts remaining unexercised both at October 31 of each calendar year as well as at the end of the Fund’s taxable year are treated as sold for their then fair market value, resulting in the recognition of gain or loss characterized in the manner described above.
While not a principal investment strategy of the Fund, the Fund may acquire certain foreign currency forward contracts, enter into certain foreign currency futures contracts, acquire put and call options on foreign currencies, or acquire or enter into similar foreign currency-related financial instruments. Generally, foreign currency regulated futures contracts and option contracts that qualify as Section 1256 Contracts will not be subject to ordinary income or loss treatment under Section 988 of the Code. However, if the Fund acquires or enters into any foreign currency futures contracts or options contracts that are not Section 1256 Contracts, or any foreign currency forward contracts or similar foreign currency-related financial instruments, any gain or loss realized by the Fund with respect to such contract or financial instruments generally will be characterized as ordinary gain or loss unless the contract or financial instrument in question is a capital asset in the hands of the Fund and is not part of a straddle transaction (as described below), and
 
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an election is made by the Fund (before the close of the day the transaction is entered into) to characterize the gain or loss attributable to such contract or financial instrument as capital gain or loss.
Offsetting positions held by the Fund, or the Investment Funds, involving certain financial futures or forward contracts or options transactions with respect to actively traded personal property may be considered, for tax purposes, to constitute “straddles.” In addition, investments by the Fund in particular combinations of Investment Funds may also be treated as a “straddle.” To the extent the straddle rules apply to positions established by the Fund, or the Investment Funds, losses realized by the Fund may be deferred to the extent of unrealized gain in the offsetting positions. Further, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gains on straddle positions may be treated as short-term capital gains or ordinary income. Certain of the straddle positions held by the Fund, or the Investment Funds, may constitute “mixed straddles.” One or more elections may be made in respect of the U.S. federal income tax treatment of “mixed straddles,” resulting in different tax consequences. In certain circumstances, the provisions governing the tax treatment of straddles override or modify certain of the provisions discussed above.
If the Fund, or possibly an Investment Fund, either (1) holds an appreciated financial position with respect to stock, certain debt obligations or partnership interests (“appreciated financial position”), and then enters into a short sale, futures, forward, or offsetting notional principal contract (collectively, a “Contract”) with respect to the same or substantially identical property, or (2) holds an appreciated financial position that is a Contract and then acquires property that is the same as, or substantially identical to, the underlying property, the Fund generally will be taxed as if the appreciated financial position were sold at its fair market value on the date the Fund, or such Investment Fund, enters into the financial position or acquires the property, respectively. The foregoing will not apply, however, to any transaction during any taxable year that otherwise would be treated as a constructive sale if the transaction is closed within 30 days after the end of that year and the appreciated financial position is held unhedged for 60 days after that closing (i.e., at no time during that 60‑day period is the risk of loss relating to the appreciated financial position reduced by reason of certain specified transactions with respect to substantially identical or related property, such as by reason of an option to sell, being contractually obligated to sell, making a short sale, or granting an option to buy substantially identical stock or securities).
If the Fund, or possibly an Investment Fund, enters into certain derivatives (including forward contracts, long positions under notional principal contracts, and related puts and calls) with respect to equity interests in certain pass-thru entities (including other RICs, REITs, partnerships, real estate mortgage investment conduits and certain trusts and foreign corporations), long-term capital gain with respect to the derivative may be recharacterized as ordinary income to the extent it exceeds the long-term capital gain that would have been realized had the interest in the pass-thru entity been held directly during the term of the derivative contract. Any gain recharacterized as ordinary income will be treated as accruing at a constant rate over the term of the derivative contract and may be subject to an interest charge. The U.S. Treasury Department (the “Treasury”) and the IRS have the authority to issue regulations expanding the application of these rules to derivatives with respect to debt instruments and/or stock in corporations that are not pass-thru entities.
Passive Foreign Investment Companies and Controlled Foreign Corporations
The Fund may indirectly hold equity interests in non‑U.S. Investment Funds and/or non‑U.S. portfolio companies that may be treated as “passive foreign investment companies” (each, a “PFIC”) under the Code. A PFIC is generally defined as a non‑U.S. entity which is classified as a corporation for U.S. federal income tax purposes, and which earns at least 75% of its annual gross income from passive sources (such as interest, dividends, rents, royalties or capital gain) or which holds at least 50% of its total assets in assets producing such passive income. The Fund may be subject to U.S. federal income tax, at ordinary income rates, on a portion of any “excess distribution” or gain from the disposition of such interests even if such income is distributed as a taxable dividend by the Fund to its Shareholders. Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes arising from such distributions or gains. If an election is made to treat the PFIC as a “qualified electing fund” under the Code (a “QEF”), then the Fund would be required, in lieu of the foregoing requirements, to include in its income each taxable year a portion of the QEF’s ordinary earnings and net capital gain (at ordinary income and capital gains rates, respectively), even if not distributed to the Fund. If the QEF incurs losses for a taxable year, these losses will not pass through to the Fund and, accordingly, cannot offset other income and/or gains of the Fund. The QEF election may not be able to be made with respect to many PFICs because of certain requirements that the PFICs themselves would have to satisfy. Alternatively, in certain cases, an election can be made to mark‑to‑market the shares of a PFIC held by the Fund at
 
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the end of the Fund’s taxable year (as well as on certain other dates prescribed in the Code). In this case, the Fund would recognize as ordinary income its share of any increase in the value of such PFIC shares, and as ordinary loss its share of any decrease in such value, to the extent such loss did not exceed its share of prior increases in income derived from such PFIC shares. Under either election, the Fund might be required to recognize income in excess of its distributions from PFICs and its proceeds from dispositions of PFIC stock during the applicable taxable year and such income would nevertheless be subject to the distribution requirement and would be taken into account under prescribed timing rules for purposes of the 4% excise tax (described above). Dividends paid by PFICs will not be treated as “qualified dividend income.” In certain cases, the Fund will not be the party legally permitted to make the QEF election or the mark‑to‑market election in respect of indirectly held PFICs and, in such cases, will not have control over whether the party within the chain of ownership that is legally permitted to make the QEF or mark‑to‑market election will do so.
If the Fund holds 10% or more (by vote or value) of the interests treated as equity for U.S. federal income tax purposes in a foreign entity classified as a corporation for U.S. federal income tax purposes and considered a controlled foreign corporation (“CFC”) under the Code, the Fund may be treated as receiving a deemed distribution (i.e., characterized as ordinary income) each taxable year from such foreign corporation in an amount equal to its pro rata share of such entity’s income for such taxable year (including both ordinary earnings and capital gains), whether or not the entity makes an actual distribution during such taxable year. The Fund would be required to include the amount of a deemed distribution from a CFC when computing its investment company taxable income as well as in determining whether the Fund satisfies the distribution requirements applicable to RICs, even to the extent the amount of the Fund’s income deemed recognized from the CFC exceeds the amount of any actual distributions from the CFC and the proceeds from any sales or other dispositions of CFC stock during the Fund’s taxable year. In general, a foreign entity classified as a corporation for U.S. federal income tax purposes will be considered a CFC if greater than 50% of the shares of the corporation, measured by reference to combined voting power or value, is owned (directly, indirectly or by attribution) by U.S. Shareholders. A “U.S. Shareholder,” for this purpose, is any U.S. person that possesses (actually or constructively) 10% or more of the combined voting power or value of all classes of shares of a foreign entity classified as a corporation for U.S. federal income tax purposes.
Under applicable final Treasury regulations, certain income derived by the Fund from a CFC or a PFIC with respect to which the Fund has made a QEF election would generally constitute qualifying income under the gross income test for purposes of determining the Fund’s ability to be subject to tax as a RIC only to the extent the CFC or the PFIC makes current distributions of that income to the Fund or the included income is derived with respect to the Fund’s business of investing in stocks and securities. The Fund may be restricted in its ability to make QEF elections with respect to the Fund’s holdings in Private Market Assets and other issuers that could be treated as PFICs or implement certain restrictions with the respect to any Private Market Assets or other issuers that could be treated as CFCs in order to limit the Fund’s tax liability or maximize the Fund’s after‑tax return from these investments.
State and Local Taxes
In addition to the U.S. federal income tax consequences summarized above, Shareholders and prospective Shareholders should consider the potential state and local tax consequences associated with an investment in the Fund. The Fund may become subject to income and other taxes in states and localities based on the Fund’s investments in entities that conduct business in those jurisdictions. Shareholders will generally be taxable in their state of residence with respect to their income or gains earned and distributed by the Fund as dividends for U.S. federal income tax purposes, or the amount of their investment in the Fund.
Foreign Taxes
The Fund’s investment in non‑U.S. stocks or securities may be subject to withholding and other taxes imposed by countries outside the United States. In that case, the Fund’s yield on those stocks or securities would be decreased. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the Fund’s assets at year‑end consists of the stock or securities of foreign corporations, the Fund may elect to permit its Shareholders to claim a credit or deduction on their income tax returns for their pro rata portion of qualified taxes paid or deemed paid by the Fund to foreign countries in respect of foreign stock or securities the Fund has held for at least the minimum period specified in the Code. In such a case, Shareholders of the Fund will include in gross income from foreign sources their pro rata shares of such taxes. The Fund does not expect to meet the requirements to make the election described above in respect of the treatment of foreign taxes.
 
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Information Reporting and Backup Withholding
Information returns will generally be filed with the IRS in connection with distributions made by the Fund to Shareholders unless Shareholders establish they are exempt from such information reporting (e.g., by properly establishing that they are classified as corporations for U.S. federal tax purposes). Additionally, the Fund may be required to withhold, for U.S. federal income taxes, a portion of all taxable dividends and repurchase proceeds payable to Shareholders who fail to provide the Fund with their correct taxpayer identification numbers, generally on an IRS Form W‑9, or who otherwise fail to make required certifications, or if the Fund or the Shareholder has been notified by the IRS that such Shareholder is subject to backup withholding. Certain Shareholders specified in the Code and the Treasury regulations promulgated thereunder are exempt from backup withholding but may be required to demonstrate their exempt status. Backup withholding is not an additional tax. Any amounts withheld will be allowed as a refund or a credit against the Shareholder’s U.S. federal income tax liability if the appropriate information is provided to the IRS.
U.S. Federally Tax‑Exempt Shareholders
Under current law, the Fund serves to “block” (that is, prevent the attribution to Shareholders of) unrelated business taxable income (“UBTI”) from being realized by its U.S. federally tax‑exempt Shareholders (including, among others, individual retirement accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable entities). Notwithstanding the foregoing, a U.S. federally tax‑exempt Shareholder could realize UBTI by virtue of its investment in Shares of the Fund if the U.S. federally tax‑exempt Shareholder has engaged in a borrowing or other similar transaction to acquire its Shares. A U.S. federally tax‑exempt Shareholder may also recognize UBTI if the Fund were to recognize “excess inclusion income” derived from direct or indirect investments in residual interests in real estate mortgage investment conduits or taxable mortgage pools. If a charitable remainder annuity trust or a charitable remainder unitrust (each as defined in Section 664 of the Code) has UBTI for a taxable year, a 100% excise tax on the UBTI is imposed on the trust.
Foreign Shareholders
U.S. taxation of a Shareholder who, as to the United States, is a nonresident alien individual, a foreign trust or estate, or a foreign corporation (each, a “Foreign Shareholder”) as defined in the Code, depends on whether the income of the Fund is “effectively connected” with a U.S. trade or business carried on by the Foreign Shareholder.
Income Not Effectively Connected. If the income from the Fund is not “effectively connected” with a U.S. trade or business carried on by the Foreign Shareholder, distributions of investment company taxable income will generally be subject to a U.S. tax of 30% (or lower treaty rate, except in the case of any “excess inclusion income” allocated to the Foreign Shareholder), which tax is generally withheld from such distributions. Capital gain dividends and any amounts retained by the Fund which are properly reported by the Fund as undistributed capital gains will not be subject to U.S. tax at the rate of 30% (or lower treaty rate), unless the Foreign Shareholder is a nonresident alien individual and is physically present in the United States for more than 182 days during the taxable year and meets certain other requirements. In order to qualify for any reduction or exemption from U.S. withholding tax, a Foreign Shareholder must comply with applicable certification requirements relating to its non‑U.S. status (including, in general, furnishing an IRS Form W‑8BEN, IRS Form W‑8BEN‑E, IRS Form W‑8ECI, IRS Form W‑8IMY or IRS Form W‑8EXP, or an acceptable substitute or successor form).
Any capital gain that a Foreign Shareholder realizes upon a repurchase of Shares or otherwise upon a sale or exchange of Shares will ordinarily be exempt from U.S. tax unless, in the case of a Foreign Shareholder that is a nonresident alien individual, the gain is U.S. source income and such Foreign Shareholder is physically present in the United States for more than 182 days during the taxable year and meets certain other requirements. However, this 30% tax on capital gains of nonresident alien individuals who are physically present in the United States for more than the 182 day period only applies in exceptional cases because any individual present in the United States for more than 182 days during the taxable year is generally treated as a resident for U.S. income tax purposes; in that case, he or she would be subject to U.S. income tax on his or her worldwide income at the graduated rates applicable to U.S. citizens, rather than the 30% tax.
Income Effectively Connected. If the income from the Fund is “effectively connected” with a U.S. trade or business carried on by a Foreign Shareholder, then distributions of investment company taxable income and capital
 
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gain dividends, any amounts retained by the Fund which are reported by the Fund as undistributed capital gains, and any gains realized upon the sale or exchange of Shares of the Fund will be subject to U.S. income tax at the graduated rates applicable to U.S. citizens, residents and domestic corporations.
Corporate Foreign Shareholders may also be subject to the branch profits tax imposed by the Code.
In the case of a Foreign Shareholder, the Fund may be required to withhold U.S. federal income tax from distributions and repurchase proceeds that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate), unless the Foreign Shareholder certifies his foreign status under penalties of perjury or otherwise establishes an exemption in the manner discussed above.
The tax consequences to a Foreign Shareholder entitled to claim the benefits of an applicable tax treaty may differ from those described herein. Foreign Shareholders are advised to consult their own tax advisors with respect to the particular tax consequences to them of an investment in the Fund.
Foreign Account Tax Compliance Act
The Fund is required under the Foreign Account Tax Compliance Act (“FATCA”) provisions of the Code to withhold U.S. tax (at a 30% rate) on payments of amounts treated as dividends for U.S. federal income tax purposes made to certain non‑U.S. entities (including financial intermediaries) that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements designed to inform the Treasury of U.S.-owned foreign investment accounts unless various U.S. information reporting and diligence requirements (that are in addition to and significantly more onerous than, the requirement to deliver an applicable U.S. nonresident withholding tax certification form (e.g., IRS Form W‑8BEN)) and certain other requirements have been satisfied. The information required to be reported includes the identity and taxpayer identification number of each account holder and transaction activity within the holder’s account. Persons located in jurisdictions that have entered into an intergovernmental agreement with the U.S. to implement FATCA may be subject to different rules. Shareholders may be requested to provide additional information to the Fund to enable the Fund to determine whether withholding is required.
Other Taxation
The foregoing represents a summary of the general tax rules and considerations affecting Shareholders and the Fund’s operations, and neither purports to be a complete analysis of all relevant tax rules and considerations, nor does it purport to be a complete listing of all potential tax risks inherent in making an investment in the Fund. A Shareholder may be subject to other taxes, including but not limited to, other state, local, and foreign taxes, estate and inheritance taxes, or intangible property taxes, which may be imposed by various jurisdictions. The Fund also may be subject to additional state, local, or foreign taxes that could reduce the amounts distributable to Shareholders. It is the responsibility of each Shareholder to file all appropriate tax returns that may be required. Shareholders should consult their own tax advisors regarding the state, local and foreign tax consequences of an investment in Shares and the particular tax consequences to them of an investment in the Fund. In addition to the particular matters set forth in this section, tax‑exempt entities should carefully review those sections of this Prospectus and its related SAI regarding liquidity and other financial matters to ascertain whether the investment objectives of the Fund are consistent with their overall investment plans.
ERISA CONSIDERATIONS
Persons who are fiduciaries with respect to an employee benefit plan, individual retirement account (“IRA”), Keogh plan, or other arrangement subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the Code (an “ERISA Plan”) should consider, among other things, the matters described below before determining whether to invest in the Fund. ERISA imposes certain general and specific responsibilities on persons who are fiduciaries with respect to an ERISA Plan, including prudence, diversification, prohibited transactions, and other standards.
The Board of Trustees may require an ERISA Plan proposing to invest in the Fund to represent that it, and any fiduciaries responsible for the ERISA Plan’s investments, are aware of and understand the Fund’s investment objectives, policies, and strategies; that the decision to invest plan assets in the Fund was made with appropriate consideration of relevant investment factors with regard to the ERISA Plan; and that the decision to invest plan assets
 
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in the Fund is consistent with the duties and responsibilities imposed upon fiduciaries with regard to their investment decisions under ERISA and the Code, as applicable.
Certain prospective ERISA Plan investors may currently maintain relationships with the Advisers or one or more Investment Managers in which the Fund invests, or with other entities that are affiliated with the Advisers or such Investment Managers. Each of such persons may be deemed to be a party in interest to or a fiduciary of any ERISA Plan to which it provides investment management, investment advisory, or other services. ERISA prohibits (and the Code penalizes) the use of ERISA Plan assets for the benefit of a party in interest, and also prohibits (and penalizes) an ERISA Plan fiduciary from using its position to cause such ERISA Plan to make an investment from which it or certain third parties in which such fiduciary has an interest would receive a fee or other consideration. ERISA Plan Shareholders should consult with legal counsel to determine if participation in the Fund is a transaction that is prohibited by ERISA or the Code. Fiduciaries of ERISA Plan Shareholders may be required to represent that the decision to invest in the Fund was made by them as fiduciaries that are independent of such affiliated persons, that are duly authorized to make such investment decisions, and that have not relied on any individualized advice of such affiliated persons, as a basis for the decision to invest in the Fund.
Employee benefit plans that are not subject to ERISA or the related provisions of the Code may be subject to other rules governing such plans, and such plans are not addressed above; fiduciaries of employee benefit plans that are not subject to ERISA, whether or not subject to the Code, should consult with their own counsel and other advisors regarding such matters.
The provisions of ERISA and the Code are subject to extensive and continuing administrative and judicial interpretation and review. The discussion of ERISA and the Code contained herein is, of necessity, general and may be affected by future publication of regulations and rulings. Potential investors should consult with their legal advisers regarding the consequences under ERISA and the Code of the acquisition and ownership of Shares.
THE FUND’S SALE OF SHARES TO ERISA PLANS IS IN NO RESPECT A REPRESENTATION OR WARRANTY BY THE FUND, THE ADVISERS, OR ANY OF ITS AFFILIATES, OR BY ANY OTHER PERSON ASSOCIATED WITH THE SALE OF THE SHARES, THAT SUCH INVESTMENT BY ANY ERISA PLAN MEETS ALL RELEVANT LEGAL REQUIREMENTS APPLICABLE TO ERISA PLANS GENERALLY OR TO ANY PARTICULAR ERISA PLAN, OR THAT SUCH INVESTMENT IS OTHERWISE APPROPRIATE FOR ERISA PLANS GENERALLY OR FOR ANY PARTICULAR ERISA PLAN.
ANTI-TAKEOVER PROVISIONS IN THE DECLARATION OF TRUST
The Declaration of Trust includes provisions that could have the effect of limiting the ability of other entities or persons to acquire control of the Fund or to change the composition of the Board. These provisions may have the effect of discouraging attempts to acquire control of the Fund, which attempts could have the effect of increasing the expenses of the Fund and interfering with the normal operation of the Fund. The Trustees are elected for indefinite terms and do not stand for reelection. A Trustee may be removed from office with cause only by action taken by a majority of the remaining Trustees (or, in the case of an Independent Trustee, only by action taken by a majority of the remaining Independent Trustees). The Declaration of Trust does not contain any other specific inhibiting provisions that would operate only with respect to an extraordinary transaction such as a merger, reorganization, tender offer, sale or transfer of substantially all of the Fund’s asset, or liquidation. Reference should be made to the Declaration of Trust on file with the SEC for the full text of these provisions.
ADDITIONAL INFORMATION ABOUT THE FUND
Each Share represents a proportional interest in the assets of the Fund. Each Share has one vote at Shareholder meetings, with fractional Shares voting proportionally on matters submitted to the vote of Shareholders. There are no cumulative voting rights. Shares do not have pre‑emptive or conversion or redemption provisions.
INQUIRIES
Inquiries concerning the Fund and Shares (including information concerning subscription and repurchase procedures) should be directed to:
StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
 
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STEPSTONE GROUP PRIVATE WEALTH LLC PRIVACY POLICY
Data privacy is a primary concern for each of StepStone Group LP (“SSG”), StepStone Group Real Assets LP (“SIRA”), StepStone Group Real Estate LP (“SRE”), and StepStone Group Private Wealth LLC (“StepStone Private Wealth” or “SPW” and together with SSG, SIRA, and SRE, collectively, “StepStone”). This data privacy notice (the “Notice”) details StepStone’s practices for collecting and disclosing the personal information of clients and others, to both affiliates of SSG, SIRA, SRE, and SPW, and, as applicable, nonaffiliated third parties. Recipients of this Notice include, among others, current clients and investors, prospective clients, former clients, employees of managers with whom StepStone has conducted business, and employees of StepStone or any of StepStone’s affiliates (each a “Notice Recipient”). For purposes of this Notice, an affiliate is an entity that (i) controls SSG, SIRA, SRE, or SPW, (ii) is controlled by SSG, SIRA, SRE, or SPW, or (iii) is under common control with SSG, SIRA, SRE, or StepStone Private Wealth. Nonaffiliated third parties are parties who are not affiliates of any of SSG, SIRA, SRE, or SPW.
Confidentiality of Personal Information
StepStone maintains the confidentiality of nonpublic personal information that a Notice Recipient provides to it. StepStone maintains physical, electronic and procedural safeguards to guard a Notice Recipient’s nonpublic personal information. All third parties that handle information must agree to follow the standards for confidentiality that StepStone has established. In addition, all people who work for StepStone are trained to handle a Notice Recipient’s information properly in order to maintain its security, and only employees who need to know nonpublic personal information about a Notice Recipient to provide services to such Notice Recipient have access to such information.
Categories of Nonpublic Personal Information that StepStone Collects
StepStone collects nonpublic personal information about Notice Recipients from the following sources: (i) information it receives from Notice Recipients on applications or other forms; and (ii) information about Notice Recipients’ transactions with StepStone, its affiliates, or others.
StepStone is a data controller within the meaning of data protection legislation in force in the European Economic Area (“EEA”) and undertakes to hold any nonpublic personal information provided in accordance with EEA data protection legislation.
Nonpublic personal information will be used by StepStone for the following purposes:
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to manage and administer holdings in StepStone managed or advised funds, separately managed accounts, advisory engagements and any related business relationships (and, in each case, the investments made pursuant thereto) on an ongoing basis in accordance with the terms agreed between a Notice Recipient and SSG, SIRA, SRE or SPW, as applicable;
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to carry out statistical analysis and market research; and
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to comply with legal and regulatory obligations applicable to the Notice Recipient, StepStone or its managed or advised funds, separately managed accounts, advisory engagements or any related business relationship with the Notice Recipient from time to time, including applicable anti-money laundering and counter terrorist financing legislation, investor qualification legislation and tax legislation.
The nonpublic personal information will only be used in connection with StepStone’s legitimate business interests and accordingly Notice Recipients’ specific consent is not required.
Disclosure of Nonpublic Personal Information to Affiliates
StepStone generally may share all of a Notice Recipient’s nonpublic personal information with StepStone’s affiliates; provided that such affiliates will be obligated to keep such nonpublic personal information confidential to the same extent as StepStone. StepStone shares information with its affiliates in order to serve its Notice Recipients better. If a Notice Recipient prefers that StepStone not disclose nonpublic personal information about such Notice Recipient to its affiliates, such Notice Recipient may opt out of those general disclosures; that is, such Notice Recipient may direct StepStone not to make such disclosures (other than disclosures permitted or required by applicable law or otherwise permitted by StepStone’s privacy policy). However, notwithstanding any such opt‑out, StepStone will be permitted to disclose personal information to its affiliates to the extent necessary or appropriate for such affiliates to perform services for the benefit of the Notice Recipient.
 
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Disclosure of Nonpublic Personal Information to Non‑Affiliates
StepStone does not sell or market a Notice Recipient’s personal information to nonaffiliated third parties. StepStone’s intent is to respect the Notice Recipients’ expectations that their personal information will be kept confidential. However, in order to serve the Notice Recipients better, StepStone will disclose personal information to nonaffiliated third parties (including service providers to StepStone), but only to the extent necessary or appropriate for such third parties to perform services for the benefit of the Notice Recipient and only if StepStone believes that such personal information will be kept confidential by such third parties after such disclosure.
Additional Information About Categories of Nonpublic Personal Information that StepStone Discloses
Except as required by applicable law and described in this privacy notice, StepStone will not share any other nonpublic personal information about a Notice Recipient with its affiliates or nonaffiliated third parties.
Nonpublic Personal Information of Former Investors and Prospective Clients
This Notice and StepStone’s policy regarding treatment of nonpublic personal information of Notice Recipients also apply to former clients, business prospects, potential clients and current and former employees.
Disclosure of Nonpublic Personal Information outside the EEA
Nonpublic personal information may be transferred to countries which may not have the same or equivalent data protection laws as that required under EEA data protection legislation. Any such transfer will be made in compliance with applicable data protection legislation, and appropriate measures are in place to ensure this, such as entering into Model Contractual Clauses (as published by the European Commission). For more information on the means of transfer of data or a copy of the relevant safeguards, please contact us at privacy@stepstoneglobal.com.
Pursuant to EEA data protection legislation, investors have the right to object to processing of nonpublic personal information and a number of other rights which may be exercised in certain circumstances, i.e.:
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the right of access to nonpublic personal information held;
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the right to amend and rectify any inaccuracies in nonpublic personal information held;
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the right to erase nonpublic personal information held;
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the right to data portability of nonpublic personal information held; and
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the right to request restriction of the processing of nonpublic personal information
These rights will be exercisable, subject to limitations as provided for in EEA data protection legislation. Any Notice Recipient may make a request to StepStone to exercise these rights by contacting us at privacy@stepstoneglobal.com.
Please note that nonpublic personal information may be retained by StepStone for the duration of a Notice Recipient’s investment or engagement with StepStone, and afterwards in accordance with StepStone’s legal and regulatory obligations, including but not limited to StepStone’s record retention policy.
For queries, requests or comments in respect of this Notice, or the way in which StepStone uses nonpublic personal information, please contact us at privacy@stepstoneglobal.com. Note that Notice Recipients have the right to lodge a complaint with the appropriate regulator.
Changes to Privacy Policy
StepStone may modify its privacy policy at any time.
 
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Investors should rely only on the information contained in this prospectus. No dealer, salesperson or other individual has been authorized to give any information or to make any representations that are not contained in this prospectus. If any such information or statements are given or made, investors should not rely upon such information or representations. This prospectus does not constitute an offer to sell any securities other than those to which this prospectus relates, or an offer to sell to, or a solicitation of an offer to buy from, any person in any jurisdiction where such an offer or solicitation would be unlawful. This prospectus speaks as of the date set forth below. Investors should not assume that the delivery of this prospectus or that any sale made pursuant to this prospectus implies that the information contained in this prospectus will remain fully accurate and correct as of any time subsequent to the date of this prospectus.
 
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Preliminary Statement of Additional Information
Dated July 11, 2023
Subject to Completion
The information in this preliminary statement of additional information is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary statement of additional information is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer is not permitted.
STEPSTONE PRIVATE INFRASTRUCTURE FUND
Class T Shares
Class S Shares
Class D Shares
Class I Shares
[ ]
STATEMENT OF ADDITIONAL INFORMATION
128 S Tryon St., Suite 1600
Charlotte, NC 28202
(704) 215‑4300
This Statement of Additional Information (“SAI”) is not a prospectus. This SAI relates to and should be read in conjunction with the prospectus (“Prospectus”) of StepStone Private Infrastructure Fund (the “Fund”) dated [ ]. A copy of the Prospectus may be obtained by contacting the Fund at the telephone number or address set forth above.
Capitalized terms used but not defined in this SAI have the meanings ascribed to them in the Prospectus.
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INVESTMENT POLICIES, PRACTICES AND RISKS
The Fund is a non‑diversified, closed‑end management investment company operated as an interval fund. The Fund was organized as a Delaware statutory trust on December 5, 2022. The Fund offers four separate classes of shares of beneficial interest (“Shares”) designated as Class T (“Class T Shares”), Class S (“Class S Shares”), Class D (“Class D Shares”), and Class I (“Class I Shares”) only to Eligible Investors. Class T Shares, Class S Shares, Class D Shares, and Class I Shares are subject to different fees and expenses. The Fund’s strategy involves investing in a range of private infrastructure assets across multiple sponsors and investment types. The portfolio will consist of private infrastructure investments that vary across industry sectors and geographies. The Fund intends to make investments in equity and debt interests across a variety of private infrastructure investments within areas such as transportation and logistics, renewables and energy, communications/digital infrastructure, utilities, social infrastructure, natural capital and other real assets that provide necessary services to society. These private infrastructure investments will be made through private transactions that are exempt from registration under the Securities Act and will not be made in governmental entities; collectively, these private infrastructure investments are referred to as “Infrastructure Assets.” Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowing for investment purposes, in Infrastructure Assets. For purposes of this 80% threshold, the Fund will include (i) investments in specific Infrastructure Assets, (ii) investments in companies that invest primarily in Infrastructure Assets and (iii) investments in Investment Funds that invest primarily in Infrastructure Assets.
In select cases, the Fund may allocate a portion of its investments to other private market asset classes, including but not limited to real estate, private equity and private debt. Infrastructure Assets, along with all other forms of private assets in which the Fund may invest, are broadly referred to as “Private Market Assets.”
StepStone Group Private Wealth LLC serves as the Fund’s investment adviser (“StepStone Private Wealth”, “SPW” or the “Adviser”), and StepStone Group Real Assets LP serves as the Fund’s investment sub‑adviser (“StepStone” or the “Sub‑Adviser,” and together with the Adviser, the “Advisers”). The investment objectives and principal investment strategies of the Fund, as well as the principal risks associated with the Fund’s investment strategies, are set forth in the Prospectus. Certain additional investment information is set forth below.
Fundamental Policies
The Fund’s stated fundamental policies, which may only be changed by the affirmative vote of a majority of the outstanding voting securities of the Fund, are listed below. As defined by the 1940 Act, as amended (the “1940 Act”), the vote of a “majority of the outstanding voting securities of the Fund” means the vote, at an annual or special meeting of the Fund’s Shareholders duly called, (a) of 66‑2/3% or more of the voting securities present at such meeting, if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy; or (b) of more than 50% of the outstanding voting securities of the Fund, whichever is less. The Fund may not:
(1)     invest 25% or more of the value of its total assets in the securities, other than U.S. Government securities, of issuers engaged in any single industry (for purposes of this restriction, the Fund’s investments in Private Market Assets are not deemed to be investments in a single industry); provided, however, that the Fund will, in normal circumstances, invest more than 25% of the value of its total assets at the time of purchase in Infrastructure Assets. To the extent that the Fund’s investments in Private Market Assets are investments in a single industry, such investments will comply with this restriction;
(2)    borrow money, except to the extent permitted by the 1940 Act (which currently limits borrowing to no more than 33‑ 1/3% of the value of the Fund’s total assets);
(3)    issue senior securities, except to the extent permitted by Section 18 of the 1940 Act (which currently limits the issuance of a class of senior securities that is indebtedness to no more than 33‑1/3% of the value of the Fund’s total assets or, if the class of senior security is stock, to no more than 50% of the value of the Fund’s total assets);
(4)    underwrite securities of other issuers, except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933, as amended, in connection with the disposition of its portfolio securities;
(5)    make loans to other persons, except that (i) the Fund will not be deemed to be making a loan to the extent that the Fund makes debt investments in accordance with its stated investment strategies; (ii) the Fund may take short positions in any security or financial instrument; and (iii) the Fund may lend its portfolio securities in an amount not in excess of 331 /3% of its total assets, taken at market value, provided that such loans shall be made in accordance with applicable law; or
(6)    purchase or sell commodities or commodity contracts, except that it may purchase and sell non‑U.S. currency, options, futures and forward contracts, including those related to indices, swaps and options on indices, and may invest in commodity pools and other entities that purchase and sell commodities and commodity contracts.
 
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Other Fundamental Policies
The Fund may invest in real estate or interests in real estate, securities that are secured by or represent interests in real estate (e.g., mortgage loans evidenced by notes or other writings defined to be a type of security), mortgage-related securities or investing in companies engages in the real estate business or that has a significant portion of their assets in real estate (including real estate investment trusts).
In addition, the Fund has adopted a fundamental policy that it will make quarterly repurchase offers pursuant to Rule 23c‑ 3 under the 1940 Act, as such rule may be amended from time to time, for between 5% and 25% of the Shares outstanding at NAV, unless suspended or postponed in accordance with regulatory requirements, and each repurchase pricing shall occur no later than the 14th day after the Repurchase Request Deadline (as defined in the Prospectus), or the next business day if the 14th day is not a business day.
With respect to these investment restrictions and other policies described in this SAI or the Prospectus (except the Fund’s policy on borrowings set forth above), if a percentage restriction is adhered to at the time of an investment or transaction, a later change in percentage resulting from a change in the values of investments or the value of the Fund’s total assets, unless otherwise stated, will not constitute a violation of such restriction or policy. The Fund’s investment policies and restrictions do not apply to the activities and transactions of Private Market Assets in which assets of the Fund are invested.
Other Risks
The following disclosure supplements the disclosure set forth under the caption “Types of Investments and Related Risks” in the Prospectus and does not, by itself, present a complete or accurate explanation of the matters disclosed. Prospective investors must refer also to “Types of Investments and Related Risks” in the Prospectus for a complete presentation of the matters disclosed below.
Substantial Fees and Expenses. The Fund will allocate to multiple Investment Funds. A Shareholder in the Fund that meets the eligibility conditions imposed by one or more Investment Funds, including minimum initial investment requirements that may be substantially higher than those imposed by the Fund, could potentially invest directly in primaries of such Investment Funds. By investing in the Investment Funds through the Fund, a Shareholder in the Fund will bear a portion of the Management Fee and other expenses of the Fund. A Shareholder in the Fund will also indirectly bear a portion of the asset-based management fees, carried interests or incentive allocations (which are a share of an Investment Fund’s returns which are paid to the Investment Manager) and fees and expenses borne by the Fund as an investor in the Investment Funds. Although not part of the Fund’s primary strategy, to the extent that the Fund invests in an Investment Fund that is itself a “fund of funds,” the Fund will bear a third layer of fees. These layered fees may result in higher Fund fees and expenses than if the Fund invested in other types of securities. Each Investment Manager receives any incentive-based allocations to which it is entitled irrespective of the performance of the other Investment Funds and the Fund generally. As a result, an Investment Fund with positive performance may receive compensation from the Fund, even if the Fund’s overall returns are negative.
Incentive Allocation Arrangements. Investment Managers of an Investment Fund may receive a performance fee, carried interest or incentive allocation generally equal to 20% of the net profits earned by the Investment Fund that it manages, typically subject to a preferred return. These performance incentives may create an incentive for the Investment Managers to make investments that are riskier or more speculative than those that might have been made in the absence of the performance fee, carried interest, or incentive allocation.
Control Positions. Private Market Assets may take control positions in companies. The exercise of control over a company imposes additional risks of liability for environmental damage, product defects, failure to supervise and other types of liability related to business operations. In addition, the act of taking a control position, or seeking to take such a position, may itself subject the Private Market Assets to litigation by parties interested in blocking it from taking that position. If those liabilities were to arise, or such litigation were to be resolved adversely to the Private Market Asset, the Fund likely would suffer losses on its investments.
Inadequate Return. No assurance can be given that the returns on the Fund’s investments will be commensurate with the risk of investment in the Fund. Shareholders should not commit money to the Fund unless they have the resources to sustain the loss of their entire investment in the Fund.
Inside Information. From time to time, the Fund or its affiliates may come into possession of material, non‑public information concerning an entity in which the Fund has invested or proposes to invest. Possession of that information may limit the ability of the Fund to buy or sell securities of the entity.
Recourse to the Fund’s Assets. The Fund’s assets, including any investments made by the Fund and any interest in the Private Market Assets held by the Fund, are available to satisfy all liabilities and other obligations of the Fund. If the Fund becomes subject to a liability, parties seeking to have the liability satisfied may have recourse to the Fund’s assets generally and not be limited to any particular asset, such as the asset representing the investment giving rise to the liability.
Possible Exclusion of a Shareholder Based on Certain Detrimental Effects. The Fund may repurchase Shares held by a Shareholder or other person acquiring Shares from or through a Shareholder, if:
 
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the Shares have been transferred or have vested in any person other than by operation of law as the result of the death, dissolution, bankruptcy, insolvency or adjudicated incompetence of the Shareholder or with the consent of the Fund;
 
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ownership of the Shares by the Shareholder or other person likely will cause the Fund to be in violation of, require registration of any Shares under, or subject the Fund to additional registration or regulation under, the securities, commodities or other laws of the United States or any other relevant jurisdiction;
 
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continued ownership of the Shares by the Shareholder or other person may be harmful or injurious to the business or reputation of the Fund, the Board of Trustees, the Advisers or any of their affiliates, or may subject the Fund or any Shareholder to an undue risk of adverse tax or other fiscal or regulatory consequences;
 
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any of the representations and warranties made by the Shareholder or other person in connection with the acquisition of the Shares was not true when made or has ceased to be true;
 
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the Shareholder is subject to special regulatory or compliance requirements, such as those imposed by the U.S. Bank Holding Company Act of 1956, as amended, certain Federal Communications Commission regulations, or ERISA (as hereinafter defined) (collectively, “Special Laws or Regulations”), and the Fund determines that the Shareholder is likely to be subject to additional regulatory or compliance requirements under these Special Laws or Regulations by virtue of continuing to hold the Shares; or
 
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the Fund, the Adviser or the Board of Trustees determine that the repurchase of the Shares would be in the best interest of the Fund.
The effect of these provisions may be to deprive an investor in the Fund of an opportunity for a return even though other investors in the Fund might enjoy such a return.
Limitations on Transfer; Shares Not Listed; No Market for Class T, Class S, Class D, or Class I Shares. The transferability of Shares is subject to certain restrictions contained in the Fund’s Agreement and Declaration of Trust and is affected by restrictions imposed under applicable securities laws. Shares are not traded on any national securities exchange or other market. No market currently exists for Class T, Class S, Class D, or Class I Shares, and the Fund contemplates that one will not develop. The Shares are, therefore, not readily marketable. The Fund intends to conduct quarterly offers at NAV to repurchase between 5% and 25% of its outstanding Shares, pursuant to Rule 23c‑3 under the 1940 Act, unless such offer is suspended or postponed in accordance with regulatory requirements. In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5% of its outstanding Shares. Although the Adviser and the Fund expect to recommend to the Board of Trustees that the Fund offer to repurchase Shares quarterly, no assurances can be given that the Fund will do so. Consequently, Class T, Class S, Class D, and Class I Shares should only be acquired by investors able to commit their funds for an indefinite period of time.
Closed‑end Fund; Liquidity Risks. The Fund is a non‑diversified closed‑end management investment company designed primarily for long-term investors and is not intended to be a trading vehicle. An investor should not invest in the Fund if the investor needs a liquid investment. Closed‑end funds differ from open‑end management investment companies (commonly known as mutual funds) in that investors in a closed‑end fund do not have the right to redeem their shares on a daily basis at a price based on NAV.
Repurchase Risks. The Fund has no obligation to repurchase Shares at any time; any such repurchases will only be made at such times, in such amounts and on such terms as may be determined by the Board of Trustees, in its sole discretion. With respect to any future repurchase offer, Shareholders repurchasing must do so by a date specified in the notice describing the terms of the repurchase offer (the “Shareholder Notification”). The Shareholder Notification generally will be approximately 21 to 42 days prior to the date as of which the Shares to be repurchased are valued by the Fund (the “Repurchase Request Deadline”). Shareholders that request to repurchase any Shares will not know the price at which such Shares will be repurchased until the Fund’s NAV as of the Repurchase Request Deadline is able to be determined, which determination is expected to be able to be made in the month following that of the Repurchase Request Deadline (the “Repurchase Pricing Date”). It is possible that during the time period between the Shareholder Notification date and the Repurchase Request Deadline, general economic and market conditions, or specific events affecting one or more underlying Private Market Assets, could cause a decline in the value of Shares in the Fund. Moreover, because the Shareholder Notification date will be substantially in advance of the Repurchase Pricing Date, Shareholders who tender Shares of the Fund for repurchase will receive their repurchase proceeds soon after the Shareholder Notification date and will not know the amount of such proceeds prior to making a decision. In no case will the Fund make full payment of all consideration offered in the repurchase offer later than seven (7) days after the Repurchase Pricing Date.
Shareholders who require minimum annual distributions from a retirement account through which they hold Shares should consider the Fund’s schedule for repurchase offers and submit repurchase requests accordingly. In addition, the Fund’s investments in Private Market Assets are subject to lengthy lock‑up periods where the Fund will not be able to dispose of such investments except through secondary transactions with third parties, which may occur at a significant discount to NAV and which may not be available at any given time. There is no assurance that third parties will engage in such secondary transactions, and the Fund may
 
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require and be unable to obtain the consents to transfer that may be required from Investment Managers, the issuers of a Co‑Investment, or other investors in a Co‑Investment needed to effect such transactions. Such parties may have no incentive to grant such consents. The Fund may need to suspend or postpone repurchase offers if it is not able to dispose of its interests in Private Market Assets in a timely manner. See “Investment Policies, Practices and Risks – Mandatory Redemptions.”
Substantial Repurchases. Substantial requests for the Fund to repurchase Shares could require the Fund to liquidate certain of its investments more rapidly than otherwise desirable in order to raise cash to fund the repurchases and achieve a market position appropriately reflecting a smaller asset base. This could have a material adverse effect on the value of the Shares.
To the extent the Fund obtains repurchase proceeds by disposing of its interest in certain Private Market Assets, the Fund will thereafter hold a larger proportion of its assets in the remaining Private Market Assets, some of whose interests at times may be less liquid or illiquid. This could adversely affect the ability of the Fund to fund subsequent repurchase requests of Shareholders or to conduct future repurchases at all. In addition, after giving effect to such dispositions, the remaining Private Market Assets may not reflect the Advisers’ ideal judgments as to the desired portfolio composition of the Fund’s Private Market Assets, in that the Fund’s performance may be tied to the performance of fewer Private Market Assets and/or may not reflect the Advisers’ judgment as to the Fund’s optimal exposure to particular asset classes or investment strategies. These consequences may be particularly applicable if the Fund received requests to repurchase substantial amounts of Shares and may have a material adverse effect on the Fund’s ability to achieve its investment objectives and the value of the Shares. In addition, substantial repurchases of Shares could result in a sizeable decrease in the Fund’s net assets, resulting in an increase in the Fund’s total annual operating expense ratio.
Special Tax Risks. Special tax risks are associated with an investment in the Fund. The Fund intends to satisfy the requirements each taxable year necessary to qualify as a “regulated investment company” or “RIC” under Subchapter M of the Code. As such, the Fund must satisfy, among other requirements, certain ongoing asset diversification, source‑of‑income and annual distribution requirements. Each of these ongoing requirements for qualification for the favorable tax treatment available to RICs requires that the Fund obtain information from the Investment Funds in which the Fund is invested. However, Investment Funds generally are not obligated to disclose the contents of their portfolios. This lack of transparency may make it difficult for the Adviser to monitor the sources of the Fund’s income and the diversification of its assets, and otherwise comply with Subchapter M of the Code, and ultimately may limit the universe of Investment Funds in which the Fund can invest. Furthermore, although the Fund expects to receive information from each Investment Manager regarding its investment performance on a regular basis, in most cases there is little or no means of independently verifying this information.
If before the end of any quarter of its taxable year, the Fund believes that it may fail any of the asset diversification requirements, the Fund may seek to take certain actions to avert such a failure. However, certain actions typically taken by RICs to avert such a failure (e.g., the disposition of assets causing the diversification discrepancy) may be difficult for the Fund to pursue because the Fund may be unable to liquidate its interest in an Infrastructure Asset promptly. While the Code ordinarily affords the Fund a 30‑day period after the end of the relevant quarter in which to cure a diversification failure by disposing of non‑diversified assets, the constraints on the Fund’s ability to liquidate a specific asset may limit utilization of this cure period.
If the Fund fails to satisfy the asset diversification or other RIC requirements, it may lose its status as a RIC under the Code. In that case, all of its taxable income would be subject to U.S. federal income tax at regular corporate rates without any deduction for distributions to Shareholders. In addition, all distributions (including distributions of net capital gain) to Shareholders would be characterized as dividend income to the extent of the Fund’s current and accumulated earnings and profits. Accordingly, disqualification as a RIC would have a material adverse effect on the value of the Fund’s Shares and the amount of the Fund’s distributions.
Additional Tax Considerations; Distributions to Shareholders and Potential Fund-Level Tax Liabilities. The Fund expects to distribute substantially all of its investment company taxable income and net capital gains to Shareholders. These distributions are respectively characterized as ordinary dividend income or long-term capital gain when distributed as dividends for U.S. federal income tax purposes to Shareholders. The Fund will inform Shareholders of the amount and character of its distributions to Shareholders. See “Tax Aspects” below for more information. If the Fund distributes (or is deemed to have distributed) in respect of any calendar year less than an amount at least equal to the sum of 98% of its calendar year ordinary income (taking into account certain deferrals and elections), 98.2% of its capital gain net income (determined on the basis of a one‑year period ended on October 31 of such calendar year, and adjusted for certain ordinary losses), plus any such amounts that were not distributed in previous calendar years, then the Fund will generally be subject to a nondeductible 4% excise tax with respect to the Fund’s undistributed amounts. The Fund will not be subject to this excise tax on any amount which the Fund incurred an entity-level U.S. federal income tax.
For U.S. federal income tax purposes, the Fund is required to recognize taxable income in some circumstances in which the Fund does not receive a corresponding payment in cash and to make distributions with respect to such income to maintain its qualification as a RIC. Under such circumstances, the Fund may have difficulty meeting the annual distribution requirement necessary to maintain its qualification as a RIC. As a result, the Fund may have to sell some of its investments at times and/or at prices that the Advisers would not consider advantageous, raise additional debt or equity capital, or forgo new investment opportunities. If the Fund is not able to obtain cash from other sources, the Fund may fail to qualify as a RIC and thus become subject to corporate-level income tax.
 
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In addition, the Fund may invest in Investment Funds located outside of the U.S. or other non‑U.S. portfolio company or entities which may be considered passive foreign investment companies (“PFICs”) or controlled foreign corporations (“CFCs”) for U.S. federal income tax purposes. As a result, the Fund may, in a particular taxable year, be required to make ordinary income distributions in excess of the net economic income from such investments with respect to such taxable year. Under applicable final Treasury regulations, certain income derived by the Fund from a CFC or a PFIC with respect to which the Fund has made a qualified electing fund (“QEF”) election would generally constitute qualifying income for purposes of determining the Fund’s ability to be subject to tax as a RIC to the extent the CFC or the PFIC makes current distributions of that income to the Fund or the included income is derived with respect to the Fund’s business of investing in stocks and securities. As such, the Fund may be restricted in its ability to make QEF elections with respect to the Fund’s holdings in Investment Funds and other issuers that could be treated as PFICs or implement certain restrictions with the respect to any Investment Funds or other issuers that could be treated as CFCs in order to limit the Fund’s tax liability or maximize the Fund’s after‑tax return from these investments. Moreover, income or gain from such Investment Funds or other entities may be subject to non‑U.S. withholding or other taxes. Any such withholding or other taxes would reduce the return on the Fund’s investment in such Investment Funds and thus on the Shareholders’ investment in the Fund. See “Tax Aspects.”
Lack of Financial Reporting Related to Non‑U.S. Investments; Adverse Non‑U.S. Taxes. The Fund may invest indirectly through Investment Funds in non‑U.S. entities. Because non‑U.S. entities are not subject to uniform reporting standards, practices and disclosure comparable with those applicable to U.S. companies, there may be different types of, and lower quality, information available about non‑U.S. companies. In particular, the assets and profits appearing on the financial statements of a company may not reflect its financial position or results of operation in the way they would be reflected had such financial statements been prepared in accordance with the U.S. generally accepted accounting principles. This limitation may be particularly true for private equity investments, where there may be little or no publicly available information about private companies. In addition, financial data related to non‑U.S. investments may be affected by both inflation and local accounting standards and may not accurately reflect the real condition of companies and securities markets. Moreover, the Fund and its Shareholders may be subject to tax, reporting and other filing obligations in non‑U.S. jurisdictions in which non‑U.S. companies reside or operate.
Regulatory Change. Legal and regulatory changes could occur during the term of the Fund, which may materially adversely affect the Fund. The regulation of the U.S. and non‑U.S. securities, derivatives and futures markets and investment funds such as the Fund has undergone substantial change in recent years and such change may continue. In particular, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended (the “Dodd-Frank Act”) was signed into law in July 2010. The Dodd-Frank Act contains changes to the existing regulatory structure in the United States and is intended to establish rigorous oversight standards to protect the U.S. economy and American consumers, investors and businesses. The Dodd-Frank Act requires additional regulation of private equity fund managers, including requirements for such managers to register as investment advisers under the Advisers Act, and to disclose various information to regulators about the positions, counterparties and other exposures of the private equity funds managed by such managers.
The Dodd-Frank Act significantly alters the regulation of commodity interests and comprehensively regulates the OTC derivatives markets for the first time in the U.S. Provisions in the new law include: new registration requirements with the SEC and/or the CFTC, recordkeeping, capital, and margin requirements for “swap dealers” and “major swap participants” as determined by the new law and applicable regulations, and the requirement that certain standardized OTC derivatives, such as interest rate swaps, be executed in regulated markets and submitted for clearing through regulated clearinghouses. OTC derivatives transactions traded through clearinghouses will be subject to margin requirements set by clearinghouses and possibly to additional requirements set by the SEC and/or the CFTC. Regulators also have discretion to set margin requirements for OTC derivative transactions that do not take place through clearinghouses. OTC derivatives dealers will be required to post margin to the clearinghouses through which they clear their customer trades instead of using such margin in their operations as they are currently permitted to do. This will increase the dealers’ costs and may be passed through to other market participants, such as an Investment Fund, in the form of higher fees or spreads and less favorable dealer valuations.
The CFTC, along with the SEC and other U.S. federal regulators, has been tasked with developing the rules and regulations enacting the provisions noted above. The Dodd-Frank Act and the rules already promulgated or to be promulgated thereunder may negatively impact the ability of an Investment Fund and, in turn, the Fund, to meet its investment objectives either through limits or requirements imposed on it or upon its counterparties. In particular, new position limits imposed on an Investment Fund or its counterparties may impact an Investment Fund’s ability to invest in a manner that most efficiently meets its investment objectives, and new requirements, including capital and mandatory clearing, may increase the cost of the Investment Fund’s investments and doing business.
The effect of the Dodd-Frank Act or other regulatory change on the Fund and/or Investment Funds, while impossible to predict, could be substantial and adverse. In addition, the practice of short selling has been the subject of numerous temporary restrictions, and similar restrictions may be promulgated at any time. Such restrictions may adversely affect the returns of Investment Funds that utilize short selling. Certain tax risks associated with an investment in the Fund are discussed in “Tax Aspects.”
The Fund has an exemption from the definition of the term “commodity pool operator” (“CPO”) under the Commodity Exchange Act, as amended (“CEA”). Therefore, neither the Fund nor the Adviser (with respect to the Fund) is subject to registration or
 
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regulation as a commodity pool or CPO, respectively, under the CEA. If the exemption no longer applies, to the extent the Fund is not otherwise eligible to claim an exclusion from regulation by the CFTC, the Fund will operate subject to CFTC regulation. If the Adviser and the Fund become subject to CFTC regulation, as well as related National Futures Association rules, the Fund may incur additional compliance and other expenses.
The impact of changes in legislation, if any, on shareholders, the Fund, and the entities through which the Fund invests is uncertain. Prospective investors are urged to consult their tax advisors regarding an investment in the Fund.
Under Rule 18f‑4, the Fund is required to trade derivatives and other transactions that potentially create senior securities (except reverse repurchase agreements and similar financing transactions) subject to a value‑at‑risk (“VaR”) leverage limit, certain other testing and derivatives risk management program requirements and requirements related to board reporting. These requirements applies unless the Fund qualifies as a “limited derivatives user,” as defined in Rule 18f‑4. Reverse repurchase agreements and similar financing transactions continue to be subject to the asset coverage requirements, and a fund trading reverse repurchase agreements needs to aggregate the amount of indebtedness associated with the reverse repurchase agreements or similar financing transactions with the aggregate amount of any other senior securities representing indebtedness when calculating the fund’s asset coverage ratio (unless the fund treats such agreements and transactions as derivatives for all purposes under the rule). Reverse repurchase agreements and similar financing transactions will not be included in the calculation of whether the Fund is a limited derivatives user (unless the Fund determines to treat such agreements and transactions as “derivative transactions” for all purposes under the rule), but if the Fund is subject to the VaR testing, reverse repurchase agreements and similar financing transactions will be included for purposes of such testing. In addition, under Rule 18f‑4, the Fund is permitted to invest in a security on a when-issued or forward-settling basis, or with a nonstandard settlement cycle, and the transaction will be deemed not to involve a “senior security,” provided that (i) the Fund intends to physically settle the transaction and (ii) the transaction will settle within 35 days of its trade date). The Fund may otherwise engage in such transactions that do not meet these conditions so long as the Fund treats any such transaction as a “derivatives transaction” for purposes of compliance with Rule 18f‑4. Furthermore, under Rule 18f‑4, the Fund will be permitted to enter into an unfunded commitment agreement, and such unfunded commitment agreement will not be subject to the limits on borrowings as described in the “Investment Program—Leverage” section above, if the Fund reasonably believes, at the time it enters into such agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all such agreements as they come due. The SEC also provided guidance in connection with the rule regarding the use of securities lending collateral that may limit the Fund’s securities lending activities. These requirements may limit the Fund’s ability to use derivatives and reverse repurchase agreements and similar financing transactions as part of the Fund’s investment strategies.
Indemnification of Investment Funds, Investment Managers and Others. The Fund may agree to indemnify certain of the Private Market Assets and their respective managers, officers, directors, and affiliates from any liability, damage, cost, or expense arising out of, among other things, acts or omissions undertaken in connection with the management of Private Market Assets. If the Fund were required to make payments (or return distributions) in respect of any such indemnity, the Fund could be materially adversely affected. Indemnification of sellers of secondaries may be required as a condition to purchasing such securities.
Other Investment Companies. The Fund may invest in the securities of other investment companies to the extent that such investments are consistent with the Fund’s investment objectives and permissible under the 1940 Act. Under one provision of the 1940 Act, the Fund may not acquire the securities of other investment companies if, as a result, (i) more than 10% of the Fund’s total assets would be invested in securities of other investment companies, (ii) such purchase would result in more than 3% of the total outstanding voting securities of any one investment company being held by the Fund or (iii) more than 5% of the Fund’s total assets would be invested in any one investment company. In some instances, the Fund may invest in an investment company in excess of these limits. For example, the Fund may invest in other registered investment companies, such as mutual funds, closed‑end funds and exchange-traded funds, and in business development companies (“BDCs”) in excess of the statutory limits imposed by the 1940 Act in reliance on Rule 12d1‑4 under the 1940 Act. These investments would be subject to the applicable conditions of Rule 12d1‑4, which in part would affect or otherwise impose certain limits on the investments and operations of the underlying fund. Accordingly, if the Fund serves as an “underlying fund” to another investment company, the Fund’s ability to invest in other investment companies, private funds and other investment vehicles may be limited and, under these circumstances, the Fund’s investments in other investment companies, private funds and other investment vehicles will be consistent with applicable law and/or exemptive relief obtained from the SEC. The Fund, as a holder of the securities of other investment companies, will bear its pro rata portion of the other investment companies’ expenses, including advisory fees. These expenses will be in addition to the direct expenses incurred by the Fund.
Limited Operating History of Fund Investments. Many of our Private Market Assets may have limited operating histories, and the information the Fund will obtain about such investments may be limited. As such, the ability of the Advisers to evaluate past performance or to validate the investment strategies of such Investment Funds will be limited.
Limitations on Performance Information. Performance of Private Market Assets are difficult to measure and therefore such measurements may not be as reliable as performance information for other investment products because, among other things: (i) there is often no market for underlying investments, (ii) Private Market Assets take years to achieve a realization event and are difficult to value before realization, (iii) Private Market Assets are made over time as capital is drawn down from investments, (iv) the performance record of Fund Investments are not established until the final distributions are made, which may be 10‑12 years or longer after the initial
 
7
closing and (v) industry performance information for Fund Investments may be skewed upwards due to survivor bias lack of reporting by underperforming managers.
Reverse Repurchase Agreements. Reverse repurchase agreements involve a sale of a security by an Investment Fund to a bank or securities dealer and the Investment Fund’s simultaneous agreement to repurchase the security for a fixed price (reflecting a market rate of interest) on a specific date. These transactions involve a risk that the other party to a reverse repurchase agreement will be unable or unwilling to complete the transaction as scheduled, which may result in losses to the Investment Fund. Reverse repurchase transactions are a form of leverage that may also increase the volatility of an Investment Fund’s investment portfolio.
Dilution. The Fund may accept additional subscriptions for Shares as determined by the Board, in its sole discretion. Additional purchases will dilute the indirect interests of existing Shareholders in the Fund’s investments prior to such purchases, which could have an adverse impact on the existing Shareholders’ interests in the Fund if subsequent investments underperform the prior investments.
MANAGEMENT OF THE FUND
The Trustees supervise the Fund’s affairs under the laws governing statutory trusts in the State of Delaware. The Trustees have approved the contracts under which certain companies provide essential management, administrative and shareholder services to the Fund.
Trustees and Officers
The Board of the Fund consists of five Trustees. Three Trustees have no affiliation or business connection with the Advisers or any of their affiliated persons and do not own any stock or other securities issued by the Advisers. These are the “non‑interested” or “Independent Trustees.” The other two Trustees (the “Interested Trustees”) are affiliated with the Advisers. The biographies of each Trustee are described below.
Board Structure and Oversight Function
The Board’s leadership structure features a “Chairperson” and the “Board Committees” described below. The Chairperson participates in the preparation of the agenda for meetings of the Board and the preparation of information to be presented to the Board with respect to matters to be acted upon by the Board. The Chairperson also presides at all meetings of the Board and is involved in discussions regarding matters pertaining to the oversight of the management of the Fund between meetings.
The Board of Trustees operates using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the Fund and Shareholders, and to facilitate compliance with legal and regulatory requirements and oversight of the Fund’s activities and associated risks. The Board of Trustees has established three standing committees: the “Audit Committee,” the “Nominating and Governance Committee” and the “Independent Trustees Committee.” The Audit Committee, the Nominating and Governance Committee, and the Independent Trustees Committee are comprised exclusively of Independent Trustees. Each committee charter governs the scope of the committee’s responsibilities with respect to the oversight of the Fund. The responsibilities of each committee, including their oversight responsibilities, are described further under “Independent Trustees and the Committees.”
The Fund is subject to a number of risks, including investment, compliance, operational and valuation risk, among others. The Board of Trustees oversees these risks as part of its broader oversight of the Fund’s affairs through various Board and committee activities. The Board has adopted, and periodically reviews, policies and procedures designed to address various risks to the Fund. In addition, appropriate personnel, including but not limited to the Fund’s Chief Compliance Officer, members of the Fund’s administration and accounting teams, representatives from the Fund’s independent registered public accounting firm, the Fund’s Treasurer and portfolio management personnel and independent valuation and brokerage evaluation service providers, make regular reports regarding the Fund’s activities and related risks to the Board of Trustees and the committees, as appropriate. These reports include, among others, quarterly performance reports and risk reports and discussions with members of the risk teams relating to each asset class. The Board’s committee structure allows separate committees to focus on different aspects of risk and the potential impact of these risks on the Fund and then report back to the full Board. In between regular meetings, Fund officers also communicate with the Trustees regarding material exceptions and items relevant to the Board’s risk oversight function.
The Board recognizes that it is not possible to identify all of the risks that may affect the Fund, and that it is not possible to develop processes and controls to eliminate all of the risks that may affect the Fund. Moreover, the Board recognizes that it may be necessary for the Fund to bear certain risks (such as investment risks) to achieve its investment objectives.
As needed between meetings of the Board, the Board, or a specific committee, receives and reviews reports relating to the Fund and engages in discussions with appropriate parties relating to the Fund’s operations and related risks.
 
8
Independent Trustees
The Fund seeks as Trustees individuals of distinction and experience in business and finance, government service or academia. In determining that a particular Trustee was and continues to be qualified to serve as Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. Based on a review of the experience, qualifications, attributes or skills of each Trustee, including those enumerated in the table below, the Board has determined that each of the Trustees is qualified to serve as a Trustee of the Fund. In addition, the Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes and skills that allow the Board to operate effectively in governing the Fund and protecting the interests of Shareholders. Information about the Fund’s committees is provided below under “Independent Trustees and the Committees.”
The Trustees of the Fund, their birth years, addresses, positions held, lengths of time served, their principal business occupations during the past five years, the number of portfolios in the “Fund Complex” (defined below) currently overseen by each Independent Trustee and other directorships, if any, held by the Trustees, are shown below. The Fund Complex includes all open‑end and closed‑end funds (including all of their portfolios) advised by the Advisers and any registered funds that have an adviser that is an affiliate of the Advisers.
 
Name, Address and Birth Year
    Position(s) Held
with Registrant		     
Length of
Time Served*
   
Principal
Occupation(s)
During Past
5 Years
   
Number of
Portfolios
Overseen in
Fund
Complex
   
Other
Trusteeships/
Directorships
Held Outside the
Fund Complex**
Independent Trustees
               
Harold Mills
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1970
      Trustee      Indefinite Length — Since Inception    CEO, VMD Ventures (since 2016); CEO, ZeroChaos (2000 – 2017)    3    None
Tracy Schmidt
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1957
      Trustee      Indefinite Length — Since Inception    Founder, Morning Star Advisory, LLC (consulting and advisory services) (since 2018), Enterprise Chief Financial Officer, Group President of Alternative Investments and Chief Operating Officer, CNL Financial Group (2004 – 2018)    3    None
Ron Sturzenegger
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1960
      Trustee      Indefinite Length — Since Inception    Enterprise Business & Community Engagement Executive, Bank of America (2014 – 2018); Legacy Asset Servicing (LAS) Executive, Bank of America (2011 - 2015)    3    Director of KBS Real Estate Investment Trust II, Inc. (since 2019), and KBS Real Estate Investment Trust III, Inc. (since 2019)
 
9
 
*
Each Trustee serves an indefinite term, until his or her successor is elected.
 
**
This includes any directorships at public companies and registered investment companies held by the Trustee over the past five years.
The Trustees who are affiliated with the Advisers or affiliates of the Advisers (as set forth below) and their age, address, positions held, length of time served, principal business occupations during the past five years, the number of portfolios in the Fund Complex overseen by each Interested Trustee and the other directorships, if any, held by each Interested Trustees, are shown below.
 
Name, Age and Address
   
Position(s) Held
with Registrant
   
Length of Time
Served*
   
Principal
Occupation(s)
During Past 5
Years
   
Number of
Portfolios
Overseen in
Fund
Complex
   
Other
Trusteeships/
Directorships
Held Outside the
Fund Complex**
Interested Trustees
               
Tom Sittema
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1958
    Chairperson of the Board of Trustees    Indefinite Length — Since Inception    Executive Chairman, StepStone Group Private Wealth LLC (Since 2020); Managing Director, RiverBridge Capital (Since 2018)    3    None
Bob Long
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1962
    Trustee    Indefinite Length — Since Inception    CEO, StepStone Group Private Wealth LLC (Since 2019); Vice Chairman/ President, Star Mountain Capital (2016-2018)    3    None
 
*
Each Trustee serves an indefinite term, until his or her successor is elected.
 
**
This includes any directorships at public companies and registered investment companies held by the Trustee over the past five years.
The executive officers of the Fund, their birth years, addresses, positions held, lengths of time served and their principal business occupations during the past five years are shown below.
 
Name, Age and
Address
   
Position(s) Held
with Registrant
   
Length of
Time Served*
   
Principal Occupation(s)
During Past 5 Years
Executive Officers
         
Bob Long
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1962
    President and Principal Executive Officer    Indefinite Length — Since Inception    See above
 
10
Kimberly Zeitvogel
c/o StepStone Group Private
Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1971
    Treasurer and Principal Financial Officer    Indefinite Length — Since Inception    Managing Director of Finance, StepStone Group Private Wealth LLC (Since 2020); Vice President of Finance, Millennium Advisors, LLC (2018- 2020)
Chris Ancona
c/o StepStone Group Private Wealth LLC
128 S Tryon St., Suite 1600
Charlotte, NC 28202
Birth Year: 1976
    Chief Compliance Officer    Indefinite Length — Since Inception    Deputy CCO, StepStone Group LP (Since 2021); CCO and Counsel, Greenspring Associates (2019-2021); CCO, Man Numeric (2017-2019)
 
*
Each officer serves an indefinite term, until his or her successor is elected.
For each Trustee, the dollar range of equity securities beneficially owned by the Trustee in the Fund and in the Family of Investment Companies (Family of Investment Companies includes all of the registered investment companies advised by the Advisers) as of June 30, 2023, is set forth in the table below.
 
Name of Trustee
    Dollar Range of
Equity Securities in the Fund(1), (2)		      Aggregate Dollar Range of
Equity Securities in All
Registered Investment
Companies Overseen by Trustee
in Family of Investment
Companies(1), (2), (3)		  
Independent:
      
Harold Mills
      None        Over $100,000  
Tracy Schmidt
      None        Over $100,000  
Ron Sturzenegger
      None        Over $100,000  
 
Name of Trustee
    Dollar Range of
Equity Securities in the Fund(1), (2)		      Aggregate Dollar Range of
Equity Securities in All
Registered Investment
Companies Overseen by Trustee
in Family of Investment
Companies (1), (2), (3)		  
Interested:
      
Tom Sittema
      None        Over $100,000  
Bob Long
      None        Over $100,000  
 
(1)
Dollar ranges are as follows: None, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000 or Over $100,000.
(2)
Beneficial ownership determined in accordance with Rule 16a‑1(a)(2) under the Exchange Act.
(3)
The Family of Investment Companies is defined as any two or more registered investment companies that (a) share the same investment adviser or principal underwriter; and (b) hold themselves out to investors as related companies for purposes of investment and investor services.
As to each Independent Trustee and his or her immediate family members, no person owned beneficially or of record securities of an investment adviser or principal underwriter of the Fund, or a person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with an investment adviser or principal underwriter of the Fund.
As of June 30, 2023, all Trustees and Officers of the Fund, as a group, owned less than 1% of the outstanding Shares of the Fund.
Independent Trustees and the Committees
Law and regulation establish both general guidelines and specific duties for the Independent Trustees. The Board has three committees: the Audit Committee, the Nominating and Governance Committee, and the Independent Trustees Committee.
 
11
The Independent Trustees are charged with recommending to the full Board approval of management, advisory and administration contracts, and distribution and underwriting agreements; continually reviewing fund performance; overseeing on the pricing of portfolio securities, brokerage commissions, transfer agent costs and performance and trading among funds in the same complex; and approving fidelity bond and related insurance coverage and allocations, as well as other matters that arise from time to time.
The Board of Trustees has a separately-designated standing Audit Committee. The Audit Committee is charged with recommending to the full Board the engagement or discharge of the Fund’s independent registered public accounting firm; directing investigations into matters within the scope of the independent registered public accounting firm’s duties, including the power to retain outside specialists; reviewing with the independent registered public accounting firm the audit plan and results of the auditing engagement; approving professional services provided by the independent registered public accounting firm and other accounting firms prior to the performance of the services; reviewing the independence of the independent registered public accounting firm; considering the range of audit and non‑audit fees; reviewing the adequacy of the Fund’s system of internal controls; and reviewing the valuation process. The Fund has adopted a formal, written Audit Committee Charter.
The members of the Audit Committee of the Fund are Harold Mills, Tracy Schmidt and Ron Sturzenegger. None of the members of the Fund’s Audit Committee is an “interested person,” as defined under the 1940 Act, of the Fund (with such disinterested Trustees being “Independent Trustees” or individually, “Independent Trustee”). Each Independent Trustee is also “independent” from the Fund under the listing standards of the New York Stock Exchange, Inc. (“NYSE”). The Chairperson of the Audit Committee of the Fund is Tracy Schmidt.
The Board also has a Nominating and Governance Committee. The members of the Nominating and Governance Committee of the Fund are Harold Mills, Tracy Schmidt and Ron Sturzenegger, each of whom is an Independent Trustee. The Chairperson of the Nominating and Governance Committee is Harold Mills. The Nominating and Governance Committee identifies individuals qualified to serve as Independent Trustees on the Board and on committees of the Board and recommends such qualified individuals for nomination by the Fund’s Independent Trustees as candidates for election as Independent Trustees, advises the Board with respect to Board composition, procedures and committees, develops and recommends to the Board a set of corporate governance principles applicable to the Fund, monitors and makes recommendations on corporate governance matters and policies and procedures of the Board and any Board committees and oversees periodic evaluations of the Board and its committees.
The Fund’s Nominating and Governance Committee recommends qualified candidates for nominations as Independent Trustees. Persons recommended by the Fund’s Nominating and Governance Committee as candidates for nomination as Independent Trustees shall possess such experience, qualifications, attributes, skills and diversity so as to enhance the Board’s ability to manage and direct the affairs and business of the Fund, including, when applicable, to enhance the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law or regulation. While the Nominating and Governance Committee expects to be able to continue to identify from their own resources an ample number of qualified candidates for the Fund’s Board as they deem appropriate, they will consider nominations from Shareholders to the Board. Nominations from Shareholders should be in writing and sent to the Nominating and Governance Committee as described below under “Shareholder Communications.”
The Board also has an Independent Trustees Committee. The members of the Independent Trustees Committee of the Fund are Harold Mills, Tracy Schmidt and Ron Sturzenegger, each of whom is an Independent Trustee. The Chairperson of the Independent Trustees Committee is Ron Sturzenegger. The Independent Trustees Committee will review and approve, to the extent required, co‑investment transactions entered into by the Fund and affiliated funds in accordance with the terms and conditions of the Fund’s co‑investment exemptive relief. The Independent Trustees Committee is responsible for assessing the flow of information between our management and the Board and overseeing the annual approval process of the Advisory Agreement, Sub‑Advisory Agreement and the Administration Agreement.
Experience, Qualifications and Attributes
The Board has concluded, based on each Trustee’s experience, qualifications and attributes that each Board member should serve as a Trustee. The following is a brief summary of the information that led to and/or supports this conclusion.
Biographies
Harold Mills
Harold Mills is a Trustee of StepStone Private Infrastructure Fund. Mr. Mills is an experienced entrepreneur and is currently the CEO of VMD Ventures, which focuses on investments in entrepreneurs in a variety of technology and service industries.
Prior to VMD Ventures, Mr. Mills was the Chairman and CEO of ZeroChaos, a leading workforce management company which grew to a multibillion-dollar company with operations globally. Prior to ZeroChaos, Mr. Mills held various executive positions in general management and corporate development with leading solutions companies, including, HR technology companies and telecom
 
12
companies. Mr. Mills also served as the general manager of one of AT&T’s emerging technology business units. Mr. Mills began his career holding several management positions at General Electric.
Mr. Mills graduated from Purdue University and Harvard Business School. Mr. Mills serves on the boards of Guidewell and Florida Blue, Rollins College, University of Central Florida, Dr. Phillips Performing Arts Center, LIFT Orlando and is the past chair of the Federal Reserve Bank (Jacksonville Branch). He is also a Henry Crown Fellow, member of the Aspen Global Leadership Network and was honored as the EY Entrepreneur of the Year.
Tracy Schmidt
Tracy Schmidt is a Trustee of StepStone Private Infrastructure Fund. Mr. Schmidt is a seasoned executive with over 40‑years’ experience in investment management, logistics, finance, operations and administration. Mr. Schmidt is the founder of Morning Star Advisory, LLC where he provides advisory and consulting services to multi-generational families and companies primarily in the logistics and supply chain space. Mr. Schmidt is also co‑founder and managing partner of Steward CW Holdings, LLC whose focus is to develop and operate a network of automated express car washes.
Prior to founding his current advisory business, Mr. Schmidt served as CNL Financial Group’s Enterprise Chief Financial Officer, Group President of Alternative Investments and Chief Operating Officer, overseeing and providing strategic leadership for the organization’s financial affairs and the alternative investments platform. Before joining CNL Financial Group, Mr. Schmidt served in various roles at FedEx Express including Senior Vice President and Chief Financial Officer. Early in his career, Mr. Schmidt served as a staff auditor at Ernst & Whinney.
Mr. Schmidt graduated from Christian Brothers University. Mr. Schmidt is an advisor, director and chair of the audit committee and member of the risk and executive committees of Gordon Food Service Holdings, Inc., a director of Pinnacle Realty Services, Inc. and a former director of the United States Chamber of Commerce. He also serves as a Senior Advisor to The Over-Haul Group, Inc. Mr. Schmidt is Chair Emeritus and founding chair of the Central Florida Regional Commission on Homelessness.
Ron Sturzenegger
Ron Sturzenegger is a Trustee of StepStone Private Infrastructure Fund. Mr. Sturzenegger is a financial services executive, primarily focused on real estate related businesses. Most recently, Mr. Sturzenegger held concurrent executive positions overseeing Enterprise Business and Community Engagement and Legacy Asset Servicing at Bank of America. Mr. Sturzenegger also held roles within Bank of America (and legacy firms) as Global Head of Real Estate, Gaming and Lodging Investment Banking and Head of Real Estate Mergers and Acquisitions. Prior to joining Bank of America, Mr. Sturzenegger served in various roles at Morgan Stanley and Bain & Company.
Mr. Sturzenegger graduated from Stanford University and Harvard Business School. Mr. Sturzenegger is an independent director and member of the audit committee and conflicts committee of KBS Real Estate Investment Trust II, Inc. and KBS Real Estate Investment Trust III, Inc. He is a member of the advisory board of the Stanford Professionals in Real Estate.
Shareholder Communications
Shareholders may send communications to the Fund’s Board of Trustees. Shareholders should send communications intended for the Fund’s Board by addressing the communications directly to that Board (or individual Board members) and/or otherwise clearly indicating in the salutation that the communication is for the Board (or individual Board members) and by sending the communication to either the Fund’s office or directly to such Board member(s) at the address specified for each Trustee previously noted. Other Shareholder communications received by the Fund not directly addressed and sent to the Board of Trustees will be reviewed and generally responded to by management, and they will be forwarded to the Board only at management’s discretion based on the matters contained therein.
Compensation
The Independent Trustees are paid an annual retainer of $50,000. The Chairperson of the Audit Committee is also paid an additional annual fee of $10,000. All Trustees are reimbursed for their reasonable out‑of‑pocket expenses. The Trustees do not receive any pension or retirement benefits from the Fund.
The following table shows information regarding the estimated compensation to be received by the Trustees, none of whom is an employee of the Fund, for services as a Trustee for the fiscal year ended March 31, 2024. The Trustees who are “interested persons,” as defined in the 1940 Act, of the Fund and the Fund’s officers do not receive compensation from the Fund.
 
13
Name of Trustee Aggregate Compensation
from the Fund		 Total Compensation from
the Fund Complex Payable
to Trustees
Independent:
Harold Mills
 $50,000 $150,000
Tracy Schmidt
 $60,000 $180,000
Ron Sturzenegger
 $50,000 $150,000
Name of Trustee
Interested:
Bob Long
 None
Tom Sittema
 None
Code of Ethics
Pursuant to Rule 17j‑1 under the 1940 Act, the Board of Trustees has adopted a “Code of Ethics” for the Fund and approved Codes of Ethics adopted by the Adviser and the Sub‑Adviser (collectively the “Codes”). The Codes are intended to ensure that the interests of Shareholders and other clients are placed ahead of any personal interest, that no undue personal benefit is obtained from the person’s employment activities and that actual and potential conflicts of interest are avoided.
The Codes apply to the personal investing activities of Trustees and officers of the Fund, the Adviser, and the Sub‑Adviser (“Access Persons”). Rule 17j‑1 under the 1940 Act and the Codes are designed to prevent unlawful practices in connection with the purchase or sale of securities by Access Persons, including with respect to securities that may be purchased or held by the Fund (which may only be purchased by Access Persons so long as the requirements set forth in the Codes are complied with). Under the Codes, Access Persons are permitted to engage in personal securities transactions, but are required to report their personal securities transactions for monitoring purposes. In addition, certain Access Persons are required to obtain approval before investing in initial public offerings or private placements. The Codes are on file with the SEC and are available to the public.
Investment Advisory, Sub‑Advisory and Distribution Agreements
StepStone Group Private Wealth LLC is registered as an investment adviser under the Investment Advisers Act of 1940 (the “Advisers Act”). The Adviser was established in 2019 and is a wholly owned business of StepStone Group LP. The Adviser is an investment platform designed to expand access to the private markets for high‑net‑worth investors. The Adviser intends to create innovative solutions for investors by focusing on convenience, efficiency and transparency. The Adviser’s mission is to convert the private market advantages enjoyed by institutional investors into opportunities for individual investors. Please see the Adviser’s website at www.stepstonepw.com for the most up‑to‑date information.
The Adviser serves as investment adviser to the Fund pursuant to an investment advisory agreement entered into between the Fund and the Adviser (the “Advisory Agreement”). The Adviser is responsible for the overall management of the Fund’s activities. The Adviser is responsible for formulating and updating (as needed) the overall investment strategy of the Fund. The Adviser is also responsible for the structuring and distribution functions for the Fund. In addition, the Adviser is responsible for the operational and governance aspects of the Fund, including the selection and management of the Fund’s service providers and the management of the Fund’s tender offers and distributions and dividend reinvestment plan. The Adviser is also responsible for the Fund’s SEC and other regulatory reporting obligations. The Adviser is subject to the ultimate supervision of, and any policies established by, the Board of Trustees.
StepStone Group Real Assets LP serves as the Sub‑Adviser of the Fund and will provide ongoing research, recommendations and portfolio management regarding the Fund’s investment portfolio. StepStone was formed in 2014 and is the infrastructure and real assets business group of StepStone Group LP. StepStone oversees $75 billion in “private market allocations” which is composed of $27 billion in assets under management and $48 billion in assets under advisement15, including $14 billion of investments approved in 2022. Led by 11 partners with an average of 21 years of infrastructure and real assets experience and supported by a team of dedicated professionals, StepStone provides clients with an “on‑the‑ground” presence in Australia, Europe, the United Kingdom and North America with deep experience in infrastructure, energy, agriculture and natural resources. StepStone is owned 49% by StepStone Group LP (together with the Sub‑Adviser, the “Firm”) and 51% by full-time investment professionals of the StepStone team.
 
 
15 “Private market allocations” means the total amount of assets under management and assets under advisement. StepStone classifies assets under management if the StepStone has full discretion over the investment decisions in an account or has responsibility or custody of assets. Assets under advisement consists of client assets for which StepStone does not have full discretion to make investment decisions but plays a role in advising the client or monitoring their investments.
 
14
As an affiliate of StepStone Group LP, StepStone benefits from the organization’s scale and depth across the private markets. StepStone Group LP is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. StepStone Group LP’s clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients. StepStone Group LP partners with its clients to develop and build portfolios designed to meet their specific objectives across private infrastructure, private equity, private real estate and private debt asset classes. As of December 31, 2022, StepStone Group LP was responsible for $602 billion of “private market allocations” which includes $134 billion of assets under management and $468 billion of assets under advisement 16.
StepStone Group Inc. is the sole managing member of StepStone Group Holdings LLC, which in turn is the general partner of StepStone Group LP. StepStone Group Inc. is listed and trades on the Nasdaq Global Select Market under the trading symbol STEP. Please see StepStone Group Inc’s website at www.stepstonegroup.com for more information.
StepStone advises and/or manages accounts other than that of the Fund, which may give rise to certain conflicts of interest. See “Conflicts of Interest.”
The Sub‑Adviser has entered into a sub‑advisory agreement (“Sub‑Advisory Agreement”) with the Adviser and will be responsible for the day‑to‑day management of the Fund’s assets and activities. The Sub‑Adviser will provide ongoing research, recommendations, and portfolio management regarding the Fund’s investment portfolio subject to the overall supervision of the Adviser and the Fund’s officers and Board of Trustees.
The offices of the Adviser are located at 128 S Tryon St., Suite 1600, Charlotte NC 28202, and its telephone number is (704) 215‑4300. The Adviser or its designee maintains the Fund’s accounts, books and other documents required to be maintained under the 1940 Act at 128 S Tryon St., Suite 1600, Charlotte, NC 28202.
Approval of the Advisory Agreement
The Advisory Agreement was approved by the Fund’s Board (including a majority of the Independent Trustees) at a meeting held in person on May 24, 2023. The Advisory Agreement of the Fund has an initial term of two years from the date of its execution. The Advisory Agreement will continue in effect from year to year thereafter so long as such continuance is approved annually by the Board or by vote of a majority of the outstanding voting securities of the Fund; provided that in either event the continuance is also approved by a majority of the Independent Trustees by vote cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement is terminable by the Fund without penalty, on 60 days’ prior written notice: by the Board; by vote of a majority of the outstanding voting securities of the Fund; or by the Adviser. The Advisory Agreement also provides that it will terminate automatically in the event of its “assignment,” as defined by the 1940 Act and the rules thereunder.
In consideration of the advisory and other services provided by the Adviser to the Fund, the Fund will pay the Adviser a Management Fee equal to 1.60% on an annualized basis of the Fund’s daily net assets. The Management Fee will be accrued daily and payable monthly in arrears within ten (10) business days after the end of the month. The Management Fee is an expense paid out of the Fund’s assets. For the avoidance of doubt, the Management Fee is applied to any assets in respect of Shares that will be repurchased by the Fund on such date.
The Advisory Agreement provides that in the absence of willful misfeasance, bad faith, gross negligence in the performance of its duties or reckless disregard of its obligations and duties under the Advisory Agreement, the Adviser is not liable for any loss the Fund sustains for any investment, adoption of any investment policy, or the purchase, sale or retention of any security.
A discussion of the factors considered by the Fund’s Board of Trustees in approving the Advisory Agreement will be set forth in the Fund’s first annual or semi-annual report following the commencement of operations.
Approval of the Sub‑Advisory Agreement
The Adviser has entered into a Sub‑Advisory Agreement with StepStone Group Real Assets LP. The Sub‑Adviser provides the Fund with non‑discretionary investment advisory services subject to the overall supervision of the Adviser and the Fund’s officers and Board of Trustees. As consideration for services provided by the Sub‑Adviser, the Adviser will pay 50% of the Management Fee proceeds to the Sub‑Adviser on a monthly basis.
 
 
16 “Private market allocations” means the total amount of assets under management and assets under advisement. StepStone Group LP classifies assets under management if StepStone Group LP has full discretion over the investment decisions in an account or has responsibility or custody of assets. Assets under advisement consists of client assets for which StepStone Group LP does not have full discretion to make investment decisions but plays a role in advising the client or monitoring their investments.
 
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A description of the factors considered by the Fund’s Board of Trustees in approving the Sub‑Advisory Agreement will be set forth in the Fund’s first annual or semi-annual report following the commencement of operations.
Distributor
UMB Distribution Services, LLC serves as the Fund’s Distributor pursuant to a distribution agreement (“Distribution Agreement”). The principal office of the Distributor is located at 235 West Galena Street, Milwaukee, Wisconsin 53212. Under the Distribution Agreement, the Distributor, as agent of the Fund, agrees to distribute the Fund’s Shares at an offering price equal to the Fund’s then current NAV per Share, plus the applicable sales load. The Distribution Agreement continues in effect so long as such continuance is approved at least annually by the Fund’s Board, including a majority of those Trustees who are not parties to such Distribution Agreement nor interested persons of any such party.
Other Accounts Managed by the Portfolio Manager
Because the portfolio manager may manage assets for other investment companies, pooled investment vehicles, and/or other accounts (including institutional clients, pension plans and certain high‑net‑worth individuals), there may be an incentive to favor one client over another resulting in conflicts of interest. For instance, the Advisers may receive fees from certain accounts that are higher than the fee it receives from the Fund, or it may receive a performance-based fee on certain accounts. In those instances, the portfolio manager may have an incentive to favor the higher and/or performance-based fee accounts over the Fund. In addition, a conflict of interest could exist to the extent the Advisers have proprietary investments in certain accounts, where portfolio manager has personal investments in certain accounts or when certain accounts are investment options in the Advisers’ employee benefits and/or deferred compensation plans. The portfolio manager may have an incentive to favor these accounts over others. If the Advisers manage accounts that engage in short sales of securities of the type in which the Fund invests, the Advisers could be seen as harming the performance of the Fund for the benefit of the accounts engaging in short sales if the short sales cause the market value of the securities to fall. The Advisers have adopted allocation and other policies and procedures that it believes are reasonably designed to address these and other conflicts of interest.
The following table shows information regarding accounts (other than the Fund) managed by the named portfolio manager as of March 31, 2023:
 
Adam Reisler Number of Accounts(1)
Total Assets in Accounts
($ billion)
Registered Investment Companies
 - $-
Other Pooled Investment Vehicles
 6 $2.7
Other Accounts
 1 $20.5
(1)
StepStone receives performance-based fees from six accounts with approximately $$2.7 billion of total assets.
Securities Ownership of Portfolio Manager
As of June 30, 2023, the dollar range of securities beneficially owned by the named portfolio manager in the Fund is shown below:
 
Name
Aggregate Dollar Range of Equity
Securities in the
Fund(1)
Adam Reisler
None
 
(1)
Dollar ranges are as follows: None, $1–$10,000, $10,001–$50,000, $50,001–$100,000, $100,001–$500,000, $500,001–$1,000,000 or Over $1,000,000.
Portfolio Manager Compensation Structure
The Sub‑Adviser’s philosophy on compensation is to provide senior professionals’ incentives that are tied to both short-term and long-term performance of the Sub‑Adviser. All investment professionals are salaried. Further, all investment professionals are eligible for a short-term incentive bonus each year that is discretionary and based upon the professional’s performance, as well as the performance of the business.
 
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For his service as portfolio manager to the Fund, Mr. Reisler receives a salary, a discretionary bonus, and certain retirement benefits from the Sub‑Adviser. Additionally, Mr. Reisler has equity interests in the Sub‑Adviser and indirectly benefits from the success of the Fund based on his ownership interest.
Proxy Voting Policies and Procedures and Proxy Voting Record
Investments in the Investment Funds and some Co‑Investments do not typically convey traditional voting rights, and the occurrence of corporate governance or other consent or voting matters for this type of investment is substantially less than that encountered in connection with registered equity securities. On occasion, however, the Fund may receive notices or proposals seeking the consent of or voting by holders (“proxies”). The Fund has delegated any voting of proxies in respect of portfolio holdings to the Adviser to vote the proxies in accordance with the Adviser’s proxy voting guidelines and procedures. In general, the Adviser believes that voting proxies in accordance with the policies described below will be in the best interests of the Fund. The Adviser has further delegated the voting of proxies to the Sub‑Adviser.
The Sub‑Adviser will generally vote to support management recommendations relating to routine matters, such as the election of board members (where no corporate governance issues are implicated) or the selection of independent auditors. The Sub‑Adviser will generally vote in favor of management or investor proposals that the Sub‑Adviser believes will maintain or strengthen the shared interests of investors and management, increase value for investors and maintain or increase the rights of investors. On non‑routine matters, the Sub‑Adviser will generally vote in favor of management proposals for mergers or reorganizations and investor rights plans, so long as it believes such proposals are in the best economic interests of the Fund. In exercising its voting discretion, the Sub‑Adviser will seek to avoid any direct or indirect conflict of interest presented by the voting decision. If any substantive aspect or foreseeable result of the matter to be voted on presents an actual or potential conflict of interest involving the Sub‑Adviser, the Sub‑Adviser will make written disclosure of the conflict to the Independent Trustees indicating how the Sub‑Adviser proposes to vote on the matter and its reasons for doing so.
Under certain circumstances, the Fund may hold its interests in the Investment Funds in non‑voting form. In such cases where only voting securities are available for purchase by the Fund, in all, or substantially all, instances, the Fund will seek to create by contract the same result as owning a non‑voting security by entering into a contract, typically before the initial purchase, to relinquish the right to vote in respect of its investment.
To assist in its responsibility for voting proxies, the Sub‑Adviser may from time to time retain experts in the proxy voting and corporate governance area as proxy research providers (“Research Providers”). The services provided to the Sub‑Adviser by the Research Providers would include in depth research, global issuer analysis, and voting recommendations. While the Sub‑Adviser may review and utilize recommendations made by the Research Providers in making proxy voting decisions, it is in no way obligated to follow any such recommendations. In addition to research, the Research Providers could provide vote execution, reporting and recordkeeping. The Board would carefully monitor and supervise the services provided by any Research Providers.
For a copy of the Proxy Voting Policy, see Annex A to this SAI. A copy of the Proxy Voting Policy is also available on our website at www.stepstonepw.com and on the SEC’s website at www.sec.gov. The Fund shall file an annual report of each proxy voted with respect to portfolio securities of the Fund during the twelve-month period ended June 30 on Form N‑PX not later than August 31 of each year.
PORTFOLIO TRANSACTIONS
Since the Fund generally acquires and disposes of its investments in privately negotiated transactions, it infrequently uses brokers in the normal course of business.
Subject to policies established by the Fund’s Board, the Advisers are primarily responsible for the execution of any traded securities in the Fund’s portfolio and the Fund’s allocation of brokerage commissions. The Advisers do not expect to execute transactions through any particular broker or dealer but seek to obtain the best net results for the Fund, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, operations facilities of the firm, and the firm’s risk and skill in positioning blocks of securities.
While the Advisers generally seek reasonably competitive trade execution costs, the Fund will not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements, the Advisers may select a broker based partly upon brokerage or research services provided to the Advisers and the Fund and any other clients. In return for such services, the Fund may pay a higher commission than other brokers would charge if the Advisers determine in good faith that such commission is reasonable in relation to the services provided.
 
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CONFLICTS OF INTEREST
The Advisers
The Advisers or their affiliates provide or may provide investment advisory and other services to various entities. The Advisers and certain of their investment professionals and other principals, may also carry on substantial investment activities for their own accounts, for the accounts of family members and for other accounts (collectively, with the other accounts advised by the Advisers and their affiliates, “Other Accounts”). The Fund has no interest in these activities. The Adviser and its affiliates may receive payments from Investment Managers in connection with such activities. As a result of the foregoing, the Adviser and the investment professionals who, on behalf of the Adviser, will manage the Fund’s investment portfolio will be engaged in substantial activities other than on behalf of the Fund, may have differing economic interests in respect of such activities, and may have conflicts of interest in allocating their time and activity between the Fund and Other Accounts. Such persons will devote only so much of their time as in their judgment is necessary and appropriate.
There also may be circumstances under which the Advisers will cause one or more Other Accounts to commit a larger percentage of its assets to an investment opportunity than to which the Advisers will commit the Fund’s assets. There also may be circumstances under which the Advisers will make investments for Other Accounts in which the Advisers do not invest on behalf of the Fund, or vice versa.
Investment opportunities are made available to the Fund and other clients of the Firm where the investment is within the parameters of the applicable strategy. Further, investment opportunities may arise where there is more demand from the Fund and other clients of the Firm for a particular investment opportunity than supply. The Firm has adopted an Allocation Policy designed to reasonably ensure that all of its clients will be treated fairly and equitably over time. Please refer to “Investment Program — The Firm’s Allocation Policy” in the Prospectus.
The 1940 Act imposes significant limits on co‑investments with affiliates of the Fund. The Advisers and the Fund have obtained an exemptive order from the SEC that permits the Fund to co‑invest alongside its affiliates in Private Market Assets. However, the SEC exemptive order contains certain conditions that limit or restrict the Fund’s ability to participate in such transactions, including, without limitation, where advised funds by the Firm have an existing investment in the operating company or Investment Fund.
The Adviser also intends to compensate, from its own resources, third-party securities dealers, other industry professionals and any affiliates thereof (“financial intermediaries”) in connection with the distribution of Shares in the Fund or for their ongoing servicing of Shares acquired by their clients. Such compensation may take various forms, including a fixed fee, a fee determined by a formula that takes into account the amount of client assets invested in the Fund, the timing of investment or the overall NAV of the Fund, or a fee determined in some other method by negotiation between the Adviser and such financial intermediaries. Financial intermediaries may also charge investors, at the financial intermediaries’ discretion, a placement fee based on the purchase price of Shares purchased by the investor. As a result of the various payments that financial intermediaries may receive from investors and the Adviser, the amount of compensation that a financial intermediary may receive in connection with the sale of Shares in the Fund may be greater than the compensation it may receive for the distribution of other investment products. This difference in compensation may create an incentive for a financial intermediary to recommend the Fund over another investment product.
Financial intermediaries may be subject to certain conflicts of interest with respect to the Fund. For example, the Fund, the Advisers, Investment Funds or portfolio companies or investment vehicles managed or sponsored by the Advisers or Investment Managers may (i) purchase securities or other assets directly or indirectly from, (ii) enter into financial or other transactions with or (iii) otherwise convey benefits through commercial activities to a financial intermediary. As such, certain conflicts of interest may exist between such persons and a financial intermediary. Such transactions may occur in the future and generally there is no limit to the amount of such transactions that may occur.
Financial intermediaries may perform investment advisory and other services for other investment entities with investment objectives and policies similar to those of the Fund or an Investment Fund. Such entities may compete with the Fund or the Investment Fund for investment opportunities and may invest directly in such investment opportunities. Financial intermediaries that invest in an Investment Fund or a portfolio company may do so on terms that are more favorable than those of the Fund.
Financial intermediaries that act as selling agents for the Fund also may act as distributor for an Investment Fund in which the Fund invests and may receive compensation in connection with such activities. Such compensation would be in addition to the placement fees described above. Financial intermediaries may pay all or a portion of the fees paid to it to certain of their affiliates, including, without limitation, financial advisors whose clients purchase Shares of the Fund. Such fee arrangements may create an incentive for a financial intermediary to encourage investment in the Fund, independent of a prospective Shareholder’s objectives.
A financial intermediary may provide financing, investment banking services or other services to third parties and receive fees therefore in connection with transactions in which such third parties have interests which may conflict with those of the Fund or an Investment Fund. A financial intermediary may give advice or provide financing to such third parties that may cause them to take actions adverse to the Fund, an Investment Fund or a portfolio company. A financial intermediary may directly or indirectly provide services to, or serve in other roles for compensation for, the Fund, an Investment Fund or a portfolio company. These services and roles may
 
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include (either currently or in the future) managing trustee, managing member, general partner, investment manager or advisor, investment sub‑advisor, distributor, broker, dealer, selling agent and investor servicer, custodian, transfer agent, fund administrator, prime broker, recordkeeper, shareholder servicer, interfund lending servicer, Fund accountant, transaction (e.g., a swap) counterparty and/or lender. A financial intermediary is expected to provide certain such services to the Fund in connection with the Fund obtaining a credit facility, if any such facility is obtained.
In addition, issuers of securities held by the Fund or its underlying Investment Funds may have publicly or privately traded securities in which a financial intermediary is an investor or makes a market. The trading activities of financial intermediaries generally will be carried out without reference to positions held by the Fund or its underlying Investment Funds and may have an effect on the value of the positions so held, or may result in a financial intermediary having an interest in the issuer adverse to the Fund or the underlying Investment Funds. No financial intermediary is prohibited from purchasing or selling the securities of, otherwise investing in or financing, issuers in which the Fund or its underlying Investment Funds has an interest.
A financial intermediary may sponsor, organize, promote or otherwise become involved with other opportunities to invest directly or indirectly in the Fund or an Investment Fund. Such opportunities may be subject to different terms than those applicable to an investment in the Fund or the Investment Fund, including with respect to fees and the right to receive information.
Set out below are practices that the Advisers may follow. Although the Advisers anticipate that the Investment Managers will follow practices similar to those described below, no guarantee or assurances can be made that similar practices will be followed or that an Investment Manager will abide by, and comply with, its stated practices. An Investment Manager may provide investment advisory and other services, directly or through affiliates, to various entities and accounts other than Private Market Assets.
Participation in Investment Activities
Directors, principals, officers, employees and affiliates of the Advisers may buy and sell securities or other investments for their own accounts and may have actual or potential conflicts of interest with respect to investments made on behalf of the Fund or an Investment Fund in which the Fund invests. As a result of differing trading and investment strategies or constraints, positions may be taken by directors, principals, officers, employees and affiliates of the Advisers, or by the Advisers for the Other Accounts, or any of their respective affiliates on behalf of their own other accounts (“Investment Manager Accounts”) that are the same as, different from or made at a different time than, positions taken for the Fund or an Investment Fund.
Other Matters
An Investment Manager may, from time to time, cause an Investment Fund to effect certain principal transactions in securities with one or more Investment Manager Accounts, subject to certain conditions. Future investment activities of the Investment Managers, or their affiliates, and the principals, partners, directors, officers or employees of the foregoing, may give rise to additional conflicts of interest.
The Advisers and their affiliates will not purchase securities or other property from, or sell securities or other property to the Fund, except that the Fund may in accordance with rules under the 1940 Act engage in transactions with accounts that are affiliated with the Fund as a result of common officers, directors, advisers, members or managing general partners. These transactions would be effected in circumstances in which the Advisers determined that it would be appropriate for the Fund to purchase and another client to sell, or the Fund to sell and another client to purchase, the same security or instrument on the same day.
Future investment activities of the Advisers and their affiliates and their principals, partners, members, directors, officers or employees may give rise to conflicts of interest other than those described above.
TAX ASPECTS
The following is a summary of certain U.S. federal income tax considerations relevant to the acquisition, holding and disposition of Shares. This discussion offers only a brief outline of the U.S. federal income tax consequences of investing in the Fund and is based upon present provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder, and judicial and administrative ruling authorities, all of which are subject to change, which change may be retroactive. The discussion is limited to persons who hold their Shares as capital assets (generally, property held for investment) for U.S. federal income tax purposes. This summary does not address all of the U.S. federal income tax consequences that may be relevant to a particular Shareholder or to Shareholders who may be subject to special treatment under federal income tax laws, such as U.S. financial institutions, insurance companies, broker-dealers, traders in securities that have made an election for U.S. federal income tax purposes to mark‑to‑market their securities holdings, tax‑exempt organizations, partnerships, Shareholders who are not “United States Persons” (as defined in the Code), Shareholders liable for the alternative minimum tax, persons holding Shares through partnerships or other pass-through entities, or persons that have a functional currency (as defined in Section 985 of the Code) other than the U.S. dollar. No ruling has been or will be obtained from the Internal Revenue Service (“IRS”) regarding any matter relating to the Fund or the Shares. No assurance can be given that the IRS would not assert a position contrary to any of the tax aspects described below. The discussion set forth herein
 
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does not constitute tax advice. Prospective Shareholders and Shareholders are urged to consult their own tax advisors as to the U.S. federal income tax consequences of the acquisition, holding and disposition of Shares of the Fund, as well as the effects of state, local and non‑U.S. tax laws.
UNLESS OTHERWISE INDICATED, REFERENCES IN THIS DISCUSSION TO THE FUND’S INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS, INCLUDE THE CO‑INVESTMENTS OR CO‑INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS OF THE FUND, AS WELL AS THOSE INDIRECTLY ATTRIBUTABLE TO THE FUND AS A RESULT OF THE FUND’S INVESTMENT IN ANY INVESTMENT FUND (OR OTHER ENTITY) THAT IS PROPERLY CLASSIFIED AS A PARTNERSHIP OR DISREGARDED ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES (AND NOT AN ASSOCIATION OR PUBLICLY TRADED PARTNERSHIP TAXABLE AS A CORPORATION).
Qualification as a Regulated Investment Company; Tax Treatment
It is expected that the Fund will qualify for treatment as a regulated investment company (“RIC”) under the Code. If the Fund so qualifies and distributes (or is deemed to have distributed) each taxable year to Shareholders dividends for U.S. federal income tax purposes of an amount at least equal to the sum of 90% of its investment company taxable income (which includes, among other items, dividends, interest and net short-term capital gains in excess of net long-term capital losses, but determined without regard to the deduction for dividends paid) plus 90% of any net tax‑exempt income for the Fund’s taxable year, the Fund will not be subject to U.S. federal corporate income taxes on any amounts it distributes as dividends for U.S. federal income tax purposes, including distributions (if any) derived from the Fund’s net capital gain (i.e., the excess of the net long-term capital gains over net short-term capital losses) to Shareholders. The Fund intends to distribute to its Shareholders, at least annually, substantially all of its investment company taxable income, net tax‑exempt income, and net capital gains.
In addition, amounts not distributed on a timely basis in accordance with a separate calendar year distribution requirement are subject to a nondeductible 4% excise tax. To prevent imposition of the excise tax, the Fund generally must be considered to have distributed dividends for U.S. federal income tax purposes in respect of each calendar year an amount at least equal to the sum of (1) 98% of its ordinary income (not taking into account any capital gains or losses), determined on a calendar year basis, (2) 98.2% of its capital gain net income, determined under prescribed rules for this purpose (which is generally determined on the basis of the one‑year period ending on October 31st of such calendar year, and adjusted for certain ordinary losses), and (3) any ordinary income and capital gain net income from previous years that was not distributed during those years and on which the Fund incurred no U.S. federal income tax. For U.S. federal income tax purposes, dividends declared by the Fund in October, November or December to Shareholders of record on a specified date in such a month and paid during January of the following calendar year are taxable to such Shareholders, and deductible by the Fund, as if paid on December 31 of the calendar year declared. The Fund generally intends to make distributions sufficient to avoid imposition of the excise tax, although there can be no assurance that it will be able to do so.
In order to qualify as a RIC, the Fund must, among other things: (a) derive in each taxable year (the “gross income test”) at least 90% of its gross income from (i) dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stocks, securities or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stocks, securities or currencies, and (ii) net income from interests in “qualified publicly traded partnerships” (as defined in the Code) (all such income items, “qualifying gross income”); and (b) diversify its holdings (the “asset diversification test”) so that, at the end of each quarter of the taxable year, (i) at least 50% of the value of the Fund’s total assets is represented by cash and cash items (including receivables), U.S. Government securities, the securities of other RICs and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and not greater than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of its total assets is invested in the securities (other than U.S. Government securities or the securities of other RICs) of a single issuer, two or more issuers that the Fund controls and that are engaged in the same, similar or related trades or businesses or one or more “qualified publicly traded partnerships” (as defined in the Code).
For the purpose of determining whether the Fund satisfies the gross income test, the character of the Fund’s distributive share of items of income, gain and loss derived through any Investment Funds that are properly treated as partnerships for U.S. federal income tax purposes (other than certain publicly traded partnerships) generally will be determined as if the Fund realized such tax items in the same manner as realized by those Investment Funds. Similarly, for the purpose of the asset diversification test, the Fund, in appropriate circumstances, will “look through” to the assets held by such Investment Funds.
A RIC that fails the gross income test for a taxable year shall nevertheless be considered to have satisfied the test for such year if (i) the RIC satisfies certain procedural requirements, and (ii) the RIC’s failure to satisfy the gross income test is due to reasonable cause and not due to willful neglect. However, in such case, a tax is imposed on the RIC for the taxable year in which, absent the application of the above cure provision, it would have failed the gross income test equal to the amount by which the RIC’s non‑qualifying gross income exceeds one‑ninth of the RIC’s qualifying gross income, each as determined for purposes of applying the gross income test for such taxable year.
 
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Additionally, a RIC that fails the asset diversification test as of the end of a quarter of a taxable year shall nevertheless be considered to have satisfied the test as of the end of such quarter in the following circumstances. If the RIC’s failure to satisfy the asset diversification test at the end of the quarter is due to the ownership of assets the total value of which does not exceed the lesser of (i) one percent of the total value of the RIC’s assets at the end of such quarter and (ii) $10 million (a “de minimis failure”), the RIC shall be considered to have satisfied the asset diversification test as of the end of such quarter if, within six months of the last day of the quarter in which the RIC identifies that it failed the asset diversification test (or such other prescribed time period), the RIC either disposes of assets in order to satisfy the asset diversification test, or otherwise satisfies the asset diversification test.
In the case of a failure to satisfy the asset diversification test at the end of a quarter of a taxable year under circumstances that do not constitute a de minimis failure, a RIC shall nevertheless be considered to have satisfied the asset diversification test as of the end of such quarter if (i) the RIC satisfies certain procedural requirements; (ii) the RIC’s failure to satisfy the asset diversification test is due to reasonable cause and not due to willful neglect; and (iii) within six months of the last day of the quarter in which the RIC identifies that it failed the asset diversification test (or such other prescribed time period), the RIC either disposes of the assets that caused the asset diversification failure in order to satisfy the asset diversification test, or otherwise satisfies the asset diversification test. However, in such case, a tax is imposed on the RIC, at the highest stated corporate income tax rate, on the net income generated by the assets that caused the RIC to fail the asset diversification test during the period for which the asset diversification test was not met. In all events, however, such tax will not be less than $50,000.
If before the end of any taxable quarter of the Fund’s taxable year, the Fund believes that it may fail the asset diversification test, the Fund may seek to take certain actions to avert such a failure. However, the action typically taken by RICs to avert such a failure (e.g., the disposition of assets causing the asset diversification discrepancy) may be difficult for the Fund to pursue because of the limited liquidity of the interests in the Private Market Assets. While the Code generally affords the Fund a 30‑day period after the end of the relevant quarter in which to cure a diversification failure by disposing of non‑diversified assets, the constraints on the Fund’s ability to do so may limit utilization of this statutory 30‑day cure period and, possibly, the extended cure period provided by the Code as discussed above.
If the Fund does not qualify as a RIC, it will be treated for tax purposes as an ordinary corporation. In that case, all of its taxable income would be subject to U.S. federal income tax at regular corporate rates without any deduction for distributions made to Shareholders. In addition, all distributions (including distributions of net capital gain) made to Shareholders generally would be characterized as dividend income to the extent of the Fund’s current and accumulated earnings and profits.
Distributions
The Fund will ordinarily declare and pay distributions from its net investment income and distribute net realized capital gains, if any, at least once a year. The Fund, however, may make distributions on a more frequent basis to comply with the distribution requirements of the Code, in all events in a manner consistent with the provisions of the 1940 Act. After the end of each calendar year, Shareholders will be provided a Form 1099, containing information regarding the amount and character of distributions received from the Fund during the calendar year.
Shareholders normally will be subject to U.S. federal income taxes, and any state and/or local income taxes, on any dividends or other distributions that they receive from the Fund. Distributions from net investment income and net short-term capital gain generally will be characterized as ordinary income (which generally cannot be offset with capital losses from other sources), and, to the extent attributable to dividends from U.S. corporations, may be eligible for a dividends-received deduction for Shareholders that are corporations. Further, to the extent the dividends are attributable to dividends from U.S. corporations and certain foreign corporations, such dividends may, in certain cases, be eligible for treatment as “qualified dividend income,” which is generally subject to tax at rates equivalent to long-term capital gain tax rates, by Shareholders that are individuals. Distributions from net capital gain (typically referred to as a “capital gain dividend”) will be characterized as long-term capital gain, regardless of how long Shares have been held by the Shareholder and will not be eligible for the dividends-received deduction or treatment as “qualified dividend income.” However, if the Shareholder received any long-term capital gain distributions in respect of the repurchased Shares (including, for this purpose, amounts credited as undistributed capital gains in respect of those Shares) and held the repurchased Shares for six months or less, any loss realized by the Shareholder upon the repurchase will be treated as long-term capital loss to the extent that it offsets the long-term capital gain distributions. Distributions by the Fund that are or are considered to be in excess of the Fund’s current and accumulated earnings and profits for the relevant period will be treated as a tax‑free return of capital to the extent of (and in reduction of) a Shareholder’s tax basis in its Shares and any such amount in excess of such tax basis will be treated as gain from the sale of Shares, as discussed below. Similarly, as discussed below at “Income from Repurchases and Transfers of Shares,” if a repurchase or transfer of a Shareholder’s Shares does not qualify for sale or exchange treatment, the Shareholder may, in connection with such repurchase or transfer, be treated as having received, in whole or in part, a taxable dividend, a tax‑free return of capital or taxable capital gain, depending on (i) whether the Fund has sufficient earnings and profits to support a dividend and (ii) the Shareholder’s tax basis in the relevant Shares repurchased or transferred. In such case, the tax basis in the Shares repurchased or transferred by the Fund, to the extent remaining after any dividend and return of capital distribution with respect to those Shares, will be added to the tax basis of any remaining Shares held by the Shareholder.
 
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The tax treatment of the Fund’s distributions from net investment income and capital gains generally will be the same whether the Shareholder takes such distributions in cash or reinvests them to buy additional Shares.
The Fund may elect to retain its net capital gain or a portion thereof for investment and be subject to tax at corporate rates on the amount retained. In such case, the Fund may report the retained amount as undistributed capital gains to its Shareholders, who will be treated as if each Shareholder received a distribution of his or her pro rata share of such gain, with the result that each Shareholder will (i) be required to report his or her pro rata share of such gain on his or her tax return as long-term capital gain, (ii) receive a refundable tax credit for his or her pro rata share of tax paid by the Fund on the gain, and (iii) increase the tax basis for his or her Shares by an amount equal to the deemed distribution less the tax credit.
For taxable years beginning before January 1, 2026, individuals (and certain other non‑corporate entities) are generally eligible for a 20% deduction with respect to taxable ordinary real estate investment trust (“REIT”) dividends. Applicable Treasury regulations allow RICs to pass through to shareholders such taxable ordinary REIT dividends. Accordingly, individual (and certain other non‑corporate) Shareholders of the Fund that have received such taxable ordinary REIT dividends may be able to take advantage of this 20% deduction with respect to any such amounts passed through.
Certain distributions reported by the Fund as section 163(j) interest dividends may be treated as interest income by Shareholders for purposes of the tax rules applicable to interest expense limitations under Section 163(j) of the Code. Such treatment by the Shareholder is generally subject to holding period requirements and other potential limitations, although the holding period requirements are generally not applicable to dividends declared by money market funds and certain other funds that declare dividends daily and pay such dividends on a monthly or more frequent basis. The amount that the Fund is eligible to report as a Section 163(j) dividend for a tax year is generally limited to the excess of the Fund’s business interest income over the sum of the Fund’s (i) business interest expense and (ii) other deductions properly allocable to the Fund’s business interest income.
An additional 3.8% tax will be imposed in respect of the net investment income of certain individuals and on the undistributed net investment income of certain estates and trusts to the extent such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts. For these purposes, “net investment income” will generally include, among other things, dividends (including dividends paid with respect to the Shares to the extent paid out of the Fund’s current or accumulated earnings and profits as determined under U.S. federal income tax principles) and net gain attributable to the disposition of property not held in a trade or business (which could include net gain from the sale, exchange or other taxable disposition of Shares), but will be reduced by any deductions properly allocable to such income or net gain. Shareholders are advised to consult their own tax advisors regarding the additional taxation of net investment income.
Income from Repurchases and Transfers of Shares
A repurchase or transfer of Shares by the Fund generally will be treated as a taxable transaction for U.S. federal income tax purposes, either as a “sale or exchange,” or, under certain circumstances, as a “dividend.” In general, the transaction should be treated as a sale or exchange of the Shares if the receipt of cash results in a meaningful reduction in the Shareholder’s proportionate interest in the Fund or results in a “complete redemption” of the Shareholder’s Shares, in each case applying certain constructive ownership rules in the Code. Alternatively, if a Shareholder does not tender all of his or her Shares, such repurchase or transfer may not be treated as a sale or exchange for U.S. federal income tax purposes, and the gross amount of such repurchase or transfer may constitute a dividend to the Shareholder to the extent of such Shareholder’s pro rata share of the Fund’s current and accumulated earnings and profits.
If the repurchase or transfer of a Shareholder’s Shares qualifies for sale or exchange treatment, the Shareholder will recognize gain or loss equal to the difference between the amount received in exchange for the repurchased or transferred Shares and the adjusted tax basis of those Shares. Such gain or loss will be capital gain or loss if the repurchased or transferred Shares were held by the Shareholder as capital assets, and generally will be treated as long-term capital gain or loss if the repurchased or transferred Shares were held by the Shareholder for more than one year, or as short-term capital gain or loss if the repurchased or transferred Shares were held by the Shareholder for one year or less.
Notwithstanding the foregoing, any capital loss realized by a Shareholder will be disallowed to the extent the Shares repurchased or transferred by the Fund are replaced (including through reinvestment of dividends) either with Shares or substantially identical securities within a period of 61 days beginning 30 days before and ending 30 days after the repurchase of the Shares. If disallowed, the loss will be reflected as an upward adjustment to the basis of the Shares acquired. The deductibility of capital losses may be subject to statutory limitations.
If the repurchase or transfer of a Shareholder’s Shares does not qualify for sale or exchange treatment, the Shareholder may be treated as having received, in whole or in part, a taxable dividend, a tax‑free return of capital or taxable capital gain, depending on (i) whether the Fund has sufficient earnings and profits to support a dividend and (ii) the Shareholder’s tax basis in the relevant Shares.
The tax basis in the Shares repurchased or transferred by the Fund, to the extent remaining after any dividend and return of capital distribution with respect to those Shares, will be added to the tax basis of any remaining Shares held by the Shareholder.
 
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The Fund generally will be required to report to the IRS and each Shareholder the cost basis and holding period for each respective Shareholder’s Shares repurchased or transferred by the Fund. The Fund has elected the average cost method as the default cost basis method for purposes of this requirement. If a Shareholder wishes to accept the average cost method as its default cost basis calculation method in respect of Shares in its account, the Shareholder does not need to take any additional action. If, however, a Shareholder wishes to affirmatively elect an alternative cost basis calculation method in respect of its Shares, the Shareholder must contact the Administrator to obtain and complete a cost basis election form. The cost basis method applicable to a particular Share repurchase may not be changed after the valuation date established by the Fund in respect of that repurchase or Share transfer. Shareholders should consult their tax advisors regarding their cost basis reporting options and to obtain more information about how the cost basis reporting rules apply to them.
A sale of Shares, other than in the context of a repurchase or transfer of Shares by the Fund, generally will have the same tax consequences as described above in respect of a Share repurchase or transfer that qualifies for “sale or exchange” treatment.
If a Shareholder recognizes a loss with respect to Shares in excess of certain prescribed thresholds (generally, $2,500,000 or more for an individual Shareholder or $10,000,000 or more for a corporate Shareholder), the Shareholder must file with the IRS a disclosure statement on an IRS Form 8886. Direct investors of portfolio securities are in many cases excepted from this reporting requirement, but, under current guidance, equity owners of RICs are not excepted. The fact that a loss is reportable as just described does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of this reporting requirement in light of their particular circumstances.
Other Considerations
Unless and until the Fund is considered under the Code to be a “publicly offered regulated investment company,” for purposes of computing the taxable income of U.S. Shareholders that are individuals, trusts or estates, (1) the Fund’s earnings will be computed without taking into account such U.S. Shareholders’ allocable shares of the Management Fees and certain other expenses, (2) each such U.S. Shareholder will be treated as having received or accrued a dividend from the Fund in the amount of such U.S. Shareholder’s allocable share of these fees and expenses for such taxable year, (3) each such U.S. Shareholder will be treated as having paid or incurred such U.S. Shareholder’s allocable share of these fees and expenses for the calendar year and (4) each such U.S. Shareholder’s allocable share of these fees and expenses will be treated as miscellaneous itemized deductions by such U.S. stockholder. For taxable years beginning before 2026, miscellaneous itemized deductions generally are not deductible by a U.S. Shareholder that is an individual, trust or estate. For taxable years beginning in 2026 or later, miscellaneous itemized deductions generally are deductible by a U.S. Shareholder that is an individual, trust or estate only to the extent that the aggregate of such U.S. Shareholder’s miscellaneous itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under Section 68 of the Code. In addition, if the Fund is not treated as a “publicly offered regulated investment company,” the Fund will be subject to limitations on the deductibility of certain “preferential dividends” that are distributed to U.S. stockholders on a non‑pro‑rata basis. A “publicly offered regulated investment company” is a RIC whose equity interests are (i) continuously offered pursuant to a public offering, (ii) regularly traded on an established securities market, or (iii) held by at least 500 persons at all times during the taxable year.
Fund Investments
The Fund will invest a portion of its assets in Investment Funds, some of which may be classified as partnerships for U.S. federal income tax purposes. An entity that is properly classified as a partnership (and not an association or publicly traded partnership taxable as a corporation) generally is not subject to an entity-level U.S. federal income tax. Instead, each partner of the partnership is required to take into account its distributive share of the partnership’s net capital gain or loss, net short-term capital gain or loss, and its other items of ordinary income or loss (including all items of income, gain, loss and deduction allocable to that partnership from investments in other partnerships) for each taxable year of the partnership ending with or within the partner’s taxable year. Each such item will have the same character to a partner and will generally have the same source (either United States or foreign), as though the partner realized the item directly. Partners of a partnership must report these items regardless of the extent to which, or whether, the partnership or the partners receive cash distributions for such taxable year. Accordingly, the Fund may be required to recognize items of taxable income and gain prior to the time that any corresponding cash distributions are made to or by the Fund and certain Investment Funds (including in circumstances where investments by the Investment Funds generate income prior to a corresponding receipt of cash). In such case, the Fund may have to dispose of interests in Investment Funds that it would otherwise have continued to hold, or devise other methods of cure, to the extent certain Investment Funds earn income of a type that is not qualifying gross income for purposes of the gross income test or hold assets that could cause the Fund not to satisfy the RIC asset diversification test.
Some of the income that the Fund may earn directly or through an Investment Fund, such as income recognized from an equity investment in an operating partnership, may not satisfy the gross income test. To manage the risk that such income might jeopardize the Fund’s tax status as a RIC resulting from a failure to satisfy the gross income test, one or more subsidiary entities treated as U.S. corporations for U.S. federal income tax purposes may be employed to earn such income and (if applicable) hold the related investment.
 
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Such subsidiary entities generally will be required to incur entity-level income taxes on their earnings, which ultimately will reduce the return to Shareholders.
UNLESS OTHERWISE INDICATED, REFERENCES IN THIS DISCUSSION TO THE FUND’S INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS, INCLUDE THE CO‑INVESTMENTS OR CO‑INVESTMENTS, ACTIVITIES, INCOME, GAIN AND LOSS OF BOTH THE FUND, AS WELL AS THOSE INDIRECTLY ATTRIBUTABLE TO THE FUND AS A RESULT OF THE FUND’S INVESTMENT IN ANY INVESTMENT FUND (OR OTHER ENTITY) THAT IS PROPERLY CLASSIFIED AS A PARTNERSHIP OR DISREGARDED ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES (AND NOT AN ASSOCIATION OR PUBLICLY TRADED PARTNERSHIP TAXABLE AS A CORPORATION).
Ordinarily, gains and losses realized from portfolio transactions will be characterized as capital gains and losses. However, because the functional currency of the Fund for U.S. federal income tax purposes is the U.S. dollar, a portion of the gain or loss realized from the disposition of foreign currencies (including foreign currency denominated bank deposits) and non‑U.S. dollar denominated securities (including debt instruments, certain futures or forward contracts and options, and similar financial instruments) is generally characterized as ordinary income or loss in accordance with Section 988 of the Code. Section 988 of the Code similarly provides that gains or losses attributable to fluctuations in exchange rates that occur between the time the Fund accrues interest or other receivables or accrues expenses or other liabilities denominated in a foreign currency and the time such receivables are collected or the time that the liabilities are paid would be generally characterized as ordinary income or loss. In addition, all or a portion of any gains realized from the sale or other disposition of certain market discount bonds will be characterized as ordinary income. Finally, all or a portion of any gain realized from engaging in “conversion transactions” (as defined in the Code to generally include certain transactions designed to convert ordinary income into capital gain) may be characterized as ordinary income.
Hedging and Derivative Transactions
Gain or loss, if any, realized from certain financial futures or forward contracts and options transactions (“Section 1256 Contracts”) generally is treated as 60% long-term capital gain or loss and 40% short-term capital gain or loss. Gain or loss will arise upon exercise or lapse of Section 1256 Contracts. In addition, any Section 1256 Contracts remaining unexercised both at October 31 of each calendar year as well as at the end of the Fund’s taxable year are treated as sold for their then fair market value, resulting in the recognition of gain or loss characterized in the manner described above.
While not a principal investment strategy of the Fund, the Fund may acquire certain foreign currency forward contracts, enter into certain foreign currency futures contracts, acquire put and call options on foreign currencies, or acquire or enter into similar foreign currency-related financial instruments. Generally, foreign currency regulated futures contracts and option contracts that qualify as Section 1256 Contracts will not be subject to ordinary income or loss treatment under Section 988 of the Code. However, if the Fund acquires or enters into any foreign currency futures contracts or options contracts that are not Section 1256 Contracts, or any foreign currency forward contracts or similar foreign currency-related financial instruments, any gain or loss realized by the Fund with respect to such contract or financial instruments generally will be characterized as ordinary gain or loss unless the contract or financial instrument in question is a capital asset in the hands of the Fund and is not part of a straddle transaction (as described below), and an election is made by the Fund (before the close of the day the transaction is entered into) to characterize the gain or loss attributable to such contract or financial instrument as capital gain or loss.
Offsetting positions held by the Fund, or the Investment Funds, involving certain financial futures or forward contracts or options transactions with respect to actively traded personal property may be considered, for tax purposes, to constitute “straddles.” In addition, investments by the Fund in particular combinations of Investment Funds may also be treated as a “straddle.” To the extent the straddle rules apply to positions established by the Fund, or the Investment Funds, losses realized by the Fund may be deferred to the extent of unrealized gain in the offsetting positions. Further, short-term capital loss on straddle positions may be recharacterized as long-term capital loss, and long-term capital gains on straddle positions may be treated as short-term capital gains or ordinary income. Certain of the straddle positions held by the Fund, or the Investment Funds, may constitute “mixed straddles.” One or more elections may be made in respect of the U.S. federal income tax treatment of “mixed straddles,” resulting in different tax consequences. In certain circumstances, the provisions governing the tax treatment of straddles override or modify certain of the provisions discussed above.
If the Fund, or possibly an Investment Fund, either (1) holds an appreciated financial position with respect to stock, certain debt obligations or partnership interests (“appreciated financial position”), and then enters into a short sale, futures, forward, or offsetting notional principal contract (collectively, a “Contract”) with respect to the same or substantially identical property, or (2) holds an appreciated financial position that is a Contract and then acquires property that is the same as, or substantially identical to, the underlying property, the Fund generally will be taxed as if the appreciated financial position were sold at its fair market value on the date the Fund, or such Investment Fund, enters into the financial position or acquires the property, respectively. The foregoing will not apply, however, to any transaction during any taxable year that otherwise would be treated as a constructive sale if the transaction is closed within 30 days after the end of that year and the appreciated financial position is held unhedged for 60 days after that closing (i.e., at no time during that 60‑day period is the risk of loss relating to the appreciated financial position reduced by reason of certain specified transactions with respect to substantially identical or related property, such as by reason of an option to sell, being contractually obligated to sell, making a short sale, or granting an option to buy substantially identical stock or securities).
 
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If the Fund, or possibly an Investment Fund, enters into certain derivatives (including forward contracts, long positions under notional principal contracts, and related puts and calls) with respect to equity interests in certain pass-thru entities (including other RICs, REITs, partnerships, real estate mortgage investment conduits and certain trusts and foreign corporations), long-term capital gain with respect to the derivative may be recharacterized as ordinary income to the extent it exceeds the long-term capital gain that would have been realized had the interest in the pass-thru entity been held directly during the term of the derivative contract. Any gain recharacterized as ordinary income will be treated as accruing at a constant rate over the term of the derivative contract and may be subject to an interest charge. The U.S. Department of the Treasury (the “Treasury”) and the IRS have the authority to issue regulations expanding the application of these rules to derivatives with respect to debt instruments and/or stock in corporations that are not pass-thru entities.
Passive Foreign Investment Companies and Controlled Foreign Corporations
The Fund may indirectly hold equity interests in non‑U.S. Investment Funds and/or non‑U.S. portfolio companies that may be treated as “passive foreign investment companies” (each, a “PFIC”) under the Code. A PFIC is generally defined as a non‑U.S. entity which is classified as a corporation for U.S. federal income tax purposes, and which earns at least 75% of its annual gross income from passive sources (such as interest, dividends, rents, royalties or capital gain) or which holds at least 50% of its total assets in assets producing such passive income. The Fund may be subject to U.S. federal income tax, at ordinary income rates, on a portion of any “excess distribution” or gain from the disposition of such interests even if such income is distributed as a taxable dividend by the Fund to its Shareholders. Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes arising from such distributions or gains. If an election is made to treat the PFIC as a “qualified electing fund” under the Code (a “QEF”), then the Fund would be required, in lieu of the foregoing requirements, to include in income each year a portion of the QEF’s ordinary earnings and net capital gain (at ordinary income and capital gains rates, respectively), even if not distributed to the Fund. If the QEF incurs losses for a taxable year, these losses will not pass through to the Fund and, accordingly, cannot offset other income and/or gains of the Fund. The QEF election may not be able to be made with respect to many PFICs because of certain requirements that the PFICs themselves would have to satisfy. Alternatively, in certain cases, an election can be made to mark‑to‑market the shares of a PFIC held by the Fund at the end of the Fund’s taxable year (as well as on certain other dates prescribed in the Code). In this case, the Fund would recognize as ordinary income its share of any increase in the value of such PFIC shares, and as ordinary loss its share of any decrease in such value, to the extent such did not exceed its share of prior increases in income derived from such PFIC shares. Under either election, the Fund might be required to recognize income in excess of its distributions from PFICs and its proceeds from dispositions of PFIC stock during the applicable taxable year and such income would nevertheless be subject to the distribution requirement and would be taken into account under prescribed timing rules for purposes of the 4% excise tax (described above).
Dividends paid by PFICs will not be treated as “qualified dividend income.” In certain cases, the Fund will not be the party legally permitted to make the QEF election or the mark‑to‑market election in respect of indirectly held PFICs and, in such cases, will not have control over whether the party within the chain of ownership that is legally permitted to make the QEF or mark‑to‑market election will do so.
If the Fund holds 10% or more (by vote or value) of the interests treated as equity for U.S. federal income tax purposes in a foreign entity classified as a corporation for U.S. federal income tax purposes and considered a controlled foreign corporation (“CFC”) under the Code, the Fund may be treated as receiving a deemed distribution (i.e., characterized as ordinary income) each taxable year from such foreign corporation in an amount equal to its pro rata share of such entity’s income for such taxable year (including both ordinary earnings and capital gains), whether or not the entity makes an actual distribution during such taxable year. The Fund would be required to include the amount of a deemed distribution from a CFC when computing its investment company taxable income as well as in determining whether the Fund satisfies the distribution requirements applicable to RICs, even to the extent the amount of the Fund’s income deemed recognized from the CFC exceeds the amount of any actual distributions from the CFC and the proceeds from any sales or other dispositions of CFC stock during the Fund’s taxable year. In general, a foreign entity classified as a corporation for U.S. federal income tax purposes will be considered a CFC if greater than 50% of the shares of the corporation, measured by reference to combined voting power or value, is owned (directly, indirectly or by attribution) by U.S. Shareholders. A “U.S. Shareholder,” for this purpose, is any U.S. person that possesses (actually or constructively) 10% or more of the combined voting power or value of all classes of shares of a foreign entity classified as a corporation for U.S. federal income tax purposes.
Under applicable final Treasury regulations, certain income derived by the Fund from a CFC or a PFIC with respect to which the Fund has made a QEF election would generally constitute qualifying income under the gross income test for purposes of determining the Fund’s ability to be subject to tax as a RIC only to the extent the CFC or the PFIC makes current distributions of that income to the Fund or the included income is derived with respect to the Fund’s business of investing in stocks and securities. The Fund may be restricted in its ability to make QEF elections with respect to the Fund’s holdings in Investment Funds and other issuers that could be treated as PFICs or implement certain restrictions with the respect to any Investment Funds or other issuers that could be treated as CFCs in order to limit the Fund’s tax liability or maximize the Fund’s after‑tax return from these investments.
State and Local Taxes
In addition to the U.S. federal income tax consequences summarized above, Shareholders and prospective Shareholders should consider the potential state and local tax consequences associated with an investment in the Fund. The Fund may become subject to
 
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income and other taxes in states and localities based on the Fund’s investments in entities that conduct business in those jurisdictions. Shareholders will generally be taxable in their state of residence with respect to their income or gains earned and distributed by the Fund as dividends for U.S. federal income tax purposes, or the amount of their investment in the Fund.
Foreign Taxes
The Fund’s investment in non‑U.S. stocks or securities may be subject to withholding and other taxes imposed by countries outside the United States. In that case, the Fund’s yield on those stocks or securities would be decreased. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the Fund’s assets at year‑end consists of the stock or securities of foreign corporations, the Fund may elect to permit its Shareholders to claim a credit or deduction on their income tax returns for their pro rata portion of qualified taxes paid or deemed paid by the Fund to foreign countries in respect of foreign stock or securities the Fund has held for at least the minimum period specified in the Code. In such a case, Shareholders of the Fund will include in gross income from foreign sources their pro rata shares of such taxes. The Fund does not expect to meet the requirements to make the election described above in respect of the treatment of foreign taxes.
Information Reporting and Backup Withholding
Information returns will generally be filed with the IRS in connection with distributions made by the Fund to Shareholders unless Shareholders establish they are exempt from such information reporting (e.g., by properly establishing that they are classified as corporations for U.S. federal tax purposes). Additionally, the Fund may be required to withhold, for U.S. federal income taxes, a portion of all taxable dividends and repurchase proceeds payable to Shareholders who fail to provide the Fund with their correct taxpayer identification numbers, generally on an IRS Form W‑9, or who otherwise fail to make required certifications, or if the Fund or the Shareholder has been notified by the IRS that such Shareholder is subject to backup withholding. Certain Shareholders specified in the Code and the Treasury regulations promulgated thereunder are exempt from backup withholding, but they may be required to demonstrate their exempt status. Backup withholding is not an additional tax. Any amounts withheld will be allowed as a refund or a credit against the Shareholder’s federal income tax liability if the appropriate information is provided to the IRS.
U.S. Federally Tax‑Exempt Shareholders
Under current law, the Fund serves to “block” (that is, prevent the attribution to Shareholders of) unrelated business taxable income (“UBTI”) from being realized by its U.S. federally tax‑exempt Shareholders (including, among others, individual retirement accounts (“IRAs”), 401(k) accounts, Keogh plans, pension plans and certain charitable entities). Notwithstanding the foregoing, a U.S. federally tax‑exempt Shareholder could realize UBTI by virtue of its investment in Shares of the Fund if the US, federally tax‑exempt Shareholder has engaged in a borrowing or other similar transaction to acquire its Shares. A tax‑exempt Shareholder may also recognize UBTI if the Fund were to recognize “excess inclusion income” derived from direct or indirect investments in residual interests in real estate mortgage investment conduits or taxable mortgage pools. If a charitable remainder annuity trust or a charitable remainder unitrust (each as defined in Section 664 of the Code) has UBTI for a taxable year, a 100% excise tax on the UBTI is imposed on the trust.
Foreign Shareholders
U.S. taxation of a Shareholder who, as to the United States, is a nonresident alien individual, a foreign trust or estate, or a foreign corporation (“Foreign Shareholder”) as defined in the Code, depends on whether the income of the Fund is “effectively connected” with a U.S. trade or business carried on by the Foreign Shareholder.
Income Not Effectively Connected. If the income from the Fund is not “effectively connected” with a U.S. trade or business carried on by the Foreign Shareholder, distributions of investment company taxable income will generally be subject to a U.S. tax of 30% (or lower treaty rate, except in the case of any “excess inclusion income” allocated to the Foreign Shareholder), which tax is generally withheld from such distributions. Capital gain dividends and any amounts retained by the Fund which are properly reported by the Fund as undistributed capital gains will not be subject to U.S. tax at the rate of 30% (or lower treaty rate), unless the Foreign Shareholder is a nonresident alien individual and is physically present in the United States for more than 182 days during the taxable year and meets certain other requirements. In order to qualify for any reduction or exemption from U.S. withholding tax, a Foreign Shareholder must comply with applicable certification requirements relating to its non‑U.S. status (including, in general, furnishing an IRS Form W‑8BEN, IRS Form W‑8BEN‑E, IRS Form W‑8ECI, IRS Form W‑8IMY or IRS Form W‑8EXP, or an acceptable substitute or successor form). However, this 30% tax on capital gains of nonresident alien individuals who are physically present in the United States for more than the 182 day period only applies in exceptional cases because any individual present in the United States for more than 182 days during the taxable year is generally treated as a resident for U.S. income tax purposes; in that case, he or she would be subject to U.S. income tax on his or her worldwide income at the graduated rates applicable to U.S. citizens, rather than the 30% tax.
Any capital gain that a Foreign Shareholder realizes upon a repurchase of Shares or otherwise upon a sale or exchange of Shares will ordinarily be exempt from U.S. tax unless, in the case of a Foreign Shareholder that is a nonresident alien individual, the gain is U.S. source income and such Foreign Shareholder is physically present in the United States for more than 182 days during the taxable year and meets certain other requirements. However, this 30% tax on capital gains of nonresident alien individuals who are physically
 
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present in the United States for more than the 182 day period only applies in exceptional cases because any individual present in the United States for more than 182 days during the taxable year is generally treated as a resident for U.S. income tax purposes; in that case, he or she would be subject to U.S. income tax on his or her worldwide income at the graduated rates applicable to U.S. citizens, rather than the 30% tax.
Income Effectively Connected. If the income from the Fund is “effectively connected” with a U.S. trade or business carried on by a Foreign Shareholder, then distributions of investment company taxable income and capital gain dividends, any amounts retained by the Fund which are reported by the Fund as undistributed capital gains, and any gains realized upon the sale or exchange of Shares of the Fund will be subject to U.S. income tax at the graduated rates applicable to U.S. citizens, residents and domestic corporations. Corporate Foreign Shareholders may also be subject to the branch profits tax imposed by the Code.
In the case of a Foreign Shareholder, the Fund may be required to withhold U.S. federal income tax from distributions and repurchase proceeds that are otherwise exempt from withholding tax (or taxable at a reduced treaty rate), unless the Foreign Shareholder certifies his foreign status under penalties of perjury or otherwise establishes an exemption in the manner discussed above.
The tax consequences to a Foreign Shareholder entitled to claim the benefits of an applicable tax treaty may differ from those described herein. Foreign Shareholders are advised to consult their own tax advisors with respect to the particular tax consequences to them of an investment in the Fund.
Foreign Account Tax Compliance Act
The Fund is required under the Foreign Account Tax Compliance Act (“FATCA”) provisions of the Code to withhold U.S. tax (at a 30% rate) on payments of amounts treated as dividends for U.S. federal income tax purposes made to certain non‑U.S. entities (including financial intermediaries) that fail to comply (or be deemed compliant) with extensive reporting and withholding requirements designed to inform the Treasury of U.S.- owned foreign investment accounts unless various U.S. information reporting and diligence requirements (that are in addition to and significantly more onerous than, the requirement to deliver an applicable U.S. nonresident withholding tax certification form (e.g., IRS Form W‑8BEN)) and certain other requirements have been satisfied. The information required to be reported includes the identity and taxpayer identification number of each account holder and transaction activity within the holder’s account. Persons located in jurisdictions that have entered into an intergovernmental agreement with the U.S. to implement FATCA may be subject to different rules. Shareholders may be requested to provide additional information to the Fund to enable the Fund to determine whether withholding is required.
Other Taxation
The foregoing represents a summary of the general tax rules and considerations affecting Shareholders and the Fund’s operations, and neither purports to be a complete analysis of all relevant tax rules and considerations, nor does it purport to be a complete listing of all potential tax risks inherent in making an investment in the Fund. A Shareholder may be subject to other taxes, including but not limited to, other state, local, and foreign taxes, estate and inheritance taxes, or intangible property taxes, that may be imposed by various jurisdictions. The Fund also may be subject to additional state, local, or foreign taxes that could reduce the amounts distributable to Shareholders. It is the responsibility of each Shareholder to file all appropriate tax returns that may be required. Shareholders should consult their own tax advisors regarding the state, local and foreign tax consequences of an investment in Shares and the particular tax consequences to them of an investment in the Fund. In addition to the particular matters set forth in this section, tax‑exempt entities should carefully review those section of the Prospectus and this SAI regarding liquidity and other financial matters to ascertain whether the investment objectives of the Fund are consistent with their overall investment plans.
ERISA AND CERTAIN OTHER CONSIDERATIONS
Persons who are fiduciaries with respect to an employee benefit plan, IRA, Keogh plan, or other arrangement subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the Code (an “ERISA Plan”) should consider, among other things, the matters described below before determining whether to invest in the Fund. ERISA imposes certain general and specific responsibilities on persons who are fiduciaries with respect to an ERISA Plan, including prudence, diversification, an obligation not to engage in a prohibited transaction and other standards.
An ERISA Plan that proposes to invest in the Fund may be required to represent to the Board of Trustees that it, and any fiduciaries responsible for such ERISA Plan’s investments, are aware of and understand the Fund’s investment objectives; policies and strategies; that the decision to invest plan assets in the Fund was made with appropriate consideration of relevant investment factors with regard to the ERISA Plan; and that the decision to invest plan assets in the Fund is consistent with the duties and responsibilities imposed upon fiduciaries with regard to their investment decisions under ERISA and the Code, as applicable.
Certain prospective Benefit Plan Shareholders may currently maintain relationships with the Advisers or their affiliates. Each of such persons may be deemed to be a fiduciary of or other party in interest or disqualified person of any Benefit Plan to which it provides investment management, investment advisory or other services. ERISA prohibits (and the Code penalizes) the use of ERISA
 
27
Plan assets for the benefit of a party in interest, and also prohibits (or penalizes) an ERISA Plan fiduciary from using its position to cause such ERISA Plan to make an investment from which it or certain third-parties in which such fiduciary has an interest would receive a fee or other consideration. ERISA Plan Shareholders should consult with their own counsel and other advisors to determine if participation in the Fund is a transaction that is prohibited by ERISA or the Code or is otherwise inappropriate. Fiduciaries of ERISA Plan Shareholders may be required to represent that the decision to invest in the Fund was made by them as fiduciaries that are independent of such affiliated persons, that such fiduciaries are duly authorized to make such investment decision and that they have not relied on any individualized advice of such affiliated persons as a basis for the decision to invest in the Fund.
Employee benefit plans or similar arrangements which are not subject to either ERISA or the related provisions of the Code may be subject to other rules governing such plans, and such plans are not addressed above; fiduciaries of employee benefit plans or similar arrangements which are not subject to ERISA, whether or not subject to the Code, should consult with their own counsel and other advisors regarding such matters.
The provisions of ERISA and the Code are subject to extensive and continuing administrative and judicial interpretation and review. The discussion of ERISA and the Code contained herein is, of necessity, general and may be affected by future publication of regulations and rulings. Potential investors should consult their legal advisers regarding the consequences under ERISA and the Code of the acquisition and ownership of Shares.
THE FUND’S SALE OF SHARES TO ERISA PLANS IS IN NO RESPECT A REPRESENTATION OR WARRANTY BY THE FUND, THE ADVISERS, OR ANY OF ITS AFFILIATES, OR BY ANY OTHER PERSON ASSOCIATED WITH THE SALE OF THE SHARES, THAT SUCH INVESTMENT BY ANY ERISA PLAN MEETS ALL RELEVANT LEGAL REQUIREMENTS APPLICABLE TO ERISA PLANS GENERALLY OR TO ANY PARTICULAR ERISA PLAN, OR THAT SUCH INVESTMENT IS OTHERWISE APPROPRIATE FOR ERISA PLANS GENERALLY OR FOR ANY PARTICULAR ERISA PLAN.
ADMINISTRATOR AND SUB‑ADMINISTRATOR
The Administrator, when providing services under the administration agreement, serves as the Fund’s administrator and will provide certain administrative and fund accounting services to the Fund. Under the terms of an administration agreement between the Fund and the Administrator (the “Administration Agreement”), the Administrator is responsible for, among other things, certain administration, accounting and investor services for the Fund. In consideration for these services, the Fund pays the Administrator the Administration Fee in an amount up to 0.23% on an annualized basis of the Fund’s net assets. The Administration Fee is calculated based on the Fund’s average daily net asset value and payable monthly in arrears. The Administration Fee is an expense paid out of the Fund’s net assets. The Administrator’s principal business address is 128 S Tryon St., Suite 1600, Charlotte, NC 28202.
The Administration Agreement provides that, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the responsibilities, obligations or duties thereunder, neither the Administrator nor its shareholders, officers, directors, employees, agents or control persons shall be liable for any act or omission in connection with or arising out of any services rendered under the Administration Agreement.
UMB Fund Services, Inc. serves as the Fund’s sub‑administrator (the “Sub‑Administrator”) and performs certain sub‑administration and sub‑accounting services for the Fund. In consideration of the sub‑administrative services and sub‑accounting services provided by the Sub‑Administrator to the Fund, the Administrator pays the Sub‑Administrator from the proceeds of the Administration Fee a sub‑administration fee (the “Sub‑Administration Fee”) in an amount up to 0.08 on an annualized basis of the Fund’s net assets, subject to a minimum annual fee. The Sub‑Administration Fee is calculated based on the Fund’s average daily net asset value and payable monthly in arrears. The Sub‑Administrator’s principal business address is 235 West Galena Street, Milwaukee, Wisconsin 53212.
CUSTODIAN AND TRANSFER AGENT
UMB Bank, N.A. (the “Custodian”) serves as the custodian of the Fund’s assets and may maintain custody of the Fund’s assets with domestic and foreign sub‑custodians (which may be banks, trust companies, securities depositories and clearing agencies) approved by the Trustees. Assets of the Fund are not held by the Advisers or commingled with the assets of other accounts other than to the extent that securities are held in the name of a custodian in a securities depository, clearing agency or omnibus customer account of such custodian. The Custodian’s principal business address is 928 Grand Blvd., 5th Floor, Kansas City, Missouri 64106.
UMB Fund Services, Inc. serves as Transfer Agent with respect to maintaining the registry of the Fund’s Shareholders and processing matters relating to subscriptions for, and repurchases of, Shares. The Transfer Agent’s principal business address is 235 West Galena Street, Milwaukee, Wisconsin 53212.
 
28
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP serves as the independent registered public accounting firm of the Fund. Its principal business address is One Manhattan West, New York, NY 10001.
DISTRIBUTOR
UMB Distribution Services, LLC acts as the distributor of the Fund’s Shares. The Distributor’s principal business address is 235 West Galena Street, Milwaukee, Wisconsin 53212.
LEGAL COUNSEL
Dechert LLP, New York, New York, acts as legal counsel to the Fund. Its principal business address is 1095 Avenue of the Americas, New York, NY 10036.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The Fund had not commenced operations as of July 11, 2023, and except as noted below, no persons owned of record or beneficially 5% or more of the outstanding Shares of the Fund as of that date. StepStone has provided the initial investment in the Fund. For so long as StepStone has a greater than 25% interest in the Fund, it may be deemed to be a “control person” of the Fund for purposes of the 1940 Act.
REPORTS TO SHAREHOLDERS
By January 31 of the following year, Shareholders will be provided a Form 1099, containing information regarding the amount and character of distributions received from the Fund during the preceding calendar year. The Fund will prepare and transmit to its Shareholders, a semi-annual and an audited annual report within 60 days after the close of the period for which it is being made, or as otherwise required by the 1940 Act. Quarterly reports from the Adviser regarding the Fund’s operations during such period also will be made available to the Fund’s Shareholders.
FISCAL YEAR
For accounting purposes, the fiscal year of the Fund is the 12‑month period ending on March 31. The 12‑month period ending September 30 of each year will be the taxable year of the Fund unless otherwise determined by the Fund.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Trustees of
StepStone Private Infrastructure Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of StepStone Private Infrastructure Fund (the “Fund”) as of June 16, 2023 and the related statement of operations for the period December 2, 2022 (inception) to June 16, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at June 16, 2023 and the results of its operations for the period December 2, 2022 (inception) to June 16, 2023 in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
29
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
 
LOGO
We have served as the auditor of one or more of the StepStone Group LP investment companies since 2020.
New York, New York
July 11, 2023
 
30
StepStone Private Infrastructure Fund
Statement of Assets and Liabilities
June 16, 2023
 
Assets
 
Cash
 $ 100,000
Deferred offering costs (Note 2)
         273,211
 
 
Total Assets
 373,211
Liabilities
Due to Adviser (Note 2)
 65,069
Accrued offering costs
 154,870
Accrued organizational costs
 53,272
 
 
Total Liabilities
 273,211
Net Assets
 $ 100,000
 
 
Composition of Net Assets:
Paid‑in capital, Class I shares
 100,000
 
 
Net Assets
 $ 100,000
 
 
Class I shares issued and outstanding
 10,000
Net asset value per share
 $ 10.00
The accompanying notes are an integral part of these financial statements.
 
31
StepStone Private Infrastructure Fund
Statement of Operations
For the period from December 2, 2022 (inception) to June 16, 2023
 
Investment Income
 $ -
 
 
Expenses
Organizational expenses (Note 2)
 107,928
 
 
Total Expenses
 107,928
Adviser expense reimbursement (Note 2)
 (107,928 ) 
 
 
Net Expenses
 -
 
 
Net Investment Income
 $ -
 
 
The accompanying notes are an integral part of these financial statements.
 
32
StepStone Private Infrastructure Fund
Notes to Financial Statements
June 16, 2023
1. Organization
StepStone Private Infrastructure Fund (the “Fund” or “STRUCTURE”) was organized on December 2, 2022 as a Delaware statutory trust under the Delaware Statutory Trust Act and is registered under the Investment Company Act of 1940, as amended, as a non‑diversified, closed‑end management investment company that is operated as an interval fund. The Fund is offered to investors who are accredited investors within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933.
The Fund’s investment objectives are to seek current income and long-term capital appreciation by offering investors access to a global investment portfolio of private infrastructure assets. The Fund will seek to achieve its investment objectives primarily through an actively managed portfolio that provides investors with exposure to private infrastructure assets across multiple sponsors and investment types. The Fund will primarily deploy capital into secondary investments, co‑investments and primary investments.
StepStone Group Private Wealth LLC, an investment adviser registered under the Investment Advisers Act of 1940, as amended, and a wholly owned business of StepStone Group LP (“StepStone”), serves as the Fund’s investment adviser (the “Adviser”). The Adviser oversees the management of the Fund’s day‑to‑day activities including structuring, governance, distribution, reporting and oversight. StepStone Group Real Assets LP, a wholly owned subsidiary of StepStone, serves as the Fund’s investment sub‑adviser (the “Sub‑Adviser”) and is responsible for the day‑to‑day management of the Fund’s assets. The Fund’s Board of Trustees (the “Board”) has the overall responsibility for the management and supervision of the business operations of the Fund.
The Fund offers Class T shares, Class S shares, Class D shares and Class I shares (together, the “Shares”) of beneficial interest to investors eligible to invest in the Fund. The Fund has been inactive since the date it was organized except for matters relating to the Fund’s establishment, designation and the registration of the Shares under the Securities Act of 1933 and the sale of 10,000 Class I shares to StepStone for $100,000 on June 14, 2023. As of June 16, 2023, no Class T, Class S or Class D shares were issued or outstanding. A Statement of Changes in Net Assets and Financial Highlights are not disclosed within the financial statements as the Fund has not commenced operations as of the date of these financial statements.
2. Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars which is the functional currency of the Fund. STRUCTURE is an investment company and therefore applies the accounting and reporting guidance issued by the U.S. Financial Accounting Standards Board in Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The following are significant accounting policies which are consistently followed in the preparation of the financial statements of the Fund.
Cash
Cash includes monies on deposit with UMB Bank, N.A., the Fund’s custodian. There are no restrictions on the cash currently held by UMB Bank, N.A. on the Fund’s behalf. Deposits, at times, may exceed the insurance limit guaranteed by the Federal Deposit Insurance Corporation. The Fund does not believe it is exposed to significant credit risk on such deposits.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statement and reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Organizational and Offering Costs
Organizational expenses consist of the costs of forming the Fund, drafting of bylaws, administration, sub‑administration, custody, escrow and transfer agency agreements, legal services in connection with the initial meeting of the Board and the Fund’s seed audit costs. Offering costs consist of the costs of preparation, review and filing with the SEC the Fund’s registration statement (including the Prospectus and the Statement of Additional Information (“SAI”)), the costs of preparation, review and filing of any associated marketing or similar materials, the costs associated with the printing, mailing or other distribution of the Prospectus, SAI and/or marketing materials and the amounts of associated filing fees and legal fees associated with the offering.
The Fund’s organizational expenses of $107,928, which have been incurred through June 16, 2023, and any additional organizational
 
33
expenses incurred prior to the commencement of operations, have been and will continue to be paid by the Adviser. These expenses will be reimbursed to the Adviser by the Fund, subject to recoupment in accordance with the Fund’s expense limitation agreement (the “Expense Limitation and Reimbursement Agreement”, as further discussed in Note 3) after the Fund commences operations. The Fund expenses organizational costs as incurred.
The Fund’s offering costs of $273,211, which have been incurred through June 16, 2023, and any additional offering costs incurred prior to the commencement of operations, have been and will continue to be paid by the Adviser. These costs will be reimbursed to the Adviser by the Fund, subject to recoupment in accordance with the Expense Limitation and Reimbursement Agreement after the Fund commences operations. The Fund treats offering costs as deferred charges until the Fund commences operations and thereafter will amortize such costs into expense over a 12‑month period using the straight-line method.
Federal Income Taxes
The Fund intends to elect to be treated, and expects each year to qualify, as a regulated investment company under the provisions of Subchapter M of the Internal Revenue Code of 1986, as amended. As such, the Fund generally will not be subject to U.S. federal corporate income tax, provided that it distributes substantially all of its net taxable income and gains on a timely basis and meets the other quarterly compliance requirements.
3. Investment Adviser
The Fund has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with the Adviser. Pursuant to the Investment Advisory Agreement, the Fund pays the Adviser a management fee (“Management Fee”) equal to 1.60% on an annualized basis of the Fund’s daily net asset value (“NAV”). The Management Fee will be accrued daily and payable monthly in arrears within ten business days after the end of the month. As consideration for services provided by the Sub‑Adviser, the Adviser will pay 50% of the management fee proceeds to the Sub‑Adviser on a monthly basis. Management fees are not charged until the Fund commences operations.
The Adviser has entered into the Expense Limitation and Reimbursement Agreement with the Fund for a one‑year term beginning on the initial closing date and ending on the one‑year anniversary thereof (the “Limitation Period”). The Adviser may extend the Limitation Period for a period of one year on an annual basis. The Expense Limitation and Reimbursement Agreement limits the amount of the Fund’s aggregate ordinary operating expenses, excluding certain specified expenses (the “Specified Expenses”), borne by the Fund in respect of each class of Shares during the Limitation Period to an amount not to exceed 1.00% for Class T shares, Class S shares, Class D shares and Class I shares, on an annualized basis, of the Fund’s daily net assets (the “Expense Cap”).
Specified Expenses that are not covered by the Expense Limitation and Reimbursement Agreement include: (i) the Management Fee; (ii) all fees and expenses of private market assets and other investments in which the Fund invests (including the underlying fees of the private market assets and other investments); (iii) transactional costs, including legal costs and brokerage commissions, associated with the acquisition and disposition of private market assets and other investments; (iv) interest payments incurred on borrowing by the Fund; (v) fees and expenses incurred in connection with a credit facility, if any, obtained by the Fund; (vi) distribution and shareholder servicing fees, as applicable; (vii) taxes; and (viii) extraordinary expenses resulting from events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. To the extent the Fund’s aggregate ordinary operating expenses, exclusive of the Specified Expenses, exceed the Expense Cap, the Adviser will waive its Management Fee and/or reimburse the Fund for expenses to the extent necessary to eliminate such excess. The Adviser may also directly pay expenses on behalf of the Fund and waive reimbursement under the Expense Limitation and Reimbursement Agreement.
To the extent that the Adviser waives its Management Fee, reimburses expenses or pay expenses directly on behalf of the Fund, it is permitted to recoup from the Fund any such amounts for a period not to exceed three years from the month in which such fees and expenses were waived, reimbursed or paid, even if such recoupment occurs after the termination of the Limitation Period. However, the Adviser may only recoup the waived fees, reimbursed expenses or directly paid expenses in respect of the applicable class of Shares if the aggregate ordinary operating expenses have fallen to a level below the Expense Cap and the recouped amount does not raise the level of aggregate ordinary operating expenses plus waived fees, reimbursed expenses or directly paid expenses in respect of a class of Shares in the month of recoupment to a level that exceeds any Expense Cap applicable at that time.
Due to Adviser represents organizational and offering expenses paid by the Adviser on behalf of the Fund less the Adviser expense reimbursement.
4. Administrator, Custodian and Transfer Agent
The Adviser serves as the Fund’s administrator (the “Administrator”) pursuant to an administration agreement (the “Administration Agreement”) under which the Administrator provides administrative, accounting and other services. Pursuant to the Administration Agreement, the Fund pays the Administrator an administration fee equal to 1/12th of an applicable annual fee between 0.08% to 0.23%,
 
34
based upon the Fund’s average daily net assets, payable monthly in arrears. Administration fees are not charged until the Fund commences operations.
UMB Fund Services, Inc. serves as the Fund’s sub‑administrator (the “Sub‑Administrator”) pursuant to a sub‑administration agreement under which the Sub‑Administrator performs certain administrative and accounting services for the Fund, on behalf of the Administrator, for an annual fee. The sub‑administration fee is paid monthly by the Administrator and is based upon the Fund’s average daily net assets, subject to an annual minimum. The Fund will reimburse certain of the Sub‑Administrator’s out‑of‑pocket expenses. These fees and expenses are not charged until the Fund commences operations.
UMB Bank, N.A. serves as the Fund’s custodian (the “Custodian”) pursuant to a custody agreement. The Custodian holds the Fund’s domestic assets. Foreign assets are held by sub‑custodians.
UMB Fund Services, Inc. serves as the Fund’s transfer agent (the “Transfer Agent”) pursuant to a transfer agency agreement. The Transfer Agent, among other things, receives and processes purchase orders, effects issuance of Shares, prepares and transmits payments for distributions, receives and processes repurchase offers and maintains records of account.
5. Capital Share Transactions
Fund Shares will be continually offered under Rule 415 of the Securities Act of 1933, as amended. The Fund will repurchase Shares from shareholders pursuant to written repurchase offers on terms and conditions that the Board determines to be fair to the Fund and to all shareholders. In connection with any given quarterly repurchase offer, the Fund currently intends to repurchase 5.00% of its outstanding Shares. The Fund expects to make its first repurchase offer in December 2023. An early repurchase fee of 2.00% of NAV will be charged with respect to the repurchase of Shares held less than one year from original purchase.
6. Indemnifications
The Fund indemnifies its officers and Board of Trustees for certain liabilities that may arise from the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
7. Subsequent Events
In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Management has determined that there are no material events that would require disclosure in the Fund’s financial statements.
 
35
ANNEX A STEPSTONE GROUP PRIVATE WEALTH LLC
PROXY VOTING POLICY
Pursuant to Rule 206(4)‑6 and Rule 204‑2 under the Advisers Act, it is a fraudulent, deceptive, or manipulative act, practice or course of business, within the meaning of Section 206(4) of the Advisers Act, for an investment adviser to exercise voting authority with respect to client securities, unless (A) the adviser has adopted and implemented written policies and procedures that are reasonably designed to ensure that the adviser votes proxies in the best interests of its clients, (B) the adviser describes its proxy voting procedures to its clients and provides copies on request, and (C) the adviser discloses to clients how they may obtain information on how the adviser voted their proxies.
VOTING PROXIES
The Sub‑Adviser is responsible for voting proxies on behalf of the Fund. The Sub‑Adviser must vote proxies in a way that is consistent with the Sub‑Adviser’s fiduciary duty to the Fund, and any investment policy of the Fund and maintain records of proxies voted, together with a brief explanation why votes were cast in a particular way.
The Sub‑Adviser, as a matter of policy and as a fiduciary to the Fund, has responsibility for voting proxies for portfolio securities consistent with the best economic interest of the Fund. The Sub‑Adviser’s policy and practice includes the responsibility to monitor corporate actions, receive and vote client proxies and disclose any potential conflicts of interest as well as make information available to clients about the voting of proxies for their portfolio securities and maintaining relevant and required records.
The Sub‑Adviser has adopted the following procedures to implement the Sub‑Adviser’s policy in regard to the Fund.
Voting Procedures
All investment professionals will forward any proxy materials received on behalf of the Fund to the Sub‑Adviser’s Chief Compliance Officer, as applicable.
The Sub‑Adviser’s Chief Compliance Officer, as applicable, will verify the Fund holds the security to which the proxy relates.
Absent material conflicts, the investment professionals responsible for the investment to which the proxy materials relate, in consultation with Sub‑Adviser’s Chief Compliance Officer will determine how the Sub‑Adviser should vote the proxy in accordance with applicable voting guidelines, complete the proxy, and vote the proxy in a timely and appropriate manner.
Voting Guidelines
The Sub‑Adviser will vote proxies in the best interests of the Fund. The Sub‑Adviser’s policy is to vote all proxies from a specific issuer the same way for each client absent qualifying restrictions from a client or as documented in the file by Sub‑Adviser’s Chief Compliance Officer, as applicable. Clients of the Sub‑Adviser, outside of the Fund, are permitted to place reasonable restrictions on the Sub‑Adviser’s voting authority in the same manner that they may place such restrictions on the actual selection of account securities.
The Sub‑Adviser will generally vote in favor of routine corporate housekeeping proposals such as to change capitalization (e.g., increase the authorized number of common or preferred shares of stock (to the extent there are not disproportionate voting rights per preferred share)), the election of directors, setting the time and place of the annual meeting, change of fiscal year, change of name, and selection of auditors absent conflicts of interest raised by an auditor’s non‑audit services.
In the case of non‑routine matters, voting decisions will generally be made in support of management, unless it is believed that such recommendation is not in the best interests of the Fund. On a case‑by‑case basis, the Sub‑Adviser will decide non‑routine matters, taking into account the opinion of management and the effect on management, and the effect on shareholder value and the issuer’s business practices. These matters include, but are
not limited to, change of domicile, change in preemptive rights or cumulative voting rights, compensation plans, investment restrictions for social policy goals, precatory proposals, classification of the board of directors, poison pill proposals or amendments, recapitalizations, and super-majority voting.
The Sub‑Adviser will abstain from voting if it is determined to be in the best interests of the Fund. In making such a determination, various factors will be considered, including, but not limited to, the costs associated with exercising the proxy (e.g., travel or translation costs) and any legal restrictions on trading resulting from the exercise of the proxy. In consultation with the Sub‑Adviser’s Chief Compliance Officer, as applicable, the Sub‑Adviser may also consider any special regulatory implications applicable to the client or the Sub‑Adviser resulting from the exercise of the proxy.
Conflicts of Interest
The Sub‑Adviser will identify any conflicts that exist between the interests of the Sub‑Adviser and the client by reviewing the relationship of the Sub‑Adviser with the issuer of each security to determine if the Sub‑Adviser or any of its employees has any financial, business or personal relationship with the issuer.
If a material conflict of interest exists, the Sub‑Adviser’s Chief Compliance Officer, as applicable, will determine whether it is appropriate to disclose the conflict to the affected clients, to give the clients an opportunity to vote the proxies themselves, or to address the voting issue through other objective means such as voting in a manner consistent with a predetermined voting policy or receiving an independent third-party voting recommendation.
The Sub‑Adviser will maintain a record of the resolution of any conflict of interest.
Recordkeeping
The Sub‑Adviser’s Chief Compliance Officer, as applicable, shall retain the following proxy records in accordance with the SEC’s five-year retention requirement.
 
●
These policies and procedures and any amendments.
 
●
Each proxy statement that the Sub‑Adviser receives.
 
●
A record of each vote that the Sub‑Adviser casts.
 
●
Any document the Sub‑Adviser created that was material to making a decision how to vote proxies, or that memorializes that decision including periodic reports to the Sub‑Adviser’s Chief Compliance Officer or proxy committee, if applicable.
 
●
A copy of each written request from the Board for information on how the Sub‑Adviser voted the Fund’s proxies, and a copy of any written response.
Private Markets Investments
Investments in private assets are often subject to contractual agreements among the investors in the fund or company. If the Sub‑Adviser has the authority to vote with respect to the interests, it will exercise its rights in accord with its contractual obligations and, if its vote is not constrained by contract, the Sub‑Adviser will determine how to vote based on the principles described above. Records relating to the vote will be kept for the five-year retention period.

PART C

 

(1)

   

Financial Statements:

  

Part A: Not applicable, as Registrant has not yet commenced operations.

  

Part B: Not applicable, as Registrant has not yet commenced operations.

(2)

   

Exhibits:

  

(a)(1)   Certificate of Trust. (1)

  

(a)(2)   Declaration of Trust. (1)

  

(a)(4)   Amended and Restated Agreement and Declaration of Trust. (3)

  

(b)     By-Laws. (3)

  

(c)     Not Applicable.

  

(d)     Not Applicable.

  

(e)     Dividend Reinvestment Plan. (3)

  

(f)     Not Applicable.

  

(g)(1)   Investment Advisory Agreement. (3)

  

(g)(2)   Sub-Advisory Agreement. (3)

  

(h)(1)   Distribution Agreement. (3)

  

(i)   Not Applicable.

  

(j)(1)    Custody Agreement. (3)

  

(k)(1)(a) Administration Agreement. (3)

  

(k)(1)(b)  Sub-Administration Agreement. (3)

  

(k)(1)(c) Fund Accounting Agreement. (3)

  

(k)(2)   Expense Limitation and Reimbursement Agreement. (3)

  

(k)(3)   Distribution and Shareholder Services Plan. (3)

  

(k)(4)   Multiple Class Plan Pursuant to Rule 18f-3. (3)

  

(k)(5)   Transfer Agency Services Agreement. (3)

  

(l)   Opinion and Consent of Dechert LLP. (3)

  

(m)   Not Applicable.

  

(n)     Consent of Independent Registered Public Accounting Firm. (3)

  

(o)     Not Applicable.

  

(p)     Subscription Agreement. (3)

  

(q)     Not Applicable.

  

(r)(1)    Joint Code of Ethics of the Registrant and the Adviser. (3)

  

(r)(2)    Code of Ethics of the Adviser and Sub-Adviser. (3)

  

(s)     Powers of Attorney. (2)

 

 

 

(1)

Incorporated by reference to the corresponding exhibit of the Registrant’s Registration Statement on Form N-2 filed on December 23, 2022.

 

(2)

Incorporated by reference to the corresponding exhibit of the Registrant’s Pre-Effective Amendment No. 3 to its Registration Statement on Form N-2 filed on June 20, 2023.

 

(3)

Filed herewith.

MARKETING ARRANGEMENTS

Not Applicable.

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be incurred in connection with the offering described in this registration statement:

 

Blue Sky Fees

    $ 150,000  

Printing

    $ 25,000  

Registration Fees

    $ 50,000  

Legal Fees

    $ 350,000  

Total

    $ 575,000  

PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

No other person is directly or indirectly controlled by or under common control with the Registrant, except that the Registrant may be deemed to be controlled by SPW, the investment adviser to the Registrant, and the Sub-Adviser, the sole shareholder of the Registrant. The Adviser was formed under the laws of the State of Delaware. Sub-Adviser was formed under the laws of the state of Delaware. Additional information regarding the Adviser is set out in its Form ADV, as filed with the Securities and Exchange Commission (SEC File No. 801-117639). Additional information regarding the Sub-Adviser is set out in its Form ADV, as filed with the Securities and Exchange Commission (SEC File No. 801-106844).

NUMBER OF HOLDERS OF SECURITIES

Set forth below is the number of holders of securities of the Registrant as of July 11, 2023:

 

Title of Class        Number of Record Holders

Shares of Beneficial Interest, Class D

      —

Shares of Beneficial Interest, Class I

      1

Shares of Beneficial Interest, Class S

      —

Shares of Beneficial Interest, Class T

      —

INDEMNIFICATION

Reference is made to Article 5.2 of the Fund’s Agreement and Declaration of Trust filed as Exhibit (a)(3) to this Registration Statement. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the Advisers, officers and controlling persons of the Fund pursuant to the foregoing provisions or otherwise, the Fund has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Fund of expenses incurred or paid by the Advisers, officer or controlling person of the Fund in the successful defense of any action, suit or proceeding) is asserted by the Advisers, officer or controlling person, the Fund will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

The Fund hereby undertakes that it will apply the indemnification provisions of the Agreement and Declaration of Trust in a manner consistent with Investment Company Act Release No. 11330 (Sept. 4, 1980) issued by the Securities and Exchange Commission, so long as the interpretation of Sections 17(h) and 17(i) of the 1940 Act contained in that release remains in effect. The Fund, in conjunction with the Advisers and the Fund’s Board of Trustees, maintains insurance on behalf of any person who is or was an Independent Trustee, officer, employee, or agent of the Fund, against certain liability asserted against him or her and incurred by him or her or arising out of his or her position. In no event, however, will the Fund pay that portion of the premium, if any, for insurance to indemnify any such person or any act for which the Fund itself is not permitted to indemnify.

BUSINESS AND OTHER CONNECTIONS OF ADVISER

A description of any other business, profession, vocation, or employment of a substantial nature in which the Adviser, and each executive officer or partner of the Adviser, is or has been, at any time during the past two fiscal years, engaged in for his or her own account or in the capacity of director, officer, employee, partner or trustee, is set out in Registrant’s Prospectus in the section entitled “Management of the Fund” and in the section of the Statement of Additional Information captioned “Management of the Fund.” The information required by this Item 31 with respect to each director, officer or partner of the Adviser is incorporated by reference to Form ADV with the Securities and Exchange Commission pursuant to the Investment Advisers Act of 1940, as amended (File No. 801-117639).

LOCATION OF ACCOUNTS AND RECORDS

The Administrator maintains the required accounting related and financial books and other records of the Registrant at 128 S Tryon St., Suite 1600, Charlotte, NC 28202.

MANAGEMENT SERVICES

Not Applicable.

UNDERTAKINGS

(1)        The Registrant hereby undertakes to suspend the offering of its shares until it amends its prospectus if (a) subsequent to the effective date of its registration statement, the net asset value declines more than 10 percent from its net asset value as of the effective date of the Registration Statement or (b) the net asset value increases to an amount greater than its net proceeds as stated in the prospectus.

(2)        Not Applicable.

(3)        The Registrant hereby undertakes:

(a) to file, during any period in which offers or sales are being made, a post-effective amendment to the registration statement:

(1) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(2) to reflect in the prospectus any facts or events after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(3) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(b) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of those securities at that time shall be deemed to be the initial bona fide offering thereof; and

(c) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(d) that, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(1) if the Registrant is relying on Rule 430B:

        (A) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

        (B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (x), or (xi) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

(2) that, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the Registrant is subject to Rule 430C: Each prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933 as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and

(e) that, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:

(1) any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424 under the Securities Act of 1933;

(2) free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

(3) the portion of any other free writing prospectus or advertisement pursuant to Rule 482 under the Securities Act of 1933 relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

(4) any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

(4)        The Registrant undertakes that:

(a) Not applicable; and

(b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.

(5)        Not applicable.

(6)        Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(7)        The Registrant undertakes to send by first class mail or other means designed to ensure equally prompt delivery within two business days of receipt of a written or oral request, any Statement of Additional Information.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, StepStone Private Infrastructure Fund has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Charlotte and State of North Carolina on the 11th day of July, 2023.

 

STEPSTONE PRIVATE INFRASTRUCTURE FUND

(A Delaware statutory trust)

/s/ Robert W. Long

By:

  

    Robert W. Long

Title:

  

    Trustee

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

 

Signature    Title    Date

 

   

 

   

 

/s/ Thomas K. Sittema*

   

Trustee

   

July 11, 2023

Thomas K. Sittema

      

/s/ Robert W. Long*

   

Trustee

   

July 11, 2023

Robert W. Long

      

/s/ Harold Mills*

   

Trustee

   

July 11, 2023

Harold Mills

      

/s/ Tracy G. Schmidt*

   

Trustee

   

July 11, 2023

Tracy G. Schmidt

      

/s/ Ron D. Sturzenegger*

   

Trustee

   

July 11, 2023

Ron D. Sturzenegger

      

/s/ Robert W. Long

    President and Principal Executive Officer   

July 11, 2023

Robert W. Long

      

/s/ Kimberly Zeitvogel

    Treasurer and Principal Financial Officer   

July 11, 2023

Kimberly Zeitvogel

      

 

*By:

  

/s/ Robert W. Long

 

Robert W. Long

 

Attorney-in-Fact

EXHIBIT INDEX

 

(a)(4)

   

Amended and Restated Agreement and Declaration of Trust.

(b)

   

By-Laws.

(e)

   

Dividend Reinvestment Plan.

(g)(1)

   

Investment Advisory Agreement.

(g)(2)

   

Sub-Advisory Agreement.

(h)(1)

   

Distribution Agreement.

(j)(1)

   

Custody Agreement.

(k)(1)(a)

   

Administration Agreement.

(k)(1)(b)

   

Sub-Administration Agreement.

(k)(1)(c)

   

Fund Accounting Agreement.

(k)(2)

   

Expense Limitation and Reimbursement Agreement.

(k)(3)

   

Distribution and Shareholder Services Plan.

(k)(4)

   

Multiple Class Plan Pursuant to Rule 18f-3.

(k)(5)

   

Transfer Agency Services Agreement.

(l)

   

Opinion and Consent of Dechert LLP.

(n)

   

Consent of Independent Registered Public Accounting Firm.

(p)

   

Subscription Agreement.

(r)(1)

   

Joint Code of Ethics of the Registrant and the Adviser.

(r)(2)

   

Code of Ethics of the Adviser and Sub-Adviser.

STEPSTONE PRIVATE INFRASTRUCTURE FUND

AMENDED AND RESTATED

AGREEMENT AND DECLARATION OF TRUST

Dated as of May 24, 2023

TABLE OF CONTENTS

 

          PAGE  

ARTICLE I THE TRUST

      1  

1.1

    Name      1  

1.2

    Definitions      1  

ARTICLE II TRUSTEES

      3  

2.1

    Number and Qualification      3  

2.2

    Term and Election      4  

2.3

    Resignation and Removal      4  

2.4

    Vacancies      4  

2.5

    Meetings      4  

2.6

    Trustee Action by Written Consent      5  

2.7

    Officers      5  

ARTICLE III POWERS AND DUTIES OF TRUSTEES

      5  

3.1

    General      5  

3.2

    Investments      6  

3.3

    Legal Title      6  

3.4

    Issuance and Repurchase of Shares      6  

3.5

    Borrow Money or Utilize Leverage      7  

3.6

    Delegation; Committees      7  

3.7

    Collection and Payment      7  

3.8

    Expenses      7  

3.9

    By-Laws      7  

3.10

    Miscellaneous Powers      8  

3.11

    Further Powers      8  

ARTICLE IV ADVISORY, MANAGEMENT AND DISTRIBUTION ARRANGEMENTS

      8  

4.1

    Advisory and Management Arrangements      8  

4.2

    Distribution Arrangements      9  

4.3

    Parties to Contract      9  

ARTICLE V LIMITATIONS OF LIABILITY AND INDEMNIFICATION

      9  

5.1

    No Personal Liability of Shareholders, Trustees, etc.      9  

5.2

    Mandatory Indemnification      10  

5.3

    No Bond Required of Trustees      11  

5.4

    No Duty of Investigation; No Notice in Trust Instruments, etc.      11  

5.5

    Reliance on Experts, etc.      11  

ARTICLE VI SHARES OF BENEFICIAL INTEREST

      11  

6.1

    Beneficial Interest      11  

6.2

    Other Securities      12  

6.3

    Rights of Shareholders      13  

6.4

    Exchange and Conversion Privileges      13  

6.5

    Trust Only      13  

6.6

    Issuance of Shares      13  

6.7

    Register of Shares      13  

6.8

    Transfer Agent and Registrar      14  

6.9

    Transfer of Shares      14  

 

i

TABLE OF CONTENTS

(continued)

 

          PAGE  

6.10

    Notices      14  

ARTICLE VII DETERMINATION OF NET ASSET VALUE

      14  

7.1

    Net Asset Value      14  

7.2

    Power to Modify Foregoing Procedures      15  

ARTICLE VIII CUSTODIANS

      15  

8.1

    Appointment and Duties      15  

8.2

    Central Certificate System      15  

ARTICLE IX TRANSFERS AND REPURCHASES

      16  

9.1

    Transfer of Shares      16  

9.2

    Repurchase of Shares      17  

ARTICLE X SHAREHOLDERS

      18  

10.1

    Meetings of Shareholders      18  

10.2

    Voting      18  

10.3

    Notice of Meeting and Record Date      18  

10.4

    Quorum and Required Vote      18  

10.5

    Proxies, etc.      19  

10.6

    Reports      19  

10.7

    Inspection of Records      19  

10.8

    Shareholder Action by Written Consent      20  

ARTICLE XI DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS; ETC.

      20  

11.1

    Duration      20  

11.2

    Termination      20  

11.3

    Amendment Procedure      21  

11.4

    Merger, Consolidation and Sale of Assets      21  

11.5

    Subsidiaries      22  

ARTICLE XII MISCELLANEOUS

      22  

12.1

    Filing      22  

12.2

    Resident Agent      22  

12.3

    Governing Law      22  

12.4

    Counterparts      22  

12.5

    Reliance by Third Parties      23  

12.6

    Provisions in Conflict with Law or Regulation      23  

 

ii

STEPSTONE PRIVATE INFRASTRUCTURE FUND

AMENDED AND RESTATED

AGREEMENT AND DECLARATION OF TRUST

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST made as of the 24th day of May 2023, by the Trustees hereunder.

WHEREAS, this Trust has been formed to carry on business as set forth more particularly hereinafter;

WHEREAS, this Trust is authorized to issue an unlimited number of its shares of beneficial interest all in accordance with the provisions hereinafter set forth;

WHEREAS, the Trustees have agreed to manage all property coming into their hands as Trustees of a Delaware statutory trust in accordance with the provisions hereinafter set forth;

WHEREAS, the parties hereto intend that the Trust created by the Declaration of Trust dated December 1, 2022 and the Certificate of Trust dated December 1, 2022 and filed with the Secretary of State of the State of Delaware shall constitute a statutory trust under the Delaware Statutory Trust Act and that this Declaration shall constitute the governing instrument of such statutory trust; and

WHEREAS, the Trustees have determined to amend and restate in its entirety the Trust’s Declaration of Trust dated as of December 1, 2022.

NOW, THEREFORE, the Trustees hereby declare that they will hold all cash, securities, and other assets which they may from time to time acquire in any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the following terms and conditions for the benefit of the holders from time to time of shares of beneficial interest in this Trust as hereinafter set forth. Any name change shall become effective upon the execution by a majority of the then Trustees of an instrument setting forth the new name and the filing of a certificate of amendment pursuant to Section 3810(b) of the Delaware Statutory Trust Act. Any such instrument shall not require the approval of the Shareholders, but shall have the status of an amendment to this Declaration.

ARTICLE I

THE TRUST

1.1     Name. This Trust shall be known as the “StepStone Private Infrastructure Fund” and the Trustees shall conduct the business of the Trust under that name or any other name or names as they may from time to time determine.

1.2     Definitions. As used in this Declaration, the following terms shall have the following meanings:

The “1940 Act” refers to the Investment Company Act of 1940 and the rules and regulations promulgated thereunder and exemptions granted therefrom, as amended from time to time.

The terms “Affiliated Person,” “Assignment,” “Interested Person” and “Principal Underwriter” shall have the meanings given them in the 1940 Act.

“By-Laws” shall mean the By-Laws of the Trust as amended from time to time by the Trustees.

“Class” shall mean a class of Shares the Trust established in accordance with the provisions hereof.

“Closing Date” means the initial closing date on which the Trust accepts Capital Contributions from one or more Shareholders and issues Shares in consideration therefor.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

“Commission” shall mean the Securities and Exchange Commission.

“Declaration” shall mean this Amended and Restated Agreement and Declaration of Trust, as amended, supplemented or amended and restated from time to time.

“Delaware General Corporation Law” means the Delaware General Corporation Law, 8 Del. C. § 100, et. seq., as amended from time to time.

“Delaware Statutory Trust Act” shall mean the provisions of the Delaware Statutory Trust Act, 12 Del. C. § 3801, et. seq., as such Act may be amended from time to time.

“Fiscal Year” means the period commencing on the Closing Date and ending on the following March 31, and thereafter each period commencing on March 31 of each year and ending on March 31 of the next year (or on the date of a final distribution made in accordance with Section 12.2 of this Declaration), unless the Trustees designate another fiscal year for the Trust. The taxable year of the Trust will end on September 30 of each year, or on any other date designated by the Trustees that is a permitted taxable year-end for tax purposes, and need not be the same as the Fiscal Year.

“Fundamental Policies” shall mean the investment policies and restrictions as set forth from time to time in any Registration Statement of the Trust filed with the Commission and designated as fundamental policies therein, as they may be amended from time to time in accordance with the requirements of the 1940 Act.

“Majority Shareholder Vote” shall mean a vote of “a majority of the outstanding voting securities” (as such term is defined in the 1940 Act) of the Trust with all classes of Shares voting together as a single class, except as with respect to votes which affect only one or more Classes, as provided for herein, in which case it shall mean a vote of a majority of outstanding voting securities of such Class or Classes, as applicable.

 

2

“Person” shall mean and include individuals, corporations, partnerships, trusts, limited liability companies, associations, joint ventures and other entities, whether or not legal entities, and governments and agencies and political subdivisions thereof.

“Prospectus” shall mean the Prospectus and Statement of Additional Information of the Trust, if any, as in effect and as may be amended from time to time.

“Registration Statement” shall mean the Trust’s registration statement or statements as filed with the Commission, as from time to time in effect and shall include any Prospectus or Statement of Additional Information forming a part thereof.

“SEC” shall mean the Securities and Exchange Commission.

“Shareholders” shall mean as of any particular time the holders of record of outstanding Shares of the Trust, at such time.

“Shares” shall mean the transferable units of beneficial interest into which the beneficial interest in the Trust shall be divided from time to time and includes fractions of Shares as well as whole Shares.

“Transfer” means the assignment, transfer, sale or other disposition of any Shares, including any right to receive any allocations and distributions attributable to Shares. Verbs, participles or adjectives such as “Transfer,” “Transferred” and “Transferring” have correlative meanings.

“Trust” shall mean the trust established by this Declaration, as amended from time to time, inclusive of each such amendment.

“Trust Property” shall mean as of any particular time any and all property, real or personal, tangible or intangible, which at such time is owned or held by or for the account of the Trust or the Trustees in such capacity.

“Trustees” shall mean the signatories to this Declaration, so long as they shall continue in office in accordance with the terms hereof, and all other persons who at the time in question have been duly elected or appointed and have qualified as trustees in accordance with the provisions hereof and are then in office. The “Sole Trustee” refers to the Person who signed the Declaration of Trust.

ARTICLE II

TRUSTEES

2.1     Number and Qualification. Prior to the offering of Shares in accordance with the Prospectus there may be a Sole Trustee. For the avoidance of doubt, such Sole Trustee shall constitute the initial Board of Trustees of the Trust and may exercise all powers and authority granted to a Trustee and the Board of Trustees hereunder. As of the date hereof, the number of Trustees shall be five (5), and such Trustees shall be the signatories hereto. Thereafter, the number of Trustees shall be determined by a written instrument signed by a majority of the Trustees then

 

3

in office, provided that the number of Trustees shall be no less than two or more than thirteen. No reduction in the number of Trustees shall have the effect of removing any Trustee from office prior to the expiration of his or her term. Trustees need not own Shares and may succeed themselves in office.

2.2     Term and Election. The term of office of a Trustee shall continue until death, resignation, removal, bankruptcy, adjudicated incompetence or other incapacity to perform the duties of the office of a Trustee. Subject to the provisions of the 1940 Act, the Trustees at any time may elect Trustees to fill vacancies in the number of Trustees. Each Trustee elected shall hold office until his or her successor shall have been elected and shall have qualified.

2.3     Resignation and Removal. Any of the Trustees may resign their trust (without need for prior or subsequent accounting) by an instrument in writing signed by such Trustee and delivered or mailed to the Trustees or the Chairperson (if any), the President, or the Secretary and such resignation shall be effective upon such delivery, or at a later date according to the terms of the instrument. Any of the Trustees may be removed (provided the aggregate number of Trustees after such removal shall not be less than the minimum number required by Section 2.1 hereof) for cause only, and not without cause, and only by action taken by a majority of the remaining Trustees. Upon the resignation or removal of a Trustee, each such resigning or removed Trustee shall execute and deliver such documents as the remaining Trustees shall require for the purpose of conveying to the Trust or the remaining Trustees any Trust Property held in the name of such resigning or removed Trustee. Upon the incapacity or death of any Trustee, such Trustee’s legal representative shall execute and deliver on such Trustee’s behalf such documents as the remaining Trustees shall require as provided in the preceding sentence.

2.4     Vacancies. Whenever a vacancy in the Board of Trustees shall occur, the remaining Trustees may fill such vacancy by appointing any individual as they may determine in their sole discretion having the qualifications described in this Article by a vote of a majority of the Trustees then in office or may leave such vacancy unfilled or may reduce the number of Trustees; provided the aggregate number of Trustees after such reduction shall not be less than the minimum number required by Section 2.1 hereof. Any vacancy created by an increase in Trustees may be filled by the appointment of an individual having the qualifications described in this Article made by a vote of a majority of the Trustees then in office. The Trustees may appoint a new Trustee as provided above in anticipation of a vacancy expected to occur because of the retirement, resignation or removal of a Trustee, or an increase in the number of Trustees, provided that such appointment shall become effective only at or after the expected vacancy occurs. No vacancy shall operate to annul this Declaration or to revoke any existing agency created pursuant to the terms of this Declaration. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled as provided herein, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration.

2.5     Meetings. Meetings of the Trustees shall be held from time to time upon the call of the Chairperson, if any, or the President, the Secretary or any two Trustees. Regular meetings of the Trustees may be held without call or notice, except as may be otherwise required by law, at a time and place fixed by the By-Laws or by resolution of the Trustees. Notice of any other meeting shall be given by the Secretary and shall be delivered to the Trustees orally or via electronic

 

4

transmission not less than 24 hours, or in writing not less than 72 hours, before the meeting, but may be waived in writing by any Trustee either before or after such meeting. The attendance of a Trustee at a meeting shall constitute a waiver of notice of such meeting except where a Trustee attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been properly called or convened. Any time there is more than one Trustee, a quorum for all meetings of the Trustees shall be one-third, but not less than two, of the Trustees. Unless provided otherwise in this Declaration and except as required under the 1940 Act, any action of the Trustees may be taken at a meeting by vote of a majority of the Trustees present (a quorum being present) or without a meeting by written consent of a majority of the Trustees.

Any committee of the Trustees, including an executive committee, if any, may act with or without a meeting. A quorum for all meetings of any such committee shall be one-third, but not less than two, of the members thereof. Unless provided otherwise in this Declaration, any action of any such committee may be taken at a meeting by vote of a majority of the members present (a quorum being present) or without a meeting by written consent of a majority of the members.

With respect to actions of the Trustees and any committee of the Trustees, Trustees who are Interested Persons in any action to be taken may be counted for quorum purposes under this Section and shall be entitled to vote to the extent not prohibited by the 1940 Act.

All or any one or more Trustees may participate in a meeting of the Trustees or any committee thereof by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other; participation in a meeting pursuant to any such communications system shall constitute presence in person at such meeting.

2.6     Trustee Action by Written Consent. Any action which may be taken by Trustees by vote may be taken without a meeting if that number of the Trustees, or members of a committee, as the case may be, required for approval of such action at a meeting of the Trustees or of such committee consent to the action in writing and the written consents are filed with the records of the meetings of Trustees. Such consent shall be treated for all purposes as a vote taken at a meeting of Trustees.

2.7     Officers. The Trustees shall elect a President, a Secretary and a Treasurer and may elect a Chairman who shall serve at the pleasure of the Trustees or until their successors are elected. The Trustees may elect or appoint or may authorize the Chairman, if any, or President to appoint such other officers or agents with such powers as the Trustees may deem to be advisable. A Chairman shall, and the President, Secretary and Treasurer may, but need not, be a Trustee.

ARTICLE III

POWERS AND DUTIES OF TRUSTEES

3.1     General. The Trustees shall owe to the Trust and its Shareholders the same fiduciary duties as owed by directors of corporations to such corporations and their stockholders under the

 

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Delaware General Corporation Law. The Trustees shall have exclusive and absolute control over the Trust Property and over the business of the Trust to the same extent as if the Trustees were the sole owners of the Trust Property and business in their own right, but with such powers of delegation as may be permitted by this Declaration. The Trustees may perform such acts as in their sole discretion are proper for conducting the business of the Trust. The enumeration of any specific power herein shall not be construed as limiting the aforesaid power. Such powers of the Trustees may be exercised without order of or resort to any court.

3.2     Investments. The Trustees shall have power, subject to the Fundamental Policies in effect from time to time with respect to the Trust, to:

(a)     manage, conduct, operate and carry on the business of an investment company; and

(b)     subscribe for, invest in, reinvest in, purchase or otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute or otherwise deal in or dispose of any and all sorts of property, tangible or intangible, including but not limited to securities of any type whatsoever, whether equity or non-equity, of any issuer, evidences of indebtedness of any person and any other rights, interests, instruments or property of any sort and to exercise any and all rights, powers and privileges of ownership or interest in respect of any and all such investments of every kind and description, including, without limitation, the right to consent and otherwise act with respect thereto, with power to designate one or more Persons to exercise any of said rights, powers and privileges in respect of any of said investments. The Trustees shall not be limited by any law limiting the investments which may be made by fiduciaries.

3.3     Legal Title. Legal title to all the Trust Property shall be vested in the Trust except that the Trustees shall have power to cause legal title to any Trust Property to be held by or in the name of one or more of the Trustees, or in the name of any other Person as nominee, custodian or pledgee, on such terms as the Trustees may determine, provided that the interest of the Trust therein is appropriately protected.

The right, title and interest of the Trustees in the Trust Property shall vest automatically in each person who may hereafter become a Trustee upon his or her due election and qualification. Upon the ceasing of any person to be a Trustee for any reason, such person shall automatically cease to have any right, title or interest in any of the Trust Property, and the right, title and interest of such Trustee in the Trust Property shall vest automatically in the remaining Trustees. Such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered.

3.4     Issuance and Repurchase of Shares. The Trustees shall have the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, convert, resell, reissue, classify and/or reclassify, dispose of, transfer, and otherwise deal in, Shares, including Shares in fractional denominations, and, subject to the more detailed provisions set forth in Articles VIII and IX, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds or property whether capital or surplus or otherwise, to the full extent now or hereafter permitted corporations formed under the Delaware General Corporation Law.

 

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3.5     Borrow Money or Utilize Leverage. Subject to the Fundamental Policies in effect from time to time with respect to the Trust, the Trustees shall have the power to borrow money or otherwise obtain credit or utilize leverage to the maximum extent permitted by law or regulation as such may be needed from time to time and to secure the same by mortgaging, pledging or otherwise subjecting as security the assets of the Trust, including the lending of portfolio securities, and to endorse, guarantee, or undertake the performance of any obligation, contract or engagement of any other person, firm, association or corporation.

3.6     Delegation; Committees. The Trustees shall have the power, consistent with their continuing exclusive authority over the management of the Trust and the Trust Property, to delegate from time to time to such of their number or to officers, employees or agents of the Trust the doing of such things, including any matters set forth in this Declaration, and the execution of such instruments either in the name of the Trust or the names of the Trustees or otherwise as the Trustees may deem expedient or appropriate to the extent permitted by law. The Trustees may designate one or more committees which shall have all or such lesser portion of the authority of the entire Board of Trustees as the Trustees shall determine from time to time except to the extent action by the entire Board of Trustees or particular Trustees is required by the 1940 Act.

3.7     Collection and Payment. The Trustees shall have power to collect all property due to the Trust; to pay all claims, including taxes, against the Trust Property or the Trust, the Trustees or any officer, employee or agent of the Trust; to prosecute, defend, compromise or abandon any claims relating to the Trust Property or the Trust, or the Trustees or any officer, employee or agent of the Trust; to foreclose any security interest securing any obligations, by virtue of which any property is owed to the Trust; and to enter into releases, agreements and other instruments. Except to the extent required for a corporation formed under the Delaware General Corporation Law, the Shareholders shall have no power to vote as to whether or not a court action, legal proceeding or claim should or should not be brought or maintained derivatively or as a class action on behalf of the Trust or the Shareholders.

3.8     Expenses. The Trustees shall have power to incur and pay out of the assets or income of the Trust any expenses which in the opinion of the Trustees are necessary or incidental to carry out any of the purposes of this Declaration, and the business of the Trust, and to pay reasonable compensation from the funds of the Trust to themselves as Trustees. The Trustees shall fix the compensation of all officers, employees and Trustees. The Trustees may pay themselves such compensation for special services, including legal, underwriting, syndicating and brokerage services, as they in good faith may deem reasonable and reimbursement for expenses reasonably incurred by themselves on behalf of the Trust. The Trustees shall have the power, as frequently as they may determine, to cause each Shareholder to pay directly, in advance or arrears, for charges of distribution, of the custodian or of the transfer, Shareholder servicing or similar agent, a pro rata amount as defined from time to time by the Trustees, by setting off such charges due from such Shareholder from declared but unpaid dividends or distributions owed such Shareholder and/or by reducing the number of shares in the account of such Shareholder by that number of full and/or fractional Shares which represents the outstanding amount of such charges due from such Shareholder.

3.9     By-Laws. The Trustees shall have the exclusive authority to adopt and from time to time amend or repeal By-Laws for the conduct of the business of the Trust.

 

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3.10     Miscellaneous Powers. The Trustees shall have the power to: (a) employ or contract with such Persons as the Trustees may deem desirable for the transaction of the business of the Trust; (b) enter into joint ventures, partnerships and any other combinations or associations; (c) purchase, and pay for out of Trust Property, insurance policies insuring the Shareholders, Trustees, officers, employees, agents, investment advisors, distributors, selected dealers or independent contractors of the Trust against all claims arising by reason of holding any such position or by reason of any action taken or omitted by any such Person in such capacity, whether or not constituting negligence, or whether or not the Trust would have the power to indemnify such Person against such liability; (d) establish pension, profit-sharing, share purchase, and other retirement, incentive and benefit plans for any Trustees, officers, employees and agents of the Trust; (e) make donations, irrespective of benefit to the Trust, for charitable, religious, educational, scientific, civic or similar purposes; (f) to the extent permitted by law, indemnify any Person with whom the Trust has dealings, including without limitation any advisor, administrator, manager, transfer agent, custodian, distributor or selected dealer, or any other person as the Trustees may see fit to such extent as the Trustees shall determine; (g) guarantee indebtedness or contractual obligations of others; (h) determine and change the fiscal year of the Trust and the method in which its accounts shall be kept; and (i) adopt a seal for the Trust, even though the absence of such seal shall not impair the validity of any instrument executed on behalf of the Trust.

3.11     Further Powers. The Trustees shall have the power to conduct the business of the Trust and carry on its operations in any and all of its branches and maintain offices both within and without the State of Delaware, in any and all states of the United States of America, in the District of Columbia, and in any and all commonwealths, territories, dependencies, colonies, possessions, agencies or instrumentalities of the United States of America and of foreign governments, and to do all such other things and execute all such instruments as they deem necessary, proper or desirable in order to promote the interests of the Trust although such things are not herein specifically mentioned. Any determination as to what is in the interests of the Trust made by the Trustees in good faith shall be conclusive. In construing the provisions of this Declaration, the presumption shall be in favor of a grant of power to the Trustees. The Trustees will not be required to obtain any court order to deal with the Trust Property.

ARTICLE IV

ADVISORY, MANAGEMENT AND DISTRIBUTION ARRANGEMENTS

4.1     Advisory and Management Arrangements. Subject to the requirements of applicable law as in effect from time to time, the Trustees may in their discretion from time to time enter into advisory, administration or management contracts (including, in each case, one or more sub-advisory, sub-administration or sub-management contracts) whereby the other party to any such contract shall undertake to furnish such advisory, administrative and management services with respect to the Trust as the Trustees shall from time to time consider desirable and all upon such terms and conditions as the Trustees may in their discretion determine. Notwithstanding any provisions of this Declaration, the Trustees may authorize any advisor, administrator or manager (subject to such general or specific instructions as the Trustees may from time to time adopt) to exercise any of the powers of the Trustees, including to effect investment transactions with respect to the assets on behalf of the Trust to the full extent of the power of the Trustees to effect such transactions or may authorize any officer, employee or Trustee to effect such transactions pursuant

 

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to recommendations of any such advisor, administrator or manager (and all without further action by the Trustees). Any such investment transaction shall be deemed to have been authorized by the Trustees.

4.2     Distribution Arrangements. Subject to compliance with the 1940 Act, the Trustees may retain underwriters and/or selling agents to sell Shares and other securities of the Trust. The Trustees may in their discretion from time to time enter into one or more contracts, providing for the sale of securities of the Trust, whereby the Trust may either agree to sell such securities to the other party to the contract or appoint such other party its sales agent for such securities. In either case, the contract shall be on such terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Article IV or the By-Laws; and such contract may also provide for the repurchase or sale of securities of the Trust by such other party as principal or as agent of the Trust and may provide that such other party may enter into selected dealer agreements with registered securities dealers and brokers and servicing and similar agreements with persons who are not registered securities dealers to further the purposes of the distribution or repurchase of the securities of the Trust.

4.3     Parties to Contract. Any contract of the character described in Sections 4.1 and 4.2 of this Article IV or in Article VIII hereof may be entered into with any Person, although one or more of the Trustees, officers or employees of the Trust may be an officer, director, trustee, shareholder, or member of such other party to the contract, and no such contract shall be invalidated or rendered voidable by reason of the existence of any such relationship, nor shall any Person holding such relationship be liable merely by reason of such relationship for any loss or expense to the Trust under or by reason of said contract or accountable for any profit realized directly or indirectly therefrom, provided that the contract when entered into was reasonable and fair and not inconsistent with the provisions of this Article IV or the By-Laws. The same Person may be the other party to contracts entered into pursuant to Sections 4.1 and 4.2 above or Article VIII, and any individual may be financially interested or otherwise affiliated with Persons who are parties to any or all of the contracts mentioned in this Section 4.3.

ARTICLE V

LIMITATIONS OF LIABILITY AND INDEMNIFICATION

5.1     No Personal Liability of Shareholders, Trustees, etc. No Shareholder of the Trust shall be subject in such capacity to any personal liability whatsoever to any Person in connection with Trust Property or the acts, obligations or affairs of the Trust. Shareholders shall have the same limitation of personal liability as is extended to stockholders of a private corporation for profit incorporated under the Delaware General Corporation Law. No Trustee or officer of the Trust shall be subject in such capacity to any personal liability whatsoever to any Person, save only liability to the Trust or its Shareholders arising from bad faith, willful misfeasance, gross negligence or reckless disregard for his or her duty to such Person; and, subject to the foregoing exception, all such Persons shall look solely to the Trust Property for satisfaction of claims of any nature arising in connection with the affairs of the Trust. No Trustee who has been determined to be an “audit committee financial expert” (for purposes of Section 407 of the Sarbanes-Oxley Act of 2002 or any successor provision thereto) by the Trustees shall be subject to any greater liability or duty of care in discharging such Trustee’s duties and responsibilities by virtue of such determination than

 

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is any Trustee who has not been so designated. If any Shareholder, Trustee or officer, as such, of the Trust, is made a party to any suit or proceeding to enforce any such liability, subject to the foregoing exception, he or she shall not, on account thereof, be held to any personal liability. Any repeal or modification of this Section 5.1 shall not adversely affect any right or protection of a Trustee or officer of the Trust existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

5.2     Mandatory Indemnification. (a) The Trust hereby agrees to indemnify each person who at any time serves as a Trustee or officer of the Trust (each such person being an “indemnitee”) against any liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and reasonable counsel fees reasonably incurred by such indemnitee in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or administrative or investigative body in which he or she may be or may have been involved as a party or otherwise or with which he or she may be or may have been threatened, while acting in any capacity set forth in this Article V by reason of his having acted in any such capacity, except that no indemnitee shall be indemnified hereunder against any liability to any person or any expense of such indemnitee arising by reason of (i) willful misfeasance, (ii) bad faith, (iii) gross negligence, or (iv) reckless disregard of the duties involved in the conduct of his or her position (the conduct referred to in such clauses (i) through (iv) being sometimes referred to herein as “disabling conduct”). Notwithstanding the foregoing, with respect to any action, suit or other proceeding voluntarily prosecuted by any indemnitee as plaintiff, indemnification shall be mandatory only if the prosecution of such action, suit or other proceeding by such indemnitee (1) was authorized by a majority of the Trustees or (2) was instituted by the indemnitee to enforce his or her rights to indemnification hereunder in a case in which the indemnitee is found to be entitled to such indemnification. The rights to indemnification set forth in this Declaration shall continue as to a person who has ceased to be a Trustee or officer of the Trust and shall inure to the benefit of his or her heirs, executors and personal and legal representatives. No amendment or restatement of this Declaration or repeal of any of its provisions shall limit or eliminate any of the benefits provided to any person who at any time is or was a Trustee or officer of the Trust or otherwise entitled to indemnification hereunder in respect of any act or omission that occurred prior to such amendment, restatement or repeal.

(b)     The Trust shall make advance payments in connection with the expenses of defending any action with respect to which indemnification might be sought hereunder if the Trust receives a written affirmation by the indemnitee of the indemnitee’s good faith belief that the standards of conduct necessary for indemnification have been met and a written undertaking to reimburse the Trust unless it is subsequently determined that the indemnitee is entitled to such indemnification and if a majority of the Trustees determine that the applicable standards of conduct necessary for indemnification appear to have been met. In addition, at least one of the following conditions must be met: (i) the indemnitee shall provide adequate security for his or her undertaking, (ii) the Trust shall be insured against losses arising by reason of any lawful advances, or (iii) a majority of a quorum of the Disinterested Non-Party Trustees, or if a majority vote of such quorum so direct, independent legal counsel in a written opinion, shall conclude, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is substantial reason to believe that the indemnitee ultimately will be found entitled to indemnification.

 

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(c)     The rights accruing to any indemnitee under these provisions shall not exclude any other right which any person may have or hereafter acquire under this Declaration, the By-Laws of the Trust, any statute, agreement, or vote of Shareholders or Trustees who are not “interested persons” (as defined in Section 2(a)(19) of the 1940 Act) or any other right to which he or she may be lawfully entitled.

(d)     Subject to any limitations provided by the 1940 Act and this Declaration, the Trust shall have the power and authority to indemnify and provide for the advance payment of expenses to employees, agents and other Persons providing services to the Trust or serving in any capacity at the request of the Trust to the full extent corporations organized under the Delaware General Corporation Law may indemnify or provide for the advance payment of expenses for such Persons, provided that such indemnification has been approved by a majority of the Trustees.

5.3     No Bond Required of Trustees. No Trustee shall, as such, be obligated to give any bond or other security for the performance of any of his or her duties hereunder.

5.4     No Duty of Investigation; No Notice in Trust Instruments, etc. No purchaser, lender, transfer agent or other person dealing with the Trustees or with any officer, employee or agent of the Trust shall be bound to make any inquiry concerning the validity of any transaction purporting to be made by the Trustees or by said officer, employee or agent or be liable for the application of money or property paid, loaned, or delivered to or on the order of the Trustees or of said officer, employee or agent. Every obligation, contract, undertaking, instrument, certificate, Share, other security of the Trust, and every other act or thing whatsoever executed in connection with the Trust shall be conclusively taken to have been executed or done by the executors thereof only in their capacity as Trustees under this Declaration or in their capacity as officers, employees or agents of the Trust. The Trustees may maintain insurance for the protection of the Trust Property, Shareholders, Trustees, officers, employees and agents in such amount as the Trustees shall deem adequate to cover possible tort liability and such other insurance as the Trustees in their sole judgment shall deem advisable or as is required by the 1940 Act.

5.5     Reliance on Experts, etc. Each Trustee and officer or employee of the Trust shall, in the performance of its duties, be fully and completely justified and protected with regard to any act or any failure to act resulting from reliance in good faith upon the books of account or other records of the Trust, upon an opinion of counsel, or upon reports made to the Trust by any of the Trust’s officers or employees or by any advisor, administrator, manager, distributor, selected dealer, accountant, appraiser or other expert or consultant selected with reasonable care by the Trustees, officers or employees of the Trust, regardless of whether such counsel or expert may also be a Trustee.

ARTICLE VI

SHARES OF BENEFICIAL INTEREST

6.1     Beneficial Interest. (a) The interest of the beneficiaries shall be divided into an unlimited number of transferable shares of beneficial par value $.001 per share. The Trustees may divide Shares into one or more Classes and the Trustees hereby establish the Classes listed in Schedule A hereto and made part hereof. Schedule A may be revised from time to time by

 

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resolution of a majority of the then Trustees, including in connection with the establishment and designation or re-designation of any Class and shall not constitute an amendment of this Declaration of Trust. All Shares issued in accordance with the terms hereof, including, without limitation, Shares issued in connection with a dividend or distribution in Shares or a split of Shares, shall be fully paid and, except as provided in the last sentence of Section 3.8, nonassessable when the consideration determined by the Trustees (if any) therefor shall have been received by the Trust. Subject to the further provisions of this Article VI, any restriction set forth in the By-Laws and any applicable requirements of the 1940 Act or any applicable exemptive relief issued by the SEC, the Trustees shall have full power and authority, in their sole discretion, and without obtaining any authorization or vote of the Shareholders of any Class to: (i) divide the beneficial interest in each Class into Shares as the Trustees shall determine; (ii) establish, designate, redesignate, classify, reclassify and change in any manner any Class and fix such preferences, voting powers, rights, duties and privileges and business purpose of each Class as the Trustees may from time to time determine, which preferences, voting powers, rights, duties and privileges may be different from any existing Class; provided, however, that the Trustees may not reclassify or change outstanding Shares in a manner materially adverse to Shareholders of such Shares, without obtaining the authorization or vote of the Class of Shareholders that would be materially adversely affected; (iii) divide or combine the Shares of any Class into a greater or lesser number without thereby materially changing the proportionate beneficial interest of the Shares of such Class in the assets held with respect to that Class; (iv) change the name of any Class; (v) dissolve and terminate any one or more Classes; and (vi) take such other action with respect to the Classes as the Trustees may deem desirable.

(b)     The establishment and designation of any Class of Shares of the Trust shall be effective upon the adoption by a majority of the then Trustees of a resolution that sets forth such establishment and designation and the relative rights and preferences of such Class of Shares of the Trust, whether directly in such resolution or by reference to another document including, without limitation, any Registration Statement of the Trust, or as otherwise provided in such resolution.

(c)     With respect to any Class of Shares of the Trust, each such Class shall represent interests in the assets of the Trust and have the same voting, dividend, liquidation and other rights and terms and conditions as each other Class of Shares of the Trust, except that, subject to applicable law, expenses allocated to a Class may be borne solely by such Class as determined by the Trustees and as provided herein, and a Class may have exclusive voting rights with respect to matters affecting only that Class.

(d)     To the fullest extent permitted by Section 3804 of the Delaware Statutory Trust Act and subject to the restrictions of the 1940 Act and any applicable exemptive relief issued by the SEC, the Trustees may allocate expenses of the Trust to a particular Class or to apportion the same between or among two or more Classes, provided that any expenses incurred by a particular Class shall be payable solely out of the assets belonging to that Class.

6.2     Other Securities. The Trustees may, subject to the Fundamental Policies and the requirements of the 1940 Act, authorize and issue such other securities of the Trust as they determine to be necessary, desirable or appropriate, having such terms, rights, preferences, privileges, limitations and restrictions as the Trustees see fit, including preferred shares, debt

 

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securities or other senior securities. The Trustees are also authorized to take such actions and retain such persons as they see fit to offer and sell such securities.

6.3     Rights of Shareholders. The Shares shall be personal property giving only the rights in this Declaration specifically set forth. The ownership of the Trust Property of every description and the right to conduct any business hereinbefore described are vested exclusively in the Trustees on behalf of the Trust, and the Shareholders shall have no interest therein other than the beneficial interest conferred by their Shares, and they shall have no right to call for any partition or division of any property, profits, rights or interests of the Trust nor can they be called upon to share or assume any losses of the Trust or, subject to the right of the Trustees to charge certain expenses directly to Shareholders, as provided in the last sentence of Section 3.8, suffer an assessment of any kind by virtue of their ownership of Shares. The Shares shall not entitle the holder to preference, preemptive, appraisal, conversion or exchange rights.

6.4     Exchange and Conversion Privileges. Subject to the provisions of the 1940 Act and provisions of this Declaration, the Trustees shall have the power and authority to provide that the Shareholders of any Class shall have the right to convert such Shares for Shares of one or more other Classes. Subject to the provisions of the 1940 Act and provisions of this Declaration, the Trustees shall have the power and authority to provide that the Shareholders of any Class may exchange their Shares for those of another fund.

6.5     Trust Only. It is the intention of the Trustees to create only the relationship of Trustee and beneficiary between the Trustees and each Shareholder from time to time. It is not the intention of the Trustees to create a general partnership, limited partnership, joint stock association, corporation, bailment or any form of legal relationship other than a trust. Nothing in this Declaration shall be construed to make the Shareholders, either by themselves or with the Trustees, partners or members of a joint stock association.

6.6     Issuance of Shares. The Trustees, in their discretion, may from time to time without vote of the Shareholders issue Shares in addition to the then issued and outstanding Shares and Shares held in the treasury, to such party or parties and for such amount and type of consideration, including cash or property, at such time or times, and on such terms as the Trustees may determine, and may in such manner acquire other assets (including the acquisition of assets subject to, and in connection with the assumption of, liabilities) and businesses. The Trustees may from time to time divide or combine the Shares into a greater or lesser number without thereby changing the proportionate beneficial interest in such Shares. Issuances and redemptions of Shares may be made in whole Shares and/or 1/1,000ths of a Share or multiples thereof as the Trustees may determine.

6.7     Register of Shares. A register shall be kept at the offices of the Trust or any transfer agent duly appointed by the Trustees under the direction of the Trustees which shall contain the names and addresses of the Shareholders and the number of Shares held by them respectively and a record of all transfers thereof. Each such register shall be conclusive as to who are the holders of the Shares and who shall be entitled to receive dividends or distributions or otherwise to exercise or enjoy the rights of Shareholders. No Shareholder shall be entitled to receive payment of any dividend or distribution, nor to have notice given to him as herein provided, until he or she has given his or her address to a transfer agent or such other officer or agent of the Trustees as shall keep the register for entry thereon. It is not contemplated that certificates will be issued for the

 

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Shares; however, the Trustees, in their discretion, may authorize the issuance of share certificates and promulgate appropriate fees therefor and rules and regulations as to their use.

6.8     Transfer Agent and Registrar. The Trustees shall have power to employ a transfer agent or transfer agents, and a registrar or registrars, with respect to the Shares. The transfer agent or transfer agents may keep the applicable register and record therein, the original issues and transfers, if any, of the said Shares. Any such transfer agents and/or registrars shall perform the duties usually performed by transfer agents and registrars of certificates of stock in a corporation, as modified by the Trustees.

6.9     Transfer of Shares. Except as otherwise provided by the Trustees, Shares shall be transferable on the records of the Trust only in accordance with Section 9.1 herein and by the record holder thereof or by its agent thereto duly authorized in writing, upon delivery to the Trustees or a transfer agent of the Trust of a duly executed instrument of transfer, together with such evidence of the genuineness of each such execution and authorization and of other matters (including compliance with any securities laws and contractual restrictions) as may reasonably be required. Upon such delivery the transfer shall be recorded on the applicable register of the Trust. Until such record is made, the Shareholder of record shall be deemed to be the holder of such Shares for all purposes hereof and neither the Trustees nor any transfer agent or registrar nor any officer, employee or agent of the Trust shall be affected by any notice of the proposed transfer.

Any person becoming entitled to any Shares in consequence of the death, bankruptcy, or incompetence of any Shareholder, or otherwise by operation of law, shall be recorded on the applicable register of Shares as the holder of such Shares upon production of the proper evidence thereof to the Trustees or a transfer agent of the Trust, but until such record is made, the Shareholder of record shall be deemed to be the holder of such for all purposes hereof, and neither the Trustees nor any transfer agent or registrar nor any officer or agent of the Trust shall be affected by any notice of such death, bankruptcy or incompetence, or other operation of law.

6.10     Notices. Any and all notices to which any Shareholder hereunder may be entitled and any and all communications shall be deemed duly served or given if mailed, postage prepaid, addressed to any Shareholder of record at his or her last known address as recorded on the applicable register of the Trust.

ARTICLE VII

DETERMINATION OF NET ASSET VALUE

7.1     Net Asset Value. The net asset value of each outstanding Share of each Class of the Trust shall be determined at such time or times on such days as the Trustees may determine, in accordance with the 1940 Act. The method of determination of net asset value shall be determined by the Trustees and shall be as set forth in the Prospectus or as may otherwise be determined by the Trustees. The power and duty to make the net asset value calculations may be delegated by the Trustees and shall be as generally set forth in the Prospectus or as may otherwise be determined by the Trustees.

 

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7.2     Power to Modify Foregoing Procedures. Notwithstanding any of the foregoing provisions of this Article VII, the Trustees may prescribe, in their absolute discretion except as may be required by the 1940 Act, such other bases and times for determining the net asset value of each Class of the Trust’s Shares or net income, or the declaration and payment of dividends and distributions as they may deem necessary or desirable for any reason, including to enable the Trust to comply with any provision of the Code, the 1940 Act, any securities exchange or association registered under the Securities Exchange Act of 1934, or any order of exemption issued by the Commission, all as in effect now or hereafter amended or modified.

ARTICLE VIII

CUSTODIANS

8.1     Appointment and Duties. The Trustees shall at all times employ a custodian or custodians, meeting the qualifications for custodians for portfolio securities of investment companies contained in the 1940 Act, as custodian with respect to the assets of the Trust. Any custodian shall have authority as agent of the Trust as determined by the custodian agreement or agreements, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the By-Laws of the Trust and the 1940 Act, including without limitation authority:

(1)     to hold the securities owned by the Trust and deliver the same upon written order;

(2)     to receive any receipt for any moneys due to the Trust and deposit the same in its own banking department (if a bank) or elsewhere as the Trustees may direct;

(3)     to disburse such funds upon orders or vouchers;

(4)     if authorized by the Trustees, to keep the books and accounts of the Trust and furnish clerical and accounting services; and

(5)     if authorized to do so by the Trustees, to compute the net income or net asset value of the Trust;

all upon such basis of compensation as may be agreed upon between the Trustees and the custodian.

The Trustees may also authorize each custodian to employ one or more sub-custodians from time to time to perform such of the acts and services of the custodian and upon such terms and conditions, as may be agreed upon between the custodian and such sub-custodian and approved by the Trustees, provided that in every case such sub-custodian shall meet the qualifications for custodians contained in the 1940 Act.

8.2     Central Certificate System. Subject to such rules, regulations and orders as the Commission may adopt, the Trustees may direct the custodian to deposit all or any part of the securities owned by the Trust in a system for the central handling of securities established by a national securities exchange or a national securities association registered with the Commission

 

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under the Securities Exchange Act of 1934, or such other Person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act, pursuant to which system all securities of any particular class of any issuer deposited within the system are treated as fungible and may be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust.

ARTICLE IX

TRANSFERS AND REPURCHASES

9.1     Transfer of Shares.

(a)     Any Shares held by a Shareholder may be Transferred only (1) by operation of law pursuant to the death, bankruptcy, insolvency, adjudicated incompetence, or dissolution of the Shareholder and (2) under certain limited instances set out in this Declaration, with the consent of the Trustees (which may be withheld in the Trustees’ sole and absolute discretion and which may be provided for pursuant to a general policy or on a case-by-case basis). The Trustees may, in their discretion, not consent to a Transfer unless (i) the Transferring Shareholder has been a Shareholder for at least six months and (ii) after the proposed Transfer, the value of the Shares held by the transferee, as well as the value of the Shares of the Shareholder Transferring less than all of its Shares, would be at least equal to the amount of the applicable minimum initial investment in the Trust. If a Shareholder Transfers Shares with the approval of the Trustees, the Trustees will promptly take all necessary actions so that each transferee or successor to whom or to which the Shares are Transferred is admitted to the Trust as a Shareholder. The admission of any transferee as a substituted Shareholder will be effective upon the execution and delivery by, or on behalf of, the substituted Shareholder of an investor certification form and acceptance thereof by the Trust. Each Shareholder and transferee agrees to pay all expenses, including attorneys’ and accountants’ fees, incurred by the Trust in connection with any Transfer. In connection with any request to Transfer Shares, the Trust may require the Shareholder requesting the Transfer to obtain, at the Shareholder’s expense, an opinion of counsel selected by the Trustees as to such matters as the Trustees may reasonably request. If a Shareholder Transfers all of its Shares, it will not cease to be a Shareholder unless and until the transferee is admitted to the Trust as a substituted Shareholder in accordance with this Section 9.1(a). Any Transfer of Shares permitted under this Section 9.1(a) will be effected in accordance with the provisions of Section 6.8 hereof. Pursuant to Section 3.6 hereof, the Trustees hereby delegate to the officers of the Trust all power and authority to approve and effect Transfers of Shares pursuant to this Section 9.1(a). Notwithstanding the foregoing, the Trustees may approve such other transfers and transfer processes and procedures as the Trustees believe are appropriate.

(b)     Each Shareholder will indemnify and hold harmless the Trust, the Trustees, each other Shareholder and any Affiliate of the Trust, the Trustees, and each of the other Shareholders against all losses, claims, damages, liabilities, costs and expenses (including legal or other expenses incurred in investigating or defending against any losses, claims, damages, liabilities, costs and expenses or any judgments, fines and amounts paid in settlement), joint or several, to which these Persons may become subject by reason of or arising from (1) any Transfer made by the Shareholder in violation of this Section 9.1 and (2) any misrepresentation by the Transferring Shareholder or substituted Shareholder in connection with the Transfer. Pursuant to

 

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Section 3.8 hereof, a Shareholder Transferring Shares may be charged reasonable expenses, including attorneys’ and accountants’ fees, incurred by the Trust in connection with the Transfer.

9.2     Repurchase of Shares

(a)     Except to the extent included as part of the Trust’s Fundamental Policies and subject to any restrictions or limitations contained therein, Shareholders shall not be entitled to require the Trust to repurchase or redeem Shares.

(b)     Subject to applicable law, the Trustees may cause the Trust to repurchase Shares of a Shareholder or any Person acquiring Shares from or through a Shareholder, on terms fair to the Trust and to the Shareholder or Person acquiring Shares from or through such Shareholder, in the event that the Trustees, in their sole discretion, determine or have reason to believe that:

(1)     the Shares have been Transferred in violation of Section 9.1 of this Declaration, or the Shares have vested in any Person other than by operation of law as the result of the death, dissolution, bankruptcy, insolvency or adjudicated incompetence of the Shareholder;

(2)     ownership of the Shares by a Shareholder or other Person is likely to cause the Trust to be in violation of, or require registration of any Shares under, or subject the Trust to additional registration or regulation under, the securities, commodities or other laws of the United States or any other relevant jurisdiction;

(3)     continued ownership of the Shares may be harmful or injurious to the business or reputation of the Trust, the Trustees or the Adviser or any of their Affiliated Persons, or may subject the Trust or any of the Shareholders to an undue risk of adverse tax or other fiscal or regulatory consequences;

(4)     any of the representations and warranties made by a Shareholder or other Person in connection with the acquisition of the Shares was not true when made or has ceased to be true;

(5)     with respect to a Shareholder subject to special regulatory or compliance requirements, such as those imposed by the Employee Retirement Income Security Act of 1974, as amended, the Bank Holding Company Act or certain Federal Communication Commission regulations (collectively, “Special Laws or Regulations”), such Shareholder will likely be subject to additional regulatory or compliance requirements under these Special Laws or Regulations by virtue of continuing to hold Shares; or

(6)     it would be in the best interests of the Trust, as determined by the Trustees, for the Trust to repurchase the Shares.

 

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ARTICLE X

SHAREHOLDERS

10.1     Meetings of Shareholders. The Trust will not hold Shareholder meetings unless required by the 1940 Act, the provisions of this Declaration, the By-Laws or any other applicable law. A special meeting of Shareholders may be called at any time by a majority of the Trustees or the Chairperson or the President and shall be called by any Trustee for any proper purpose upon written request of Shareholders of the Trust holding in the aggregate at least a majority of the outstanding Shares of the Trust, such request specifying the purpose or purposes for which such meeting is to be called. Any shareholder meeting, including a special meeting, shall be held within or without the State of Delaware on such day and at such time as the Trustees shall designate.

10.2     Voting.         (a) Shareholders shall have no power to vote on any matter except matters on which a vote of Shareholders is required by applicable law, this Declaration or resolution of the Trustees. There shall be no cumulative voting in the election or removal of Trustees.

(b)     Notwithstanding any other provision of this Declaration, on any matters submitted to a vote of the Shareholders, all Shares of the Trust then-entitled to vote shall be voted in aggregate, except: (i) when required by the 1940 Act and/or other applicable law, Shares shall be voted by individual Class; (ii) when the matter involves any action that the Trustees have determined will affect only the interests of one or more Classes, then only the Shareholders of such Class or Classes shall be entitled to vote thereon.

10.3     Notice of Meeting and Record Date. Notice of all meetings of Shareholders, stating the time, place and purposes of the meeting, shall be given by the Trustees by mail to each Shareholder of record entitled to vote thereat at its registered address, mailed at least 10 days and not more than 90 days before the meeting or otherwise in compliance with applicable law. Only the business stated in the notice of the meeting shall be considered at such meeting; provided, however, that the foregoing shall in no way limit the ability of one or more adjournments to be considered at a meeting. Any adjourned meeting may be held as adjourned one or more times without further notice not later than 120 days after the record date. For the purposes of determining the Shareholders who are entitled to notice of and to vote at any meeting the Trustees may, without closing the transfer books, fix a date not more than 90 nor less than 10 days prior to the date of such meeting of Shareholders as a record date for the determination of the Persons to be treated as Shareholders of record for such purposes.

10.4     Quorum and Required Vote. (a) The holders of one-third of the Shares entitled to vote on any matter at a meeting present in person or by proxy shall constitute a quorum at such meeting of the Shareholders for purposes of conducting business on such matter. When any one or more Classes is to vote separately from any other Classes of Shares, holders of one-third of the Shares entitled to vote of each such Class shall constitute a quorum at a Shareholders’ meeting of that Class. The absence from any meeting, in person or by proxy, of a quorum of Shareholders for action upon any given matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if there shall be present thereat, in person or by proxy, a quorum of Shareholders in respect of such other matters.

 

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(b)     Subject to any provision of applicable law, this Declaration or a resolution of the Trustees specifying a greater or a lesser vote requirement for the transaction of any item of business at any meeting of Shareholders, the affirmative vote of a majority of the Shares present in person or represented by proxy and entitled to vote on the subject matter shall be the act of the Shareholders with respect to such matter; provided that, (i) where any provision of law or of this Declaration requires that the holders of any Class shall vote as a Class, then the affirmative vote of a majority of the Shares of such Class present in person or represented by proxy and entitled to vote on the subject matter shall decide that matter insofar as that Class is concerned, and provided that (ii) the Trustees shall be elected by a plurality of the votes of the Shares present in person or represented by proxy at the meeting and entitled to vote on the election of Trustees.

10.5     Proxies, etc. At any meeting of Shareholders, any holder of Shares entitled to vote thereat may vote by properly executed proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Secretary, or with such other officer or agent of the Trust as the Secretary may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of a majority of the Trustees, proxies may be solicited in the name of one or more Trustees or one or more of the officers or employees of the Trust. No proxy shall be valid after the expiration of 11 months from the date thereof, unless otherwise provided in the proxy. Only Shareholders of record shall be entitled to vote. Each full Share shall be entitled to one vote and fractional Shares shall be entitled to a vote of such fraction. When any Share is held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Share, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Share. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. If the holder of any such Share is a minor or a person of unsound mind, and subject to guardianship or to the legal control of any other person as regards the charge or management of such Share, he or she may vote by his or her guardian or such other person appointed or having such control, and such vote may be given in person or by proxy.

10.6     Reports. The Trustees shall cause to be prepared at least annually and more frequently to the extent and in the form required by law, regulation or any exchange on which Trust Shares are listed a report of operations containing a balance sheet and statement of income and undistributed income of the Trust prepared in conformity with generally accepted accounting principles and an opinion of an independent public accountant on such financial statements. Copies of such reports shall be mailed to all Shareholders of record within the time required by the 1940 Act. The Trustees shall, in addition, furnish to the Shareholders at least semi-annually to the extent required by law, interim reports containing an unaudited balance sheet of the Trust as of the end of such period and an unaudited statement of income and surplus for the period from the beginning of the current fiscal year to the end of such period.

10.7     Inspection of Records. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted shareholders of a corporation formed under the Delaware General Corporation Law.

 

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10.8     Shareholder Action by Written Consent. Any action which may be taken by Shareholders by vote may be taken without a meeting if the holders, entitled to vote thereon, of the proportion of Shares required for approval of such action at a meeting of Shareholders pursuant to Section 10.4 consent to the action in writing and the written consents are filed with the records of the meetings of Shareholders. Such consent shall be treated for all purposes as a vote taken at a meeting of Shareholders.

ARTICLE XI

DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS; ETC.

11.1     Duration. Subject to possible termination in accordance with the provisions of Section 11.2 hereof, the Trust created hereby shall have perpetual existence.

11.2     Termination. (a) The Trust may be dissolved, only upon approval of not less than 80% of the Trustees or, to the extent provided under those circumstances described in the Registration Statement, by the vote of the majority of the Shareholders. Upon the dissolution of the Trust:

(i)     The Trust shall carry on no business except for the purpose of winding up its affairs.

(ii)     The Trustees shall proceed to wind up the affairs of the Trust and all of the powers of the Trustees under this Declaration shall continue until the affairs of the Trust shall have been wound up, including the power to fulfill or discharge the contracts of the Trust, collect its assets, sell, convey, assign, exchange, merge where the Trust is not the survivor, transfer or otherwise dispose of all or any part of the remaining Trust Property to one or more Persons at public or private sale for consideration which may consist in whole or in part in cash, securities or other property of any kind, discharge or pay its liabilities, and do all other acts appropriate to liquidate its business; provided that any sale, conveyance, assignment, exchange, merger in which the Trust is not the survivor, transfer or other disposition of all or substantially all the Trust Property of the Trust shall require approval of the principal terms of the transaction and the nature and amount of the consideration by Shareholders.

(iii)     After paying or adequately providing for the payment of all liabilities, and upon receipt of such releases, indemnities and refunding agreements, as they deem necessary for their protection, the Trustees may distribute the remaining Trust Property, in cash or in kind or partly each, among the Shareholders according to their respective rights.

(b)     After the winding up and termination of the Trust and distribution to the Shareholders as herein provided, a majority of the Trustees shall execute and lodge among the records of the Trust an instrument in writing setting forth the fact of such termination and shall execute and file a certificate of cancellation with the Secretary of State of the State of Delaware. Upon termination of the Trust, the Trustees shall thereupon be discharged from all further liabilities and duties hereunder, and the rights and interests of all Shareholders shall thereupon cease.

 

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11.3     Amendment Procedure. (a) Except as provided in subsection (b) of this Section 11.3, this Declaration may be amended, after a majority of the Trustees (including a majority of the independent Trustees if such a vote is required under the 1940 Act) have approved a resolution therefor, by the affirmative vote required by Section 10.4 of this Declaration. The Trustees also may amend this Declaration without any vote of Shareholders to change the name of the Trust, to change the U.S. federal income tax classification of the Trust from an association taxable as a corporation to a partnership if the Trust elects to cease qualifying as a regulated investment company under Subchapter M of the Code, to make any other change that does not adversely affect the relative rights or preferences of any Shareholder, as they may deem necessary, or to conform this Declaration to the requirements of the 1940 Act or any other applicable federal or state laws or regulations including pursuant to Section 6.2 or, if applicable, the requirements of the regulated investment company provisions of the Code, but the Trustees shall not be liable for failing to do so.

(b)     No amendment may be made to Section 2.1, Section 2.2, Section 2.3, Section 3.8, Section 5.1, Section 5.2, Section 11.2(a), this Section 11.3 or Section 11.4 of this Declaration and no amendment may be made to this Declaration which would change any rights with respect to any Shares of the Trust by reducing the amount payable thereon upon liquidation of the Trust or by diminishing or eliminating any voting rights pertaining thereto (except that this provision shall not limit the ability of the Trustees to authorize, and to cause the Trust to issue, other securities pursuant to Section 6.2), except after a majority of the Trustees have approved a resolution therefor, and such amendment has been approved by the affirmative vote of the holders of not less than 75% of the Shares, unless such amendment has been approved by 80% of the Trustees, in which case approval by a Majority Shareholder Vote shall be required. Nothing contained in this Declaration shall permit the amendment of this Declaration to impair the exemption from personal liability of the Shareholders, Trustees, officers, employees and agents of the Trust or to permit assessments upon Shareholders.

(c)     An amendment duly adopted by the requisite vote of the Board of Trustees and, if required under the 1940 Act or otherwise under this Declaration, the Shareholders as aforesaid, shall become effective at the time of such adoption or at such other time as may be designated by the Board of Trustees or Shareholders, as the case may be. A certification in recordable form signed by a majority of the Trustees setting forth an amendment and reciting that it was duly adopted by the Trustees and, if required, the Shareholders as aforesaid, or a copy of the Declaration, as amended, in recordable form, and executed by a majority of the Trustees, shall be conclusive evidence of such amendment when lodged among the records of the Trust or at such other time designated by the Board.

Notwithstanding any other provision hereof, until such time as Shares are issued and sold, this Declaration may be terminated or amended in any respect by the affirmative vote of a majority of the Trustees or by an instrument signed by a majority of the Trustees.

11.4     Merger, Consolidation and Sale of Assets. The Trust may merge or consolidate with any other corporation, association, trust or other organization or may sell, lease or exchange all or substantially all of the Trust Property or the property, including its goodwill, upon such terms and conditions and for such consideration when and as authorized by two-thirds of the Trustees and approved by a Majority Shareholder Vote to the extent required by the 1940 Act and any such

 

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merger, consolidation, sale, lease or exchange shall be determined for all purposes to have been accomplished under and pursuant to the statutes of the State of Delaware.

11.5     Subsidiaries. Without approval by Shareholders, the Trustees may cause to be organized or assist in organizing one or more corporations, trusts, limited liability companies, partnerships, associations or other organizations to take over all of the Trust Property or to carry on any business in which the Trust shall directly or indirectly have any interest, and to sell, convey and transfer all or a portion of the Trust Property to any such corporation, trust, limited liability company, association or organization in exchange for the shares or securities thereof, or otherwise, and to lend money to, subscribe for the shares or securities of, and enter into any contracts with any such corporation, trust, limited liability company, partnership, association or organization, or any corporation, partnership, trust, limited liability company, association or organization in which the Trust holds or is about to acquire shares or any other interests.

ARTICLE XII

MISCELLANEOUS

12.1     Filing. (a) This Declaration and any amendment or supplement hereto shall be filed in such places as may be required or as the Trustees deem appropriate. Each amendment or supplement shall be accompanied by a certificate signed and acknowledged by a Trustee stating that such action was duly taken in a manner provided herein and shall, upon insertion in the Trust’s minute book, be conclusive evidence of all amendments contained therein. A restated Declaration, containing the original Declaration and all amendments and supplements theretofore made, may be executed from time to time by a majority of the Trustees and shall, upon insertion in the Trust’s minute book, be conclusive evidence of all amendments and supplements contained therein and may thereafter be referred to in lieu of the original Declaration and the various amendments and supplements thereto.

12.2     Resident Agent. The Trust shall maintain a resident agent in the State of Delaware, which agent shall initially be The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The Trustees may designate a successor resident agent, provided, however, that such appointment shall not become effective until written notice thereof and any required filing is delivered to the office of the Secretary of the State.

12.3     Governing Law. This Declaration is executed by the Trustees and delivered in the State of Delaware and with reference to the laws thereof (except for conflict-of-laws provisions or doctrines thereof), and the rights of all parties and the validity and construction of every provision hereof shall be subject to and construed according to laws of said State, and reference shall be specifically made to the Delaware General Corporation Law as to the construction of matters not specifically covered herein or as to which an ambiguity exists, although such law shall not be viewed as limiting the powers otherwise granted to the Trustees hereunder and any ambiguity shall be viewed in favor of such powers.

12.4     Counterparts. This Declaration may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts, together,

 

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shall constitute one and the same instrument, which shall be sufficiently evidenced by any such original counterpart.

12.5     Reliance by Third Parties. Any certificate executed by an individual who, according to the records of the Trust, or of any recording office in which this Declaration may be recorded, appears to be a Trustee hereunder, certifying to: (a) the number or identity of Trustees or Shareholders, (b) the name of the Trust, (c) the due authorization of the execution of any instrument or writing, (d) the form of any vote passed at a meeting of Trustees or Shareholders, (e) the fact that the number of Trustees or Shareholders present at any meeting or executing any written instrument satisfies the requirements of this Declaration, (f) the form of any By-Laws adopted by or the identity of any officers elected by the Trustees, or (g) the existence of any fact or facts which in any manner relate to the affairs of the Trust, shall be conclusive evidence as to the matters so certified in favor of any person dealing with the Trustees and their successors.

12.6     Provisions in Conflict with Law or Regulation. (a) The provisions of this Declaration are severable, and if the Trustees shall determine, with the advice of counsel, that any of such provisions is in conflict with the 1940 Act, if applicable, with the regulated investment company provisions of the Code (if applicable) or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Declaration; provided, however, that such determination shall not affect any of the remaining provisions of this Declaration or render invalid or improper any action taken or omitted prior to such determination.

(b)     If any provision of this Declaration shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision in such jurisdiction and shall not in any manner affect such provision in any other jurisdiction or any other provision of this Declaration in any jurisdiction.

 

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IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as of the day and year first above written.

 

By:

   /s/ Thomas K. Sittema
  Thomas K. Sittema
  Trustee

By:

   /s/ Robert W. Long
  Robert W. Long
  Trustee

By:

   /s/ Harold Mills
  Harold Mills
  Trustee

By:

   /s/ Tracy G. Schmidt
  Tracy G. Schmidt
  Trustee

By:

   /s. Ron D. Sturzenegger
  Ron D. Sturzenegger
  Trustee

 

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Schedule A

Class T

Class S

Class D

Class I

 

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STEPSTONE PRIVATE INFRASTRUCTURE FUND

BY-LAWS

Dated as of May 24, 2023

TABLE OF CONTENTS

 

         Page  

ARTICLE I         SHAREHOLDER MEETINGS

      1  

1.1.

  

Chairperson

      1  

1.2.

  

Proxies; Voting

      1  

1.3.

  

Fixing Record Dates

      1  

1.4.

  

Inspectors of Election

      1  

1.5.

  

Records at Shareholder Meetings

      2  

ARTICLE II         TRUSTEES

      2  

2.1.

  

Regular Meetings

      2  

2.2.

  

Chairperson; Records

      2  

ARTICLE III         OFFICERS

      2  

3.1.

  

Officers of the Trust

      2  

3.2.

  

Election and Tenure

      2  

3.3.

  

Removal of Officers

      2  

3.4.

  

Bonds and Surety

      3  

3.5.

  

President and Vice Presidents

      3  

3.6.

  

Secretary

      3  

3.7.

  

Treasurer

      3  

3.8.

  

Other Officers and Duties

      4  

ARTICLE IV         MISCELLANEOUS

      4  

4.1.

  

Depositories

      4  

4.2.

  

Signatures

      4  

4.3.

  

Seal

      4  

ARTICLE V         SHARE TRANSFERS

      4  

5.1.

  

Transfer Agents, Registrars and the Like

      4  

5.2.

  

Transfer of Shares

      5  

5.3.

  

Registered Shareholders

      5  

ARTICLE VI         AMENDMENT OF BY-LAWS

      5  

6.1.

  

Amendment and Repeal of By-Laws

      5  

 

 

-i-

STEPSTONE PRIVATE INFRASTRUCTURE FUND

BY-LAWS

These By-Laws are made and adopted pursuant to Section 3.9 of the Amended and Restated Agreement and Declaration of Trust establishing StepStone Private Infrastructure Fund dated as of May 24, 2023, as from time to time amended (hereinafter called the “Declaration”). All words and terms capitalized in these By-Laws shall have the meaning or meanings set forth for such words or terms in the Declaration.

ARTICLE I

SHAREHOLDER MEETINGS

1.1     Chairperson. The Chairperson, if any, shall act as chairperson at all meetings of the Shareholders; in the Chairperson’s absence, the Trustee or Trustees present at each meeting may elect a temporary chairperson for the meeting, who may be one of themselves.

1.2     Proxies; Voting. Shareholders may vote either in person or by duly executed proxy and each full share represented at the meeting shall have one vote, all as provided in Article X of the Declaration.

1.3     Fixing Record Dates. For the purpose of determining the Shareholders who are entitled to notice of or to vote or act at any meeting, including any adjournment thereof, or who are entitled to participate in any dividends, or for any other proper purpose, the Trustees may from time to time, without closing the transfer books, fix a record date in the manner provided in Section 10.3 of the Declaration. If the Trustees do not prior to any meeting of Shareholders so fix a record date or close the transfer books, then the date of mailing notice of the meeting or the date upon which the dividend resolution is adopted, as the case may be, shall be the record date.

1.4     Inspectors of Election. In advance of any meeting of Shareholders, the Trustees may appoint Inspectors of Election to act at the meeting or any adjournment thereof. If Inspectors of Election are not so appointed, the Chairperson, if any, of any meeting of Shareholders may, and on the request of any Shareholder or Shareholder proxy shall, appoint Inspectors of Election of the meeting. The number of Inspectors of Election shall be either one or three. If appointed at the meeting on the request of one or more Shareholders or proxies, a majority of Shares present shall determine whether one or three Inspectors of Election are to be appointed, but failure to allow such determination by the Shareholders shall not affect the validity of the appointment of Inspectors of Election. In case any person appointed as Inspector of Election fails to appear or fails or refuses to act, the vacancy may be filled by appointment made by the Trustees in advance of the convening of the meeting or at the meeting by the person acting as chairperson. The Inspectors of Election shall determine the number of Shares outstanding, the Shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies, shall receive votes, ballots or consents, shall hear and determine all challenges and questions in any way arising in connection with the right to vote, shall count and tabulate all votes or consents, determine the results, and do such other acts as may be proper to conduct the election or vote with fairness to all Shareholders. If there are three Inspectors of Election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. On request of the Chairperson, if any, of the

meeting, or of any Shareholder or Shareholder proxy, the Inspectors of Election shall make a report in writing of any challenge or question or matter determined by them and shall execute a certificate of any facts found by them.

1.5     Records at Shareholder Meetings. At each meeting of the Shareholders, there shall be made available for inspection at a convenient time and place during normal business hours, if requested by Shareholders, the minutes of the last previous Annual or Special Meeting of Shareholders of the Trust and a list of the Shareholders of the Trust, as of the record date of the meeting or the date of closing of transfer books, as the case may be. Such list of Shareholders shall contain the name and the address of each Shareholder in alphabetical order and the number of Shares owned by such Shareholder. Shareholders shall have such other rights and procedures of inspection of the books and records of the Trust as are granted to shareholders of a Delaware business corporation.

ARTICLE II

TRUSTEES

2.1     Regular Meetings. Meetings of the Trustees shall be held from time to time upon the call of the Chairperson, if any, the President, the Secretary or any two Trustees. Regular meetings of the Trustees may be held without call or notice and shall generally be held quarterly. Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Trustees need be stated in the notice or waiver of notice of such meeting, and no notice need be given of action proposed to be taken by written consent, except as may otherwise be required by law.

2.2     Chairperson; Records. The Chairperson, if any, shall act as chairperson at all meetings of the Trustees; in absence of a chairperson, the Trustees present shall elect one of their number to act as temporary chairperson. The results of all actions taken at a meeting of the Trustees, or by written consent of the Trustees, shall be recorded by the person appointed by the Board of Trustees as the meeting secretary.

ARTICLE III

OFFICERS

3.1     Officers of the Trust. The officers of the Trust shall consist of a President, a Secretary, a Treasurer and such other officers or assistant officers as may be elected or authorized by the Trustees. Any two or more of the offices may be held by the same Person. No officer of the Trust need be a Trustee.

3.2     Election and Tenure. At the initial organization meeting, the Trustees shall elect the Chairperson, if any, President, Secretary, Treasurer and such other officers as the Trustees shall deem necessary or appropriate in order to carry out the business of the Trust. Such officers shall serve at the pleasure of the Trustees or until their successors have been duly elected and qualified. The Trustees may fill any vacancy in office or add any additional officers at any time.

3.3     Removal of Officers. Any officer may be removed at any time, with or without cause, by action of a majority of the Trustees. This provision shall not prevent the making of a contract of employment for a definite term with any officer and shall have no effect upon any cause of action which any officer may have as a result of removal in breach of a contract of employment.

 

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Any officer may resign at any time by notice in writing signed by such officer and delivered or mailed to the Chairperson, if any, President, or Secretary, and such resignation shall take effect immediately upon receipt by the Chairperson, if any, President, or Secretary, or at a later date according to the terms of such notice in writing.

3.4     Bonds and Surety. Any officer may be required by the Trustees to be bonded for the faithful performance of such officer’s duties in such amount and with such sureties as the Trustees may determine.

3.5     President and Vice Presidents. The President shall be the chief executive officer of the Trust and, subject to the control of the Trustees, shall have general supervision, direction and control of the business of the Trust and of its employees and shall exercise such general powers of management as are usually vested in the office of President of a corporation. Subject to direction of the Trustees, the President shall have power in the name and on behalf of the Trust to execute any and all loans, documents, contracts, agreements, deeds, mortgages, registration statements, applications, requests, filings and other instruments in writing, and to employ and discharge employees and agents of the Trust. Unless otherwise directed by the Trustees, the President shall have full authority and power, on behalf of all of the Trustees, to attend and to act and to vote, on behalf of the Trust at any meetings of business organizations in which the Trust holds an interest, or to confer such powers upon any other persons, by executing any proxies duly authorizing such persons. The President shall have such further authorities and duties as the Trustees shall from time to time determine. In the absence or disability of the President, the Vice-Presidents in order of their rank as fixed by the Trustees or, if more than one and not ranked, the Vice-President designated by the Trustees, shall perform all of the duties of the President, and when so acting shall have all the powers of and be subject to all of the restrictions upon the President. Subject to the direction of the Trustees, and of the President, each Vice-President shall have the power in the name and on behalf of the Trust to execute any and all instruments in writing, and, in addition, shall have such other duties and powers as shall be designated from time to time by the Trustees or by the President.

3.6     Secretary. The Secretary shall maintain the minutes of all meetings of, and record all votes of, Shareholders, Trustees and any committee of the Trustees. The Secretary shall be custodian of the seal of the Trust, if any, and the Secretary (and any other person so authorized by the Trustees) shall affix the seal, or if permitted, facsimile thereof, to any instrument executed by the Trust which would be sealed by a Delaware business corporation executing the same or a similar instrument and shall attest the seal and the signature or signatures of the officer or officers executing such instrument on behalf of the Trust. The Secretary shall also perform any other duties commonly incident to such office in a Delaware business corporation, and shall have such other authorities and duties as the Trustees shall from time to time determine.

3.7     Treasurer. Except as otherwise directed by the Trustees, the Treasurer shall have the general supervision of the monies, funds, securities, notes receivable and other valuable papers and documents of the Trust, and shall have and exercise under the supervision of the Trustees and of the President all powers and duties normally incident to the office. The Treasurer may endorse for deposit or collection all notes, checks and other instruments payable to the Trust or to its order. The Treasurer shall deposit all funds of the Trust in such depositories as the Trustees shall designate. The Treasurer shall be responsible for such disbursement of the funds of the Trust as

 

3

may be ordered by the Trustees or the President. The Treasurer shall keep accurate account of the books of the Trust’s transactions which shall be the property of the Trust, and which together with all other property of the Trust in the Treasurer’s possession, shall be subject at all times to the inspection and control of the Trustees. Unless the Trustees shall otherwise determine, the Treasurer shall be the principal accounting officer of the Trust and shall also be the principal financial officer of the Trust. The Treasurer shall have such other duties and authorities as the Trustees shall from time to time determine. Notwithstanding anything to the contrary herein contained, the Trustees may authorize any adviser, administrator, manager or transfer agent to maintain bank accounts and deposit and disburse funds on behalf the Trust.

3.8     Other Officers and Duties. The Trustees may elect such other officers and assistant officers as they shall from time to time determine to be necessary or desirable in order to conduct the business of the Trust. Assistant officers shall act generally in the absence of the officer whom they assist and shall assist that officer in the duties of the office. Each officer, employee and agent of the Trust shall have such other duties and authority as may be conferred upon such person by the Trustees or delegated to such person by the President.

ARTICLE IV

MISCELLANEOUS

4.1     Depositories. In accordance with Section 8.1 of the Declaration, the funds of the Trust shall be deposited in such custodians as the Trustees shall designate and shall be drawn out on checks, drafts or other orders signed by such officer, officers, agent or agents (including the adviser, administrator or manager), as the Trustees may from time to time authorize.

4.2     Signatures. All contracts and other instruments shall be executed on behalf of the Trust by its properly authorized officers, agent or agents, as provided in the Declaration or By-laws or as the Trustees may from time to time by resolution provide.

4.3     Seal. The Trust is not required to have any seal, and the adoption or use of a seal shall be purely ornamental and be of no legal effect. The seal, if any, of the Trust may be affixed to any instrument, and the seal and its attestation may be lithographed, engraved or otherwise printed on any document with the same force and effect as if it had been imprinted and affixed manually in the same manner and with the same force and effect as if done by a Delaware business corporation. The presence or absence of a seal shall have no effect on the validity, enforceability or binding nature of any document or instrument that is otherwise duly authorized, executed and delivered.

ARTICLE V

SHARE TRANSFERS

5.1     Transfer Agents, Registrars and the Like. As provided in Section 6.8 of the Declaration, the Trustees shall have authority to employ and compensate such transfer agents and registrars with respect to the Shares of the Trust as the Trustees shall deem necessary or desirable. In addition, the Trustees shall have power to employ and compensate such dividend disbursing agents, warrant agents and agents for the reinvestment of dividends as they shall deem necessary

 

4

or desirable. Any of such agents shall have such power and authority as is delegated to any of them by the Trustees.

5.2     Transfer of Shares. The Shares of the Trust shall be subject to the limitations on transfer as provided in Section 6.9 of the Declaration. The Trust, or its transfer agents, shall be authorized to refuse any transfer unless and until presentation of proper evidence as may be reasonably required to show that the requested transfer is proper.

5.3     Registered Shareholders. The Trust may deem and treat the holder of record of any Shares as the absolute owner thereof for all purposes and shall not be required to take any notice of any right or claim of right of any other person.

ARTICLE VI

AMENDMENT OF BY-LAWS

6.1     Amendment and Repeal of By-Laws. In accordance with Section 3.9 of the Declaration, the Trustees shall have the exclusive power to amend or repeal the By-Laws or adopt new By-Laws at any time. Action by the Trustees with respect to the By-Laws shall be taken by an affirmative vote of a majority of the Trustees. The Trustees shall in no event adopt By-Laws which are in conflict with the Declaration, and any apparent inconsistency shall be construed in favor of the related provisions in the Declaration.

 

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STEPSTONE PRIVATE INFRASTRUCTURE FUND

DIVIDEND REINVESTMENT PLAN

StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”), hereby adopts the following Dividend Reinvestment Plan (the “Plan”) with respect to distributions declared by its board of trustees (the “Board”) on its shares of beneficial interest (the “Shares”):

1.     Participation. The Fund’s Plan is available to shareholders of record of the Shares. UMB Fund Services, Inc. (“UMB”) acting as agent for each participant in the Plan, will apply income dividends or capital gains or other distributions (each, a “Distribution” and collectively, “Distributions”), net of any applicable U.S. withholding tax, that become payable to such participant on Shares (including shares held in the participant’s name and shares accumulated under the Plan), to the purchase of additional whole and fractional Shares for such participant.

2.     Eligibility and Election to Participate. Participation in the Plan is limited to registered owners of Shares. The Fund’s Board reserves the right to amend or terminate the Plan. Shareholders automatically participate in the Plan, unless and until an election is made to withdraw from the Plan on behalf of such participating shareholder. If participating in the Plan, a shareholder is required to include all of the Shares owned by such shareholder in the Plan.

3.     Share Purchases. When the Fund declares a Distribution, UMB, on the shareholder’s behalf, will receive additional authorized shares from the Fund either newly issued or repurchased from shareholders by the Fund and held as treasury stock. The number of shares to be received when Distributions are reinvested will be determined by dividing the amount of the Distribution by the Fund’s net asset value per share on the next valuation date following the ex-distribution date. There will be no sales load charged on Shares issued to a shareholder under the Plan, but shareholder servicing fees and placement agent fees will be charged where applicable. In making purchases for the accounts of participants, UMB may commingle the funds of one participant with those of other participants in the Plan. All shares purchased under the Plan will be held in the name of each participant. In the case of shareholders, such as banks, brokers or nominees, that hold shares for others who are beneficial owners participating under the Plan, UMB will administer the Plan on the basis of the number of shares certified from time to time by the record shareholder as representing the total amount of shares registered in the shareholder’s name and held for the account of beneficial owners participating under the Plan.

4.     Timing of Purchases. The Fund expects to issue Shares pursuant to the Plan, immediately following each Distribution payment date and UMB will make every reasonable effort to reinvest all Distributions on the day the Distribution is paid (except where necessary to comply with applicable securities laws) by the Fund. If, for any reason beyond the control of UMB, reinvestment of the Distributions cannot be completed within 30 days after the applicable Distribution payment date, funds held by UMB on behalf of a participant will be distributed to that participant.

5.     Account Statements. UMB will maintain all shareholder accounts and furnish or cause to be furnished written confirmations of all transactions in the accounts, including information needed by shareholders for personal and tax records. UMB will hold shares in the account of the shareholders in non-certificated form in the name of the participant, and each shareholder’s proxy, if any, will include those shares purchased pursuant to the Plan. UMB will confirm to each participant each acquisition made pursuant to the Plan as soon as practicable after calculating the Fund’s net asset value. No less frequently than quarterly, UMB will provide to each participant an account statement showing the Distribution, the number of shares purchased with the Distribution, and the year-to-date and cumulative Distributions paid.

UMB will distribute or cause to be distributed all proxy solicitation materials, if any, to participating shareholders.

6.     Expenses. There will be no direct expenses to participants for the administration of the Plan. There is no direct service charge to participants with regard to purchases under the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Administrative fees associated with the Plan will be paid by the Fund.

7.     Taxation of Distributions. The reinvestment of Distributions does not relieve the participant of any taxes which may be payable on such Distributions.

8.     Share Certificates. UMB will hold shares in the account of the shareholders in non-certificated form in the name of the participant.

9.     Voting of Shares. Shares issued pursuant to the Plan will have the same voting rights as the Shares issued pursuant to the Fund’s public offering.

10.     Absence of Liability. Neither the Fund nor UMB shall have any responsibility or liability beyond the exercise of ordinary care for any action taken or omitted pursuant to the Plan, nor shall they have any duties, responsibilities or liabilities except such as expressly set forth herein. Neither the Fund nor UMB shall be liable for any act done in good faith or for any good faith omission to act, including, without limitation, any claims of liability: (a) arising out of the failure to terminate a participant’s account prior to receipt of written notice of such participant’s death, or (b) with respect to prices at which shares are purchased or sold for the participant’s account and the terms on which such purchases and sales are made. NOTWITHSTANDING THE FOREGOING, LIABILITY UNDER THE U.S. FEDERAL SECURITIES LAWS CANNOT BE WAIVED.

11.     Termination of Participation. A shareholder who does not wish to have Distributions automatically reinvested may terminate participation in the Plan at any time by written instructions to that effect to UMB. Such written instructions must be received by UMB by the Repurchase Request Deadline (as defined in the Fund’s prospectus) or the shareholder will receive such Distribution in Shares through the Plan. If a shareholder requests to change its election within 45 days prior to a distribution, the request will be effective only with respect to distributions after the 45-day period.

12.     Amendment, Supplement, Termination, and Suspension of Plan. This Plan may be amended, supplemented, or terminated by the Fund at any time upon 30 days’ notice to shareholders. The amendment or supplement shall be filed with the Securities and Exchange Commission as an exhibit to a subsequent appropriate filing made by the Fund and shall be deemed to be accepted by each participant unless, prior to its effective date thereof, UMB receives written notice of termination of the participant’s account. Amendment may include an appointment by the Fund or UMB with the approval of the Fund of a successor agent, in which event such successor shall have all of the rights and obligations of UMB under this Plan. The Fund may suspend the Plan at any time without notice to the participants.

13.     Governing Law. This Plan and the authorization form signed by the participant (which is deemed a part of this Plan) and the participant’s account shall be governed by and construed in accordance with the laws of the State of New York.

INVESTMENT ADVISORY AGREEMENT

AGREEMENT made as of this 24th day of May, 2023 by and between StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”), and StepStone Group Private Wealth LLC, a Delaware limited liability company (the “Adviser”).

1.     Duties of Adviser. (a) The Fund hereby appoints the Adviser to act as investment adviser to the Fund, for the period and on the terms set forth in this Agreement. The Fund employs the Adviser to manage the investment and reinvestment of the assets of the Fund, to continuously review, supervise and administer the investment program of the Fund, to determine in its discretion the securities to be purchased or sold and the portion of the Fund’s assets to be held uninvested, to provide the Fund with records concerning the Adviser’s activities which the Fund is required to maintain and to render regular reports to the Fund’s officers and Board of Trustees (the “Board”) concerning the Adviser’s discharge of the foregoing responsibilities. The Fund has discussed and concurs in the Adviser’s employing StepStone Group Real Assets LP to act as the Fund’s sub-investment adviser (the “Sub-Adviser”) to provide day-to-day management of the Fund’s investments.

 

(b)

The Adviser is authorized, in its sole discretion, to:

 

  (i)

obtain and evaluate pertinent economic, financial, and other information affecting the economy generally and certain investment assets as such information relates to securities, loans or other financial instruments that are purchased for or considered for purchase by the Fund;

 

  (ii)

make investment decisions for the Fund (including the exercise or disposition of rights accompanying portfolio securities, loans or other financial instruments (such as tender offers, exchanges, amendments, consents, waivers or forbearances) and other attendant rights thereto);

 

  (iii)

place purchase and sale orders for portfolio transactions on behalf of the Fund and manage otherwise uninvested cash assets of the Fund;

 

  (iv)

arrange for the pricing of Fund securities, loans or other financial instruments;

 

  (v)

execute account documentation, agreements, contracts and other documents as may be requested by brokers, dealers, assignors, assignees, participants, counterparties and other persons in connection with the Adviser’s management of the assets of the Fund (in such respect, the Adviser will act as the Fund’s agent and attorney-in-fact);

 

  (vi)

employ professional portfolio managers and securities analysts who provide research services to the Fund;

 

  (vii)

 engage certain third-party professionals, consultants, experts or specialists in connection with the Adviser’s management of the assets of the Fund (in such respect, the Adviser will act as the Fund’s agent and attorney-in-fact);

  (viii)

 make decisions with respect to the use by the Fund of borrowing for leverage or other investment purposes (in such respect, the Adviser will act as the Fund’s agent and attorney-in-fact); and

 

  (ix)

 to engage one or more sub-advisors, including StepStone Group Real Assets LP, subject to approval by the Board of the Fund. The Adviser will in general take such action as is appropriate to effectively manage the Fund’s investment portfolio and practices.

(c)     The Adviser accepts such employment and agrees to render the services and to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services described in this Section 1 on the terms and for the compensation provided herein, subject to the terms of the administration agreement between the Fund and the Adviser (the “Administration Agreement”).

2.     Portfolio Transactions. (a) The Adviser is authorized to select the brokers or dealers that will execute the purchases and sales of securities for the Fund and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein.

(b)     The Adviser may select affiliates of the Adviser as brokers or dealers in connection with purchase and sale transactions for the Fund. The Fund understands that such affiliates may provide execution services relative to the purchase and/or sale of securities for the Fund, provided that any such affiliate of the Adviser discloses at least annually, and as may be required under the Fund’s Rule 17e-1 Procedures, as amended from time to time with notice to the Adviser (the “Procedures”), the amount of the commission it has received. By executing this Agreement, the Fund authorizes an affiliate of the Adviser to effect securities transactions on behalf of the Fund and to retain compensation therewith, provided that any such compensation is permissible under the Procedures. This authorization is being executed and delivered pursuant to Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder.

(c)     Unless and until otherwise directed by the Board of the Fund, the Adviser may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser’s overall responsibilities with respect to the Fund. The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty created by this Agreement or otherwise.

(d)     The Adviser will promptly communicate to the officers and the Board of the Fund such information relating to portfolio transactions as they may reasonably request.

3.     Compensation of the Adviser. (a) For the services to be rendered by the Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the Adviser at the end of each month (starting with the month investment operations commence) a fee (the “Management Fee”) equal to 1.60% on an annualized basis of the Fund’s daily net assets. The Management Fee will be accrued daily and payable monthly in arrears within ten (10) business days after the end of the

 

2

month. The Adviser will pay all fees of the Sub-Adviser in connection with its duties in respect of the Fund.

(b)     [Reserved.]

(c)    In the event of termination of this Agreement, the Management Fee provided in this Section 3 shall be prorated according to the proportion that such period bears to the full monthly period and will be payable upon the date of termination of this Agreement.

4.     Fund Expenses. Except as otherwise provided in this Agreement, the Administration Agreement or by law, the Adviser shall not be responsible for the Fund’s expenses and the Fund assumes and shall pay or cause to be paid all of its expenses, including without limitation, all Fund expenses set forth in the Fund’s then current Prospectus. To the extent the Adviser incurs any costs or performs any services which are an obligation of the Fund, the Fund shall promptly reimburse the Adviser for such costs and expenses. To the extent the services for which the Fund is obligated to pay are performed by the Adviser, the Adviser shall be entitled to recover from the Fund only to the extent of its costs for such services, as reasonably determined.

5.     Information and Reports. (a) The Adviser will keep the Fund informed of developments relating to its duties as investment adviser of which the Adviser has, or should have, knowledge that would materially affect the Fund. In this regard, the Adviser will provide the Fund and its officers with such periodic reports concerning the obligations the Adviser has assumed under this Agreement as the Fund may from time-to-time reasonably request.

(b)    The Adviser also will provide the Fund with any information reasonably requested regarding its management of the Fund required for reports to the shareholders of the Fund (collectively, “Shareholders” and each a “Shareholder”), amended registration statements, or prospectus supplements to be filed by the Fund with the SEC. The Adviser will promptly inform the Fund if, to the best of its knowledge, any information in the Registration Statement, as amended from time to time, is (or will become) materially inaccurate or incomplete.

6.     Status of Adviser. The Adviser shall, for all purposes herein, be deemed to be an independent contractor. The services of the Adviser to the Fund are not to be deemed exclusive, and the Adviser shall be free to render similar services to others. Nothing in this Agreement shall limit or restrict the right of any director, officer, owner, member, manager, partner or employee of the Adviser or its affiliates, who also may be a trustee, officer or employee of the Fund, to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business, whether of a similar or dissimilar nature.

7.     Liability of Adviser. In the absence of (a) willful misfeasance, bad faith or gross negligence on the part of the Adviser in performance of its obligations and duties hereunder, (b) reckless disregard by the Adviser of its obligations and duties hereunder, or (c) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended (the “1940 Act”)), the Adviser shall not be subject to any liability whatsoever to the Fund, or to any Shareholder for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering

 

3

services hereunder including, without limitation, for any losses that may be sustained in connection with the purchase, holding, redemption or sale of any security on behalf of the Fund.

8.     Indemnification. (a) To the fullest extent permitted by law, the Fund shall, subject to Section 8(c) of this Agreement, indemnify the Adviser (including for this purpose each officer, director, shareholder, partner, owner, member, manager, principal, employee or agent of, or any person who controls, is controlled by or is under common control with, the Adviser, and their respective executors, heirs, assigns, successors or other legal representatives (each such person, including the Adviser, being referred to as an “indemnitee”)) against all losses, claims, damages, liabilities, costs and expenses arising from any act or omission by reason of being or having been Adviser to the Fund, or in connection with the Fund’s business, affairs or assets, or the past or present performance of services to the Fund in accordance with this Agreement by the indemnitee, except to the extent that the loss, claim, damage, liability, cost or expense has been finally determined in a judicial decision on the merits from which no further appeal may be taken in any action, suit, investigation or other proceeding to have been incurred or suffered by the indemnitee by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Adviser’s duties or obligations under this Agreement or otherwise as Adviser of the Fund. These losses, claims, damages, liabilities, costs and expenses include, but are not limited to, amounts paid in satisfaction of judgments, in compromise, or as fines or penalties, and counsel fees and expenses, incurred in connection with the defense or disposition of any action, suit, investigation or other proceeding, whether civil or criminal, before any judicial, arbitral, administrative or legislative body, in which the indemnitee may be or may have been involved as a party or otherwise, or with which such indemnitee may be or may have been threatened, during the duration of this Agreement or thereafter. The rights of indemnification provided under this Section 8 are not to be construed so as to provide for indemnification of an indemnitee for any liability (including liability under U.S. federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith) to the extent (but only to the extent) that indemnification would be in violation of applicable law, but shall be construed so as to effectuate the applicable provisions of this Section 8.

(b)     Expenses, including counsel fees and expenses, incurred by any indemnitee (but excluding amounts paid in satisfaction of judgments, in compromise, or as fines or penalties) may be paid from time to time by the Fund in advance of the final disposition of any action, suit, investigation or other proceeding upon receipt of an undertaking by or on behalf of the indemnitee to repay to the Fund amounts paid if a determination is made that indemnification of the expenses is not authorized under Section 8(a) of this Agreement, so long as (i) the indemnitee provides security for the undertaking, (ii) the Fund is insured by or on behalf of the indemnitee against losses arising by reason of the indemnitee’s failure to fulfill his, her or its undertaking, or (iii) a majority of the trustees (each, a “Trustee,” and collectively, the “Trustees”) of the Fund who are not “interested persons” (as that term is defined in the 1940 Act) of the Fund (“Independent Trustees”) (excluding any Trustee who is or has been a party to any other action, suit, investigation or other proceeding involving claims similar to those involved in the action, suit, investigation or proceeding giving rise to a claim for advancement of expenses under this Agreement) or independent legal counsel in a written opinion determines based on a review of readily available facts (as opposed to a full trial-type inquiry) that reason exists to believe that the indemnitee ultimately shall be entitled to indemnification.

 

4

(c)     As to the disposition of any action, suit, investigation or other proceeding (whether by a compromise payment, pursuant to a consent decree or otherwise) without an adjudication or a decision on the merits by a court, or by any other body before which the proceeding has been brought, that an indemnitee is liable to the Fund or its Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Adviser’s duties or obligations under this Agreement or otherwise as the Adviser of the Fund, indemnification shall be provided in accordance with Section 8(a) of this Agreement if (i) approved as in the best interests of the Fund by a majority of the Independent Trustees (excluding any Trustee who is or has been a party to any other action, suit, investigation or other proceeding involving claims similar to those involved in the action, suit, investigation or proceeding giving rise to a claim for indemnification under this Agreement) upon a determination based upon a review of readily available facts (as opposed to a full trial-type inquiry) that the indemnitee acted in good faith and in the reasonable belief that the actions were in the best interests of the Fund and that the indemnitee is not liable to the Fund or its Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Adviser’s duties or obligations under this Agreement or otherwise as the Adviser of the Fund or (ii) the Trustees secure a written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry) to the effect that indemnification would not protect the indemnitee against any liability to the Fund or its Shareholders to which the indemnitee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Adviser’s duties or obligations under this Agreement or otherwise as the Adviser of the Fund.

(d)     Any indemnification or advancement of expenses made in accordance with this Section 8 shall not prevent the recovery from any indemnitee of any amount if the indemnitee subsequently is determined in a final judicial decision on the merits in any action, suit, investigation or proceeding involving the liability or expense that gave rise to the indemnification or advancement of expenses to be liable to the Fund or its Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Adviser’s duties or obligations under this Agreement or otherwise as Adviser of the Fund. In any suit brought by an indemnitee to enforce a right to indemnification under this Section 8 it shall be a defense that, and in any suit in the name of the Fund to recover any indemnification or advancement of expenses made in accordance with this Section 8 the Fund shall be entitled to recover the expenses upon a final adjudication from which no further right of appeal may be taken that, the indemnitee has not met the applicable standard of conduct described in this Section 8. In any suit brought to enforce a right to indemnification or to recover any indemnification or advancement of expenses made in accordance with this Section 8, the burden of proving that the indemnitee is not entitled to be indemnified, or to any indemnification or advancement of expenses, under this Section 8 shall be on the Fund (or on any Shareholder acting derivatively or otherwise on behalf of the Fund or its Shareholders).

(e)     An indemnitee may not satisfy any right of indemnification or advancement of expenses granted in this Section 8 or to which he, she or it may otherwise be entitled except out of the assets of the Fund, and no Shareholder shall be personally liable with respect to any such claim for indemnification or advancement of expenses.

(f)     The rights of indemnification provided in this Section 8 shall not be exclusive of or affect any other rights to which any person may be entitled by contract or otherwise under law. Nothing

 

5

contained in this Section 8 shall affect the power of the Fund to purchase and maintain liability insurance on behalf of the Adviser or any indemnitee.

9.     Duration and Termination. This Agreement will become effective as of the date first written above and will continue for an initial two-year term and will continue thereafter so long as such continuance is specifically approved at least annually (a) by the vote of a majority of the Trustees who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of the Fund or by vote of a majority of the outstanding voting securities of the Fund; provided, however, that if the Shareholders of the Fund fail to approve the Agreement as provided herein, the Adviser may continue to serve in such capacity in the manner and to the extent permitted by the 1940 Act and the rules thereunder. This Agreement may be terminated by the Fund at any time, without the payment of any penalty, by vote of a majority of the entire Board of the Fund or by vote of a majority of the outstanding voting securities of the Fund on 60 days’ written notice to the Adviser. This Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 120 days’ written notice to the Fund. This Agreement will automatically and immediately terminate in the event of its “assignment,” as such term is defined under the 1940 Act.

10.     Use of Names. (a) As owner or licensee of the rights to use and sublicense the use of the name “STRUCTURE” any trademarks or derivatives thereof or logo associated therewith, the Adviser hereby grants the Fund a non-exclusive right and sublicense to use (i) the STRUCTURE name as part of the Fund’s name, and (ii) in connection with the Fund’s investment products and services, in each case only for so long as this Agreement, any other investment management agreement between the Fund and the Adviser (or any organization which shall have succeeded to the Adviser’s business as investment manager (the “Adviser’s Successor”)), or any extension, renewal or amendment hereof or thereof remains in effect, and only for so long as the Adviser or the Adviser’s Successor is an owner or licensee of the STRUCTURE name. The Fund agrees that it shall have no right to sublicense or assign rights to use the STRUCTURE name, it shall acquire no interest in the STRUCTURE name other than the rights granted herein, and the Fund shall not challenge the validity of the STRUCTURE name or the ownership thereof.

(b)     The Fund further agrees that all services and products it offers in connection with the STRUCTURE name shall meet commercially reasonable standards of quality, as may be determined by the Adviser from time to time. At the Adviser’s reasonable request, the Fund shall cooperate with the Adviser and shall execute and deliver any and all documents necessary to maintain and protect (including, but not limited to, any trademark infringement action) the Adviser and/or enter the Fund as a registered user thereof.

(c)     At such time as this Agreement or any other investment management agreement shall no longer be in effect between the Adviser (or the Adviser’s Successor) and the Fund, or the Adviser no longer is an owner or licensee of the STRUCTURE name, the Fund shall (to the extent that, and as soon as, it lawfully can) cease to use “STRUCTURE” in the name of the Fund or any other name indicating that it is advised by, managed by or otherwise connected with the Adviser (or the Adviser’s Successor). In no event shall the Fund use the STRUCTURE name or any other name or mark confusingly similar thereto (including, but not limited to, any name or mark that includes

 

6

“STRUCTURE”) if this Agreement or any other investment management agreement between the Adviser (or the Adviser’s Successor) and the Fund is terminated.

11.     Definitions. As used in this Agreement, the terms “assignment,” “interested person,” and a “vote of a majority of the outstanding voting securities” shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section 2(a)(42) of the 1940 Act.

12.     Amendment of Agreement. This Agreement may be amended by mutual consent, but the consent of the Fund must be approved (a) by vote of a majority of those members of the Board of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding voting securities of the Fund, as defined under the 1940 Act.

13.     Severability. If any provisions of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.

14.     Applicable Law. This Agreement shall be construed in accordance with the laws of the State of New York; provided, however, that nothing herein shall be construed in a manner inconsistent with the 1940 Act.

15.     Notices. Any notice under this Agreement shall be given in writing and deemed to have been duly given when delivered by hand or facsimile or five days after mailed by certified mail, post-paid, by return receipt requested to the other party at the principal office of such party.

16.    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.

17.    Form ADV. The Fund acknowledges receiving Part II of the Adviser’s Form ADV.

18.    Fund Obligations. The parties to this Agreement agree that the obligations of the Fund under this Agreement shall not be binding upon any of the Trustees, Shareholders, officers, employees or agents, whether past, present or future, of the Fund, individually, but are binding only upon the assets and property of the Fund.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first written above.

 

STEPSTONE GROUP PRIVATE WEALTH LLC:       STEPSTONE PRIVATE INFRASTRUCTURE FUND:  
By: /s/ Robert W. Long                 By:       /s/ Robert W. Long  
Name: Robert W. Long       Name: Robert W. Long  
Title: Chief Executive Officer       Title: President  

 

8

SUB-ADVISORY AGREEMENT

AGREEMENT made as of this 24th day of May, 2023 by and among StepStone Group Private Wealth LLC, a Delaware limited liability company (the “Adviser”), StepStone Group Real Assets LP, a Delaware limited partnership (the “Sub-Adviser”), and Stepstone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”).

1.    Duties of the Sub-Adviser. (a) The Adviser hereby employs the Sub-Adviser to act as a non-discretionary investment sub-adviser by providing private markets investment advice and services, as described below, to the Adviser in regard to the Adviser’s management of the Fund, subject to the broad supervision of the Adviser and the Fund, for the period and on the terms and conditions set forth in this Agreement. The Sub-Adviser hereby accepts such employment and agrees during such period, at its own expense, to render, or arrange for the rendering of, such services and to assume the obligations herein set forth for the compensation provided for herein. The Sub-Adviser and its affiliates shall for all purposes herein each be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund. The Sub-Adviser shall be responsible for providing private markets investment advice and services to the Adviser regarding that portion of the Fund’s assets allocated, or under consideration for allocation, to infrastructure assets as defined in the Fund’s currently effective Prospectus (as defined below) (“Infrastructure Assets”). The Sub-Adviser’s provision of ongoing infrastructure asset advice and services to the Adviser in respect of the Fund’s investment in Infrastructure Assets shall include, but not be limited to:

(i) employing asset allocation and diversification strategies among Infrastructure Assets;

(ii) deploying commitment and over-commitment models and strategies among Infrastructure Assets to minimize cash drag on Fund returns and balance Fund liquidity requirements;

(iii) identifying and managing infrastructure portfolio risk through tracking commitments, capital calls, distribution variations, and valuations, among other factors;

(iv) identifying investment opportunities resulting from fundamental financial analysis and initial due diligence performed on investments (actual or contemplated) in Infrastructure Assets; and

(v) tracking and monitoring the continuing operations, management, financial condition and other pertinent details and information and conducting ongoing due diligence as to Fund allocations of assets to Infrastructure Assets.

All of the foregoing is subject always to the restrictions of the Agreement and Declaration of Trust and By-Laws of the Fund, as they may be amended and/or restated from time to time and as provided to the Sub-Adviser by the Adviser, the provisions of the Investment Company Act of 1940, as amended (the “1940 Act”) and the statements relating to the Fund’s investment objective(s), investment policies and investment restrictions as the same are set forth in the Fund’s prospectus, as may be amended from time to time (the “Prospectus”), as well as to the supervision of the Adviser and the Board of Trustees of the Fund.

(b)    The Sub-Adviser will not hold money on behalf of the Adviser or the Fund, nor will the Sub-Adviser be the registered holder of the registered investments of the Adviser or the Fund or be the custodian of documents or other evidence of title.

(c)    Unless otherwise instructed by the Adviser or the Board of Trustees of the Fund, the Sub-Adviser shall not have the power, discretion or responsibility to execute subscriptions or other documentation effecting investments in Infrastructure Assets of the Fund, or to place orders for other securities transactions on behalf of the Fund. Instead, the Adviser will exercise such discretion as to subscriptions, investments and other trading activity necessary to implement the Fund’s investment program strategy. The Sub-Adviser will use its best efforts to cooperate with the Adviser in support of efforts to implement the Fund’s investment program.

(d)    The Sub-Adviser may, where reasonable, employ agents (including affiliates) to perform any administrative, dealing or ancillary services required to enable the Sub-Adviser to perform its services under this Agreement.

2.    Allocation of Charges and Expenses. Subject to the terms of the administration agreement between the Fund and the Adviser, as applicable, the Sub-Adviser assumes and shall pay for maintaining the staff and personnel necessary to perform its obligations under this Agreement and shall at its own expense provide the office space, furnishings, equipment and personnel required by it to perform the services described under Section 1 hereof.

3.    Compensation of the Sub-Adviser. For the services rendered, the facilities furnished and expenses assumed by the Sub-Adviser, the Adviser will pay the Sub-Adviser 50% of the management fee received by the Adviser pursuant to the Advisory Agreement each month. Each fee shall be payable by the Adviser to the Sub-Adviser within three business days of the date that the Adviser receives its management fee from the Fund.

4.    Liability of Sub-Adviser. In the absence of (a) willful misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in performance of its obligations and duties hereunder, (b) reckless disregard by the Sub-Adviser of its obligations and duties hereunder, or (c) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act), the Sub-Adviser shall not be subject to any liability whatsoever to the Fund, or to any Shareholder for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder including, without limitation, for any losses that may be sustained in connection with the purchase, holding, redemption or sale of any security on behalf of the Fund.

5.    Indemnification. (a) To the fullest extent permitted by law, the Fund shall, subject to this Section 5, indemnify the Sub-Adviser (including for this purpose each officer, director, shareholder, partner, owner, member, manager, principal, employee or agent of or any person who controls, is controlled by or is under common control with, the Sub-Adviser, and their respective executors, heirs, assigns, successors or other legal representatives (each such person, including the Sub-Adviser, being referred to as a “Sub-Adviser indemnitee”)) against all losses, claims, damages, liabilities, costs and expenses arising from any act or omission by reason of being or having been Sub-Adviser to the Fund, or in connection with the Fund’s business, affairs or assets,

 

2

or the past or present performance of services to the Fund in accordance with this Agreement by the Sub-Adviser indemnitee, except to the extent that the loss, claim, damage, liability, cost or expense has been finally determined in a judicial decision on the merits from which no further appeal may be taken in any action, suit, investigation or other proceeding to have been incurred or suffered by the Sub-Adviser indemnitee by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Sub-Adviser’s duties or obligations under this Agreement or otherwise as Sub-Adviser of the Fund. These losses, claims, damages, liabilities, costs and expenses include, but are not limited to, amounts paid in satisfaction of judgments, in compromise, or as fines or penalties, and counsel fees and expenses, incurred in connection with the defense or disposition of any action, suit, investigation or other proceeding, whether civil or criminal, before any judicial, arbitral, administrative or legislative body, in which the Sub-Adviser indemnitee may be or may have been involved as a party or otherwise, or with which such Sub-Adviser indemnitee may be or may have been threatened, during the duration of this Agreement or thereafter. The rights of indemnification provided under this Section 5 are not to be construed so as to provide for indemnification of an Sub-Adviser indemnitee for any liability (including liability under U.S. federal securities laws which, under certain circumstances, impose liability even on persons that act in good faith) to the extent (but only to the extent) that indemnification would be in violation of applicable law, but shall be construed so as to effectuate the applicable provisions of this Section 5.

(b)    Expenses, including counsel fees and expenses, incurred by any Sub-Adviser indemnitee (but excluding amounts paid in satisfaction of judgments, in compromise, or as fines or penalties) may be paid from time to time by the Fund in advance of the final disposition of any action, suit, investigation or other proceeding upon receipt of an undertaking by or on behalf of the Sub-Adviser indemnitee to repay to the Fund amounts paid if a determination is made that indemnification of the expenses is not authorized under this Section 5, so long as: (i) the Sub-Adviser indemnitee provides security for the undertaking; (ii) the Fund is insured by or on behalf of the Sub-Adviser indemnitee against losses arising by reason of the Sub-Adviser indemnitee’s failure to fulfill his, her or its undertaking; or (iii) a majority of the Board of the Fund who are not “interested persons” (as that term is defined in the 1940 Act) of the Fund (“Independent Trustees”) (excluding any trustee who is or has been a party to any other action, suit, investigation or other proceeding involving claims similar to those involved in the action, suit, investigation or proceeding giving rise to a claim for advancement of expenses under this Agreement) or independent legal counsel in a written opinion determines based on a review of readily available facts (as opposed to a full trial-type inquiry) that reason exists to believe that the Sub-Adviser indemnitee ultimately shall be entitled to indemnification.

(c)    As to the disposition of any action, suit, investigation or other proceeding (whether by a compromise payment, pursuant to a consent decree or otherwise) without an adjudication or a decision on the merits by a court, or by any other body before which the proceeding has been brought, that a Sub-Adviser indemnitee is liable to the Fund or its shareholders by reason of willful misfeasance, bad faith, gross negligence, reckless disregard of the Sub-Adviser’s duties or obligations under this Agreement or otherwise as Sub-Adviser of the Fund, indemnification shall be provided in accordance with this Section 5 if (i) approved as in the best interests of the Fund by a majority of the Independent Trustees (excluding any trustee who is or has been a party to any other action, suit, investigation or other proceeding involving claims similar to those involved in the action, suit, investigation or proceeding giving rise to a claim for indemnification under this

 

3

Agreement) upon a determination based upon a review of readily available facts (as opposed to a full trial-type inquiry) that the Sub-Adviser indemnitee acted in good faith and in the reasonable belief that the actions were in the best interests of the Fund and that the Sub-Adviser indemnitee is not liable to the Fund or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties or obligations under this Agreement or otherwise as Sub-Adviser of the Fund or as a result of the Sub-Adviser’s breach of this Agreement, or (ii) the Trustees secure a written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry) to the effect that indemnification would not protect the Sub-Adviser indemnitee against any liability to the Fund or its shareholders to which the Sub-Adviser indemnitee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Sub-Adviser’s duties or obligations under this Agreement or otherwise as Sub-Adviser of the Fund.

(d)    Any indemnification or advancement of expenses made in accordance with this Section 5 shall not prevent the recovery from any Sub-Adviser indemnitee of any amount if the Sub-Adviser indemnitee subsequently is determined in a final judicial decision on the merits in any action, suit, investigation or proceeding involving the liability or expense that gave rise to the indemnification or advancement of expenses to be liable to the Fund or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Sub-Adviser’s duties or obligations under this Agreement or otherwise as Sub-Adviser of the Fund. In any suit brought by a Sub-Adviser indemnitee to enforce a right to indemnification under this Section 5 it shall be a defense that, and in any suit in the name of the Fund to recover any indemnification or advancement of expenses made in accordance with this Section 5 the Fund shall be entitled to recover the expenses upon a final adjudication from which no further right of appeal may be taken that, the Sub-Adviser indemnitee has not met the applicable standard of conduct described in this Section 5. In any suit brought to enforce a right to indemnification or to recover any indemnification or advancement of expenses made in accordance with this Section 5, the burden of proving that the Sub-Adviser indemnitee is not entitled to be indemnified, or to any indemnification or advancement of expenses, under this Section 5 shall be on the Fund (or on any shareholder acting derivatively or otherwise on behalf of the Fund or its shareholders).

(e)    A Sub-Adviser indemnitee may not satisfy any right of indemnification or advancement of expenses granted in this Section 5 or to which he, she or it may otherwise be entitled except out of the assets of the Fund, and no shareholder shall be personally liable with respect to any such claim for indemnification or advancement of expenses.

(f)    The rights of indemnification provided in this Section 5 shall not be exclusive of or affect any other rights to which any person may be entitled by contract or otherwise under law. Nothing contained in this Section 5 shall affect the power of the Fund to purchase and maintain liability insurance on behalf of the Sub-Adviser or any indemnitee.

6.    Status of the Sub-Adviser. The Sub-Adviser shall, for all purposes herein, be deemed to be an independent contractor. The services of the Sub-Adviser to the Fund are not to be deemed exclusive, and the Sub-Adviser shall be free to render similar services to others. Nothing in this Agreement shall limit or restrict the right of any director, officer, owner, member, manager, partner or employee of the Sub-Adviser or its affiliates, who also may be a trustee, officer or employee of the Fund, to engage in any other business or to devote his or her time and attention in

 

4

part to the management or other aspects of any other business, whether of a similar or dissimilar nature.

7.    Duration and Termination of this Agreement. This Agreement will become effective as of the date first written above and will continue for an initial two-year term and will continue thereafter so long as such continuance is specifically approved at least annually (a) by the vote of a majority of the Trustees who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of the Fund or by vote of a majority of the outstanding voting securities of the Fund; provided, however, that if the Shareholders of the Fund fail to approve the Agreement as provided herein, the Sub-Adviser may continue to serve in such capacity in the manner and to the extent permitted by the 1940 Act and the rules thereunder. This Agreement may be terminated by the Fund at any time, without the payment of any penalty, by vote of a majority of the entire Board of the Fund or by vote of a majority of the outstanding voting securities of the Fund on 60 days’ written notice to the Sub-Adviser. This Agreement may be terminated by the Sub-Adviser at any time, without the payment of any penalty, upon 120 days’ written notice to the Fund. This Agreement will automatically and immediately terminate in the event of its “assignment,” as such term is defined under the 1940 Act.

8.    Use of Names. (a) As owner or licensee of the rights to use and sublicense the use of the name “StepStone” and any trademarks or derivatives thereof or logo associated therewith, the Sub-Adviser hereby grants the Fund a non-exclusive right and sublicense to use (i) the StepStone name and mark as part of the Fund’s name, and (ii) in connection with the Fund’s investment products and services, in each case only for so long as this Agreement, any other investment management agreement between the Fund and the Sub-Adviser (or any organization which shall have succeeded to the Sub-Adviser’s business as investment manager (the “Sub-Adviser’s Successor”)), or any extension, renewal or amendment hereof or thereof remains in effect, and only for so long as the Sub-Adviser or the Sub-Adviser’s Successor is an owner or licensee of the StepStone name and mark. The Fund agrees that it shall have no right to sublicense or assign rights to use the StepStone name and mark, it shall acquire no interest in the StepStone name and mark other than the rights granted herein, and the Fund shall not challenge the validity of the StepStone name and mark or the ownership thereof.

(b)    The Fund further agrees that all services and products it offers in connection with the StepStone name and mark shall meet commercially reasonable standards of quality, as may be determined by the Sub-Adviser from time to time. At the Sub-Adviser’s reasonable request, the Fund shall cooperate with the Sub-Adviser and shall execute and deliver any and all documents necessary to maintain and protect (including, but not limited to, any trademark infringement action) the Sub-Adviser and/or enter the Fund as a registered user thereof.

(c)    At such time as this Agreement or any other investment management agreement shall no longer be in effect between the Sub-Adviser (or the Sub-Adviser’s Successor) and the Fund, or the Sub-Adviser no longer is an owner or licensee of the StepStone name and mark, the Fund shall (to the extent that, and as soon as, it lawfully can) cease to use “StepStone” in the name of the Fund or any other name indicating that it is advised by, managed by or otherwise connected with the Sub-Adviser (or the Sub-Adviser’s successor). In no event shall the Fund use the StepStone name and marks or any other name or mark confusingly similar thereto (including, but not limited to,

 

5

any name or mark that includes the name “StepStone”) if this Agreement or any other investment management agreement between the Sub-Adviser (or the Sub-Adviser’s Successor) and the Fund is terminated.

9.    Confidentiality. Any information or recommendations supplied by either the Adviser or the Sub-Adviser, that are not otherwise in the public domain or previously known to the other party in connection with the performance of its obligations and duties hereunder, including portfolio holdings of the Fund, financial information or other information relating to a party to this Agreement, are to be regarded as confidential (“Confidential Information”) and held in the strictest confidence. Except as may be required by applicable law or rule or as requested by regulatory authorities having jurisdiction over a party to this Agreement, Confidential Information may be used only by the party to which said information has been communicated and such other persons as that party believes are necessary to carry out the purposes of this Agreement, the custodian, and such persons as the Adviser may designate in connection with the Fund. Nothing in this Agreement shall be construed to prevent the Sub-Adviser from giving other entities investment advice.

10.    Amendments to this Agreement. This Agreement may be amended by mutual consent, but the consent of the Fund must be approved (a) by vote of a majority of those members of the Board of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding voting securities of the Fund, as defined under the 1940 Act.

11.    Definitions of Certain Terms. The terms “vote of a majority of the outstanding voting securities,” “assignment,” “affiliated person” and “interested person” used in this Agreement, shall have the respective meanings specified in the 1940 Act and the rules and regulations thereunder, subject, however, to such exemptions as may be granted by the Securities and Exchange Commission under said Act.

12.    Governing Law. This Agreement shall be construed in accordance with the laws of the State of New York; provided, however, that nothing herein shall be construed in a manner inconsistent with the 1940 Act.

 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

 

STEPSTONE GROUP PRIVATE WEALTH LLC
By:  

/s/ Robert W. Long

Name:   Robert W. Long
Title:   Chief Executive Officer

STEPSTONE GROUP REAL ASSETS LP

By: StepStone Group Real Assets Holdings LLC, its general partner

By:  

/s/ Joey Wong Castillo

Name:   Joey Wong Castillo
Title:   Authorized Signatory
STEPSTONE PRIVATE INFRASTRUCTURE FUND
By:  

/s/ Robert W. Long

Name:   Robert W. Long
Title:   President

 

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DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (the “Agreement”) is made as of this 24th day of May, 2023, by and StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Trust”) and UMB Distribution Services, LLC, a Wisconsin limited liability company (“Provider”).

WHEREAS, the Trust is a non-diversified, closed-end management investment company registered under the 1940 Act (as defined below) and is authorized to issue Shares (as defined below);

WHEREAS, Provider is registered as a broker-dealer under the 1934 Act (as defined below) and is a member of FINRA (as defined below); and

WHEREAS, the Trust and Provider desire to enter into an agreement pursuant to which Provider shall be the distributor for the Shares.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

 

1.

Definitions

In addition to any terms defined in the body of this Agreement, the following capitalized terms shall have the meanings set forth hereinafter whenever they appear in this Agreement:

“1933 Act” shall mean the Securities Act of 1933, as amended.

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“Board” shall mean the Board of Trustees of the Trust.

“Commission” shall mean the U.S. Securities and Exchange Commission.

“FINRA” shall mean the Financial Industry Regulatory Authority, Inc.

“Offering Price” shall mean the price per share that the Shares will be offered for sale to the public calculated in accordance with the Trust’s then current Prospectus.

“Prospectus” shall mean the current Prospectus and Statement of Additional Information with respect to the Trust (including any applicable amendments and supplements thereto) actually received by Provider from the Trust with respect to which the Trust has indicated a Registration Statement has become effective under the 1933 Act and the 1940 Act.

 

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“Registration Statement” shall mean any registration statement on Form N-2 at any time now or hereafter filed with the Commission with respect to any of the Shares and any amendments and supplements thereto which at any time shall have been or will be filed with the Commission.

“Services” shall mean the services described in Section 2 of this Agreement and such additional services as may be agreed to by the parties from time to time and set forth in an amendment to this Agreement.

“Shares” shall mean such shares of beneficial interest, or class thereof, of the Trust as may be issued from time to time.

“Shareholder” shall mean a record owner of Shares of the Trust.

 

2.

Appointment and Services

(a)     The Trust hereby appoints Provider as agent for the distribution of Shares during the term of this Agreement and on the terms set forth in this Agreement and Provider accepts such appointment. Subject to the direction and control of the Board and utilizing information provided by the Trust and its current and prior agents and service providers, Provider will render the Services in accordance with the terms of this Agreement. The duties of Provider shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against Provider hereunder.

(b)     Provider will act as distributor for the distribution of Shares in accordance with the instructions of the Board and the Registration Statement and Prospectuses then in effect with respect to the Trust under the 1933 Act.

(c)     Provider may incur expenses for distribution activities which it deems reasonable and which are primarily intended to result in the sale of Shares, including, but not limited to, advertising, the printing and mailing of prospectuses to other than current Shareholders, and the printing and mailing of sales literature. At the direction of the Trust, Provider may in its sole discretion enter into servicing and/or selling agreements with qualified broker/dealers and other persons ore entities with respect to the offering of Shares to the public. Provider shall not be obligated to incur any specific expenses or sell any certain number of Shares.

(d)     All Shares offered for sale by Provider shall be offered for sale at the Offering Price. Provider shall have no liability for the payment of the purchase price of the Shares sold pursuant to this Agreement or with respect to redemptions or repurchases of Shares. The price the Trust shall receive for any Shares purchased by investors shall be the net asset value used in determining the Offering Price applicable to the sale of such Shares, as calculated in the manner set forth in the Trust’s Registration Statement.

(e)     Provider shall act as distributor of the Shares in compliance in all material respects with all applicable laws, rules and regulations, including, without limitation, all rules and regulations made or adopted pursuant to the 1940 Act, by the Commission and FINRA.

 

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(f)     Provider shall not utilize any materials in connection with the sale or offering of Shares except the Prospectus and such other materials as the Trust shall provide or approve. Provider agrees to review all marketing materials prepared for use by or on behalf of the Trust for compliance with applicable rules and regulations in advance of the use of such materials. The Trust agrees to incorporate changes to such materials as Provider may request to the satisfaction of Provider. Provider will file such materials as may be required with FINRA, or the Commission. The Trust represents that it will not use or authorize the use of any marketing materials, including any such materials in use prior to the execution of this Agreement, unless and until such materials have been approved and authorized for use by Provider. All marketing materials related to the Trust shall be delivered to Provider for review prior to use with sufficient time to permit Provider to review the material and to file with FINRA if necessary. The Trust and Provider shall mutually agree upon a reasonable turnaround time for such review. Provider shall, with respect to any marketing materials required to be filed with FINRA, file such marketing materials within ten (10) business days of the date of first use. The Trust shall address any comments received from FINRA with respect to any marketing materials to the satisfaction of Provider, including updating or discontinuing use of such marketing material.

 

3.

Duties and Representations of the Trust

(a)     The Trust represents that it is registered as a closed-end fund under the 1940 Act and that it has and will continue to act in conformity with its Declaration of Trust, its Bylaws, its Registration Statement and resolutions and other instructions of its Board and has and will continue to comply with all applicable laws, rules and regulations including without limitation the 1933 Act, the 1934 Act, the 1940 Act, the laws of the states in which Shares are offered and sold, and the rules and regulations thereunder.

(b)     The Trust shall take or cause to be taken all necessary action to register and maintain the registration of the Shares for sale as herein contemplated and shall pay all costs and expenses in connection with the registration of Shares, and be responsible for all expenses in connection with maintaining facilities for the issue and transfer of Shares and for supplying information, prices and other data to be furnished by the Trust hereunder.

(c)     The Trust shall execute any and all documents and furnish any and all information and otherwise take all actions which may be reasonably necessary in the discretion of the Trust’s officers in connection with the qualification of the Shares for sale in such states as Provider and the Trust may agree, shall maintain the registration of a sufficient number or amount of Shares thereunder, and shall pay all costs and expenses in connection with such qualification. The Trust shall notify Provider, or cause Provider to be notified, of the states in which Shares may be sold and shall notify Provider of any change thereto.

(d)     The Trust shall, at its expense, keep Provider fully informed with respect to its affairs as necessary for Provider to perform the Services and to fulfill any applicable regulatory or legal responsibilities. In addition, the Trust shall furnish Provider from time to time such information, documents and reports with respect to the Trust and the Shares as Provider may reasonably request,

 

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and the Trust warrants that the statements contained in any such information shall be true and correct and fairly represent what they purport to represent.

(e)     The Trust represents to Provider that all Registration Statements and Prospectuses of the Trust filed or to be filed with the Commission under the 1933 Act and 1940 Act with respect to the Shares have been and will be prepared in conformity with the requirements of the 1933 Act, 1940 Act, and the rules and regulations of the Commission thereunder. The Trust represents and warrants to Provider that any Registration Statement and Prospectus, when such Registration Statement becomes effective, will contain all statements required to be stated therein in conformity with the the 1933 Act, 1940 Act and the rules and regulations of the Commission; that all information contained in the Registration Statement and Prospectus will be true and correct in all material respects when such Registration Statement becomes effective; and that neither the Registration Statement nor any Prospectus when such Registration Statement becomes effective will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the above representations are expressly based on the Trust’s reasonable assumption that information supplied by Provider and included in the Trust’s Registration Statements and Prospectus is at all relevant times materially correct and accurate. The Trust agrees to file from time to time such amendments, supplements, reports and other documents as may be necessary or required in order to: (1) comply with the 1933 Act and the 1940 Act; (2) ensure that there is no untrue statement(s) of a material fact in a Registration Statement or Prospectus; or (3) ensure that all statements necessary or required in order that there may be no omission to state a material fact in the Registration Statement or Prospectus which omission would make the statements therein misleading. The Trust shall promptly notify Provider of any advice given to it by counsel to the Trust regarding the necessity or advisability of amending or supplementing the Registration Statement.

(f)     The Trust shall not file any amendment to the Registration Statement or supplement to any Prospectus without giving Provider reasonable notice thereof in advance and if Provider declines to assent to such amendment (after a reasonable time), the Trust may terminate this Agreement forthwith by written notice to Provider without payment of any penalty. If the Trust shall not propose an amendment or amendments and/or supplement or supplements promptly after receipt by the Trust of a written request in good faith from Provider to do so, Provider may, at its option, terminate this Agreement upon no less than 60 days’ written notice. In addition, if, at any time during the term of this Agreement, Provider requests that the Trust make any change in its governing instruments or in its methods of doing business which are necessary in order to comply with any requirement of applicable law or regulation, and the Trust fails (after a reasonable time) to make any such change as requested, Provider may terminate this Agreement forthwith by written notice to the Trust without payment of any penalty. Nothing contained in this Agreement shall in any way limit the Trust’s right to file at any time any amendments to any Registration Statement and/or supplements to any Prospectus, of whatever character, as the Trust may deem advisable, with advice of its counsel, such right being in all respects absolute and unconditional.

(g)     Whenever in its judgment such action is warranted by market, economic or political conditions, or by circumstances of any kind, the Trust may decline to accept any orders for, or make any sales of, any Shares until such time as the Trust deems it advisable to accept such orders and to make such sales and the Trust shall advise Provider promptly of such determination.

 

4

(h)     The Trust agrees to advise Provider promptly in writing of the following:

(i)     any material correspondence or other material communication by the Commission or its staff relating to the Trust including requests by the Commission for amendments to the Registration Statement or Prospectuses;

(ii)     the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or Prospectuses then in effect or the initiation of any proceeding for that purpose;

(iii)     the happening of any event which makes untrue any statement of a material fact made in the Registration Statement or Prospectuses or which requires the making of a change in such Registration Statement or Prospectuses in order to make the statements therein not misleading; or

(iv)     all actions taken by the Commission with respect to any amendments to any Registration Statement or Prospectus which may from time to time be filed with the Commission.

 

4.

Offering of Shares.

No Shares shall be offered by either Provider or the Trust under any of the provisions of this Agreement and no orders for the purchase or sale of such Shares hereunder shall be accepted by the Trust if and so long as the effectiveness of the Registration Statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act or if and so long as the current Prospectus as required by Section 10 of the 1933 Act, as amended, is not on file with the Commission; provided, however, that nothing contained in this paragraph 4 shall in any way restrict or have an application to or bearing upon the Trust’s obligation to repurchase Shares from any shareholder in accordance with the provisions of the Prospectus or Declaration of Trust.

 

5.

Fees

(a)     As compensation for the services performed hereunder and the expenses incurred by Provider, the Trust shall pay Provider the fees and reimburse the expenses of Provider as provided in Schedule A hereto. Fees shall be adjusted in accordance with Schedule A or as otherwise agreed to by the parties from time to time. Fees shall be earned and paid quarterly in arrears in an amount equal to at least 1/ 4th of the applicable annual fee. The parties may amend this Agreement to include fees for any additional services requested by the Trust or enhancements to current Services. The Trust agrees to pay Provider’s then current rate for Services added to, or for any enhancements to existing Services set forth on, Schedule A after the execution of this Agreement.

(b)     For the purpose of determining fees payable to Provider, net asset value shall be computed in accordance with the Prospectus and resolutions of the Board. The fee for the period from the day of the month this Agreement is entered into until the end of that month shall be pro-

 

5

rated according to the proportion that such period bears to the full monthly period. Upon any termination of this Agreement before the end of any month, the fee for such part of a month shall be pro-rated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement. Should the Trust be liquidated, merged with or acquired by another fund or investment company, any accrued fees shall be immediately payable.

(c)     Provider will bear all expenses incurred by it in connection with the performance of its services under Section 2, except as otherwise provided herein. Provider shall not be required to pay or finance any costs and expenses incurred in the operation of the Trust, including, but not limited to: taxes; interest; brokerage fees and commissions; salaries, fees and expenses of officers and trustees; Commission fees and state Blue Sky fees; advisory fees; charges of custodians, transfer agents, dividend disbursing and accounting services agents and other service providers; security pricing services; insurance premiums; outside auditing and legal expenses; costs of organization and maintenance of corporate existence; taxes and fees payable to federal, state and other governmental agencies; preparation, typesetting, printing, proofing and mailing of Prospectuses, notices, forms and applications and proxy materials for regulatory purposes and for distribution to current Shareholders; preparation, typesetting, printing, proofing and mailing and other costs of Shareholder reports; expenses in connection with the electronic transmission of documents and information including electronic filings with the Commission and the states; research and statistical data services; expenses incidental to holding meetings of the Shareholders and Trustees; fees and expenses associated with internet, e-mail and other related activities; and extraordinary expenses. Expenses incurred for distribution of shares, including the typesetting, printing, proofing and mailing of Prospectuses for persons who are not shareholders of the Trust, will be borne by the Trust’s investment adviser(s), except for such expenses permitted to be paid by the Trust under a distribution and/or service plan, if any, adopted pursuant to exemptive relief received by the Trust from the Commission (“Distribution Plan”).

(d)     The Trust also agrees to promptly reimburse Provider for all out-of-pocket expenses or disbursements incurred by Provider in connection with the performance of Services under this Agreement. Out-of-pocket expenses shall include, but not be limited to, those items specified on Schedule A hereto. If requested by Provider, out-of-pocket expenses are payable in advance. Payment of postage expenses, if prepayment is requested, is due at least seven (7) days prior to the anticipated mail date. In the event Provider requests advance payment, Provider shall not be obligated to incur such expenses or perform the related Service(s) until payment is received.

(e)     The Trust agrees to pay all amounts due hereunder within thirty (30) days of receipt of each invoice (“Due Date”). Except as provided in Schedule A, Provider shall bill Service fees monthly, and out-of-pocket expenses as incurred (unless prepayment is requested by the Provider). Provider may, at its option, arrange to have various service providers submit invoices directly to the Trust for payment of reimbursable out-of-pocket expenses.

(f)     The Trust is aware that its failure to remit to Provider all amounts due on or before the Due Date will cause Provider to incur costs not contemplated by this Agreement, including, but not limited to carrying, processing and accounting charges. Accordingly, in the event that the Provider does not receive any amounts due hereunder by the Due Date, the Trust agrees to pay a late charge on the overdue amount equal to one and one-half percent (1.5%) per month or the maximum amount

 

6

permitted by law, whichever is less. In addition, the Trust shall pay Provider’s reasonable attorney’s fees and court costs in the event that an attorney is engaged to assist in the collection of any undisputed amounts due Provider. The parties hereby agree that such late charge represents a fair and reasonable computation of the costs incurred by reason of the Trust’s late payment. Acceptance of such late charge shall in no event constitute a waiver by Provider of the Trust’s default or prevent Provider from exercising any other rights and remedies available to it.

(g)     In the event that any charges are disputed, the Trust shall, on or before the Due Date, pay all undisputed amounts due hereunder and notify Provider in writing of any disputed charges for out-of-pocket expenses which it is disputing in good faith. Payment for such disputed charges shall be due on or before the fifth business day after the day on which Provider provides to the Trust documentation which an objective observer would agree reasonably supports any disputed charges (“Revised Due Date”). Late charges shall not begin to accrue as to charges disputed in good faith until the first day after the Revised Due Date.

(h)     The Trust acknowledges that the fees charged by Provider under this Agreement reflect the allocation of risk between the parties, including the exclusion of remedies and limitations of liability in Section 7. Modifying the allocation of risk from what is stated herein would affect the fees that Provider charges. Accordingly, in consideration of those fees, the Trust agrees to the stated allocation of risk.

 

6.

Confidentiality

In case of any requests or demands for inspection of the records of the Trust, Provider will endeavor to notify the Trust promptly and to secure instructions from a representative of the Trust as to such inspection. Records and information which have become known to the public through no wrongful act of Provider or any of its employees, agents or representatives, and information which was already in the possession of Provider prior to receipt thereof, shall not be subject to this paragraph. The obligations of the parties under this Section 6 shall survive the termination of this Agreement.

 

7.

Limitation of Liability

(a)     Provider shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the performance of its obligations and duties under this Agreement, except a loss resulting from Provider’s willful misfeasance, bad faith or gross negligence in the performance of such duties and obligations, or by reason of its reckless disregard thereof. Furthermore, notwithstanding anything herein to the contrary, Provider shall not be liable for: (1) any action taken or omitted to be taken in accordance with instructions received by Provider from an officer or representative of the Trust; or, (2) any action taken or omission by the Trust, its investment adviser(s) or any past or current service provider.

 

7

(b)     Notwithstanding anything herein to the contrary, Provider will be excused from its obligation to perform any act, service or obligation required of it hereunder for the duration that such performance is prevented by events beyond its reasonable control and shall not be liable for any default, damage, loss of data or documents, errors, delay or any other loss whatsoever caused thereby. Provider will, however, take all reasonable steps to minimize the effect of any service interruption for any period that such interruption continues beyond its control.

(c)     In no event and under no circumstances shall Provider, its affiliates or any of its or their members, officers, directors, agents or employees be liable to anyone, including, without limitation, the other party, under any theory of tort, contract, strict liability or other legal or equitable theory for lost profits, exemplary, punitive, special, indirect or consequential damages for any act or failure to act under any provision of this Agreement regardless of whether such damages were foreseeable and even if advised of the possibility thereof.

 

8.

Indemnification.

(a)     The Trust authorizes Provider to use any Prospectus, in the form furnished to Provider from time to time, in connection with the sale of Shares. The Trust shall indemnify, defend and hold Provider, and each of its present or former directors, members, officers, employees, representatives and any person who controls or previously controlled Provider within the meaning of Section 15 of the 1933 Act (“Provider Indemnitees”), free and harmless from and against: (1) any and all losses, claims, demands, liabilities, damages, charges, payments, costs and expenses (including the costs of investigating or defending any alleged losses, claims, demands, liabilities, damages, charges, payments, fines, penalties, costs or expenses and any reasonable counsel fees incurred in connection therewith) of any and every nature (“Losses”) which Provider and each of the Provider Indemnitees may incur under the 1933 Act, the 1934 Act, the 1940 Act and any other statute (including Blue Sky laws) or any rule or regulation thereunder, or under common law or otherwise arising out of or based upon any untrue statement, or alleged untrue statement, of a material fact contained in the Registration Statement or any Prospectus, an annual or interim report to shareholders or sales literature, or any amendments or supplements thereto, or arising out of or based upon any omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Trust’s obligation to indemnify Provider and any of the foregoing Provider Indemnitees shall not be deemed to cover any Losses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with information relating to Provider and furnished to the Trust or its counsel by Provider in writing for the purpose of, and used in, the preparation thereof; (2) any and all Losses which Provider and each of the Provider Indemnitees may incur in connection with this Agreement or Provider’s performance hereunder, except to the extent the Losses result from Provider’s willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Agreement; or (3) any and all Losses which Provider and each Provider Indemnitee may incur when acting in accordance with instructions from the Trust or its representatives.

(b)     Promptly after receipt by Provider of notice of the commencement of an investigation, action, claim or proceeding, Provider shall, if a claim for indemnification in respect thereof is made

 

8

under this section, notify the Trust in writing of the commencement thereof, although the failure to do so shall not prevent recovery by Provider or any Provider Indemnitee. The Trust shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such Loss, but if the Trust elects to assume the defense, such defense shall be conducted by counsel chosen by the Trust and approved by Provider, which approval shall not be unreasonably withheld. In the event the Trust elects to assume the defense of any such suit and retain such counsel and notifies Provider of such election, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them subsequent to the receipt of the Trust’s election. If the Trust does not elect to assume the defense of any such suit, or in case Provider does not, in the exercise of reasonable judgment, approve of counsel chosen by the Trust, or in case there is a conflict of interest between the Trust and Provider or any Provider Indemnitee, the Trust will reimburse the indemnified person or persons named as defendant or defendants in such suit, for the fees and expenses of any counsel retained by Provider and them. The Trust’s indemnification agreement contained in this Section 8 and the Trust’s representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of Provider and each Provider Indemnitee, and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to Provider’s benefit, to the benefit of each Provider Indemnitee and their estates and successors. The Trust agrees to promptly notify Provider of the commencement of any litigation or proceedings against the Trust or any of its officers or directors in connection with the issue and sale of any of the Shares.

(c)     The Trust acknowledges and agrees that in the event Provider, at the direction of the Trust, is required to give indemnification to any entity selling Shares or providing shareholder services to Shareholders or others and such entity shall make a claim for indemnification against Provider, Provider shall make a similar claim for indemnification against the Trust and shall be entitled to such indemnification.

(d)     Provider shall indemnify, defend and hold the Trust, and each of its present or former trustees, officers, employees, representatives, and any person who controls or previously controlled the Trust within the meaning of Section 15 of the 1933 Act (“Trust Indemnitees”), free and harmless from and against any and all Losses which the Trust, and each of its present or former trustees, officers, employees, representatives, or any such controlling person, may incur under the 1933 Act, the 1934 Act, the 1940 Act, any other statute (including Blue Sky laws) or any rule or regulation thereunder, or under common law or otherwise: (1) arising out of or based upon any untrue, or alleged untrue, statement of a material fact contained in the Trust’s Registration Statement or any Prospectus, as from time to time amended or supplemented, or the omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statement not misleading, but only if such statement or omission was made in reliance upon, and in conformity with, information relating to Provider and furnished in writing to the Trust or its counsel by Provider for the purpose of, and used in, the preparation thereof; or (2) to the extent any Losses arise out of or result from Provider’s willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties under this Agreement. Provider’s agreement to indemnify the Trust and any of the Trust Indemnitees shall not be deemed to cover any Losses to the extent they arise out of or result from the Trust’s willful misfeasance, bad

 

9

faith or negligence in the performance of its duties, or by reason of its reckless disregard of its obligations and duties, under this Agreement.

(e)     Promptly after receipt by the Trust of notice of the commencement of an investigation, action, claim or proceeding, the Trust shall, if a claim for indemnification in respect thereof is to made under this section, notify Provider in writing of the commencement thereof, although the failure to do so shall not prevent recovery by the Trust or any Trust Indemnitee. Provider shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such loss, claim, demand, liability, damage or expense, but if Provider elects to assume the defense, such defense shall be conducted by counsel chosen by Provider and approved by the Trust, which approval shall not be unreasonably withheld. In the event Provider elects to assume the defense of any such suit and retain such counsel and notifies Provider of such election, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them subsequent to the receipt of Provider’s election. If Provider does not elect to assume the defense of any such suit, or in case the Trust does not, in the exercise of reasonable judgment, approve of counsel chosen by Provider, or in case there is a conflict of interest between the Provider and the Trust or any Trust Indemnitee, Provider will reimburse the indemnified person or persons named as defendant or defendants in such suit, for the fees and expenses of any counsel retained by the Trust and them. Provider’s indemnification agreement contained in this Section 8 and Provider’s representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Trust or any Trust Indemnitee, and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the Trust’s benefit, to the benefit of each Trust Indemnitee and their estates and successors. Provider agrees to promptly notify the Trust of the commencement of any litigation or proceedings against Provider or any of its officers or directors in connection with the issue and sale of any of the Shares.

 

9.

Term

(a)     This Agreement shall become effective with respect to the Trust as of the date hereof. Unless sooner terminated as provided herein, this Agreement shall continue in effect until             , 2025. Thereafter, if not terminated, this Agreement shall continue automatically in effect for successive annual periods, provided such continuance is specifically approved at least annually by: (1) the Board; or (2) the vote of a majority (as defined in the 1940 Act and Rule 18f-2 thereunder) of the outstanding voting securities of the Trust; and provided that in either event the continuance is also approved by a majority of the Board who are not “interested persons” (as defined in the 1940 Act) of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval.

(b)     This Agreement may be terminated without penalty: (1) through a failure to renew this Agreement at the end of a term; (2) upon mutual consent of the parties; or (3) on no less than sixty (60) days’ written notice, by the Board, by vote of a majority (as defined with respect to voting securities in the 1940 Act and Rule 18f-2 thereunder) of the outstanding voting securities of the Trust, or by Provider (which notice may be waived by the party entitled to such notice). The terms of this Agreement shall not be waived, altered, modified, amended or supplemented in any manner

 

10

whatsoever except by a written instrument signed by Provider and the Trust. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act).

(c)     In the event of termination of this Agreement, all reasonable expenses associated with movement of records and materials and conversion thereof shall be borne by the Trust. Notwithstanding anything herein to the contrary, upon the termination of this Agreement as provided herein or the liquidation of the Trust, Provider shall deliver the records of the Trust to the Trust or its designee in a form that is consistent with Provider’s applicable license agreements at the expense of the Trust, and thereafter the Trust or its designee shall be solely responsible for preserving the records for the periods required by all applicable laws, rules and regulations.

 

10.

Miscellaneous.

(a)     Any notice required or to be permitted to be given by either party to the other shall be in writing and shall be deemed to have been given when sent by either an overnight delivery service or by registered or certified mail, postage prepaid, return receipt requested, to the addresses listed below, or to such other location as either party may from time to time designate in writing:

 

If to Provider:    UMB Distribution Services, LLC
   235 West Galena Street
   Milwaukee, Wisconsin 53212
   Attention: Legal Department
If to the Trust:    c/o StepStone Group Private Wealth LLC
   128 S. Tryon Street, Ste. 1600
   Charlotte, NC 28202
   Attention: Kimberly Zeitvogel

(b)     Except as provided to the contrary herein, this Agreement may not be amended or modified in any manner except by written agreement executed by both parties with the formality of this Agreement.

(c)     This Agreement shall be governed by Delaware law, excluding the laws on conflicts of laws. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the Commission thereunder. Any provision of this Agreement which may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.

(d)     This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original agreement but such counterparts shall together constitute but one and the

 

11

same instrument. The facsimile signature of any party to this Agreement shall constitute the valid and binding execution hereof by such party.

(e)     The services of Provider hereunder are not deemed to be exclusive. Provider may render such services and any other services to others, including other investment companies. The Trust recognizes that from time to time directors, officers, and employees of Provider may serve as directors, trustees, officers and employees of other entities (including other investment companies), that such other entities may include the name of Provider as part of their name and that Provider or its affiliates may enter into distribution, administration, fund accounting, transfer agent or other agreements with such other entities.

(f)     The captions of this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

(g)     This Agreement is executed by the Trust and the obligations hereunder are not binding upon any of the trustees, officers or shareholders of the Trust individually but are binding only upon the Trust.

(h)     This Agreement and the Schedule incorporated hereto constitute the full and complete understanding and agreement between Provider and the Trust and supersedes all prior negotiations, understandings and agreements.

(i)     The person signing below represents and warrants that he/she is duly authorized to execute this Agreement on behalf of the Trust.

(j)     Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into between the parties hereto and any actions taken or omitted by any party hereunder shall not affect any rights or obligations of the other party.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer as of the day and year first above written.

 

STEPSTONE PRIVATE INFRASTRUCTURE FUND      UMB DISTRIBUTION SERVICES, LLC
(the “Trust”)      (“Provider”)
By: /s/ Kimberly Zeitvogel      By: /s/ Scott Schulenburg

Kimberly Zeitvogel

     

Scott Schulenburg

Treasurer

     

President

 

13

Schedule A

to the

Distribution Agreement

by and between

StepStone Private Infrastructure Fund

and

UMB Distribution Services, LLC

FEES

Compliance and Medallion Fees

 

Annual Asset-Based Fee (per fund)

   
∎   

First $1 billion in assets

   

0.65 basis point, plus

∎   

Next $2 billion in assets

   

0.20 basis point, plus

∎   

Assets in excess of $3 billion

   

0.05 basis point

Subject to Minimum Annual Fee (per fund)

   

$15,000

 

Advertising Compliance

   

∎

    Regular review/comment on advertising (turnaround within 48 hours)    $85 per hour**

∎

   

Rapid review service (turnaround within 24 hours) –

in addition to the per-hour charge for regular review

    $400 per submission

**Does not include FINRA filing fees (if applicable), which are paid by the fund company or Advisor

 

Selling Agreement Review   
Review and comment on non-standard selling agreements    Waived

Out-of-Pocket Expenses

Out-of-pocket expenses include, but are not limited to, travel on behalf of the Administrator or Fund(s) (airfare, transportation, lodging and meals), postage, materials, background checks, charges associated with archiving emails (currently $10 per month and subject to change), FINRA and state licensing fees, FINRA registration, filing and testing fees and expenses, attorney’s fees incurred in connection with responding to and complying with SEC or other regulatory investigations, inquiries or subpoenas, excluding routine examinations of UMB in its capacity as a service provider to the funds.

* For UMB Distribution Services, LLC, as named distributor

The expenses of marketing, promoting and distributing a fund are in addition to the fees above and include but are not limited to: the development and printing of prospectuses, advertising, and direct mail pieces; public relations activities; trade show attendance; call management and fulfillment; and fees paid to broker-dealers.

 

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All fees, other than basis point fees, are subject to an annual escalation equal to the increase in the Consumer Price Index–Urban Wage Earners (CPI) but not to exceed a 3% increase per year. Such escalations shall be effective commencing one year from the effective date of each Fund and the corresponding date each year thereafter. No amendment of this fee schedule shall be required with each escalation. CPI will be determined by reference to the Consumer Price Index News Release issued by the Bureau of Labor Statistics, U.S. Department of Labor.

Fees for services not contemplated by this schedule will be negotiated on a case-by-case basis.

 

15

CUSTODY AGREEMENT

Dated May 24, 2023

Between

UMB BANK, N.A.

and

STEPSTONE PRIVATE INFRASTRUCTURE FUND

 

1

CUSTODY AGREEMENT

This agreement made as of the date first set forth above (the “Agreement”) between UMB Bank, n.a., a national banking association with its principal place of business located in Kansas City, Missouri (hereinafter “Custodian”) and StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”).

WITNESSETH:

WHEREAS, the Fund is registered as a closed-end management investment company under the Investment Company Act of 1940, as amended (“the 1940 Act”); and

WHEREAS, the Fund desires to appoint Custodian as its custodian for the custody of Assets (as hereinafter defined) owned by the Fund, which Assets are to be held in such accounts as the Fund may establish from time to time; and

WHEREAS, Custodian is willing to accept such appointment on the terms and conditions hereof.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties hereto, intending to be legally bound, mutually covenant and agree as follows:

1. APPOINTMENT OF CUSTODIAN.

The Fund hereby constitutes and appoints the Custodian as custodian of Assets belonging to the Fund which have been or may be from time to time delivered to and accepted by the Custodian. Custodian accepts such appointment as a custodian and agrees to perform the duties and responsibilities of Custodian as set forth herein on the conditions set forth herein. For purposes of this Agreement, the term “Assets” shall include Securities, monies, and other property held by the Custodian for the benefit of the Fund. “Security” or “Securities” shall mean stocks, bonds, rights, warrants, certificates, instruments, obligations and all other negotiable or non-negotiable paper commonly known as Securities which have been or may from time to time be delivered to and accepted by the Custodian. For the avoidance of doubt, “Securities” shall also mean, for purposes of the Fund’s investments in underlying investment companies, the completed subscription agreements (or any document, however titled, containing factual information regarding the Fund and Fund representations and warranties necessary to make the investment, which shall be defined herein as a “Subscription Agreement”), pertaining to such underlying investment company. Custodian shall have no obligation to treat a Subscription Agreement as a Security until the Fund delivers such completed Subscription Agreement to the Custodian.

2. INSTRUCTIONS.

(a) An “Instruction,” as used herein, shall mean a request, direction, instruction or certification initiated by the Fund and conforming to the terms of this paragraph. An Instruction may be transmitted to the Custodian by any of the following means:

(i) a writing manually signed on behalf of the Fund by an Authorized Person (as hereinafter defined);

(ii) a telephonic or other oral communication from a person the Custodian reasonably believes to be an Authorized Person;

 

2

(iii) a facsimile transmission that the Custodian reasonably believes has been signed or otherwise originated by an Authorized Person;

 

  (iv)

a communication effected through the internet or web-based functionality (including without limitation, emails, data files and other communications) on behalf of the Fund (“Electronic Communication”); or

  (v)

other means reasonably acceptable to both parties.

Instructions in the form of oral communications shall be confirmed by the Fund by either a writing (as set forth in (i) above), a facsimile (as set forth in (iii) above), or an Electronic Communication (as set forth in (iv) above), but the lack of such confirmation shall in no way affect any action taken by the Custodian in reliance upon such oral Instructions prior to the Custodian’s receipt of such confirmation. The Fund authorizes the Custodian to record any and all telephonic or other oral Instructions communicated to the Custodian. The parties acknowledge and agree that, with respect to Instructions transmitted by facsimile, the Custodian cannot verify that the signature of an Authorized Person has been properly affixed and, with respect to Instructions transmitted by an Electronic Communication, the Custodian cannot verify that the Electronic Communication has been initiated by an Authorized Person; accordingly, the Custodian shall have no liability as a result of actions taken in reliance on unauthorized facsimile or Electronic Communication Instructions. The Custodian recommends that any Instructions transmitted by the Fund via email be done so through a secure system or process.

(b) “Special Instructions,” as used herein, shall mean Instructions countersigned or confirmed in writing by the Treasurer or any other officer of the Fund, which countersignature or confirmation shall be on the same instrument containing the Instructions or on a separate instrument relating thereto.

(c) Instructions and Special Instructions shall be delivered to the Custodian at the address and/or telephone number, facsimile transmission number or email address agreed upon from time to time by the Custodian and the Fund.

(d) Where appropriate and specifically stated, Instructions and Special Instructions shall be continuing Instructions.

(e) An Authorized Person shall be responsible for assuring the accuracy and completeness of Instructions. If the Custodian reasonably determines that an Instruction is unclear or incomplete, the Custodian may notify the Fund of such determination, in which case the Fund shall be responsible for delivering to the Custodian an amended Instruction. The Custodian shall have no obligation to take any action until the Fund re-delivers to the Custodian an Instruction that is clear and complete.

(f) The Fund shall be responsible for delivering to the Custodian Instructions or Special Instructions in a timely manner, after considering such factors as the involvement of subcustodians, brokers or agents in a transaction, time zone differences, reasonable industry standards, etc. The Custodian shall have no liability if the Fund delivers Instructions or Special Instructions to the Custodian after any deadline established by the Custodian.

(g) By providing Instructions to acquire or hold Foreign Assets (as defined in Rule 17f-5(a)(2) under the 1940 Act), the Fund shall be deemed to have confirmed to the Custodian that the Fund has (i) considered and accepted responsibility for all Sovereign Risks and Country Risks (as hereinafter defined) associated with investing in a particular country or jurisdiction, and (ii) made all determinations and provided to shareholders and other investors all disclosures required of registered investment companies by the 1940 Act.

 

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3. DELIVERY OF CORPORATE AND OTHER DOCUMENTS.

Each of the parties to this Agreement represents that its execution does not violate any of the provisions of its respective charter, articles of incorporation, partnership agreement, declaration of trust, articles of association or bylaws, that all required corporate or organizational action to authorize the execution and delivery of this Agreement has been taken, and that the person signing this Agreement is authorized to bind such party.

The Fund agrees to provide the Custodian, upon request, documentation regarding the Fund, including, by way of example: declaration of trust, by-laws, resolutions, registration statements, W-9s and other tax-related documentation, compliance policies and procedures and other compliance documents, etc.

In addition, the Fund has delivered or will promptly deliver to the Custodian, copies of the resolution(s) of its Board of Trustees and all amendments or supplements thereto, properly certified or authenticated, designating certain officers or employees of the Fund who will have continuing authority to certify to the Custodian: (a) the names, titles, signatures and scope of authority of all persons authorized to give Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of the Fund, and (b) the names, titles and signatures of those persons authorized to countersign or confirm Special Instructions on behalf of the Fund (in both cases collectively, the “Authorized Persons” and individually, an “Authorized Person”). Such resolutions and certificates may be accepted and relied upon by the Custodian as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Custodian of a similar resolution or certificate to the contrary; provided, however, that the Custodian may rely upon any written designation furnished by the Treasurer or other officer of the Fund designating persons authorized to countersign or confirm Special Instructions (as provided in Section 2(b)). Upon delivery of a certificate which deletes or does not include the name(s) of a person previously authorized to give Instructions or to countersign or confirm Special Instructions, such person shall no longer be considered an Authorized Person authorized to give Instructions or to countersign or confirm Special Instructions. Unless the certificate specifically requires that the approval of anyone else will first have been obtained, the Custodian will be under no obligation to inquire into the right of the person giving such Instructions or Special Instructions to do so. Notwithstanding any of the foregoing, no Instructions or Special Instructions received by the Custodian from the Fund will be deemed to authorize or permit any director, trustee, officer, employee, or agent of the Fund to withdraw any of the Assets of the Fund upon the mere receipt of such authorization, Special Instructions or Instructions from such director, trustee, officer, employee or agent.

The Fund further agrees to promptly provide the Custodian completed Subscription Agreements and any other applicable documentation for the Fund’s investment in any underlying investment companies. Such investments will only be Securities, and therefore Assets of the Fund, upon receipt by the Custodian of completed Subscription Agreements for the Fund. The Fund undertakes to work with Custodian to ensure that quarterly confirmations, and any documentation representing changes to the Fund’s holding in such investment (such as related to an “add-on” purchase), are provided to Custodian as soon as practicably possible.

4. POWERS AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN.

Except for Assets held by any Foreign Subcustodian, Special Subcustodian or Eligible Securities Depository appointed pursuant to Sections 5(b), (c), or (f) of this Agreement, the Custodian shall have and perform the powers and duties hereinafter set forth in this Section 4. For purposes of this Section 4 all

 

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references to powers and duties of the “Custodian” shall also refer to any Domestic Subcustodian appointed pursuant to Section 5(a).

(a) Safekeeping.

The Custodian will keep safely the Assets of the Fund which are delivered to and accepted by it from time to time. The Custodian shall notify the Fund if it is unwilling or unable to accept custody of any asset of the Fund. The Custodian shall not be responsible for any property of the Fund held by the Fund and not delivered to the Custodian or for any pre-existing faults or defects in Assets that are delivered to the Custodian.

(b) Manner of Holding Securities.

(1) The Custodian shall at all times hold Securities of the Fund either: (i) by physical possession of the share certificates, completed Subscription Agreements, or other instruments representing such Securities, in registered or bearer form; in the vault of the Custodian, Domestic Subcustodian, a Special Custodian, depository or agent of the Custodian; or in an account maintained by the Custodian or agent at a Securities System (as hereinafter defined); or (ii) in book-entry form by a Securities System in accordance with the provisions of sub-paragraph (3) below.

(2) The Custodian may hold registrable portfolio Securities which have been delivered to it in physical form, by registering the same in the name of the Fund or its nominee, or in the name of the Custodian or its nominee, for whose actions the Fund and Custodian, respectively, shall be fully responsible. Upon the receipt of Instructions, the Custodian shall hold such Securities in street certificate form, so called, with or without any indication of representative capacity. However, unless it receives Instructions to the contrary, the Custodian will register all such portfolio Securities in the name of the Custodian’s authorized nominee. All such Securities shall be held in an account of the Custodian containing only assets of the Fund or only assets held by the Custodian for the benefit of customers, provided that the records of the Custodian shall indicate at all times the Fund or other customer for which such Securities are held in such accounts and the respective interests therein.

(3) The Custodian may deposit and/or maintain domestic Securities owned by the Fund in, and the Fund hereby approves use of: (a) The Depository Trust & Clearing Corporation; (b) any other clearing agency registered with the Securities and Exchange Commission (“SEC”) under section 17A of the Securities Exchange Act of 1934, which acts as a securities depository; and (c) a Federal Reserve Bank or other entity authorized to operate the federal book-entry system described in the regulations of the Department of the Treasury or book-entry systems operated pursuant to comparable regulations of other federal agencies. Upon the receipt of Special Instructions, the Custodian may deposit and/or maintain domestic Securities owned by the Fund in any other domestic clearing agency that may otherwise be authorized by the SEC to serve in the capacity of depository or clearing agent for the Securities or other assets of investment companies and that acts as a Securities depository. Each of the foregoing shall be referred to in this Agreement as a “Securities System”, and all such Securities Systems shall be listed on the attached Appendix A. Use of a Securities System shall be in accordance with applicable Federal Reserve Board and SEC rules and regulations, if any, and subject to the following provisions:

(i) The Custodian may deposit the Securities directly or through one or more agents or Subcustodians which are also qualified to act as custodians for investment companies.

 

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(ii) Securities held in a Securities System shall be subject to any agreements or rules effective between the Securities System and the Custodian or a Subcustodian, as the case may be.

(iii) Any Securities deposited or maintained in a Securities System shall be held in an account (“Account”) of the Custodian or a Subcustodian in the Securities System that includes only assets held by the Custodian or a Subcustodian as a custodian or otherwise for customers.

(iv) The books and records of the Custodian shall at all times identify those Securities belonging to the Fund which are maintained in a Securities System.

(v) The Custodian shall pay for Securities purchased for the account of the Fund only upon (a) receipt of advice from the Securities System that such Securities have been transferred to the Account of the Custodian in accordance with the rules of the Securities System, and (b) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of the Fund. The Custodian shall transfer Securities sold for the account of the Fund only upon (a) receipt of advice from the Securities System that payment for such Securities has been transferred to the Account of the Custodian in accordance with the rules of the Securities System, and (b) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Fund. Copies of all advices from the Securities System relating to transfers of Securities for the account of the Fund shall be maintained for the Fund by the Custodian. Such copies may be maintained by the Custodian in electronic form. The Custodian shall make available to the Fund or its agent on the next business day, by Electronic Communication, facsimile, or other means reasonably acceptable to both parties, daily transaction activity that shall include each day’s transactions for the account of the Fund.

(vi) The Custodian shall, if requested by the Fund pursuant to Instructions, provide the Fund with reports obtained by the Custodian or any Subcustodian with respect to a Securities System’s accounting system, internal accounting control and procedures for safeguarding Securities deposited in the Securities System.

(vii) Upon receipt of Special Instructions to do so, the Custodian shall terminate the use of any Securities System on behalf of the Fund as promptly as practicable and shall take all actions reasonably practicable to safeguard the Securities of the Fund maintained with such Securities System.

(viii) The Custodian otherwise complies with the requirements of Rule 17f-4 under the 1940 Act.

(c) Free Delivery of Assets.

Notwithstanding any other provision of this Agreement and except as provided in Section 3 hereof, the Custodian, upon receipt of Special Instructions, will undertake to make free delivery of Assets, provided such Assets are on hand and available, in connection with the Fund’s transactions and to transfer such Assets to such broker, dealer, Subcustodian, bank, agent, Securities System or otherwise as specified in such Special Instructions.

(d) Exchange of Securities.

Upon receipt of Instructions, the Custodian will exchange Securities held by it for the Fund for other Securities or cash paid in connection with any reorganization, recapitalization, merger, consolidation, conversion, or similar event, and will deposit any such Securities in accordance with the terms of any reorganization or protective plan.

 

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Unless otherwise directed by Instructions, the Custodian is authorized to exchange Securities held by it in temporary form for Securities in definitive form, to surrender Securities for transfer into a name or nominee name as permitted in Section 4(b)(2), to effect an exchange of shares in a stock split or when the par value of the stock is changed, to sell any fractional shares, and, upon receiving payment therefor, to surrender bonds or other Securities held by it at maturity or call.

(e) Purchases of Assets.

(1) Securities Purchases. In accordance with Instructions, the Custodian shall, with respect to a purchase of Securities, pay for such Securities out of monies held for the Fund’s account for which the purchase was made, but only insofar as monies are available therein for such purpose, and receive the Securities so purchased. Unless the Custodian has received Special Instructions to the contrary, such payment will be made only upon delivery of such Securities to the Custodian, a clearing corporation of a national securities exchange of which the Custodian is a member, or a Securities System in accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the foregoing, upon receipt of Instructions to do so, (i) in connection with a repurchase agreement, the Custodian may release funds to a Securities System prior to the receipt of advice from the Securities System that the Securities underlying such repurchase agreement have been transferred by book-entry into the Account maintained with such Securities System by the Custodian, provided that the Custodian’s instructions to the Securities System require that the Securities System may make payment of such funds to the other party to the repurchase agreement only upon transfer by book-entry of the Securities underlying the repurchase agreement into such Account; (ii) in the case of options, Interest Bearing Deposits (as hereinafter defined), currency deposits and other deposits, and foreign exchange transactions, pursuant to Sections 4(g), 4(k), and 4(l) hereof, the Custodian may make payment therefor before receipt of an advice of transaction; and (iii) the Custodian may make payment for Securities or other Assets prior to delivery thereof in accordance with Instructions, applicable laws, generally accepted trade practices, or the terms of the instrument representing such Security or other Asset, including, but not limited to, Securities and other Assets as to which payment for the Security and receipt of the instrument evidencing the Security are under generally accepted trade practices or the terms of the instrument representing the Security expected to take place in different locations or through separate parties.

(2) Other Assets Purchased. Upon receipt of Instructions and except as otherwise provided herein, the Custodian shall pay for and receive other Assets for the account of the Fund as provided in Instructions.

(f) Sales of Assets.

(1) Securities Sold. In accordance with Instructions, the Custodian shall, with respect to a sale, deliver or cause to be delivered the Securities thus designated as sold to the broker or other person specified in the Instructions relating to such sale. Unless the Custodian has received Special Instructions to the contrary, such delivery shall be made only upon receipt of payment therefor in the form of: (a) cash, certified check, bank cashier’s check, bank credit, or bank wire transfer; (b) credit to the account of the Custodian with a clearing corporation of a national securities exchange of which the Custodian is a member; or (c) credit to the Account of the Custodian with a Securities System, in accordance with the provisions of Section 4(b)(3) hereof. Notwithstanding the foregoing, the Custodian may deliver Securities and other Assets prior to receipt of payment for such Securities in accordance with Instructions, applicable laws, generally accepted trade practices, or the terms of the instrument representing such Security or other Asset. For example, Securities held in physical form may be delivered and paid for in accordance with “street delivery custom” to a broker or its clearing agent, against delivery to the Custodian of a receipt for such Securities, provided that the Custodian shall have taken reasonable steps

 

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to ensure prompt collection of the payment for, or return of, such Securities by the broker or its clearing agent, and provided further that the Custodian shall not be responsible for the selection of or the failure or inability to perform of such broker or its clearing agent or for any related loss arising from delivery or custody of such Securities prior to receiving payment therefor.

(2) Other Assets Sold. Upon receipt of Instructions and except as otherwise provided herein, the Custodian shall receive payment for and deliver other Assets for the account of the Fund as provided in Instructions.

(g) Options.

(1) Upon receipt of Instructions relating to the purchase of an option or sale of a covered call option, the Custodian shall: (a) receive and retain Instructions or other documents, to the extent they are provided to the Custodian, evidencing the purchase or writing of the option by the Fund; (b) if the transaction involves the sale of a covered call option, deposit and maintain in a segregated account the Securities (either physically or by book-entry in a Securities System) subject to the covered call option written on behalf of the Fund; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any notices or other communications evidencing the expiration, termination or exercise of such options which are furnished to the Custodian by the Options Clearing Corporation (the “OCC”), the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions.

(2) Upon receipt of Instructions relating to the sale of a naked option (including stock index and commodity options), the Custodian, the Fund and the broker-dealer shall enter into an agreement to comply with the rules of the OCC or of any registered national securities exchange or similar organizations(s). Pursuant to that agreement and the Fund’s Instructions, the Custodian shall: (a) receive and retain Instructions or other documents, if any, evidencing the writing of the option; (b) deposit and maintain in a segregated account, Securities (either physically or by book-entry in a Securities System), cash and/or other Assets; and (c) pay, release and/or transfer such Securities, cash or other Assets in accordance with any such agreement and with any notices or other communications evidencing the expiration, termination or exercise of such option which are furnished to the Custodian by the OCC, the securities or options exchanges on which such options were traded, or such other organization as may be responsible for handling such option transactions. The Fund and the broker-dealer shall be responsible for determining the quality and quantity of assets held in any segregated account established in compliance with applicable margin maintenance requirements and the performance of other terms of any option contract.

(h) Segregated Accounts.

Upon receipt of Instructions, the Custodian shall establish and maintain on its books a segregated account or accounts for and on behalf of the Fund, into which account or accounts may be transferred Assets of the Fund, including Securities maintained by the Custodian in a Securities System pursuant to Paragraph (b)(3) of this Section 4, said account or accounts to be maintained (i) for the purposes set forth in Sections 4(g) and 4(m) and (ii) for the purpose of compliance by the Fund with the procedures required by, as applicable, Rule 18f-4 under the 1940 Act, any subsequent release or releases, or other applicable SEC interpretations relating to the maintenance of segregated accounts by registered investment companies, or (iii) for such other purposes as may be set forth, from time to time, in Special Instructions. The Custodian shall not be responsible for the determination of the type or amount of Assets to be held in any segregated account referred to in this paragraph, or for compliance by the Fund with required procedures noted in (ii) above.

 

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(i) Depositary Receipts.

Upon receipt of Instructions, the Custodian shall surrender or cause to be surrendered Securities to the depository used for such Securities by an issuer of American Depositary Receipts or International Depositary Receipts (hereinafter referred to, collectively, as “ADRs”), against a written receipt therefor adequately describing such Securities and written evidence satisfactory to the organization surrendering the same that the depository has acknowledged receipt of instructions to issue ADRs with respect to such Securities in the name of the Custodian or a nominee of the Custodian, for delivery in accordance with such instructions.

Upon receipt of Instructions, the Custodian shall surrender or cause to be surrendered ADRs to the issuer thereof, against a written receipt therefor adequately describing the ADRs surrendered and written evidence satisfactory to the organization surrendering the same that the issuer of the ADRs has acknowledged receipt of instructions to cause its depository to deliver the Securities underlying such ADRs in accordance with such instructions.

(j) Corporate Actions, Put Bonds, Called Bonds, Etc.

Upon receipt of Instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or similar Securities to the issuer or trustee thereof (or to the agent of such issuer or trustee) for the purpose of exercise or sale, provided that the new Securities, cash or other Assets, if any, acquired as a result of such actions are to be delivered to the Custodian; and (b) deposit Securities upon invitations for tenders thereof, provided that the consideration for such Securities is to be paid or delivered to the Custodian, or the tendered Securities are to be returned to the Custodian.

Unless otherwise directed to the contrary in Instructions, the Custodian shall comply with the terms of all mandatory or compulsory exchanges, calls, tenders, redemptions, or similar rights of security ownership of which the Custodian receives notice through data services or publications to which it normally subscribes, and shall promptly notify the Fund of such action in writing or in such other manner as the Fund and Custodian may agree in writing.

The Fund agrees that if it gives an Instruction for the performance of an action after the last permissible date of a period established by the Custodian or any optional offer or on the last permissible date for the performance of such act, the Fund shall hold the Custodian harmless from any adverse consequences in connection with acting upon or failing to act upon such Instructions.

If the Fund wishes to receive periodic corporate action notices of exchanges, calls, tenders, redemptions and other similar notices pertaining to Securities and to provide Instructions with respect to such Securities via the internet, the Custodian and the Fund may enter into a Supplement to this Agreement whereby the Fund will be able to participate in the Custodian’s Electronic Corporate Action Notification Service.

(k) Interest Bearing Deposits.

Upon receipt of Instructions directing the Custodian to purchase interest bearing fixed-term certificates of deposit or call deposits (hereinafter referred to, collectively, as “Interest Bearing Deposits”) for the account of the Fund, the Custodian shall purchase such Interest Bearing Deposits with such banks or trust companies, including the Custodian, any Subcustodian or any subsidiary or affiliate of the Custodian (hereinafter referred to as “Banking Institutions”), and in such amounts as the Fund may direct

 

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pursuant to Instructions. Such Interest Bearing Deposits shall be denominated in U.S. dollars. Interest Bearing Deposits issued by the Custodian shall be in the name of the Fund. Interest Bearing Deposits issued by another Banking Institution may be in the name of the Fund or the Custodian or in the name of the Custodian for its customers generally. The responsibilities of the Custodian to the Fund for Interest Bearing Deposits issued by the Custodian shall be that of a U.S. bank for a similar deposit. With respect to Interest Bearing Deposits issued by any other Banking Institution, (a) the Custodian shall be responsible for the collection of income and the transmission of cash to and from such accounts; and (b) the Custodian shall have no duty with respect to the selection of the Banking Institution or for the failure of such Banking Institution to pay upon demand.

(l) Foreign Exchange Transactions.

(l) The Fund may appoint the Custodian as its agent in the execution of all currency exchange transactions. If requested, the Custodian agrees to provide exchange rate and U.S. Dollar information, in writing, or by other means agreeable to both parties, to the Fund.

(2) Upon receipt of Instructions, the Custodian shall settle foreign exchange contracts or options to purchase and sell foreign currencies for spot and future delivery on behalf of and for the account of the Fund with such currency brokers or Banking Institutions as the Fund may determine and direct pursuant to Instructions. If, in its Instructions, the Fund does not direct the Custodian to utilize a particular currency broker or Banking Institution, the Custodian is authorized to select such currency broker or Banking Institution as it deems appropriate to execute the Fund’s foreign currency transaction. It is understood that all such transactions shall be undertaken by the Custodian as agent for the Fund.

(3) The Fund accepts full responsibility for its use of third party foreign exchange brokers and for execution of said foreign exchange contracts and understands that the Fund shall be responsible for any and all costs and interest charges which may be incurred as a result of the failure or delay of its third party broker to deliver foreign exchange. The Custodian shall have no responsibility or liability with respect to the selection of the currency brokers or Banking Institutions selected by the Fund or the performance or non-performance of such brokers or Banking Institutions.

(4) Notwithstanding anything to the contrary contained herein, upon receipt of Instructions the Custodian may, in connection with a foreign exchange contract, make free outgoing payments of cash in the form of U.S. Dollars or foreign currency prior to receipt of confirmation of such foreign exchange contract or confirmation that the countervalue currency completing such contract has been delivered or received.

(m) Pledges or Loans of Securities.

(1) Upon receipt of Instructions from the Fund, the Custodian will release or cause to be released Securities held in custody to the pledgees designated in such Instructions by way of pledge or hypothecation to secure loans incurred by the Fund with various lenders including but not limited to UMB Bank, n.a.; provided, however, that the Securities shall be released only upon payment to the Custodian of the monies borrowed, except that in cases where additional collateral is required to secure existing borrowings, further Securities may be released or delivered, or caused to be released or delivered for that purpose upon receipt of Instructions. Upon receipt of Instructions, the Custodian will pay, but only from funds available for such purpose, any such loan upon re-delivery to it of the Securities pledged or hypothecated therefor and upon surrender of the note or notes evidencing such loan. In lieu of delivering collateral to a pledgee, the Custodian, on the receipt of Instructions, shall transfer the pledged Securities to a segregated account for the benefit of the pledgee.

 

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(2) Upon receipt of Instructions, the Custodian will release securities to a securities lending agent appointed by the Fund and designated in such Instructions. The Custodian shall act upon Instructions from the Fund and/or such agent in order to effect securities lending transactions on behalf of the Fund. For its services in facilitating the Fund’s securities lending activities through such agent, the Custodian may receive from the agent a portion of the agent’s securities lending revenue or a fee directly from the Fund. The Custodian shall have no responsibility or liability for any losses arising in connection with the agent’s actions or omissions, including but not limited to the delivery of Securities prior to the receipt of collateral, in the absence of negligence or willful misconduct on the part of the Custodian.

(n) Stock Dividends, Rights, Etc.

The Custodian shall receive and collect all stock dividends, rights, and other items of like nature and, upon receipt of Instructions, take action with respect to the same as directed in such Instructions.

(o) Routine Dealings.

The Custodian will, in general, attend to all routine and operational matters in accordance with industry standards in connection with the sale, exchange, substitution, purchase, transfer, or other dealings with Securities or other property of the Fund, except as may be otherwise provided in this Agreement or directed from time to time by Instructions from the Fund. The Custodian may also make payments to itself or others from the Assets for disbursements and out-of-pocket expenses incidental to handling Securities or other similar items relating to its duties under this Agreement, provided that all such payments shall be accounted for to the Fund.

(p) Collections.

The Custodian shall (a) collect amounts due and payable to the Fund with respect to Securities and other Assets; (b) promptly credit to the account of the Fund all income and other payments relating to Securities and other Assets held by the Custodian hereunder upon Custodian’s receipt of such income or payments or as otherwise agreed in writing by the Custodian and the Fund; (c) promptly endorse and deliver any instruments required to effect such collection; and (d) promptly execute ownership and other certificates, affidavits and other documents for all federal, state, local and foreign tax purposes in connection with receipt of income or other payments with respect to Securities and other Assets, or in connection with the transfer of such Securities or other Assets; provided, however, that with respect to Securities registered in so-called street name, or physical Securities with variable interest rates, the Custodian shall use its best efforts to collect amounts due and payable to the Fund. The Custodian shall notify the Fund in writing by facsimile transmission or in such other manner as the Fund and Custodian may agree in writing if any amount payable with respect to Securities or other Assets is not received by the Custodian when due. The Custodian shall not be responsible for the collection of amounts due and payable with respect to Securities or other Assets that are in default.

Any advance credit of cash or Securities expected to be received shall be subject to actual collection and may, when the Custodian determines collection unlikely, be reversed by the Custodian.

(q) Dividends, Distributions and Redemptions.

To enable the Fund to pay dividends or other distributions to shareholders of the Fund and to make payment to shareholders who have requested repurchase or redemption of their shares of the Fund (collectively, the “Shares”), the Custodian shall release cash or Securities insofar as available. In the case

 

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of cash, the Custodian shall, upon the receipt of Instructions, transfer such funds by check or wire transfer to any account at any bank or trust company designated by the Fund in such Instructions. In the case of Securities, the Custodian shall, upon the receipt of Special Instructions, make such transfer to any entity or account designated by the Fund in such Special Instructions.

(r) Proceeds from Shares Sold.

The Custodian shall receive funds representing cash payments received for shares issued or sold from time to time by the Fund, and shall credit such funds to the account of the Fund. The Custodian shall notify the Fund of Custodian’s receipt of cash in payment for shares issued by the Fund by facsimile transmission or in such other manner as the Fund and the Custodian shall agree. Upon receipt of Instructions, the Custodian shall: (a) deliver all federal funds received by the Custodian in payment for shares as may be set forth in such Instructions and at a time agreed upon between the Custodian and the Fund; and (b) make federal funds available to the Fund as of specified times agreed upon from time to time by the Fund and the Custodian, in the amount of checks received in payment for shares which are deposited to the accounts of the Fund.

(s) Proxies and Notices; Compliance with the Shareholders Communication Act of 1985.

The Custodian shall deliver or cause to be delivered to the Fund, or its designated agent or proxy service provider, all forms of proxies, all notices of meetings, and any other notices or announcements affecting or relating to Securities owned by the Fund that are received by the Custodian and, upon receipt of Instructions, the Custodian shall execute and deliver, or cause a Subcustodian or nominee to execute and deliver such proxies or other authorizations as may be required. Except as directed pursuant to Instructions, neither the Custodian nor any Subcustodian shall vote upon any such Securities, or execute any proxy to vote thereon, or give any consent or take any other action with respect thereto.

The Custodian will not release the identity of the Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and the Fund unless the Fund directs the Custodian otherwise pursuant to Instructions.

(t) Books and Records.

The Custodian shall maintain such records relating to its activities under this Agreement as are required to be maintained by Rule 31a-1 under the 1940 Act and to preserve them for the periods prescribed in Rule 31a-2 under the 1940 Act. These records shall be open for inspection by duly authorized officers, employees or agents (including independent public accountants) of the Fund during normal business hours of the Custodian.

The Custodian shall provide accountings relating to its activities under this Agreement as shall be agreed upon by the Fund and the Custodian.

(u) Opinion of Fund’s Independent Certified Public Accountants.

The Custodian shall take all reasonable action as the Fund may request to obtain from year to year favorable opinions from the Fund’s independent certified public accountants with respect to the Custodian’s activities hereunder and in connection with the preparation of the Fund’s periodic reports to the SEC and with respect to any other requirements of the SEC.

 

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(v) Reports by Independent Certified Public Accountants.

At the request of the Fund, the Custodian shall deliver to the Fund a written report, which may be in electronic form, prepared by the Custodian’s independent certified public accountants with respect to the services provided by the Custodian under this Agreement, including, without limitation, the Custodian’s accounting system, internal accounting control, financial strength and procedures for safeguarding cash, Securities and other Assets, including cash, Securities and other Assets deposited and/or maintained in a Securities System or with a Subcustodian. Such report shall be of sufficient scope and in sufficient detail as may reasonably be required by the Fund and as may reasonably be obtained by the Custodian.

(w) Bills and Other Disbursements.

Upon receipt of Instructions, the Custodian shall pay, or cause to be paid, all bills, statements, or other obligations of the Fund.

(x) Sweep or Automated Cash Management.

Upon receipt of Instructions, the Custodian shall invest any otherwise uninvested cash of the Fund held by the Custodian in a money market mutual fund, a cash deposit product, or other cash investment vehicle made available by the Custodian from time to time, in accordance with the directions contained in such Instructions. A fee may be charged or a spread may be received by the Custodian for investing the Fund’s otherwise uninvested cash in the available cash investment vehicles or products.

The Custodian shall have no responsibility to determine whether any purchases of money market mutual fund shares or any other cash investment vehicle or cash deposit product by or on behalf of the Fund under the terms of this section will cause the Fund to exceed the limitations contained in the 1940 Act on ownership of shares of another registered investment company or any other asset or portfolio restrictions or limitations contained in applicable laws or regulations or the Fund’s prospectus. The Fund agrees to indemnify and hold harmless the Custodian from all losses, damages and expenses (including attorney’s fees) suffered or incurred by the Custodian as a result of a violation by the Fund of the limitations on ownership of shares of another registered investment company or any other cash investment vehicle or cash deposit product.

5. SUBCUSTODIANS.

From time to time, in accordance with the relevant provisions of this Agreement and subject to the prior written consent of the Fund, which consent shall not be unreasonably withheld, (i) the Custodian may appoint one or more Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians or Interim Subcustodians (each as hereinafter defined) to act on behalf of the Fund; and (ii) the Custodian may be directed, pursuant to an agreement between the Fund and the Custodian (“Delegation Agreement”), to appoint a Domestic Subcustodian to perform the duties of the Foreign Custody Manager (as such term is defined in Rule 17f-5 under the 1940 Act) (“Approved Foreign Custody Manager”) for the Fund so long as such Domestic Subcustodian is so eligible under the 1940 Act. Such Delegation Agreement shall provide that the appointment of any Domestic Subcustodian as the Approved Foreign Custody Manager must be governed by a written agreement between the Custodian and the Domestic Subcustodian, which provides for compliance with Rule 17f-5. The Approved Foreign Custody Manager may then appoint a Foreign Subcustodian or Interim Subcustodian in accordance with this Section 5. For purposes of this Agreement, all Domestic Subcustodians, Special Subcustodians, Foreign Subcustodians and Interim Subcustodians shall be referred to collectively as “Subcustodians.”

 

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(a) Domestic Subcustodians.

The Custodian may, at any time and from time to time, appoint any bank as defined in Section 2(a)(5) of the 1940 Act or any trust company or other entity, any of which meets the requirements of a custodian under Section 17(f) of the 1940 Act and the rules and regulations thereunder, to act for the Custodian on behalf of the Fund as a subcustodian for purposes of holding Assets of the Fund and performing other functions of the Custodian within the United States (a “Domestic Subcustodian”). The Fund shall approve in writing the appointment of the proposed Domestic Subcustodian; and the Custodian’s appointment of any such Domestic Subcustodian shall not be effective without such prior written approval of the Fund. Each such duly approved Domestic Subcustodian shall be reflected on Appendix A hereto, as it may be amended from time-to-time.

(b) Foreign Subcustodians.

(1)     The Approved Foreign Custody Manager may appoint any entity meeting the requirements of an Eligible Foreign Custodian, as such term is defined in Rule 17f-5(a)(1) under the 1940 Act, and which term shall also include a bank that qualifies to serve as a custodian of assets of investment companies under Section 17(f) of the 1940 Act or by SEC order is exempt therefrom (each a “Foreign Subcustodian” in the context of either a subcustodian or a sub-subcustodian), provided that the Approved Foreign Custody Manager’s appointments of such Foreign Subcustodians shall at all times be governed by an agreement that complies with Rule 17f-5.

(2)     Notwithstanding the foregoing, in the event that the Approved Foreign Custody Manager determines that it will not provide delegation services (i) in a country in which the Fund has directed that the Fund invest in a security or other Asset or (ii) with respect to a specific Foreign Subcustodian which the Fund has directed be used, the Custodian shall, or shall cause the Approved Foreign Custody Manager to, promptly notify the Fund in writing by facsimile transmission, Electronic Communication, or otherwise of the unavailability of the Approved Foreign Custody Manager’s delegation services in such country. The Custodian and the Approved Foreign Custody Manager (or Domestic Subcustodian) as applicable, shall be entitled to rely on and shall have no liability or responsibility for following such direction from the Fund as a Special Instruction and shall have no duties or liabilities under this Agreement save those that it may undertake specifically in writing with respect to each particular instance. Upon the receipt of such Special Instructions, the Custodian may, in its absolute discretion, designate, or cause the Approved Foreign Custody Manager to designate, an entity (defined herein as “Interim Subcustodian”) designated by the Fund in such Special Instructions, to hold such security or other Asset. In such event, the Fund represents and warrants that it has made a determination that the arrangement with such Interim Subcustodian satisfies the requirements of the 1940 Act and the rules and regulations thereunder (including Rule 17f-5, if applicable). It is further understood that where the Approved Foreign Custody Manager and the Custodian do not agree to provide fully to the Fund the services under this Agreement and the Delegation Agreement with respect to a particular country or specific Foreign Subcustodian, the Fund may delegate such services to another delegate pursuant to Rule 17f-5.

(c) Special Subcustodians.

Upon receipt of Special Instructions, the Custodian shall, on behalf of the Fund, appoint one or more banks, trust companies or other entities designated in such Special Instructions to act for the Custodian on behalf of the Fund as a subcustodian for purposes of: (i) effecting third-party repurchase transactions with banks, brokers, dealers or other entities through the use of a common custodian or subcustodian; (ii)

 

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providing depository and clearing agency services with respect to certain variable rate demand note Securities, (iii) providing depository and clearing agency services with respect to dollar denominated Securities; and (iv) effecting any other transactions designated by the Fund in such Special Instructions. Each such designated subcustodian (hereinafter referred to as a “Special Subcustodian”) shall be listed on Appendix A attached hereto, as it may be amended from time to time. In connection with the appointment of any Special Subcustodian, the Custodian may enter into a subcustodian agreement with the Special Subcustodian.

(d) Termination of a Subcustodian.

The Custodian may, at any time in its discretion upon notification to the Fund, terminate any Subcustodian of the Fund in accordance with the termination provisions under the applicable subcustodian agreement, and upon the receipt of Special Instructions, the Custodian shall terminate any Subcustodian in accordance with the termination provisions under the applicable subcustodian agreement.

(e) Information Regarding Foreign Subcustodians.

Upon request of the Fund, the Custodian shall deliver, or cause any Approved Foreign Custody Manager to deliver, to the Fund a letter or list stating: (i) the identity of each Foreign Subcustodian then acting on behalf of the Custodian; (ii) the Eligible Securities Depositories (as defined in Section 5(f)) in each foreign market through which each Foreign Subcustodian is then holding cash, securities and other Assets of the Fund; and (iii) such other information as may be requested by the Fund to ensure compliance with rules and regulations under the 1940 Act.

(f) Eligible Securities Depositories.

(1) The Custodian or the Domestic Subcustodian may place and maintain the Fund’s Foreign Assets with an Eligible Securities Depository (as defined in Rule 17f-7, which term shall include any other securities depository for which the SEC by exemptive order has permitted registered investment companies to maintain their assets).

(2) Upon the request of the Fund, the Custodian shall direct the Domestic Subcustodian to provide to the Fund (including the Fund’s Board of Trustees) and/or the Fund’s adviser or other agent an analysis of the custody risks associated with maintaining the Fund’s Foreign Assets with such Eligible Securities Depository utilized directly or indirectly by the Custodian or the Domestic Subcustodian as of the date hereof (or, in the case of an Eligible Securities Depository not so utilized as of the date hereof, prior to the placement of the Fund’s Foreign Assets at such depository) and at which any Foreign Assets of the Fund are held or are expected to be held. The Custodian shall direct the Domestic Subcustodian to monitor the custody risks associated with maintaining the Fund’s Foreign Assets at each such Eligible Securities Depository on a continuing basis and shall promptly notify the Fund or its adviser of any material changes in such risks through the Approved Foreign Custody Manager’s letter, market alerts or other periodic correspondence.

(3) The Custodian shall direct the Domestic Subcustodian to determine the eligibility under Rule 17f-7 of each foreign securities depository before maintaining the Fund’s Foreign Assets therewith and shall promptly advise the Fund if any Eligible Securities Depository ceases to be so eligible. Notwithstanding Subsection 17(c) hereof, Eligible Securities Depositories may, subject to Rule 17f-7, be added to or deleted from such list from time to time.

 

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(4) Withdrawal of Assets. If an arrangement with an Eligible Securities Depository no longer meets the requirements of Rule 17f-7, the Custodian shall direct the Domestic Subcustodian to withdraw the Fund’s Foreign Assets from such depository as soon as reasonably practicable.

(5) Standard of Care. In fulfilling its responsibilities under this Section 5(f), the Custodian will exercise reasonable care, prudence and diligence.

6. STANDARD OF CARE.

(a) General Standard of Care.

The Custodian shall exercise due care in accordance with reasonable commercial standards in discharging its duties hereunder. The Custodian shall be liable to the Fund for all losses, damages and reasonable costs and expenses suffered or incurred by the Fund resulting from the negligence, bad faith or willful misconduct of the Custodian or the Custodian’s reckless disregard of its duties under this Agreement; provided, however, in no event shall the Custodian be liable for attorneys’ fees or for special, indirect, consequential or punitive damages arising under or in connection with this Agreement.

(b) Actions Prohibited by Applicable Law, Etc.

In no event shall the Custodian incur liability hereunder if the Custodian or any Subcustodian or Securities System, or any Subcustodian, Eligible Securities Depository utilized by any such Subcustodian, or any nominee of the Custodian or any Subcustodian (individually, a “Person”) is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed, by reason of: (i) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or of any foreign country, or political subdivision thereof or of any court of competent jurisdiction (and neither the Custodian nor any other Person shall be obligated to take any action contrary thereto); or (ii) any “Force Majeure,” which for purposes of this Agreement, shall mean any circumstance or event which is beyond the reasonable control of the Custodian, a Subcustodian or any agent of the Custodian or a Subcustodian and which adversely affects the performance by the Custodian of its obligations hereunder, by the Subcustodian of its obligations under its subcustodian agreement or by any other agent of the Custodian or the Subcustodian, unless in each case, such delay or nonperformance is caused by the negligence, bad faith or willful misconduct of the Custodian or the Custodian’s reckless disregard of its duties under this Agreement. Such Force Majeure events may include any event caused by, arising out of or involving (a) an act of God, (b) accident, fire, water damage or explosion, (c) any computer, system outage or downtime or other equipment failure or malfunction caused by any computer virus or any other reason or the malfunction or failure of any communications medium (provided that the Custodian has adopted commercially reasonable cybersecurity systems, policies and procedures), (d) any interruption of the power supply or other utility service, (e) any strike or other work stoppage, whether partial or total, (f) any delay or disruption resulting from or reflecting the occurrence of any Sovereign Risk (as defined below), (g) any disruption of, or suspension of trading in, the securities, commodities or foreign exchange markets, whether or not resulting from or reflecting the occurrence of any Sovereign Risk, (h) any encumbrance on the transferability of cash, currency or a currency position on the actual settlement date of a foreign exchange transaction, whether or not resulting from or reflecting the occurrence of any Sovereign Risk, or (i) any other cause similarly beyond the reasonable control of the Custodian.

Subject to the Custodian’s general standard of care set forth in Subsection 6(a) hereof and the requirements of Section 17(f) of the 1940 Act and Rules 17f-5 and 17f-7 thereunder, the Custodian shall not incur liability hereunder if any Person is prevented, forbidden or delayed from performing, or omits to perform, any act or thing which this Agreement provides shall be performed or omitted to be performed

 

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by reason of any (i) “Sovereign Risk,” which for the purpose of this Agreement shall mean, in respect of any jurisdiction, including but not limited to the United States of America, where investments are acquired or held under this Agreement, (a) any act of war, terrorism, riot, insurrection or civil commotion, (b) the imposition of any investment, repatriation or exchange control restrictions by any governmental authority, (c) the confiscation, expropriation or nationalization of any investments by any governmental authority, whether de facto or de jure, (d) any devaluation or revaluation of the currency, (e) the imposition of taxes, levies or other charges affecting investments, (f) any change in the applicable law, or (g) any other economic, systemic or political risk incurred or experienced that is not directly related to the economic or financial conditions of the Eligible Foreign Custodian, except as otherwise provided in this Agreement or the Delegation Agreement, or (ii) “Country Risk,” which for the purpose of this Agreement shall mean, with respect to the acquisition, ownership, settlement or custody of investments in a jurisdiction, all risks relating to, or arising in consequence of, systemic and market factors affecting the acquisition, payment for or ownership of investments, including (a) the prevalence of crime and corruption in such jurisdiction, (b) the inaccuracy or unreliability of business and financial information (unrelated to the Approved Foreign Custody Manager’s duties imposed by Rule 17f-5(c) under the 1940 Act or to the duties imposed on the Custodian by Rule 17f-7 under the 1940 Act), (c) the instability or volatility of banking and financial systems, or the absence or inadequacy of an infrastructure to support such systems, (d) custody and settlement infrastructure of the market in which such investments are transacted and held, (e) the acts, omissions and operation of any Eligible Securities Depository, it being understood that this provision shall not excuse the Custodian’s performance under the express terms of this Agreement, (f) the risk of the bankruptcy or insolvency of banking agents, counterparties to cash and securities transactions, registrars or transfer agents, (g) the existence of market conditions which prevent the orderly execution or settlement of transactions or which affect the value of assets, and (h) the laws relating to the safekeeping and recovery of the Fund’s Foreign Assets held in custody pursuant to the terms of this Agreement; provided, however, that, in compliance with Rule 17f-5, neither Sovereign Risk nor Country Risk shall include the custody risk of a particular Eligible Foreign Custodian of the Fund’s Foreign Assets.

(c) Liability for Past Records.

Neither the Custodian nor any Domestic Subcustodian shall have any liability in respect of any loss, damage or expense suffered by the Fund, insofar as such loss, damage or expense arises from the performance of the Custodian or any Domestic Subcustodian in reliance upon records that were maintained for the Fund by entities other than the Custodian or any Domestic Subcustodian prior to the Custodian’s employment hereunder.

(d) Advice of Counsel.

The Custodian and all Domestic Subcustodians shall be entitled to receive and act upon advice of counsel of its own choosing on all matters. The Custodian and all Domestic Subcustodians shall be without liability for any actions taken or omitted in good faith pursuant to the advice of counsel.

(e) Advice of the Fund and Others.

The Custodian and any Domestic Subcustodian may rely upon the advice of the Fund and upon statements of the Fund’s accountants and other persons believed by it in good faith to be expert in matters upon which they are consulted, and neither the Custodian nor any Domestic Subcustodian shall be liable for any actions taken or omitted, in good faith, pursuant to such advice or statements.

(f) Information Services.

 

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The Custodian may rely upon information received from issuers of Securities or agents of such issuers, information received from Subcustodians or depositories, information from data reporting services that provide detail on corporate actions and other securities information, and other commercially reasonable industry sources; and, provided the Custodian has acted in accordance with the standard of care set forth in Section 6 (a), the Custodian shall have no liability as a result of relying upon such information sources, including but not limited to errors in any such information.

(g) Instructions Appearing to be Genuine.

The Custodian and all Domestic Subcustodians shall be fully protected and indemnified in acting as a custodian hereunder upon any resolutions of the Board of Trustees, Instructions, Special Instructions, advice, notice, request, consent, certificate, instrument or paper appearing to it to be genuine and to have been properly executed and shall, unless otherwise specifically provided herein, be entitled to receive as conclusive proof of any fact or matter required to be ascertained from the Fund hereunder a certificate signed by any officer of the Fund authorized to countersign or confirm Special Instructions. The Custodian shall have no liability for any losses, damages or expenses incurred by the Fund arising from the use of a non-secure form of email or other non-secure electronic system or process.

(h) No Investment Advice.

The Custodian shall have no duty to assess the risks inherent in Securities or other Assets or to provide investment advice, accounting or other valuation services regarding any such Securities or other Assets.

(i) Exceptions from Liability.

Without limiting the generality of any other provisions hereof, neither the Custodian nor any Domestic Subcustodian shall be under any duty or obligation to inquire into, nor be liable for:

(i) the validity of the issue of any Securities purchased by or for the Fund, the legality of the purchase thereof or evidence of ownership required to be received by any the Fund, or the propriety of the decision to purchase or amount paid therefor;

(ii) the legality of the sale, transfer or movement of any Securities by or for the Fund, or the propriety of the amount for which the same were sold; or

(iii) any other expenditures, encumbrances of Securities, borrowings or similar actions with respect to the Fund’s Assets;

and may, until notified to the contrary, presume that all Instructions or Special Instructions received by it are not in conflict with or in any way contrary to any provisions of any the Fund’s Declaration of Trust, Partnership Agreement, Articles of Incorporation or By-Laws or votes or proceedings of the shareholders, trustees, partners or directors of the Fund, or the Fund’s currently effective Registration Statement on file with the SEC.

7. LIABILITY OF THE CUSTODIAN FOR ACTIONS OF OTHERS.

(a) Domestic Subcustodians

 

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Except as provided in Section 7(d), the Custodian shall be liable for the acts or omissions of any Domestic Subcustodian to the same extent as if such actions or omissions were performed by the Custodian itself.

(b) Liability for Acts and Omissions of Foreign Subcustodians.

The Custodian shall be liable to the Fund for any loss or damage to the Fund caused by or resulting from the acts or omissions of any Foreign Subcustodian to the extent that, under the terms set forth in the subcustodian agreement between the Custodian or a Domestic Subcustodian and such Foreign Subcustodian, the Foreign Subcustodian has failed to perform in accordance with the standard of conduct imposed under such subcustodian agreement and the Custodian or Domestic Subcustodian recovers from the Foreign Subcustodian under the applicable subcustodian agreement.

(c) Securities Systems, Interim Subcustodians, Special Subcustodians, Eligible Securities Depositories.

The Custodian shall not be liable to the Fund for any loss, damage or expense suffered or incurred by the Fund resulting from or occasioned by the actions or omissions of a Securities System, Interim Subcustodian, Special Subcustodian, or Eligible Securities Depository unless such loss, damage or expense is caused by, or results from, the negligence, bad faith or willful misconduct of the Custodian or the Custodian’s reckless disregard of its duties under this Agreement.

(d) Failure of Third Parties.

The Custodian shall not be liable for any loss, damage or expense suffered or incurred by the Fund resulting from or occasioned by the actions, omissions, neglects, defaults, insolvency or other failure of any (i) issuer of any Securities or of any agent of such issuer; (ii) any counterparty with respect to any Security or other Asset, including any issuer of any option, futures, derivatives or commodities contract; (iii) investment adviser or other agent of the Fund; or (iv) any broker, bank, trust company or any other person with whom the Custodian may deal (other than any of such entities acting as a Subcustodian, Securities System or Eligible Securities Depository, for whose actions the liability of the Custodian is set out elsewhere in this Agreement); or (v) any agent or depository (including but not limited to a securities lending agent) with whom the Custodian may deal at the direction of, and behalf of, the Fund; unless such loss, damage or expense is caused by, or results from, the negligence, bad faith or willful misconduct of the Custodian or the Custodian’s reckless disregard of its duties under this Agreement or the Custodian’s breach of the terms of any contract between the Fund and the Custodian.

8. INDEMNIFICATION.

(a) Indemnification by Fund.

Subject to the limitations set forth in this Agreement, the Fund agrees to indemnify and hold harmless the Custodian and its nominees from all losses, damages and expenses (including attorneys’ fees) suffered or incurred by the Custodian or its nominee caused by or arising from actions taken by the Custodian, its employees or agents in the performance of its duties and obligations under this Agreement, including, but not limited to, any indemnification obligations undertaken by the Custodian under any relevant subcustodian agreement; provided, however, that such indemnity shall not apply to the extent the Custodian is liable under Sections 6 or 7 hereof.

 

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If the Fund requires the Custodian to take any action with respect to Securities, which action involves the payment of money or which may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund being liable for the payment of money or incurring liability of some other form, the Fund, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it.

(b) Indemnification by Custodian.

Subject to the limitations set forth in this Agreement, the Custodian agrees to indemnify and hold harmless the Fund from all losses, damages and expenses (with the exception of those damages and expenses referenced in Section 6(a)) suffered or incurred by the Fund caused by the negligence, bad faith or willful misconduct of the Custodian or the Custodian’s reckless disregard of its duties under this Agreement.

9. ADVANCES.

In the event that the Custodian or any Subcustodian, Securities System, or Eligible Securities Depository acting either directly or indirectly under agreement with the Custodian (each of which for purposes of this Section 9 shall be referred to as “Custodian”), makes any payment or transfer of funds on behalf of the Fund as to which there would be, at the close of business on the date of such payment or transfer, insufficient funds held by the Custodian on behalf of the Fund, the Custodian may, in its discretion without further Instructions, provide an advance (“Advance”) to the Fund in an amount sufficient to allow the completion of the transaction by reason of which such payment or transfer of funds is to be made. In addition, in the event the Custodian is directed by Instructions to make any payment or transfer of funds on behalf of the Fund as to which it is subsequently determined that the Fund has overdrawn its cash account with the Custodian as of the close of business on the date of such payment or transfer, said overdraft shall constitute an Advance. Any Advance shall be payable by the Fund on behalf of which the Advance was made on demand by Custodian, unless otherwise agreed by the Fund and the Custodian, and shall accrue interest from the date of the Advance to the date of payment by the Fund to the Custodian at a rate determined from time to time by the Custodian. It is understood that any transaction in respect of which the Custodian shall have made an Advance, including but not limited to a foreign exchange contract or transaction in respect of which the Custodian is not acting as a principal, is for the account of and at the risk of the Fund on behalf of which the Advance was made, and not, by reason of such Advance, deemed to be a transaction undertaken by the Custodian for its own account and risk. The Custodian and the Fund which are parties to this Agreement acknowledge that the purpose of Advances is to finance temporarily the purchase or sale of Securities for prompt delivery in accordance with the settlement terms of such transactions or to meet emergency expenses not reasonably foreseeable by the Fund. The Custodian shall promptly notify the Fund of any Advance. Such notification may be communicated by telephone, Electronic Communication or facsimile transmission or in such other manner as the Custodian may choose. Nothing herein shall be deemed to create an obligation on the part of the Custodian to advance monies to the Fund.

10. SECURITY INTEREST.

To secure the due and prompt payment of all Advances, together with any taxes, charges, fees, expenses, assessments, obligations, claims or liabilities incurred by the Custodian in connection with its or their performance of any duties under this Agreement (collectively, “Liabilities”), except for any Liabilities arising from or the Custodian’s negligence, bad faith or willful misconduct or the Custodian’s reckless disregard of its duties under this Agreement, the Fund grants to the Custodian a security interest in all of the Fund’s Securities and other Assets now or hereafter in the possession of the Custodian and all

 

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proceeds thereof (collectively, the “Collateral”). The Fund shall promptly reimburse the Custodian for any and all such Liabilities. In the event that the Fund fails to satisfy any of the Liabilities as and when due and payable, the Custodian shall have in respect of the Collateral, in addition to all other rights and remedies arising hereunder or under local law, the rights and remedies of a secured party under the Uniform Commercial Code. Without prejudice to the Custodian’s rights under applicable law, the Custodian shall be entitled, without notice to the Fund, to withhold delivery of any Collateral, sell, set-off, or otherwise realize upon or dispose of any such Collateral and to apply the money or other proceeds and any other monies credited to the Fund in satisfaction of the Liabilities. This includes, but is not limited to, any interest on any such unpaid Liability as the Custodian deems reasonable, and all costs and expenses (including reasonable attorney’s fees) incurred by the Custodian in connection with the sale, set-off or other disposition of such Collateral.

11. COMPENSATION.

The Fund will pay to the Custodian such compensation as is set forth on Schedule A hereto, or as otherwise agreed to in writing by the Custodian and the Fund from time to time. In addition, the Fund shall reimburse the Custodian for all reasonable out-of-pocket expenses incurred by the Custodian in connection with this Agreement, but excluding salaries and usual overhead expenses. Such compensation, and expenses shall be billed to the Fund and paid in cash to the Custodian.

12. POWERS OF ATTORNEY.

Upon request, the Fund shall deliver to the Custodian such proxies, powers of attorney or other instruments as may be reasonable and necessary or desirable in connection with the performance by the Custodian or any Subcustodian of their respective obligations under this Agreement or any applicable subcustodian agreement.

13. TAX LAWS.

The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Fund or on the Custodian as custodian for the Fund by the tax law of any country or of any state or political subdivision thereof. The Fund agrees to indemnify the Custodian for and against any such obligations including taxes, tax reclaims, withholding and reporting requirements, claims for exemption or refund, additions for late payment, interest, penalties and other expenses (including legal expenses) that may be assessed against the Fund or the Custodian as custodian of the Fund.

14. TERM AND ASSIGNMENT.

Unless sooner terminated as provided herein, this Agreement shall continue in effect with respect to each Fund for a two-year period beginning on the date of this Agreement (the “Initial Term”). Thereafter, if not terminated as provided herein, the Agreement shall continue automatically in effect as to each Fund for successive one-year periods (each a “Renewal Term”).

In the event this Agreement is terminated by the Fund prior to the end of the Initial Term or any subsequent Renewal Term, the Fund shall be obligated to pay the Custodian the remaining balance of the fees payable to the Custodian under this Agreement through the end of the Initial Term or Renewal Term, as applicable. Notwithstanding the foregoing, either party may terminate this Agreement, and pay fees through the date of termination: (i) at the end of the Initial Term or at the end of any successive Renewal Term by giving the other party a written notice not less than ninety (90) days’ prior to the end of the respective term; (ii) upon the material breach of the other party of any term of this Agreement if such

 

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breach is not cured within 15 business days of notice of such breach to the breaching party; and (iii) in the event of the appointment of a conservator or receiver for the Custodian by regulatory authorities or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Upon termination of this Agreement, the Fund shall pay to the Custodian such fees as may be due the Custodian hereunder as well as its reimbursable disbursements, costs and expenses paid or incurred. Upon termination of this Agreement, the Custodian shall deliver, at the terminating party’s expense, all Assets held by it hereunder to a successor custodian designated by the Fund or, if a successor custodian is not designated, then to the Fund or as otherwise designated by the Fund by Special Instructions. Upon such delivery, the Custodian shall have no further obligations or liabilities under this Agreement except as to the final resolution of matters relating to activity occurring prior to the effective date of termination. In the event that for any reason Securities or other Assets remain in the possession of the Custodian after the date such termination shall take effect, the Custodian shall be entitled to compensation at the same rates as agreed to by the Custodian and the Fund during the term of this Agreement as set forth in Section 11.

This Agreement may not be assigned by the Custodian or the Fund without the respective consent of the other.

15. ADDITIONAL FUNDS.

[RESERVED]

16. NOTICES.

As to the Fund, notices, requests, instructions and other writings delivered to StepStone Private Infrastructure Fund, 128 S. Tryon St., Suite 1600, Charlotte, NC 28202 postage prepaid, or to such other address as the Fund may have designated to the Custodian in writing, shall be deemed to have been properly delivered or given to the Fund.

Notices, requests, instructions and other writings delivered to the Custodian at its office at 928 Grand Blvd., 10th Floor, Attn: Amy Small, Kansas City, Missouri 64106, postage prepaid, or to such other addresses as the Custodian may have designated to the Fund in writing, shall be deemed to have been properly delivered or given to the Custodian hereunder; provided, however, that procedures for the delivery of Instructions and Special Instructions shall be governed by Section 2(c) hereof.

17. CONFIDENTIALITY.

The parties agree that all Information, books and records provided by the Custodian or the Fund to each other in connection with this Agreement, and all information provided by either party pertaining to its business or operations, is “Confidential Information.” All Confidential Information shall be used by the party receiving such information only for the purpose of providing or obtaining services under this Agreement and, except as may be required to carry out the terms of this Agreement, shall not be disclosed to any other party without the express consent of the party providing such Confidential Information. The foregoing limitations shall not apply to any information that is available to the general public other than as a result of a breach of this Agreement, or that is required to be disclosed by or to any entity having regulatory authority over a party hereto or any auditor of a party hereto or that is required to be disclosed as a result of a subpoena or other judicial process, or otherwise by applicable laws.

 

22

18. ANTI-MONEY LAUNDERING COMPLIANCE.

Although the Fund is not subject to detailed anti-money laundering program obligations under the USA PATRIOT Act, the Fund represents and warrants that it will establish and maintain policies and procedures designed to meet the requirements imposed by the USA PATRIOT Act, including policies and procedures designed to detect and prevent money laundering, including those required by the USA PATRIOT Act. The Fund agrees to use commercially reasonable efforts to provide to the Custodian, from time to time upon the request of the Custodian, certifications regarding its compliance with the USA PATRIOT Act and other anti-money laundering laws with respect to the Fund. The Fund acknowledges that, because the Custodian will not have information regarding the shareholders of the Fund, the Custodian shall not assume responsibility for customer identification and verification and other CIP requirements in regard to such shareholders.

19. MISCELLANEOUS.

(a) This Agreement is executed and delivered in the State of Delaware and shall be governed by the laws of such state.

(b) All of the terms and provisions of this Agreement shall be binding upon, and inure to the benefit of, and be enforceable by the respective successors and assigns of the parties hereto.

(c) No provisions of this Agreement may be amended, modified or waived in any manner except in writing, properly executed by both parties hereto; provided, however, Appendix A may be amended from time to time as Domestic Subcustodians, Securities Systems, and Special Subcustodians are approved or terminated according to the terms of this Agreement.

(d) The captions in this Agreement are included for convenience of reference only, and in no way define or delimit any of the provisions hereof or otherwise affect their construction or effect.

(e) This Agreement shall be effective as of the date of execution hereof.

(f) This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

(g) If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid by any court of competent jurisdiction, the remaining portion or portions shall be considered severable and shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be illegal or invalid.

(h) Entire Agreement. This Agreement and the Delegation Agreement (if applicable), as amended from time to time, constitute the entire understanding and agreement of the parties thereto with respect to the subject matter therein and accordingly, supersedes as of the effective date of this Agreement any custodian agreement heretofore in effect between the Fund and the Custodian.

(i) The rights and obligations contained in Sections 6, 7, 8, 9, 10, 11 and 17 of this Agreement shall continue, notwithstanding the termination of this Agreement, in order to fulfill the intention of the parties as described in such Sections.

[Signature page to follow.]

 

23

IN WITNESS WHEREOF, the parties hereto have caused this Custody Agreement to be executed by their respective duly authorized officers.

 

   

STEPSTONE PRIVATE INFRASTRUCTURE FUND

  Attest:

    

  By: /s/ Kimberly Zeitvogel

   

  Name: Kimberly Zeitvogel

   

  Title: CFO and Treasurer

   

  Date: May 24, 2023

      UMB BANK, N.A.

  Attest:

    

  By: /s/ Amy Small

   

  Name: Amy Small

   

  Title: Executive President

   

  Date: May 24, 2023

 

24

Schedule A

to the

Custody Agreement

by and between

StepStone Private Infrastructure Fund

and

UMB Bank, N.A.

Fees

Asset Value Fee

Computed as of month-end on the net asset market value of each account at the annual rate of:

 

∎

   

First $250 million in assets

      1.0 basis point, plus  

∎

   

Next $250 million in assets

      .50 basis point, plus  

∎

   

Assets over $500 million

      .40 basis point  

Subject to annual minimum per account*

      $24,000  

*Assessed monthly at the greater of 1/12 of asset basis point calculation or 1/12 of annual minimum.

 

Flat Fee per Blocker Fund (annual, per portfolio)

      $3,000  

Portfolio Transaction Fees

∎

   

DTC*

      $6.00  

∎

   

Fed book entry*

      $10.00  

∎

   

Physical*

      $30.00  

∎

   

Principal paydown

      $7.00  

∎

   

Option (purchased or written)

      $30.00  

∎

   

Inter-portfolio cash/security transfer

      $3.00  

∎

   

Corporate action / call / reorganization / capital change

      $30.00  

∎

   

UMB repurchase agreement*

      $6.00  

∎

   

Tri-party repurchase agreement*

      $20.00  

∎

   

Wire in (non-settlement-related)

      $10.00  

∎

   

Wire out and check issued – requested via UMB Direct (non-settlement-related)

      $10.00  

∎

   

Wire out and check issued – requested via email or fax (non-settlement-related)

      $25.00  

∎

   

ACH out and in

      $1.00  

∎

   

Domestic Proxy

      Included  

∎

   

FX via UMB

      Included  

∎

   

USD cross border wire in/out via UMB

      $35.00  

∎

   

Third-party FX via UMB

      $35.00  

∎

   

Buy, sell and free security movement – Mutual Fund trade execution

      $10.00  

∎

   

Dividend, capital gain and re-invest, each – Mutual Fund trade execution

      $5.00  

* A transaction includes buys, sells, maturities, and free security movements.

Alternative Investment Fees (pertain to underlying portfolio fund holdings)

∎

   

Initial subscriptions

      $75.00  

 

25

∎

   

Subsequent subscriptions

      $50.00  

∎

   

Redemptions

      $50.00  

∎

   

Transfer of assets to UMB as nominee

      $75.00  

∎

   

Additional alternative asset processing

      $40.00  

∎

   

Market value updates

      $25.00  
Special Services       

∎

   

Class action filings/collection

      Included  

∎

   

Standard file transmission (cash, holdings, transactions)

      Included  

∎

   

Conversion transactions

      TBD  

∎

   

Non-standard file transmission, maintenance, monthly

      $200  

Additional fees at $200 per hour, or as agreed upon by project, may apply for special programming or projects to meet your servicing requirements or to create custom reports or data extracts.

Out-of-Pocket Expenses

Other expenses are out-of-pocket or pass-through expenses that include, but are not limited to, security transfer fees, certificate fees, shipping/courier fees or charges, bank DDA service charges, proxy fees/charges, legal review/processing of restricted and private placement securities, allocated pass-through costs of third-party providers to the fund and expenses, including but not limited to attorney’s fees, incurred in connection with responding to and complying with SEC or other regulatory investigations, inquiries or subpoenas, excluding routine examinations of UMB in its capacity as a service provider.

All fees, other than basis point fees, are subject to an annual escalation no greater than the increase in the Consumer Price Index–Urban Wage Earners (CPI) but not to exceed a 3% increase per year. Such escalations shall be effective commencing one year from the effective date of each Fund and the corresponding date each year thereafter. No amendment of this fee schedule shall be required with each escalation. CPI will be determined by reference to the Consumer Price Index News Release issued by the Bureau of Labor Statistics, U.S. Department of Labor.

This fee schedule pertains to custody of U.S. domestic assets only. We will provide our fee schedule for Euroclear and global custody upon request.

Fees for services not contemplated by this schedule, including a material change in the scope of a service, will be negotiated on a case-by-case basis.

 

26

APPENDIX A

CUSTODY AGREEMENT

The following Subcustodians and Securities Systems are approved for use in connection with the Custody Agreement dated May 24, 2023.

SECURITIES SYSTEMS:

Depository Trust Company

Federal Book Entry

SPECIAL SUBCUSTODIANS:

DOMESTIC SUBCUSTODIANS:

Brown Brothers Harriman & Co. (Foreign Securities Only)

 

STEPSTONE PRIVATE INFRASTRUCTURE FUND

       UMB BANK, N.A.

  By: /s/ Kimberly Zeitvogel

    

  By: /s/ Amy Small

  Name: Kimberly Zeitvogel

    

  Name: Amy Small

  Title: CFO and Treasurer

    

  Title: Executive Vice President

  Date: May 24, 2023

    

  Date: May 24, 2023

 

27

ADMINISTRATION AGREEMENT

THIS AGREEMENT (the “Agreement”) is made as of this 24th day of May, 2023, between StepStone Private Infrastructure Fund (the “Fund”), a Delaware statutory trust, and StepStone Group Private Wealth LLC (the “Administrator”), a limited liability company organized under the laws of the State of Delaware.

WHEREAS, the Fund is a closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”); and

WHEREAS, the Fund desires to retain the Administrator to furnish certain administrative services to the Fund, and the Administrator is willing to furnish such services, on the terms and conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the premises, the promises and mutual covenants herein contained, it is agreed between the parties as follows:

1.     Appointment. The Fund hereby appoints the Administrator, subject to the direction of the Board of Trustees (the “Trustees”), for the period and on the terms set forth in this Agreement, to provide administrative services, as described herein, with respect to the Fund. The Administrator accepts such appointment and agrees to render the services set forth herein.

2.     Services of the Administrator. Subject to the general supervision of the Trustees, the Administrator shall provide the following administrative services with respect to the Fund:

(a)     Provide the administrative services described below in furtherance of the ordinary operation of the Fund including, but not limited to, (i) coordinating all matters relating to the ordinary operation of the Fund, including any necessary coordination among the investment adviser to the Fund (the “Adviser”), custodian, transfer agent, sub-administrator and any portfolio accounting agent (including pricing and valuation of the Fund’s portfolio), other pricing services, accountants, attorneys, and other parties performing services or operational functions for the Fund; (ii) supervising the maintenance by third parties selected by the Fund of such books and records of the Fund as may be required by applicable federal or state law; (iii) supervising the preparation by third parties selected by the Fund of all federal, state, and local tax returns and reports relating to the Fund required by applicable law; (iv) supervising general portfolio compliance monitoring with respect to applicable federal, state or foreign law or regulation; (v) supervising the preparation and the filing, with the assistance of counsel, and arranging for the distribution of proxy materials and periodic reports to shareholders of the Fund as required by applicable law; (vi) supervising the preparation and the filing, with the assistance of counsel, of registration statements and other documents with the U.S. Securities and Exchange Commission (the “SEC”) and other federal and state regulatory authorities as may be required by applicable law; (vii) taking such other action with respect to the Fund as may be required by applicable law, including without limitation the rules and regulations of the SEC and other regulatory agencies; (viii) providing the Fund, with the assistance of counsel, legal support for the purchase, sale, holding, monitoring, disposing or sustenance of portfolio securities and other assets for the Fund; (ix) providing the Fund, at the Administrator’s expense, with adequate personnel, office space, communications facilities, and other facilities necessary for operation of the Fund as contemplated in this Agreement; (x) arranging for meetings of the Fund’s Trustees and, in connection therewith, providing the Trustees with necessary or appropriate information for its meetings; (xi) supervising the maintenance of the Fund’s existence, and during such time as shares of the Fund are publicly offered, maintaining the registration and qualification of the Fund’s shares under federal and state law; and (xii) supervising the maintenance of the Fund’s governance documents. Reference in this paragraph to “laws” will include any applicable regulations. Nothing in this provision shall be deemed to inhibit the Fund or its officers from

 

1

engaging, at the expense of the Fund, other persons to assist in providing administrative services to the Fund including, but not limited to, accounting agents, recordkeeping agents, proxy solicitation agents, attorneys, accountants, consultants, sub-administrator and others.

(b)     Render to the Trustees of the Fund such periodic and special reports as the Trustees may reasonably request.

(c)     Make available to the Fund, promptly upon request, any of the Fund’s books and records under supervision of the Administrator under this Agreement, and will furnish to regulatory authorities having the requisite authority any such books and records and any information or reports in connection with the Administrator’s services under this Agreement that may be requested in order to ascertain whether the operations of the Fund are being conducted in a manner consistent with applicable laws and regulations.

(d)     Make its officers and employees available to the Trustees and officers of the Fund for consultation and discussions regarding the administration of the Fund and the services provided to the Fund under this Agreement.

(e)     Develop and implement, if appropriate, management and shareholder services designed to enhance the value or convenience of the Fund as an investment vehicle, which include receiving and responding to inquiries and instructions from shareholders or their representatives or intermediaries relating to the Fund, concerning, among other things, share transactions or account information, or referring any such inquiries to the Fund’s officers or appropriate agents.

(f)     Supervise the Fund’s accountant in determining, consistent with the Fund’s valuation procedures and the policies and procedures stated in the Fund’s registration statement, the value of portfolio securities or other assets of the Fund and the net asset value per share for the Fund and calculate for recommendation to or ratification by the Trustees of the Fund, or parties to whom the Trustees have so delegated, the value of any of the Fund’s portfolio securities and other assets for which readily available market quotations are not available.

(g)     Supervise the Fund’s sub-administrator in its performance of certain sub-administration and sub-accounting services for the Fund.

(h)     The Administrator shall also provide services in connection with such other administrative services, whether similar to or different from those described in subparagraphs (a)-(g) of this paragraph 2, as the parties may from time to time agree in writing.

(i)     In the event that the Administrator provides any services to the Fund, or pays or assumes a Fund expense, which the Administrator is not obligated to provide, pay or assume under this Agreement, the Administrator shall not be obligated hereby to provide the same or any similar service to the Fund or to pay or assume the same or any similar Fund expense in the future; provided, that nothing herein contained shall be deemed to relieve the Administrator of any obligation to the Fund under any separate agreement or arrangement between the parties, including the Investment Advisory Agreement between the Fund and the Adviser.

3.     Conformity with Applicable Law and Industry Standard. The Administrator, in the performance of its duties and obligations under this Agreement, shall act in conformity with the registration statement of the Fund and with the instructions, procedures and directions of the Trustees of the Fund and will conform to, and comply with, the requirements of the 1940 Act and all other applicable federal and state laws and regulations. In addition, the Administrator shall seek to maintain a standard of service that is consistent with those prevailing in the fund industry for comparable funds.

 

2

4.     Exclusivity. The services of the Administrator to the Fund under this Agreement are not to be deemed exclusive, and the Administrator, or any affiliate thereof, shall be free to render similar services to other investment companies and other clients (whether or not their investment objectives and policies are similar to those of the Fund) and to engage in other activities.

5.     Expenses. During the term of this Agreement, the Administrator will pay all expenses incurred by it in connection with its activities under this Agreement, except such expenses as are assumed by the Fund, including without limitation, all Fund expenses set forth in the Fund’s then current Prospectus, and such expenses as are assumed by the Adviser pursuant to the Investment Advisory Agreement between the Fund and the Adviser or by the Fund’s sub-adviser, if any, pursuant to a sub-advisory agreement. To the extent the Administrator incurs any costs or performs any services which are an obligation of the Fund, the Fund shall promptly reimburse the Administrator for such costs and expenses. To the extent the services for which the Fund is obligated to pay are performed by the Administrator, the Administrator shall be entitled to recover from the Fund only to the extent of its costs for such services, as reasonably determined.

6.     Compensation. (a) For the services provided by the Administrator to the Fund pursuant to this Agreement, the Fund shall pay to the Administrator at the end of each month (starting with the month investment operations commence) a fee (the “Administration Fee”) in an amount equal to 1/12th of the applicable annual fee set forth on Schedule A hereto of the Fund’s net assets. The Administration Fee will be accrued daily based on the value of the net assets of the Fund as of the close of business on each business day (including any assets in respect of shares that will be repurchased by the Fund as of the end of the period). The Administration Fee is due and payable in arrears within ten business days after the end of the month. The Adviser will pay all fees of the Sub-Administrator in connection with its duties in respect of the Fund.

(b)     In the event of termination of this Agreement, the Administration Fee provided in this Section 6 shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in such month.

7.     Liability; Indemnification.

(a)     The Administrator shall give the Fund the benefit of the Administrator’s reasonable best efforts and diligence in rendering services under this Agreement. The parties acknowledge the importance of the Administrator freely exercising its reasonable judgment in the performance of its responsibilities, obligations and duties hereunder, and thus the Administrator may rely on information reasonably believed by it to be accurate and reliable. Accordingly, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the responsibilities, obligations or duties hereunder, neither the Administrator nor its shareholders, officers, directors, employees, agents or control persons (collectively, the “Covered Persons”) shall be subject to any liability for any act or omission in connection with or arising out of any services rendered under this Agreement or otherwise related to this Agreement, or for any Losses (as defined below) that may be sustained in the purchase, holding or sale of any security or other asset by the Fund. Any liability incurred by the Administrator pursuant to this paragraph 7(a) in any year shall be limited to the revenues of the Administrator derived from the Fund in that fiscal year of the Fund. The Administrator shall be responsible as provided herein for the performance of only such duties as are set forth in this Agreement and shall have no responsibility for the actions or activities of any other party, including other agents of or service providers to the Fund. The Administrator shall not be liable for any special, indirect, incidental, punitive or consequential damages, including lost profits, of any kind whatsoever (including, without limitation, attorneys’ fees) under any provision of this Agreement or for any such damages arising out of any act or failure to act hereunder.

 

3

(b)     The Administrator is authorized and instructed to rely upon the information it receives from the Fund, its Trustees or any third-party agent (including, without limitation, the Fund’s custodian(s), manager(s), sub-adviser(s), and pricing services or sources) authorized by the Fund to provide such information to the Administrator. The Fund and any third-party agents from which the Administrator shall receive or obtain certain records, reports and other data used or relied upon by the Administrator in rendering the services provided hereunder are solely responsible for the contents of such information, including, without limitation, the accuracy thereof. The Administrator has no responsibility to review, confirm or otherwise assume any duty with respect to the accuracy or completeness of any such information and shall be without liability for any loss or damage suffered by the Fund as a result of the Administrator’s reliance on and utilization of such information. The Administrator shall have no responsibility and shall be without liability for any loss or damage caused by the failure of the Fund or any third-party agent to provide it with the information required.

(c)     The Fund shall indemnify and save harmless the Covered Persons and their executors, heirs, assigns, successors or other legal representatives (“Indemnitees”), to the fullest extent permitted by law, from and against any and all claims, liabilities, damages, losses, costs, charges, fees, penalties and other expenses (including reasonable attorney’s fees and disbursements) of every nature and character (“Losses”), which may be asserted against or incurred by any Indemnitee or for which any Indemnitee may be held liable (a “Claim”) and that in any way arise out of or in connection with, or in any way relate to, the performance or non-performance of or by the Indemnitee of any of the Administrator’s duties, responsibilities, or services hereunder, whether express or implied hereunder; provided, however, that no Indemnitee shall be indemnified against any liability by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Indemnitee’s duties under this Agreement (“disabling conduct”).

(d)     Expenses, including reasonable counsel fees incurred by the Indemnitee (but excluding amounts paid in satisfaction of judgments, in compromise, or as fines or penalties), shall be paid from time to time by the Fund in advance of the final disposition of a proceeding upon receipt by the Fund of an undertaking by or on behalf of the Indemnitee to repay amounts so paid to the Fund if it is ultimately determined that indemnification of such expenses is not indemnifiable under this Agreement; provided, however, that expenses shall not be advanced by the Fund unless (i) the Indemnitee has provided security considered in the reasonable discretion of the Trustees to be appropriate for such undertaking; or (ii) the Fund shall be insured against losses arising from any such advance payments; or (iii) a reasonable belief is formed that the Indemnitee ultimately will be found entitled to indemnification, as determined by either (x) a majority of the Trustees who are not interested persons (as such term is defined in the 1940 Act) of the Fund who are not parties to the proceeding, acting on the matter, or (y) independent legal counsel, in a written opinion that includes a discussion of pertinent facts and legal analysis, based upon a review of readily available facts (as opposed to a full trial-type inquiry).

(e)     Promptly after receipt of notice of the commencement of an investigation, action, claim or proceeding, an Indemnitee shall notify the Fund in writing of the commencement thereof, although the failure to do so shall not prevent recovery under this paragraph. The Fund shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such Loss or Claim, but if the Fund elects to assume the defense, such defense shall be conducted by counsel chosen by the Fund and approved by the Indemnitee, which approval shall not be unreasonably withheld. In the event the Fund elects to assume the defense of any such suit and retain such counsel and notifies the Indemnitee of such election, the Indemnitee in such suit shall bear the fees and expenses of any additional counsel retained by it subsequent to the receipt of the Fund’s election. If the Fund does not elect to assume the defense of any such suit, or in case the Indemnitee does not, in the exercise of reasonable judgment, approve of counsel chosen by the Fund, or in case there is a conflict of interest between the parties or a party and any Indemnitee, the Fund will reimburse the Indemnitee in such suit for the reasonable fees and expenses of any counsel retained by the Indemnitee.

 

4

(f)     In the event the Fund elects to assume its own defense in any such suit, the Fund agrees that it shall not enter into any settlement agreement or similar agreement with other parties in such suit unless the Administrator and all of the other Indemnitees named as defendants are unconditionally released in such agreement or arrangement, or unless the Administrator provides its consent to such settlement or similar arrangement in writing.

(g)     The Administrator shall look solely to Fund property for satisfaction of claims of any nature against the Fund or a Trustee, officer or agent of the Fund arising in connection with the affairs of the Fund.

(h)     The indemnification agreement and all obligations of the parties contained in this paragraph 7 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any party seeking indemnification and shall survive the delivery of any shares of the Fund and the termination of this Agreement. This agreement of indemnity will inure exclusively to the benefit of parties indemnified hereunder and their estates and successors.

8.     Continuation and Termination. This Agreement will become effective as of the date first written above and will continue for an initial two-year term. Thereafter, if not terminated, this Agreement shall continue from year to year thereafter so long as such continuation is approved at least annually by the vote of a majority of the Trustees, including a majority of the Independent Trustees.

This Agreement may be terminated by the Fund at any time, without the payment of any penalty, by vote of a majority of the Trustees on ninety (90) days’ written notice to the Administrator, or by the Administrator at any time, without the payment of any penalty, on ninety (90) days’ written notice to the Fund.

9.     Amendment. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. This Agreement shall extend to and shall be binding upon the parties thereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Administrator without the written consent of the Fund.

10.   Limitation of Liability of Trustees. Notice is hereby given that this Agreement is executed by an officer of the Fund on behalf of the Trustees, as Trustees and not individually, and that the obligations of this Agreement with respect to the Fund shall be binding upon the assets and the properties of the Fund only and shall not be binding upon the assets or properties of the Trustees, officers, agents or shareholders of the Fund individually.

11.   Fund Ownership of Records. All records required to be maintained and preserved by the Fund and by the Administrator pursuant to the provisions or rules or regulations of the SEC under Section 31(a) of the 1940 Act, including any such records maintained by the Administrator in connection with the performance of its obligations hereunder, are the property of the Fund and shall be surrendered by the Administrator promptly on request by the Fund; provided that the Administrator may at its own expense, make and retain copies of any such records.

12.   Notices. Notices of any kind shall be in writing and shall be duly given if delivered to (1) the Administrator at StepStone Group Private Wealth LLC, 128 S Tryon St., Suite 1600, Charlotte, NC 28202; or (2) to the Fund at 128 S Tryon St., Suite 1600, Charlotte, NC 28202.

13.   Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.

 

5

14.   Applicable Law.

(a)     This Agreement shall be governed by the laws of the State of New York, provided that nothing herein shall be construed in a manner inconsistent with the 1940 Act, the Investment Advisers Act of 1940, as amended, or any rules or order of the SEC thereunder, and without regard for the conflicts of laws principle thereof.

(b)   If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby and, to this extent, the provisions of this Agreement shall be deemed to be severable.

(c)     The captions of this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

[The remainder of this page has been intentionally left blank. The signature page follows.]

 

6

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested by their duly authorized officers, on the day and year first above written.

 

STEPSTONE PRIVATE INFRASTRUCTURE FUND

By: /s/ Kimberly Zeitvogel                                                     

Name: Kimberly Zeitvogel

Title: CFO and Treasurer

 

STEPSTONE GROUP PRIVATE WEALTH LLC

By: /s/ Bob Long                                                     

Name: Bob Long

Title: CEO

 

7

Schedule A

Fees

 

Net Assets    Annual Rate

First $100 million

    0.23%

Next $100 million

    0.195%

Next $100 million

    0.14%

Assets over $300 million

    0.08%

 

8

SUB-ADMINISTRATION AGREEMENT

THIS SUB-ADMINISTRATION AGREEMENT (the “Agreement”) is made as of this 24th day of May, 2023, by and between StepStone Group Private Wealth LLC, a Delaware limited liability company (the “Administrator”), and UMB Fund Services, Inc., a Wisconsin corporation, its successors and assigns (the “UMBFS”).

WHEREAS, the Administrator acts as administrator to the StepStone Private Infrastructure Fund (the “Fund”) and the Fund is a closed-end management investment company registered under the 1940 Act (as defined below) and is authorized to issue Shares;

WHEREAS, the Administrator and the UMBFS desire to enter into an agreement pursuant to which the UMBFS shall provide Services (as defined below) to the Fund on behalf of the Administrator.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1. Definitions In addition to any terms defined in the body of this Agreement, the following capitalized terms shall have the meanings set forth hereinafter whenever they appear in this Agreement:

“1933 Act” shall mean the Securities Act of 1933, as amended.

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“Authorized Person” shall mean any individual who is authorized to provide UMBFS with Instructions and requests on behalf of the Administrator or Fund, whose name shall be certified to UMBFS from time to time pursuant to this Agreement. Any officer of the Fund or Administrator authorized by the Board to be an Authorized Person shall be considered an Authorized Person (unless such authority is limited in a writing from the Administrator and received by UMBFS) and has the authority to appoint additional Authorized Persons, to limit or revoke the authority of any previously designated Authorized Person, and to certify to UMBFS the names of the Authorized Persons from time to time.

“Board” shall mean the Board of Trustees of the Fund.

“By-Laws” shall mean the Fund’s By-Laws, including any amendments made thereto.

“Commission” shall mean the U.S. Securities and Exchange Commission.

“Declaration of Trust” shall mean the Declaration of Trust or other similar operational document of the Fund, as the case may be, as the same may be amended from time to time.

“Investment Adviser” shall mean the investment adviser or investment advisers to the Fund and includes all sub-advisers or persons performing similar services.

 

1

“Instructions” shall mean an oral communication from an Authorized Person or a written communication signed by an Authorized Person and actually received by UMBFS. Instructions shall include manually executed originals, telefacsimile transmissions of manually executed originals or electronic communications.

“Prospectus” shall mean the current prospectus and statement of additional information with respect to the Fund (including any applicable amendments and supplements thereto) actually received by UMBFS from the Fund with respect to which the Fund has indicated a Registration Statement has become effective under the 1933 Act and the 1940 Act.

“Registration Statement” shall mean any registration statement on Form N-2 at any time now or hereafter filed with the Commission with respect to any of the Shares and any amendments and supplements thereto which at any time shall have been or will be filed with the Commission.

“Services” shall mean the sub-administration services described on Schedule B hereto and such additional services as may be agreed to by the parties from time to time and set forth in an amendment to Schedule B.

“Shares” shall mean such shares of beneficial interest, or class thereof, of the Fund as may be issued from time to time.

“Shareholder” shall mean a record owner of Shares of the Fund.

2. Appointment and Services

(a) The Administrator hereby appoints UMBFS as sub-administrator of the Fund and hereby authorizes UMBFS to provide Services during the term of this Agreement and on the terms set forth herein. Subject to the oversight of the Board and utilizing information provided by the Fund, Administrator and their current and prior agents and service providers, UMBFS will provide the Services in accordance with the terms of this Agreement. Notwithstanding anything herein to the contrary, UMBFS shall not be required to provide any Services or information that it believes, in its sole, reasonable discretion, to represent dishonest, unethical or illegal activity. In no event shall UMBFS provide any investment advice or recommendations to any party in connection with its Services hereunder.

(b) UMBFS may from time to time, in its reasonable discretion and at its own expense, appoint one or more other parties to carry out some or all of its responsibilities under this Agreement, provided that UMBFS shall remain responsible to the Administrator for all such delegated responsibilities in accordance with the terms and conditions of this Agreement, in the same manner and to the same extent as if UMBFS were itself providing such Services.

(c) UMBFS’s duties shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against UMBFS hereunder. The Services do not include correcting, verifying or addressing any prior actions or inactions of the Fund, Administrator or by any other current or prior agent or service provider. To the extent UMBFS agrees to take such actions, those actions taken shall be deemed part of the Services.

 

2

(d) Subject to the terms of Section 8, and where applicable, the UMBFS further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records described in Schedule B which are maintained by UMBFS for the Fund. To the extent required by Rule 31a-3 under the 1940 Act, UMBFS hereby agrees that all records which it maintains for the Fund hereunder are the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund’s or Administrator’s request.

(e) Any resolution passed by the Board that affects accounting practices and procedures under this Agreement shall be effective upon written receipt of notice and acceptance by UMBFS.

(f) Nothing in this Agreement shall be deemed to appoint UMBFS and its officers, directors and employees as the Administrator’s attorney, form an attorney-client relationship or require the provision of legal advice. The Administrator acknowledges that UMBFS’s in-house attorneys exclusively represent UMBFS and the Administrator’s legal counsel will provide independent judgment on the Administrator’s behalf. Because no attorney-client relationship exists between UMBFS’s in-house attorneys and the Administrator or the Fund, any information provided to the UMBFS’s in-house attorneys may not be privileged and may be subject to compulsory disclosure under certain circumstances, notwithstanding the provisions of Section 5. UMBFS represents that it will maintain the confidentiality of information disclosed to its in-house attorneys on a best efforts basis.

3. Representations and Deliveries

(a) The Administrator represents and warrants to UMBFS that:

(i) It is a limited liability company duly organized and existing under the laws of the State of Delaware; it is empowered under applicable laws and by its operating agreements to enter into and perform this Agreement; and all requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

(ii) It will conduct its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained (or will timely obtain) all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its Declaration of Trust, By-laws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.

(b) The Administrator shall use reasonable efforts to cause the Fund’s officers and trustees, and shall use its reasonable efforts to cause the Fund’s Investment Adviser, legal counsel, independent accountants, transfer agent, custodian, distributor and other service providers and agents, past or present, to cooperate with UMBFS and to provide UMBFS with such information, documents and communications relating to the Fund and the Administrator as necessary and/or appropriate or as reasonably requested by UMBFS, in order to enable UMBFS to perform the Services. In connection with the performance of the Services, UMBFS shall (without investigation or verification) be entitled and is hereby instructed to, rely upon any and all Instructions, communications, information or documents provided to UMBFS by a representative of the Administrator or by any of the aforementioned persons. UMBFS shall be entitled to rely on any document that it reasonably believes to be genuine and to have been signed or presented by the proper party. Fees charged by such persons shall be an expense of the Administrator. UMBFS shall not be held to have notice of any change of authority of any trustee, officer, agent, representative or employee of the Fund, Investment Adviser or service provider until receipt of written notice thereof from the Administrator.

 

3

(c) The Board, the Investment Adviser and the Administrator have and retain primary responsibility for all compliance matters relating to the Fund including but not limited to (as applicable to the specific parties) compliance with the 1940 Act, the Internal Revenue Code of 1986, as amended, the USA PATRIOT Act of 2001, the Sarbanes-Oxley Act of 2002 and the policies and limitations of the Fund relating to the portfolio investments as set forth in the Prospectus. UMBFS’s monitoring and other functions hereunder shall not relieve the Board, the Investment Adviser and the Administrator of their primary day-to-day responsibility for assuring such compliance. Notwithstanding the foregoing, the UMBFS will be responsible for its own compliance with such statutes insofar as such statutes are applicable to the Services it has agreed to provide hereunder, and will promptly notify the Administrator if it becomes aware of any non-compliance which relates to the Fund. The UMBFS shall provide the Administrator with quarterly and annual certifications (on a calendar basis) with respect to the design and operational effectiveness of its compliance and procedures.

(d) The Administrator agrees that it shall advise UMBFS in writing at least thirty (30) days prior to affecting any change in any Prospectus which would increase or alter the duties and obligations of UMBFS hereunder, and shall proceed with such change only if it shall have received the written consent of UMBFS thereto.

(e) UMBFS represents and warrants to the Administrator that:

(i) It is a corporation duly organized and existing under the laws of the State of Wisconsin; it is empowered under applicable law and by its Articles of Incorporation and By-Laws to enter into and perform this Agreement; and all requisite proceedings have been taken to authorize it to enter into and perform this Agreement.

(ii) It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained (or will timely obtain) all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its operating documents or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement. Its execution, delivery or performance of this Agreement will not conflict with or violate (a) any provision of the organizational or governance documents of UMBFS or (b) any law applicable to UMBFS.

(iii) UMBFS shall maintain a disaster recovery and business continuity plan and adequate and reliable computer and other equipment necessary and appropriate to carry out its obligations under this Agreement, including commercially reasonable cybersecurity systems, policies and procedures designed to prevent the unauthorized or inadvertent disclosure of Fund information. Upon the Administrator’s reasonable request, UMBFS shall provide supplemental information concerning the aspects of its cybersecurity systems, policies and procedures and disaster recovery and business continuity plan that are relevant to the Services.

 

4

(iv) It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement in accordance with industry standards.

(f) UMBFS shall act as liaison with the Fund’s independent public accountants, to the extent requested by the Administrator, and shall provide account analyses, fiscal year summaries, and other audit-related schedules. UMBFS shall take all reasonable action in the performance of its duties under this Agreement to assure that the necessary information is made available to such auditors and accountants in a timely fashion for the expression of their opinion, as required by the Administrator.

(g) UMBFS agrees to comply (and to the extent UMBFS takes or is required to take action on behalf of the Fund hereunder shall cause the Fund to comply) with all applicable law, as well as all investment restrictions, policies and procedures adopted by the Fund. Except as set forth in this Agreement, UMBFS assumes no responsibility for such compliance by the Fund. UMBFS shall maintain at all times a program reasonably designed to prevent violations of the federal securities laws (as defined in Rule 38a-1 under the 1940 Act) with respect to the Services provided.

4. Fees and Expenses

(a) As compensation for the performance of the Services, the Administrator agrees to pay UMBFS the fees set forth on Schedule C hereto. Fees shall be adjusted in accordance with Schedule C or as otherwise agreed to in writing by the parties from time to time. Fees shall be earned and paid monthly in an amount equal to at least 1/12th of the applicable annual fee. The parties may amend this Agreement to include fees for any additional services requested by the Administrator, enhancements to current Services, or to add funds. The Administrator agrees to pay UMBFS’s rate (as the parties may agree to in writing from time to time) for Services added to, or for any enhancements to existing Services set forth on, Schedule B after the execution of this Agreement (as the parties may agree to in writing from time to time). In addition, to the extent that UMBFS corrects, verifies or addresses any prior actions or inactions by the Fund or by any prior service provider, UMBFS shall be entitled to additional fees as provided in Schedule C. In the event of any disagreement between this Agreement and Schedule C related to fees, the terms of Schedule C shall control.

(b) For the purpose of determining fees payable to UMBFS, net asset value shall be computed in accordance with the Prospectus and resolutions of the Board. The fee for the period from the day of the month this Agreement is entered into until the end of that month shall be pro-rated according to the proportion that such period bears to the full monthly period. Upon any termination of this Agreement before the end of any month and subject to Section 8(b) of this Agreement, the fee for such part of a month shall be pro-rated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement. Should this Agreement be terminated (other than for cause on the part of the UMBFS) or the Fund be liquidated, merged with or acquired by another fund or investment company, any accrued fees shall be immediately payable.

(c) UMBFS will bear all expenses incurred by it in connection with its performance of Services, except as otherwise provided herein. UMBFS shall not be required to pay or finance any costs and expenses incurred in the operation of the Fund, including, but not limited to: taxes; interest; brokerage fees and commissions; salaries, fees and expenses of officers and trustees; Commission fees

 

5

and state Blue Sky fees; advisory fees; charges of custodians, transfer agents, dividend disbursing and accounting services agents and other service providers; security pricing services; insurance premiums; outside auditing and legal expenses; costs of organization and maintenance of corporate existence; taxes and fees payable to federal, state and other governmental agencies; preparation, typesetting, printing, proofing and mailing of Prospectuses, statements of additional information, supplements, notices, forms and applications and proxy materials for regulatory purposes and for distribution to current Shareholders; preparation, typesetting, printing, proofing and mailing and other costs of Shareholder reports; expenses in connection with the electronic transmission of documents and information including electronic filings with the Commission and the states; research and statistical data services; expenses incidental to holding meetings of the Fund’s Shareholders and Trustees; fees and expenses associated with internet, e-mail and other related activities; and extraordinary expenses. Expenses incurred for distribution of Shares, including, as applicable, the typesetting, printing, proofing and mailing of Prospectuses for persons who are not Shareholders, will be borne by the Fund, except for such expenses permitted to be paid under a distribution plan adopted in accordance with applicable laws. UMBFS shall not be required to pay any Blue Sky fees or take any related Blue Sky actions unless and until it has received the amount of such fees from the Administrator.

(d) The Administrator also agrees to promptly reimburse UMBFS for all reasonable out-of-pocket expenses or disbursements reasonably incurred by UMBFS in connection with the performance of Services under this Agreement. Out-of-pocket expenses shall include, but not be limited to, those items specified on Schedule C hereto. If reasonably requested by UMBFS, out-of-pocket expenses are payable in advance. Payment of postage expenses, if prepayment is reasonably requested, is due at least seven (7) days prior to the anticipated mail date. In the event UMBFS reasonably requests advance payment, UMBFS shall not be obligated to incur such expenses or perform the related Service(s) until payment is received.

(e) The Administrator agrees to pay all amounts due hereunder within thirty (30) days of receipt of each invoice (the “Due Date”). Except as provided in Schedule C, UMBFS shall bill Service fees monthly, and out-of-pocket expenses as incurred (unless prepayment is requested by UMBFS). UMBFS may, at its option, arrange to have various service providers submit invoices directly to the Administrator for payment of reimbursable out-of-pocket expenses.

(f) The Administrator is aware that its failure to remit to UMBFS all amounts due on or before the Due Date may cause UMBFS to incur costs not contemplated by this Agreement, including, but not limited to carrying, processing and accounting charges. Accordingly, in the event that UMBFS does not receive any amounts due hereunder by the Due Date, the Administrator agrees to pay a late charge on the overdue amount equal to one and one-half percent (1.5%) per month or the maximum amount permitted by law, whichever is less. In addition, the Administrator shall pay UMBFS’s reasonable attorney’s fees and court costs if any amounts due UMBFS in the event that an attorney is engaged to assist in the collection of amounts due. Acceptance of such late charge shall in no event constitute a waiver by UMBFS of the Administrator’s default or prevent UMBFS from exercising any other rights and remedies available to it.

 

6

(g) In the event that any charges are disputed, the Administrator shall, on or before the Due Date, pay all undisputed amounts due hereunder and notify UMBFS in writing of any disputed charges for out-of-pocket expenses which it is disputing in good faith. Payment for such disputed charges shall be due on or before the close of the tenth (10th) business day after the day on which UMBFS provides documentation which an objective observer would agree reasonably supports the disputed charges (the “Revised Due Date”). Late charges shall not begin to accrue as to charges disputed in good faith until the first day after the Revised Due Date.

(h) The Administrator acknowledges that the fees charged by UMBFS under this Agreement reflect the allocation of risk between the parties, including the exclusion of remedies and limitations of liability in Section 6. Modifying the allocation of risk from what is stated herein would affect the fees that UMBFS charges. Accordingly, in consideration of those fees, the Administrator agrees to the stated allocation of risk.

5. Confidential Information

UMBFS agrees on behalf of itself and its affiliates, partners, employees, directors and agents to treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund’s portfolio holdings, not to use such information other than in the performance of its responsibilities and duties hereunder, and not to disclose such information except: (i) when requested to divulge such information by duly-constituted authorities or court process; (ii) to an affiliate, as defined by Section 248.3(a) of Regulation S-P; or, (iii) pursuant to any other exception permitted by Sections 248.14 and 248.15 of Regulation S-P in the ordinary course of business to carry out the activities covered by the exception under which UMBFS received the information. In case of any requests or demands for inspection of the records of the Fund, UMBFS will endeavor to notify the Administrator promptly and to secure instructions from a representative of the Administrator as to such inspection. Records and information which have become known to the public through no wrongful act of UMBFS or any of its employees, agents or representatives, and information which was already in the possession of UMBFS prior to receipt thereof, shall not be subject to this Section. Any party appointed pursuant to Section 2(b) above shall be required to observe the confidentiality obligations contained herein. The obligations of the parties under Section 5 shall indefinitely survive the termination of this Agreement.

6. Limitation of Liability

(a) UMBFS shall exercise due care and reasonable care in good faith and in accordance with reasonable commercial standards in discharging its duties hereunder. Notwithstanding anything to the contrary in this Agreement, UMBFS shall be liable to the Administrator for all losses, damages and reasonable costs and expenses suffered or incurred by such Administrator resulting from the bad faith, gross negligence, fraud, reckless disregard in the performance of its duties and obligations under this Agreement, uncured material breach of this Agreement or willful misconduct of UMBFS (the “Standard of Care”). Subject to the foregoing, UMBFS shall not be liable for: (i) any action reasonably taken or omitted to be taken in accordance with or in reasonable reliance upon Instructions, communications, data, documents or information (without investigation or verification) received by UMBFS from an officer or representative of the Administrator, or from any Authorized Person; (ii) any action taken or omission by the Administrator, the Fund, Investment Adviser, any Authorized Person or any past or current service provider (not including the Sub-Administrator or its affiliates); or, (iii) its reliance on the security valuations without investigation or verification provided by pricing service(s), the Investment Adviser or representatives of the Administrator, in each case only to the extent that the Fund would utilize a pricing service with respect to the valuation of any such security.

 

7

(b) Notwithstanding anything herein to the contrary, each party hereto will be excused from its obligation to perform any Service or obligation required of it hereunder solely for the duration that such performance is prevented by events beyond its reasonable control and shall not be liable for any default, damage, loss of data or documents, errors, delay or any other loss whatsoever caused thereby. UMBFS will, however, take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond its reasonable control.

(c) In no event and under no circumstances shall the Indemnified Parties (as defined below) be liable to anyone, including, without limitation, the other party, under any theory of tort, contract, strict liability or other legal or equitable theory for lost profits, exemplary, punitive, special, indirect or consequential damages for any act or failure to act under any provision of this Agreement regardless of whether such damages were foreseeable and even if advised of the possibility thereof.

(d) The obligations of the parties under Section 6 shall indefinitely survive the termination of this Agreement.

7. Indemnification

(a) The Administrator agrees to indemnify and hold harmless UMBFS, and its nominees (collectively, the “UMBFS Indemnified Parties”) from and against any and all claims, demands, actions and suits, and any and all judgments, liabilities, losses, damages, costs, charges, fees, penalties, and other expenses (excluding attorney’s fees) of every nature and character (“Losses”) which may be asserted against or incurred by any UMBFS Indemnified Party or for which any UMBFS Indemnified Party may be held liable (a “Claim”), arising out of or in any way relating to any of the following, except, in each case, to the extent a Claim resulted from UMBFS’s breach of the Standard of Care:

(i) any action or omission of UMBFS;

(ii) UMBFS’s reasonable reliance on, implementation of or use of, Instructions, communications, data, documents or information (without investigation or verification) received by UMBFS from any Authorized Person;

(iii) any action taken, or omission by, the Administrator, the Fund, Investment Adviser, any Authorized Person or any past or current service provider (not including UMBFS);

(iv) any Claim that arises out of the Administrator’s gross negligence or misconduct or breach of any representation or warranty of the Administrator made herein; and

(v) its reliance on the security valuations without investigation or verification provided by pricing service(s), the Investment Adviser or representatives of the Fund, in each case only to the extent that the Fund would utilize a pricing service with respect to the valuation of any such security.

 

8

(b) The UMBFS agrees to indemnify and hold harmless the Administrator and their respective employees and officers (collectively, the “Administrator Indemnified Parties” and together with the UMBFS Indemnified Parties, each, an “Indemnified Party” and together, the “Indemnified Parties”) from and against any and all Claims against the Administrator Indemnified Parties arising out of or in any way relating to the UMBFS’s breach of the Standard of Care except, in each case, to the extent a Claim resulted from the Administrator’s bad faith, gross negligence or willful misconduct or breach of any representation or warranty of the Administrator made herein.

(c) Promptly after receipt by a party of notice of the commencement of an investigation, action, claim or proceeding, the receiving party shall, if a claim for indemnification in respect thereof is made under this Section, notify the indemnifying party in writing of the commencement thereof, although the failure to do so shall not prevent recovery by the Indemnified Party. The indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such Loss, but if the indemnifying party elects to assume the defense, such defense shall be conducted by counsel chosen by the indemnifying party and approved by the Indemnified Party, which approval shall not be unreasonably withheld. In the event the indemnifying party elects to assume the defense of any such suit and retain such counsel and notifies the Indemnified Party of such election, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them subsequent to the receipt of the indemnifying party’s election. If the indemnifying party does not elect to assume the defense of any such suit, or in case the Indemnified Party does not, in the exercise of reasonable judgment, approve of counsel chosen by the indemnifying party, or in case there is a conflict of interest between the indemnifying party and the Indemnified Party, the indemnifying party will reimburse the Indemnified Party or Parties named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by them. The indemnification agreement contained in this Section 7 and the representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the benefit of each Indemnified Party and their estates and successors. The Administrator agrees to promptly notify UMBFS of the commencement of any litigation or proceedings against the Administrator or any of its officers or directors in connection with the issue and sale of any of the Shares.

(c) The obligations of the parties under this Section 7 shall indefinitely survive the termination of this Agreement.

8. Term

(a) This Agreement shall become effective with respect to the Fund as of the date hereof. Unless sooner terminated as provided herein, this Agreement shall continue in effect with respect to the Fund for a two-year period beginning on the date of this Agreement (the “Initial Term”). Thereafter, if not terminated as provided herein, the Agreement shall continue automatically in effect as to the Fund for successive one-year periods (each a “Renewal Term”).

(b) In the event this Agreement is terminated by the Administrator prior to the end of the Initial Term or any subsequent Renewal Term, the Administrator shall be obligated to pay UMBFS the remaining balance of the fees payable to UMBFS under this Agreement through the end of the Initial Term or Renewal Term, as applicable. Notwithstanding the foregoing, either party may terminate this Agreement: (i) at the end of the Initial Term or at the end of any successive Renewal Term by giving the

 

9

other party a written notice not less than ninety (90) days’ prior to the end of the respective term; (ii) upon the material breach of the other party of any term of this Agreement if such breach is not cured within 15 business days of notice of such breach to the breaching party; and (iii) in the event of the appointment of a conservator or receiver for the UMBFS by regulatory authorities or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Notwithstanding anything herein to the contrary, upon the termination of the Agreement as provided herein or the liquidation, merger or acquisition of the Fund, UMBFS shall deliver the records of the Fund to the Fund or its successor service provider at the expense of the Administrator in a form that is consistent with UMBFS’s applicable license agreements, and thereafter the Administrator or its designee shall be solely responsible for preserving the records for the periods required by all applicable laws, rules and regulations. The Administrator shall be responsible for all expenses associated with the movement (or duplication) of records and materials and conversion thereof to a successor service provider, including all reasonable trailing expenses incurred by UMBFS. In addition, in the event of termination of this Agreement, or the proposed liquidation, merger or acquisition of the Fund, and UMBFS’s agreement to provide additional Services in connection therewith, UMBFS shall provide such Services and be entitled to such compensation as the parties may mutually agree. UMBFS shall not reduce the level of service provided to the Administrator prior to termination following notice of termination by the Administrator.

9. Power of Attorney

The Administrator hereby grants to Administrator the limited power of attorney on behalf of the Fund to sign Blue Sky forms and related documents in connection with the performance of Services under this Agreement.

10. Miscellaneous

(a) Any notice required or permitted to be given by either party to the other under this Agreement shall be in writing and shall be deemed to have been given when received by the other party as set forth below. Such notices shall be sent to the addresses listed below, or to such other location as either party may from time to time designate in writing:

 

  If to UMBFS:    UMB Fund Services, Inc.
     235 West Galena Street
     Milwaukee, Wisconsin 53212
     Attention: Legal Department
  If to the Administrator:    StepStone Group Private Wealth LLC
     128 S Tyron St., Suite 1600
     Charlotte, NC 28202
     Attention: Fund Accounting Department

If notice is sent by electronic delivery or facsimile, it shall be deemed to have been given immediately (contingent upon confirmed receipt by the intended recipient). If notice is sent by first-class mail, it shall be deemed to have been given five days after it has been mailed. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered.

 

10

(b) Except as provided to the contrary herein, this Agreement may not be amended or modified in any manner except by a written agreement executed by both parties with the formality of this Agreement.

(c) This Agreement shall be governed by Delaware law, excluding the laws on conflicts of laws. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the Commission thereunder. Any provision of this Agreement which is determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.

(d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original agreement but such counterparts shall together constitute but one and the same instrument. The facsimile signature of any party to this Agreement shall constitute the valid and binding execution hereof by such party.

(e) The services of UMBFS hereunder are not deemed to be exclusive. UMBFS may render sub-administration services and any other services to others, including other investment companies.

(f) The captions in the Agreement are included for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

(g) This Agreement and the Schedules incorporated herein constitute the full and complete understanding and agreement of Administrator and the UMBFS and supersedes all prior negotiations, understandings and agreements with respect to sub-administration services.

(h) Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into among the parties hereto and any actions taken or omitted by any party hereunder shall not affect any rights or obligations of any other party hereunder.

(i) UMBFS shall retain all right, title and interest in any and all computer programs, screen formats, report formats, procedures, data bases, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, trade secrets, trademarks and other related legal rights provided, developed or utilized by UMBFS in connection with the Services provided by UMBFS to the Fund hereunder.

(j) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns. This Agreement shall not be assignable by either party without the written consent of the other party, provided; however, that UMBFS may, in its sole discretion and upon advance written notice to the Fund, assign all its right, title and interest in this Agreement to an affiliate, parent or subsidiary.

 

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(l) The person signing below represents and warrants that he/she is duly authorized to execute this Agreement on behalf of the party on whose behalf such person is signing.

[Signature page to follow.]

 

12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized person as of the day, month and year first above written.

 

STEPSTONE GROUP PRIVATE WEALTH LLC

(the “Administrator”)

By:   /s/ Tim Smith
Title:   CFO & COO
Date:   May 24, 2023

 

UMB FUND SERVICES, INC.

(“UMBFS”)

By:   /s/ Maureen Quill
Title:   Executive Vice President
Date:   June 8, 2023

 

 

13

Schedule A

to the

Sub-Administration Agreement

by and between

StepStone Group Private Wealth LLC

and

UMB Fund Services, Inc.

[RESERVED]

 

14

Schedule B

to the

Sub-Administration Agreement

by and between

StepStone Group Private Wealth LLC

and

UMB Fund Services, Inc.

SERVICES

Subject to the oversight of, and utilizing information provided by the Administrator, Fund, Investment Adviser, and the Fund’s agents, the UMBFS will provide the following services:

Regulatory Administration

Subject to the direction of and utilizing information provided by the Administrator, the Fund, the Investment Adviser, and the Fund’s agents, UMBFS will provide the services listed below. UMBFS’s provision of these services shall not relieve the Fund and the Fund’s Investment Adviser of their primary day-to-day responsibility for assuring such compliance. UMBFS’s ability to provide information regarding compliance with respect to applicable rules and regulations may be limited by the characteristics of the Fund’s investments. UMBFS shall perform the following duties on behalf of the Fund:

 

1.

General Fund Management

 

  a.

Provide appropriate personnel, office facilities, information technology, record keeping and other resources as necessary for UMBFS to perform its duties and responsibilities under this agreement;

 

  b.

Act as liaison among all Fund service providers.

 

2.

Financial Reporting and Audits

 

  a.

Prepare quarterly, semi-annual and annual schedules and financial statements including schedule of investments and the related statements of operations, assets and liabilities, changes in net assets and cash flow (if required), and financial highlights to each financial statement;

 

  b.

Draft footnotes to financial statements for approval by the Fund’s officers and independent accountants;

 

  c.

Provide facilities, information and personnel as necessary to accommodate annual audits with the Fund’s independent accountants or examinations by the SEC or other regulatory authorities.

 

3.

Compliance

 

  a.

From time to time as UMBFS deems appropriate (but no less frequently than quarterly), check the Fund’s compliance with the policies and limitations of the Fund relating to the portfolio investments as set forth in the Fund’s Offering Memorandum and Statement of Additional Information (but these functions shall not relieve the Fund’s Portfolio Managers, if any, of their primary day-to-day responsibility for assuring such compliance);

 

  b.

Monitor Fund activity for compliance with subchapter M under the Internal Revenue Code (but these functions shall not relieve the Fund’s Portfolio Managers, if any, of their primary day-to-day responsibility for assuring such compliance). Compliance testing is dependent on receiving necessary information from any underlying investment.

 

15

4.

Expenses

 

  a.

Prepare annual Fund-level and class-level budgets and update on a periodic basis;

 

  b.

Coordinate the payment of expenses;

 

  c.

Establish accruals and provide to the Fund’s Fund Accountant;

 

  d.

Provide expense summary reporting as reasonably requested by the Fund.

 

5.

Filings

 

  a.

Provide the following for Form N-2 filings and required updates:

 

  i.

Preparation of expense table;

 

  ii.

Performance information;

 

  iii.

Preparation of shareholder expense transaction and annual fund operating expense examples; and

 

  iv.

Investment Advisor and trustee fee data.

 

  b.

Subject to having received all relevant information from the Fund and upon the advice and direction of Fund counsel, prepare Form N-PX and provide to Fund counsel for its review; upon the advice and direction of Fund counsel, file Form N-PX with the Commission as required;

 

  c.

Assist in compiling exhibits and disclosures for Form N-CEN and Form N-CSR and file when approved by the principal officers of the Fund;

 

  d.

File Rule 17g-1 fidelity bond filing when received from the Fund or broker.

 

6.

Other

 

  a.

Calculate dividend and capital gain distributions, subject to review and approval by the Fund’s officers and independent accountants;

 

  b.

Calculate standard performance, as defined by Rule 482 of the Investment Company Act of 1940, as requested by the Fund;

 

  c.

Report performance and other portfolio information to outside reporting agencies as directed by the Investment Adviser;

 

  d.

Assist in securing and monitoring the directors and officers liability coverage and fidelity bond for the Fund;

 

  e.

Provide periodic updates on recent accounting, tax and regulatory events affecting the Fund and/or Investment Adviser;

 

  f.

Assist the Fund during SEC audits, including providing applicable documents from the SEC’s document request list;

 

  g.

Maintain a regulatory compliance calendar (initially provided by the Fund’s CCO) listing various Board approval and SEC filing dates.

1.

Tax Preparation, Compliance and Reporting – 1099

 

1.

Prepare income tax and excise tax provisions. Calculate required income and excise dividend and capital gains distribution amounts subject to review and approval by the Fund’s officers and their independent accountants.

 

2.

Prepare analysis in determining qualified dividend income amounts for notification to shareholders and prepare ICI Primary and Secondary Layouts for shareholder reporting.

 

3.

Prepare forms 1099-MISC Miscellaneous Income for board members and other required Fund vendors.

Online Board Books

Provide web portal access for directors, officers and/or client staff to view completed board materials.

 

16

Blue Sky State Filings

Prepare and file state securities qualification/notice compliance filings, with the advice of the Fund’s legal counsel, upon and in accordance with instructions from the Fund, which instructions will include the states to qualify in, the amounts of shares to initially and subsequently qualify and the warning threshold to be maintained; promptly prepare an amendment to the Fund’s notice permit to increase the offering amount as necessary.

 

17

Schedule C

to the

Sub-Administration Agreement

by and between

StepStone Group Private Wealth LLC

and

UMB Fund Services, Inc.

FEES

 

Regulatory Administration   

•  Per master/stand-alone fund, per year:

   

•  First $100 million in assets

    2.5 basis points, plus

•  Next $100 million in assets

    2.5 basis points, plus

•  Next $100 million in assets

    2 basis points, plus

•  Assets over $300 million

    1 basis point

Subject to a minimum annual fee

    $36,000

Level 3 Holdings greater than 100 will increase the minimum by 20%. Level 3 Holdings greater than 200 will increase the minimum by 40%. Level 3 Holdings greater than 300 will increase the minimum by 60%.

 

•  Per feeder fund, per year

    $12,000
N-PORT and N-CEN Service Fees   

•  Annual fee per fund

    $12,000

•  Annual data feeds from third party – out-of-pocket estimates 1

   

•  Security master, per fund

    $1,400

•  Risk data (if applicable) 2,3

   $1,400

 

  1

Per-service fees are subject to increase by vendor. Such increases will be applied when effective.

  2

Applies to funds with derivatives or at least 25% of net asset value in debt instruments.

  3 

Fee does not apply if advisor chooses not to use the third-party vendor to provide the data; however, advisor must provide fund holdings data in UMB’s required format by the 7th business day of each month.

 

Multi-Class Fee (all fund types)   
First four classes    Included
For each additional class, based on complexity, per month    $500

 

*

Fund Accounting and Regulatory Administration core service fees are subject to a Year 1 cap of $200,000. Cap covers fund asset and minimum fees, blocker fees, and N-PORT and N-CEN fees. Cap does not include Feeders, Optional or Out-of-Pocket fees. Year 2 and forward core service fees will be as listed.

 

18

Tax Coordination (if UMB is not the tax preparer)

 

Per fund, per year    $10,000

Level 3 Holdings greater than 100 will increase the minimum by 20%. Level 3 Holdings greater than 200 will increase the minimum by 40%. Level 3 Holdings greater than 300 will increase the minimum by 60%.

Blue Sky

 

Per state filing    $150

 

Online Board Books    One-time implementation/ training fee    Annual fee

•  Board license

    $250    $500

•  User license (per user)

    $350    $900

Programming and Special Project Fees

Additional fees at $200 per hour, or as quoted by project, may apply for special programming or projects to meet your servicing requirements or to create custom reports or data extracts.

Out-of-Pocket Expenses

Out-of-pocket expenses include, but are not limited to, normal recurring expenses such as pricing services; security master set-up services; corporate action services; factor services; EDGAR filing fees; design, typesetting and printing of shareholder reports and prospectuses; customized reporting; third-party data provider/research services costs (including but not limited to Gainskeeper, E&Y PFIC Analyzer, Bloomberg, GICS, MSCI, CUSIP, SEDOL); assistance in preparation of responses to IRS correspondence; statement paper; tax forms; envelopes; postage; express delivery charges; courier services; telephone charges; printing of reports; photocopying; binders; dividers; stationery; record retention/storage/retrieval; travel on behalf and request of the fund; bank account service fees and any other bank charges; DTCC/NSCC participant billing; customer identity check fees; and expenses, including but not limited to attorney’s fees, incurred in connection with responding to and complying with SEC or other regulatory investigations, inquiries or subpoenas, excluding routine examinations of UMB in its capacity as a service provider to the fund. Customized reports or excessive reporting requests may be charged in accordance with the current pricing schedule.

Complex tax vehicles such as MLPs, straddles, or other unique structures may require additional charges for review or systems.

All fees, other than basis point fees, are subject to an annual escalation equal to the increase in the Consumer Price Index–Urban Wage Earners (CPI) but not to exceed a 3% increase per year. Such escalations shall be effective commencing one year from the effective date of each Fund and the corresponding date each year thereafter. No amendment of this fee schedule shall be required with each escalation. CPI will be determined by reference to the Consumer Price Index News Release issued by the Bureau of Labor Statistics, U.S. Department of Labor.

 

19

Fees for services not contemplated by this schedule will be negotiated on a case-by-case basis.

 

20

FUND ACCOUNTING AGREEMENT

THIS FUND ACCOUNTING AGREEMENT (the “Agreement”) is made as of this 24th day of May, 2023, by and between StepStone Group Private Wealth LLC, a Delaware limited liability company (the “Administrator”), and UMB Fund Services, Inc., a Wisconsin corporation, its successors and assigns (the “UMBFS”).

WHEREAS, the Administrator acts as administrator to the StepStone Private Infrastructure Fund (the “Fund”) and the Fund is a closed-end management investment company registered under the 1940 Act (as defined below) and is authorized to issue Shares;

WHEREAS, the Administrator and the UMBFS desire to enter into an agreement pursuant to which the UMBFS shall provide Services (as defined below) to the Fund on behalf of the Administrator.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1. Definitions In addition to any terms defined in the body of this Agreement, the following capitalized terms shall have the meanings set forth hereinafter whenever they appear in this Agreement:

“1933 Act” shall mean the Securities Act of 1933, as amended.

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“Authorized Person” shall mean any individual who is authorized to provide UMBFS with Instructions and requests on behalf of the Administrator or Fund, whose name shall be certified to UMBFS from time to time pursuant to this Agreement. Any officer of the Fund or Administrator authorized by the Board to be an Authorized Person shall be considered an Authorized Person (unless such authority is limited in a writing from the Administrator and received by UMBFS) and has the authority to appoint additional Authorized Persons, to limit or revoke the authority of any previously designated Authorized Person, and to certify to UMBFS the names of the Authorized Persons from time to time.

“Board” shall mean the Board of Trustees of the Fund.

“By-Laws” shall mean the Fund’s By-Laws, including any amendments made thereto.

“Commission” shall mean the U.S. Securities and Exchange Commission.

“Declaration of Trust” shall mean the Declaration of Trust or other similar operational document of the Fund, as the case may be, as the same may be amended from time to time.

“Investment Adviser” shall mean the investment adviser or investment advisers to the Fund and includes all sub-advisers or persons performing similar services.

 

1

“Instructions” shall mean an oral communication from an Authorized Person or a written communication signed by an Authorized Person and actually received by UMBFS. Instructions shall include manually executed originals, telefacsimile transmissions of manually executed originals or electronic communications.

“Prospectus” shall mean the current prospectus and statement of additional information with respect to the Fund (including any applicable amendments and supplements thereto) actually received by UMBFS from the Fund with respect to which the Fund has indicated a Registration Statement has become effective under the 1933 Act and the 1940 Act.

“Registration Statement” shall mean any registration statement on Form N-2 at any time now or hereafter filed with the Commission with respect to any of the Shares and any amendments and supplements thereto which at any time shall have been or will be filed with the Commission.

“Services” shall mean the fund accounting services described on Schedule B hereto and such additional services as may be agreed to by the parties from time to time and set forth in an amendment to Schedule B.

“Shares” shall mean such shares of beneficial interest, or class thereof, of the Fund as may be issued from time to time.

“Shareholder” shall mean a record owner of Shares of the Fund.

2. Appointment and Services

(a) The Administrator hereby appoints UMBFS as fund accountant of the Fund and hereby authorizes UMBFS to provide Services during the term of this Agreement and on the terms set forth herein. Subject to the oversight of the Board and utilizing information provided by the Fund, the Administrator and their current and prior agents and service providers, UMBFS will provide the Services in accordance with the terms of this Agreement. Notwithstanding anything herein to the contrary, UMBFS shall not be required to provide any Services or information that it believes, in its sole, reasonable discretion, to represent dishonest, unethical or illegal activity. In no event shall UMBFS provide any investment advice or recommendations to any party in connection with its Services hereunder.

(b) UMBFS may from time to time, in its reasonable discretion and at its own expense, appoint one or more other parties to carry out some or all of its responsibilities under this Agreement, provided that UMBFS shall remain responsible to the Administrator for all such delegated responsibilities in accordance with the terms and conditions of this Agreement, in the same manner and to the same extent as if UMBFS were itself providing such Services.

(c) UMBFS’s duties shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against UMBFS hereunder. The Services do not include correcting, verifying or addressing any prior actions or inactions of the Fund, Administrator or by any other current or prior agent or service provider. To the extent UMBFS agrees to take such actions, those actions taken shall be deemed part of the Services.

 

2

(d) It is understood that in determining security valuations, UMBFS employs one or more pricing services, as directed by the Administrator, to determine valuations of portfolio securities for purposes of calculating net asset values of the Fund. The Administrator shall identify to UMBFS the pricing service(s) to be utilized. If requested by the Administrator, the UMBFS shall price the securities and other holdings of the Fund for which market quotations or prices are available by the use of such pricing service(s).

For those securities where prices are not provided by the pricing service(s) utilized by UMBFS, the Administrator shall approve, in good faith, the procedures for determining the fair value of the securities. The Investment Adviser shall determine or obtain the valuation of the securities in accordance with those procedures and shall deliver to UMBFS the resulting prices for use in its calculation of net asset values. When security valuations are so provided, the following provisions will also apply:

(i) Valued securities are typically complicated financial instruments. There are many methodologies (including computer-based analytical modeling and individual security valuations) available to generate approximations of the market value of such securities and there is significant professional disagreement about which method is best. No evaluation method, including those used by UMBFS and its suppliers, may consistently generate approximations that correspond to actual “Traded” prices of the securities.

(ii) Methodologies used to provide the pricing portion of certain data may rely on valuations, however, the Administrator acknowledges that there may be errors or defects in the software, databases, or methodologies generating the valuations that may cause resultant valuations to be inappropriate for use in certain applications.

The Fund assumes all responsibility for edit checking, external verification of valuations, and ultimately the appropriateness of using data containing valuations, regardless of any efforts made by UMBFS and its suppliers in this regard.

(e) Subject to the terms of Section 8, and where applicable, the UMBFS further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records described in Schedule B which are maintained by UMBFS for the Fund. To the extent required by Rule 31a-3 under the 1940 Act, UMBFS hereby agrees that all records which it maintains for the Fund hereunder are the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund’s or Administrator’s request.

(f) Any resolution passed by the Board that affects accounting practices and procedures under this Agreement shall be effective upon written receipt of notice and acceptance by UMBFS.

(g) Nothing in this Agreement shall be deemed to appoint UMBFS and its officers, directors and employees as the Administrator’s attorney, form an attorney-client relationship or require the provision of legal advice. The Administrator acknowledges that UMBFS’s in-house attorneys exclusively represent UMBFS and the Administrator’s legal counsel will provide independent judgment on the Administrator’s behalf. Because no attorney-client relationship exists between UMBFS’s in-house attorneys and the Administrator or the Fund, any information provided to the UMBFS’s in-house attorneys may not be privileged and may be subject to compulsory disclosure under certain circumstances, notwithstanding the provisions of Section 5. UMBFS represents that it will maintain the confidentiality of information disclosed to its in-house attorneys on a best efforts basis.

 

3

3. Representations and Deliveries

(a) The Administrator represents and warrants to UMBFS that:

(i) It is a limited liability company duly organized and existing under the laws of the State of Delaware; it is empowered under applicable laws and by its operating agreements to enter into and perform this Agreement; and all requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

(ii) It will conduct its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained (or will timely obtain) all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its Declaration of Trust, By-laws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.

(b) The Administrator shall use reasonable efforts to cause the Fund’s officers and trustees, and shall use its reasonable efforts to cause the Fund’s Investment Adviser, legal counsel, independent accountants, transfer agent, custodian, distributor and other service providers and agents, past or present, to cooperate with UMBFS and to provide UMBFS with such information, documents and communications relating to the Fund and the Administrator as necessary and/or appropriate or as reasonably requested by UMBFS, in order to enable UMBFS to perform the Services. In connection with the performance of the Services, UMBFS shall (without investigation or verification) be entitled and is hereby instructed to, rely upon any and all Instructions, communications, information or documents provided to UMBFS by a representative of the Administrator or by any of the aforementioned persons. UMBFS shall be entitled to rely on any document that it reasonably believes to be genuine and to have been signed or presented by the proper party. Fees charged by such persons shall be an expense of the Administrator. UMBFS shall not be held to have notice of any change of authority of any trustee, officer, agent, representative or employee of the Fund, Investment Adviser or service provider until receipt of written notice thereof from the Administrator.

(c) The Board, the Investment Adviser and the Administrator have and retain primary responsibility for all compliance matters relating to the Fund including but not limited to (as applicable to the specific parties) compliance with the 1940 Act, the Internal Revenue Code of 1986, as amended, the USA PATRIOT Act of 2001, the Sarbanes-Oxley Act of 2002 and the policies and limitations of the Fund relating to the portfolio investments as set forth in the Prospectus. UMBFS’s monitoring and other functions hereunder shall not relieve the Board, the Investment Adviser and the Administrator of their primary day-to-day responsibility for assuring such compliance. Notwithstanding the foregoing, UMBFS will be responsible for its own compliance with such statutes insofar as such statutes are applicable to the Services it has agreed to provide hereunder, and will promptly notify the Administrator if it becomes aware of any non-compliance which relates to the Fund. UMBFS shall provide the Administrator with quarterly and annual certifications (on a calendar basis) with respect to the design and operational effectiveness of its compliance and procedures.

 

4

(d) The Administrator agrees that it shall advise UMBFS in writing at least thirty (30) days prior to affecting any change in any Prospectus which would increase or alter the duties and obligations of UMBFS hereunder, and shall proceed with such change only if it shall have received the written consent of UMBFS thereto.

(e) The Administrator will notify UMBFS of any discrepancy between UMBFS and the Fund, including, but not limited to, failing to account for a security position in the Fund’s portfolio, upon the later to occur of: (i) three (3) business days after receipt of any reports rendered by UMBFS to the Fund; (ii) three (3) business days after discovery of any error or omission not covered in the balancing or control procedure; or (iii) three (3) business days after receiving notice from any Shareholder regarding any such discrepancy.

(f) UMBFS represents and warrants to the Administrator that:

(i) It is a corporation duly organized and existing under the laws of the State of Wisconsin; it is empowered under applicable law and by its Articles of Incorporation and By-Laws to enter into and perform this Agreement; and all requisite proceedings have been taken to authorize it to enter into and perform this Agreement.

(ii) It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained (or will timely obtain) all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its operating documents or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement. Its execution, delivery or performance of this Agreement will not conflict with or violate (a) any provision of the organizational or governance documents of UMBFS or (b) any law applicable to UMBFS.

(iii) UMBFS shall maintain a disaster recovery and business continuity plan and adequate and reliable computer and other equipment necessary and appropriate to carry out its obligations under this Agreement, including commercially reasonable cybersecurity systems, policies and procedures designed to prevent the unauthorized or inadvertent disclosure of Fund information. Upon the Administrator’s reasonable request, UMBFS shall provide supplemental information concerning the aspects of its cybersecurity systems, policies and procedures and disaster recovery and business continuity plan that are relevant to the Services.

(iv) It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement in accordance with industry standards.

(h) UMBFS shall act as liaison with the Fund’s independent public accountants, to the extent requested by the Administrator, and shall provide account analyses, fiscal year summaries, and other audit-related schedules. UMBFS shall take all reasonable action in the performance of its duties under this Agreement to assure that the necessary information is made available to such auditors and accountants in a timely fashion for the expression of their opinion, as required by the Administrator.

 

5

(i) UMBFS agrees to comply (and to the extent UMBFS takes or is required to take action on behalf of the Fund hereunder shall cause the Fund to comply) with all applicable law, as well as all investment restrictions, policies and procedures adopted by the Fund. Except as set forth in this Agreement, UMBFS assumes no responsibility for such compliance by the Fund. UMBFS shall maintain at all times a program reasonably designed to prevent violations of the federal securities laws (as defined in Rule 38a-1 under the 1940 Act) with respect to the Services provided.

4. Fees and Expenses

(a) As compensation for the performance of the Services, the Administrator agrees to pay UMBFS the fees set forth on Schedule C hereto. Fees shall be adjusted in accordance with Schedule C or as otherwise agreed to in writing by the parties from time to time. Fees shall be earned and paid monthly in an amount equal to at least 1/12th of the applicable annual fee. The parties may amend this Agreement to include fees for any additional services requested by the Administrator, enhancements to current Services, or to add funds. The Administrator agrees to pay UMBFS’s rate (as the parties may agree to in writing from time to time) for Services added to, or for any enhancements to existing Services set forth on, Schedule B after the execution of this Agreement (as the parties may agree to in writing from time to time). In addition, to the extent that UMBFS corrects, verifies or addresses any prior actions or inactions by the Fund or by any prior service provider, UMBFS shall be entitled to additional fees as provided in Schedule C. In the event of any disagreement between this Agreement and Schedule C related to fees, the terms of Schedule C shall control.

(b) For the purpose of determining fees payable to UMBFS, net asset value shall be computed in accordance with the Prospectus and resolutions of the Board. The fee for the period from the day of the month this Agreement is entered into until the end of that month shall be pro-rated according to the proportion that such period bears to the full monthly period. Upon any termination of this Agreement before the end of any month and subject to Section 8(b) of this Agreement, the fee for such part of a month shall be pro-rated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement. Should this Agreement be terminated (other than for cause on the part of the UMBFS) or the Fund be liquidated, merged with or acquired by another fund or investment company, any accrued fees shall be immediately payable.

(c) UMBFS will bear all expenses incurred by it in connection with its performance of Services, except as otherwise provided herein. UMBFS shall not be required to pay or finance any costs and expenses incurred in the operation of the Fund, including, but not limited to: taxes; interest; brokerage fees and commissions; salaries, fees and expenses of officers and trustees; Commission fees and state Blue Sky fees; advisory fees; charges of custodians, transfer agents, dividend disbursing and accounting services agents and other service providers; security pricing services; insurance premiums; outside auditing and legal expenses; costs of organization and maintenance of corporate existence; taxes and fees payable to federal, state and other governmental agencies; preparation, typesetting, printing, proofing and mailing of Prospectuses, statements of additional information, supplements, notices, forms and applications and proxy materials for regulatory purposes and for distribution to current Shareholders; preparation, typesetting, printing, proofing and mailing and other costs of Shareholder reports; expenses in connection with the electronic transmission of documents and information including electronic filings with the Commission and the states; research and statistical data services; expenses incidental to holding meetings of the Fund’s Shareholders and Trustees; fees and expenses associated

 

6

with internet, e-mail and other related activities; and extraordinary expenses. Expenses incurred for distribution of Shares, including, as applicable, the typesetting, printing, proofing and mailing of Prospectuses for persons who are not Shareholders, will be borne by the Fund, except for such expenses permitted to be paid under a distribution plan adopted in accordance with applicable laws. UMBFS shall not be required to pay any Blue Sky fees or take any related Blue Sky actions unless and until it has received the amount of such fees from the Administrator.

(d) The Administrator also agrees to promptly reimburse UMBFS for all reasonable out-of-pocket expenses or disbursements reasonably incurred by UMBFS in connection with the performance of Services under this Agreement. Out-of-pocket expenses shall include, but not be limited to, those items specified on Schedule C hereto. If reasonably requested by UMBFS, out-of-pocket expenses are payable in advance. Payment of postage expenses, if prepayment is reasonably requested, is due at least seven (7) days prior to the anticipated mail date. In the event UMBFS reasonably requests advance payment, UMBFS shall not be obligated to incur such expenses or perform the related Service(s) until payment is received.

(e) The Administrator agrees to pay all amounts due hereunder within thirty (30) days of receipt of each invoice (the “Due Date”). Except as provided in Schedule C, UMBFS shall bill Service fees monthly, and out-of-pocket expenses as incurred (unless prepayment is requested by UMBFS). UMBFS may, at its option, arrange to have various service providers submit invoices directly to the Administrator for payment of reimbursable out-of-pocket expenses.

(f) The Administrator is aware that its failure to remit to UMBFS all amounts due on or before the Due Date may cause UMBFS to incur costs not contemplated by this Agreement, including, but not limited to carrying, processing and accounting charges. Accordingly, in the event that UMBFS does not receive any amounts due hereunder by the Due Date, the Administrator agrees to pay a late charge on the overdue amount equal to one and one-half percent (1.5%) per month or the maximum amount permitted by law, whichever is less. In addition, the Administrator shall pay UMBFS’s reasonable attorney’s fees and court costs if any amounts due UMBFS in the event that an attorney is engaged to assist in the collection of amounts due. Acceptance of such late charge shall in no event constitute a waiver by UMBFS of the Administrator’s default or prevent UMBFS from exercising any other rights and remedies available to it.

(g) In the event that any charges are disputed, the Administrator shall, on or before the Due Date, pay all undisputed amounts due hereunder and notify UMBFS in writing of any disputed charges for out-of-pocket expenses which it is disputing in good faith. Payment for such disputed charges shall be due on or before the close of the tenth (10th) business day after the day on which UMBFS provides documentation which an objective observer would agree reasonably supports the disputed charges (the “Revised Due Date”). Late charges shall not begin to accrue as to charges disputed in good faith until the first day after the Revised Due Date.

(h) The Administrator acknowledges that the fees charged by UMBFS under this Agreement reflect the allocation of risk between the parties, including the exclusion of remedies and limitations of liability in Section 6. Modifying the allocation of risk from what is stated herein would affect the fees that UMBFS charges. Accordingly, in consideration of those fees, the Administrator agrees to the stated allocation of risk.

 

7

5. Confidential Information

UMBFS agrees on behalf of itself and its affiliates, partners, employees, directors and agents to treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund’s portfolio holdings, not to use such information other than in the performance of its responsibilities and duties hereunder, and not to disclose such information except: (i) when requested to divulge such information by duly-constituted authorities or court process; (ii) to an affiliate, as defined by Section 248.3(a) of Regulation S-P; or, (iii) pursuant to any other exception permitted by Sections 248.14 and 248.15 of Regulation S-P in the ordinary course of business to carry out the activities covered by the exception under which UMBFS received the information. In case of any requests or demands for inspection of the records of the Fund, UMBFS will endeavor to notify the Administrator promptly and to secure instructions from a representative of the Administrator as to such inspection. Records and information which have become known to the public through no wrongful act of UMBFS or any of its employees, agents or representatives, and information which was already in the possession of UMBFS prior to receipt thereof, shall not be subject to this Section. Any party appointed pursuant to Section 2(b) above shall be required to observe the confidentiality obligations contained herein. The obligations of the parties under Section 5 shall indefinitely survive the termination of this Agreement.

6. Limitation of Liability

(a) UMBFS shall exercise due care and reasonable care in good faith and in accordance with reasonable commercial standards in discharging its duties hereunder. Notwithstanding anything to the contrary in this Agreement, UMBFS shall be liable to the Administrator for all losses, damages and reasonable costs and expenses suffered or incurred by such Administrator resulting from the bad faith, gross negligence, fraud, reckless disregard in the performance of its duties and obligations under this Agreement, uncured material breach of this Agreement or willful misconduct of UMBFS (the “Standard of Care”). Subject to the foregoing, UMBFS shall not be liable for: (i) any action reasonably taken or omitted to be taken in accordance with or in reasonable reliance upon Instructions, communications, data, documents or information (without investigation or verification) received by UMBFS from an officer or representative of the Administrator, or from any Authorized Person; (ii) any action taken or omission by the Administrator, the Fund, Investment Adviser, any Authorized Person or any past or current service provider; or, (iii) its reliance on the security valuations without investigation or verification provided by pricing service(s), the Investment Adviser or representatives of the Administrator, in each case only to the extent that the Fund would utilize a pricing service with respect to the valuation of any such security.

(b) Notwithstanding anything herein to the contrary, each party hereto will be excused from its obligation to perform any Service or obligation required of it hereunder solely for the duration that such performance is prevented by events beyond its reasonable control and shall not be liable for any default, damage, loss of data or documents, errors, delay or any other loss whatsoever caused thereby. UMBFS will, however, take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond its reasonable control.

 

8

(c) In no event and under no circumstances shall the Indemnified Parties (as defined below) be liable to anyone, including, without limitation, the other party, under any theory of tort, contract, strict liability or other legal or equitable theory for lost profits, exemplary, punitive, special, indirect or consequential damages for any act or failure to act under any provision of this Agreement regardless of whether such damages were foreseeable and even if advised of the possibility thereof.

(d) The obligations of the parties under Section 6 shall indefinitely survive the termination of this Agreement.

7. Indemnification

(a) The Administrator agrees to indemnify and hold harmless UMBFS, and its nominees (collectively, the “UMBFS Indemnified Parties”) from and against any and all claims, demands, actions and suits, and any and all judgments, liabilities, losses, damages, costs, charges, fees, penalties, and other expenses (excluding attorney’s fees) of every nature and character (“Losses”) which may be asserted against or incurred by any UMBFS Indemnified Party or for which any UMBFS Indemnified Party may be held liable (a “Claim”), arising out of or in any way relating to any of the following, except, in each case, to the extent a Claim resulted from UMBFS’s breach of the Standard of Care:

(i) any action or omission of UMBFS;

(ii) UMBFS’s reasonable reliance on, implementation of or use of, Instructions, communications, data, documents or information (without investigation or verification) received by UMBFS from any Authorized Person;

(iii) any action taken, or omission by, the Administrator, the Fund, Investment Adviser, any Authorized Person or any past or current service provider (not including UMBFS);

(iv) any Claim that arises out of the Administrator’s gross negligence or misconduct or breach of any representation or warranty of the Administrator made herein; and

(v) its reliance on the security valuations without investigation or verification provided by pricing service(s), the Administrator, the Investment Adviser or representatives of the Fund, in each case only to the extent that the Fund would utilize a pricing service with respect to the valuation of any such security.

(b) The UMBFS agrees to indemnify and hold harmless the Administrator, the Fund, their respective employees and officers (collectively, the “Administrator Indemnified Parties” and together with the UMBFS Indemnified Parties, each, an “Indemnified Party” and together, the “Indemnified Parties”) from and against any and all Claims against the Administrator Indemnified Parties arising out of or in any way relating to the UMBFS’s breach of the Standard of Care except, in each case, to the extent a Claim resulted from the Administrator’s bad faith, gross negligence or willful misconduct or breach of any representation or warranty of the Administrator made herein.

(b) Promptly after receipt by a party of notice of the commencement of an investigation, action, claim or proceeding, the receiving party shall, if a claim for indemnification in respect thereof is made under this Section, notify the indemnifying party in writing of the commencement thereof, although the failure to do so shall not prevent recovery by the Indemnified Party. The indemnifying

 

9

party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such Loss, but if the indemnifying party elects to assume the defense, such defense shall be conducted by counsel chosen by the indemnifying party and approved by the Indemnified Party, which approval shall not be unreasonably withheld. In the event the indemnifying party elects to assume the defense of any such suit and retain such counsel and notifies the Indemnified Party of such election, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them subsequent to the receipt of the indemnifying party’s election. If the indemnifying party does not elect to assume the defense of any such suit, or in case the Indemnified Party does not, in the exercise of reasonable judgment, approve of counsel chosen by the indemnifying party, or in case there is a conflict of interest between the indemnifying party and the Indemnified Party, the indemnifying party will reimburse the Indemnified Party or Parties named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by them. The indemnification agreement contained in this Section 7 and the representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the benefit of each Indemnified Party and their estates and successors. The Administrator agrees to promptly notify UMBFS of the commencement of any litigation or proceedings against the Administrator or any of its officers or directors in connection with the issue and sale of any of the Shares.

(c) The obligations of the parties under this Section 7 shall indefinitely survive the termination of this Agreement.

8. Term

(a) This Agreement shall become effective with respect to the Fund as of the date hereof. Unless sooner terminated as provided herein, this Agreement shall continue in effect with respect to the Fund for a two-year period beginning on the date of this Agreement (the “Initial Term”). Thereafter, if not terminated as provided herein, the Agreement shall continue automatically in effect as to the Fund for successive one-year periods (each a “Renewal Term”).

(b) In the event this Agreement is terminated by the Administrator prior to the end of the Initial Term or any subsequent Renewal Term, the Administrator shall be obligated to pay UMBFS the remaining balance of the fees payable to UMBFS under this Agreement through the end of the Initial Term or Renewal Term, as applicable. Notwithstanding the foregoing, either party may terminate this Agreement: (i) at the end of the Initial Term or at the end of any successive Renewal Term by giving the other party a written notice not less than ninety (90) days’ prior to the end of the respective term; (ii) upon the material breach of the other party of any term of this Agreement if such breach is not cured within 15 business days of notice of such breach to the breaching party; and (iii) in the event of the appointment of a conservator or receiver for the UMBFS by regulatory authorities or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Notwithstanding anything herein to the contrary, upon the termination of the Agreement as provided herein or the liquidation, merger or acquisition of the Fund, UMBFS shall deliver the records of the Fund to the Fund or its successor service provider at the expense of the Administrator in a form that is consistent with UMBFS’s applicable license agreements, and thereafter the Administrator or its

 

10

designee shall be solely responsible for preserving the records for the periods required by all applicable laws, rules and regulations. The Administrator shall be responsible for all expenses associated with the movement (or duplication) of records and materials and conversion thereof to a successor service provider, including all reasonable trailing expenses incurred by UMBFS. In addition, in the event of termination of this Agreement, or the proposed liquidation, merger or acquisition of the Fund, and UMBFS’s agreement to provide additional Services in connection therewith, UMBFS shall provide such Services and be entitled to such compensation as the parties may mutually agree. UMBFS shall not reduce the level of service provided to the Administrator prior to termination following notice of termination by the Administrator.

9. Miscellaneous

(a) Any notice required or permitted to be given by either party to the other under this Agreement shall be in writing and shall be deemed to have been given when received by the other party as set forth below. Such notices shall be sent to the addresses listed below, or to such other location as either party may from time to time designate in writing:

 

If to UMBFS:    UMB Fund Services, Inc.
   235 West Galena Street
   Milwaukee, Wisconsin 53212
   Attention: Legal Department
If to the Administrator:    StepStone Group Private Wealth LLC
   128 S Tyron St., Suite 1600
   Charlotte, NC 28202
   Attention: Fund Accounting Department

If notice is sent by electronic delivery or facsimile, it shall be deemed to have been given immediately (contingent upon confirmed receipt by the intended recipient). If notice is sent by first-class mail, it shall be deemed to have been given five days after it has been mailed. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered.

(b) Except as provided to the contrary herein, this Agreement may not be amended or modified in any manner except by a written agreement executed by both parties with the formality of this Agreement.

(c) This Agreement shall be governed by Delaware law, excluding the laws on conflicts of laws. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the Commission thereunder. Any provision of this Agreement which is determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.

 

11

(d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original agreement but such counterparts shall together constitute but one and the same instrument. The facsimile signature of any party to this Agreement shall constitute the valid and binding execution hereof by such party.

(e) The services of UMBFS hereunder are not deemed to be exclusive. UMBFS may render fund accounting services and any other services to others, including other investment companies.

(f) The captions in the Agreement are included for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

(g) This Agreement and the Schedules incorporated herein constitute the full and complete understanding and agreement of the Administrator and UMBFS and supersedes all prior negotiations, understandings and agreements with respect to fund accounting and administration services.

(h) Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into among the parties hereto and any actions taken or omitted by any party hereunder shall not affect any rights or obligations of any other party hereunder.

(i) UMBFS shall retain all right, title and interest in any and all computer programs, screen formats, report formats, procedures, data bases, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, trade secrets, trademarks and other related legal rights provided, developed or utilized by UMBFS in connection with the Services provided by UMBFS to the Fund hereunder.

(j) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns. This Agreement shall not be assignable by either party without the written consent of the other party, provided; however, that UMBFS may, in its sole discretion and upon advance written notice to the Fund, assign all its right, title and interest in this Agreement to an affiliate, parent or subsidiary.

(k) The person signing below represents and warrants that he/she is duly authorized to execute this Agreement on behalf of the party on whose behalf such person is signing.

[Signature page to follow.]

 

12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized person as of the day, month and year first above written.

 

STEPSTONE GROUP PRIVATE WEALTH LLC
(the “Administrator”)
By:   /s/ Tim Smith
Title:   CFO & COO
Date:   May 24, 2023
UMB FUND SERVICES, INC.
(“UMBFS”)
By:   /s/ Maureen Quill
Title:   Executive Vice President
Date:   June 8, 2023

 

13

Schedule A

to the

Fund Accounting Agreement

by and between

StepStone Group Private Wealth LLC

and

UMB Fund Services, Inc.

[RESERVED]

 

14

Schedule B

to the

Fund Accounting Agreement

by and between

StepStone Group Private Wealth LLC

and

UMB Fund Services, Inc.

SERVICES

Subject to the oversight of, and utilizing information provided by the Fund, Administrator, Investment Adviser, and the Fund’s agents, the UMBFS will provide the following services:

Fund Accounting

 

1.

Cash Processing:

 

  a.

Provide the Investment Adviser, sub-adviser(s), and/or delegate with a daily report of cash and projected cash;

 

  b.

Maintain cash and position reconciliations with custodian(s) and prime brokers.

 

2.

Investment Accounting and Securities Processing:

 

  a.

Maintain daily portfolio records for each Fund, using security information provided by the Investment Adviser or sub-adviser(s);

 

  b.

On a daily basis, process non-discretionary corporate action activity and discretionary corporate action activity upon receipt of instructions from the Investment Adviser;

 

  c.

On each day a net asset value is calculated, record the prices for every portfolio position using sources approved by the Board;

 

  d.

On each business day, record interest and dividend accruals, on a book basis, for the portfolio securities held in each Fund and calculate and record the gross earnings on investments for that day. Account for daily or periodic distributions of income to shareholders and maintain undistributed income balances each day;

 

  e.

On each business day, determine gains and losses on portfolio securities sales on a book basis. Account for periodic distributions of gains to shareholders of each Fund and maintain undistributed gain or loss balance as of each day;

 

  f.

Provide the Investment Adviser with standard daily/periodic portfolio reports for each Fund as mutually agreed upon.

 

3.

General Ledger Accounting and Reconciliation:

 

  a.

On each business day, calculate the amount of expense accruals according to the methodology, rates or dollar amounts provided by the Investment Adviser or the Funds’ Administrator. Account for expenditures and maintain accrual balances at a level of accounting detail specified by the Investment Adviser;

 

  b.

Account for purchases, sales, exchanges, transfers, reinvested distributions, and other activity related to the shares of each Fund as reported by the Funds’ Transfer Agent. Reconcile activity to the transfer agency records;

 

  c.

Review outstanding trade, income, or reclaim receivable/payable balances with the appropriate party;

 

  d.

Maintain and keep current all books and records of the Funds as required by Section 31 of the 1940 Act, and the rules thereunder, in connection with the Fund Accountant’s duties hereunder.

 

15

4.

Compute NAV in accordance with Fund procedures:

 

  a.

Calculate the net asset value per share and other per-share amounts on the basis of shares outstanding reported by the Funds’ Transfer Agent.

 

  b.

Issue daily reports detailing per share information of each Fund to such persons (including Transfer Agent, NASDAQ and other reporting agencies) as directed by the Investment Adviser.

 

16

Schedule C

to the

Fund Accounting Agreement

by and between

StepStone Group Private Wealth LLC

and

UMB Fund Services, Inc.

FEES

Fund Accounting – Interval Fund

 

  •  

Per master/stand-alone fund, per year:

 

•  First $100 million in assets

    5.5 basis points, plus

•  Next $100 million in assets

    5 basis points, plus

•  Next $100 million in assets

    4 basis points, plus

•  Assets over $300 million

    3 basis points

Subject to a minimum annual fee

    $25,000

Level 3 Holdings greater than 100 will increase the minimum by 20%. Level 3 Holdings greater than 200 will increase the minimum by 40%. Level 3 Holdings greater than 300 will increase the minimum by 60%.

 

•  Per feeder/blocker fund, per year

    $8,000

Multi-Class Fee (all fund types)

 

First four classes

      Included  

For each additional class, based on complexity, per month

    $ 500  

 

*

Fund Accounting and Regulatory Administration core service fees are subject to a Year 1 cap of $200,000. Cap covers fund asset and minimum fees, blocker fees, and N-PORT and N-CEN fees. Cap does not include Feeders, Optional or Out-of-Pocket fees. Year 2 and forward core service fees will be as listed.

Programming and Special Project Fees

Additional fees at $200 per hour, or as quoted by project, may apply for special programming or projects to meet your servicing requirements or to create custom reports or data extracts.

 

17

Out-of-Pocket Expenses

Out-of-pocket expenses include, but are not limited to, normal recurring expenses such as pricing services; security master set-up services; corporate action services; factor services; EDGAR filing fees; design, typesetting and printing of shareholder reports and prospectuses; customized reporting; third-party data provider/research services costs (including but not limited to Gainskeeper, E&Y PFIC Analyzer, Bloomberg, GICS, MSCI, CUSIP, SEDOL); assistance in preparation of responses to IRS correspondence; statement paper; tax forms; envelopes; postage; express delivery charges; courier services; telephone charges; printing of reports; photocopying; binders; dividers; stationery; record retention/storage/retrieval; travel on behalf and request of the fund; bank account service fees and any other bank charges; DTCC/NSCC participant billing; customer identity check fees; and expenses, including but not limited to attorney’s fees, incurred in connection with responding to and complying with SEC or other regulatory investigations, inquiries or subpoenas, excluding routine examinations of UMB in its capacity as a service provider to the fund. Customized reports or excessive reporting requests may be charged in accordance with the current pricing schedule.

Complex tax vehicles such as MLPs, straddles, or other unique structures may require additional charges for review or systems.

All fees, other than basis point fees, are subject to an annual escalation equal to the increase in the Consumer Price Index–Urban Wage Earners (CPI) but not to exceed a 3% increase per year. Such escalations shall be effective commencing one year from the effective date of each Fund and the corresponding date each year thereafter. No amendment of this fee schedule shall be required with each escalation. CPI will be determined by reference to the Consumer Price Index News Release issued by the Bureau of Labor Statistics, U.S. Department of Labor.

Fees for services not contemplated by this schedule will be negotiated on a case-by-case basis.

 

18

StepStone Group Private Wealth LLC

128 S Tryon St., Suite 1600

Charlotte, NC 28202

As of May 24, 2023

StepStone Private Infrastructure Fund

128 S Tryon St., Suite 1600

Charlotte, NC 28202

Re:     Expense Limitation and Reimbursement Agreement

Ladies and Gentlemen:

StepStone Group Private Wealth LLC (the “Adviser”) hereby confirms its agreement as follows in respect of StepStone Private Infrastructure Fund (the “Fund”):

1.       Expense Limitation. For the period from the effective date of that certain Investment Advisory Agreement (the “Advisory Agreement”), between the Fund and the Adviser, for a one-year term beginning with the commencement of operations (the “Initial Closing Date”) and ending on the one year anniversary thereof (the “Limitation Period”), subject to the terms hereof, the Adviser agrees that, except as provided in Section 2 below, it will pay, absorb or reimburse on a daily basis the Fund’s aggregate ordinary operating expenses, excluding certain “Specified Expenses” listed below, borne by the Fund in respect of each Class of Shares during the Limitation Period to an amount set forth on Schedule A, on an annualized basis, of each Class’s daily net assets (the “Expense Cap”). For any day in which the Fund’s aggregate ordinary operating expenses, exclusive of the Specified Expenses, in respect of any Class of Shares on an annualized basis exceed the Expense Cap applicable to that Class of Shares, the Adviser will reimburse the Fund for expenses to the extent necessary to eliminate such excess. The Adviser may also directly pay expenses on behalf of the Fund and waive reimbursement under this letter agreement.

2.       Specified Expenses. Each Expense Cap applies only to each Class’s aggregate ordinary operating expenses (“Ordinary Expenses”) and excludes Specified Expenses. Specified Expenses not covered by this letter agreement include: (i) the management fee; (ii) all fees and expenses of Private Market Assets and other investments in which the Fund invests (including the underlying fees of the Private Market Assets and other investments); (iii) transactional costs, including legal costs and brokerage commissions, associated with the acquisition and disposition of Private Market Assets and other investments; (iv) interest payments incurred on borrowing by the Fund; (v) fees and expenses incurred in connection with a credit facility, if any, obtained by the Fund; (vi) distribution and shareholder servicing fees, as applicable; (vii) taxes; and (viii) extraordinary expenses resulting from events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or similar proceeding, indemnification expenses, and expenses in connection with holding and/or soliciting proxies for all annual and other meetings of Shareholders.

3.       Term. This letter agreement will remain in effect throughout the Limitation Period, unless terminated by the Fund’s Board of Trustees upon thirty (30) days written notice to the Adviser.

 

1

This letter agreement may be renewed by the mutual agreement of the Adviser and the Fund for successive terms of one year. Unless so renewed, this letter agreement will terminate automatically at the end of the Limitation Period. This letter agreement will also terminate automatically upon the termination of the Advisory Agreement, unless a new investment advisory agreement with the Adviser (or with an affiliate under common control with the Adviser) becomes effective upon such termination.

4.       Excess Expenses. In consideration of the Adviser’s agreement as provided herein, the Fund agrees to carry forward the amount of fees and expenses in respect of the applicable Class of shares waived, reimbursed or paid by the Adviser (“Excess Expenses”) for a period not to exceed three years from the end of the month in which such fees and expenses were waived, reimbursed or paid by the Adviser, and to reimburse the Adviser in the amount of such Excess Expenses as promptly as possible, on a monthly basis, even if such reimbursement occurs after the termination of the Limitation Period, provided that the Ordinary Expenses in respect of the applicable Class of shares have fallen to a level below the Expense Cap of the Class and the reimbursement amount does not raise the level of Ordinary Expenses plus waived fees, reimbursed expenses or directly paid expenses in respect of the applicable Class of shares in the month the reimbursement is being made to a level that exceeds the Expense Cap of the Class (or such other Expense Cap as may be in effect at the time). For the avoidance of doubt, if in respect of the applicable Class of Shares, at the end of any fiscal year in which the Fund has reimbursed the Adviser for any Excess Expenses, the Fund’s waived fees, reimbursed expenses or directly paid expenses for such fiscal year exceed the Expense Cap (or such other Expense Cap as may be in effect at the time) of the Class, the Adviser shall promptly pay the Fund an amount equal to the lesser of: (i) the amount by which the Fund’s waived fees, reimbursed expenses or directly paid expenses in respect of the applicable Class of shares for such fiscal year exceed the Expense Cap of the Class (or such other Expense Cap as may be in effect at the time); and (ii) the amount of reimbursements for Excess Expenses in respect of the applicable Class of Shares paid by the Fund to the Adviser in such fiscal year. Any payment by the Adviser to the Fund pursuant to the foregoing sentence shall be subject to later reimbursement by the Fund in accordance with this Section 4. The Adviser’s obligations under this Section 4 shall survive termination of this letter agreement.

5.       Entire Agreement; Amendment. This letter agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements between the parties hereto relating to the matters contained herein and may not be modified, waived or terminated orally and may only be amended by an agreement in writing signed by the parties hereto.

6.       Construction and Forum. This letter agreement shall be governed by the laws of the State of New York, without regard to its conflicts of law principles. Each of the parties hereto irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York, in any action or proceeding arising out of or relating to this letter agreement or the transactions contemplated hereby, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. Capitalized terms used, but not defined, herein shall have the meanings provided to such terms in the Fund’s registration statement on Form N-2.

 

2

7.       Counterparts. This letter agreement may be executed in any number of separate counterparts, each of which shall be deemed an original, but the several counterparts shall together constitute but one and the same agreement of the parties hereto.

8.       Severability. If any one or more of the covenants, agreements, provisions or texts of this letter agreement shall be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this letter agreement and shall in no way affect the validity or enforceability of the other provisions of this letter agreement.

 

  STEPSTONE GROUP PRIVATE WEALTH LLC
  By:   /s/ Robert W. Long
    Name: Robert W. Long                                
    Title:   President

 

Accepted and Agreed:

STEPSTONE PRIVATE INFRASTRUCTURE FUND

By:  

/s/ Robert W. Long

 

Name: Robert W. Long

 

Title:   Chief Executive Officer

 

3

SCHEDULE A

 

Share Class    Expense Cap

Class T

    1.00%

Class S

    1.00%

Class D

    1.00%

Class I

    1.00%

 

4

STEPSTONE PRIVATE INFRASTRUCUTRE FUND

DISTRIBUTION AND SHAREHOLDER SERVICES PLAN

WHEREAS, StepStone Private Infrastructure Fund (the “Fund”) is engaged in business as a closed-end management investment company and is registered as such under the Investment Company Act of 1940 (the “Act”); and

WHEREAS, the Fund relies upon exemptive relief granted by the Securities and Exchange Commission to permit the Fund to offer multiple classes of shares (the “Exemptive Relief”); and

WHEREAS, pursuant to the Exemptive Relief, the Fund is subject to Rule 12b-1 (“Rule 12b-1”) under the Act.

NOW, THEREFORE, the Fund hereby adopts the terms of this Distribution and Shareholder Services Plan (the “Plan”) under Rule 12b-1, with respect to the classes of shares of beneficial interest (each, a “Class”) listed on Schedule A hereto, as such Schedule A may be amended from time to time, on the following terms and conditions:

1.    The Fund may pay to UMB Distribution Services, LLC, the Fund’s distributor (the “Distributor”) and other affiliated broker-dealers, unaffiliated broker-dealers, financial institutions and/or intermediaries (collectively, “Service Agents”) as compensation for the services provided and expenses incurred relating to the distribution, offering and marketing of a Class, fees as set forth in Schedule A hereto, as may be amended from time to time. Such fees shall be calculated and accrued monthly and paid monthly or at such other intervals as the Fund and the Distributor shall mutually agree. In addition to the payment of the fees, the Fund may pay for (i) due diligence expenses, (ii) expenses in connection with the printing and mailing of prospectuses to other than current shareholders and the printing and mailing of sales literature and (iii) expenses related to offering the Fund as an option on any distribution “platform” a Service Agent administers, including expenses for any services provided in connection therewith.

2.    Any shareholder service fees may be paid for the provision of “personal service and/or the maintenance of shareholder accounts” as provided for in the Financial Industry Regulatory Authority (“FINRA”) Rule 2341. If FINRA amends the definition of “service fee” or adopts a related definition intended to define the same concept, the services provided under the Plan shall be automatically amended, without further action of the parties, to conform to such definition.

3.    This Plan must be approved, together with any related agreements, by votes of a majority of both (a) the Board of Trustees of the Fund (the “Board”) and (b) those Trustees of the Fund who are not “interested persons” of the Fund, as defined in the Act, and who have no direct or indirect financial interest in the operation of the Plan or in any agreements related to the Plan (the “Independent Trustees”), cast in person at a meeting (or meetings) called for the purpose of voting on the Plan and related agreements.

4.    This Plan shall continue in full force and effect for so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in Paragraph 3 hereof.

5.    The Distributor shall provide to the Board and the Board shall review, at least quarterly, a written report of Fund payments made in accordance with this Plan and the purposes for which such payments were made.

6.    This Plan may be terminated at any time without penalty with respect to a Class of the Fund by the vote of a majority of the Independent Trustees or by vote of a majority of the outstanding voting securities of such Class.

7.    This Plan may not be amended to increase materially the amount payable hereunder by a Class unless such amendment is approved by a vote of at least a majority (as defined in the Act) of the outstanding voting securities of such Class, and no material amendment to this Plan shall be made unless approved in the manner provided in Paragraph 3 hereof.

8.    While this Plan is in effect, the selection and nomination of the Independent Trustees shall be committed to the discretion of the Independent Trustees then in office.

9.    The Distributor may direct that all or any part of the amounts receivable by it under this Plan be paid directly to affiliated broker-dealers, unaffiliated broker-dealers, financial institutions and/or intermediaries. All payments made hereunder pursuant to the Plan shall be in accordance with the terms and limitations of the FINRA Rules.

10.    The Fund shall preserve copies of this Plan (including any amendments thereto) and any related agreements and all reports made pursuant to Paragraph 5 hereof for a period of not less than six years from the date of this Plan, the first two years in an easily accessible place.

11.    The obligations of the Fund hereunder are not personally binding upon, nor shall be held to the private property of, any of the Trustees, shareholders, officers, employees or agents of the Fund, but only the Fund’s property allocable to the applicable Class(es) shall be bound.

12.    This Plan only relates to those Classes stated on Schedule A hereto and the fees determined in accordance with Paragraph 1 hereof shall be based upon the average monthly net assets of the Fund attributable to the applicable Class.

 

2

SCHEDULE A

 

  1.

Class T and S – Shareholders of Class T and Class S shares shall pay a fee at the annual rate of 0.85% of the Fund’s average monthly net assets attributable to Class T and Class S shares, 0.25% of which shall be a “shareholder service fee”. Such fee shall be calculated and accrued monthly (before repurchases of any Class T and Class S shares).

 

  2.

Class D – Shareholders of Class D shares shall pay a fee at the annual rate of 0.25% of the Fund’s average monthly net assets attributable to Class D shares, all 0.25% of which shall be a “shareholder service fee.” Such fee shall be calculated and accrued monthly (before repurchases of any Class D shares).

 

  3.

Class I – Shareholders of Class I shares will not be subject to a fee under this Plan.

STEPSTONE PRIVATE INFRASTRUCTURE FUND

MULTIPLE CLASS PLAN

May 24, 2023

WHEREAS, StepStone Private Infrastructure Fund (the “Fund”) is engaged in business as a closed-end management investment company and is registered as such under the Investment Company Act of 1940 (the “1940 Act”); and

WHEREAS, the Fund relies upon exemptive relief granted by the Securities and Exchange Commission to permit the Fund to offer multiple classes of shares (the “Exemptive Relief”); and

WHEREAS, pursuant to the Exemptive Relief, the Fund is subject to Rule 18f-3 (“Rule 18f-3”) under the 1940 Act, as if it were an open-end management investment company.

NOW, THEREFORE, the Fund hereby adopts this multiple class plan pursuant to Rule 18f-3 (the “Plan”).

The provisions of the Plan are:

 

A.

General Description of Classes

As of the effective date of the Plan as set forth above, the Fund will offer four (4) classes of shares of beneficial interest: Class T Shares, Class S Shares, Class D Shares and Class I Shares. In addition, pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a Distribution and Shareholder Services Plan (the “12b-1 Plan”) under which shares of certain classes are subject to a sales load and a distribution and shareholder servicing fee. A general description of the fees applicable to each class of shares is set forth below.

 

  1.

Class T. Class T Shares are subject to a sales load of up to 3.50% of the investment amount. Class T Shares are subject to a monthly distribution and shareholder servicing fee at the annual rate of 0.85% of the Fund’s month-end average net assets attributable to Class T Shares under the 12b-1 Plan. Class T Shares require a minimum initial investment of $25,000 and a minimum subsequent investment of $5,000.

 

  2.

Class S. Class S Shares are subject to a sales load of up to 3.50% of the investment amount. Class S Shares are subject to a monthly distribution and shareholder servicing fee at the annual rate of 0.85% of the Fund’s month-end average net assets attributable to Class S Shares under the 12b-1 Plan. Class S Shares require a minimum initial investment of $25,000 and a minimum subsequent investment of $5,000.

 

  3.

Class D. Class D Shares are subject to a sales load of up to 1.50% of the investment amount. Class D Shares are subject to a monthly shareholder servicing fee at the annual rate of 0.25% of the Fund’s month-end average net assets attributable to Class D Shares under the 12b-1 Plan. Class D Shares require a minimum initial investment of $25,000 and a minimum subsequent investment of $5,000.

 

  4.

Class I. Class I Shares are not subject to a sales load. Class I Shares are not subject to a distribution or shareholder servicing fee under the 12b-1 Plan. Class I Shares require a minimum initial investment of $1,000,000 and a minimum subsequent investment of $100,000.

 

1

B.

Expense Allocation of Each Class

All expenses incurred by the Fund will be allocated among its classes of shares based on the respective net assets of the Fund attributable to each such class, except that the net asset value and expenses of each class will reflect the expenses associated with the 12b-1 Plan of that class (if any), shareholder services fees attributable to a particular class (including transfer agency fees, if any).

Each class of shares may, by action of the Fund’s Board of Trustees (the “Board”) or its delegate, also pay a different amount of the following expenses:

 

  1.

administrative and/or accounting or similar fees (each as described in the Fund’s prospectus, as amended or supplemented from time to time);

 

  2.

legal, printing and postage expenses related to preparing and distributing to current shareholders of a specific class materials such as shareholder reports, prospectuses and proxies;

 

  3.

Blue Sky fees incurred by a specific class;

 

  4.

Securities and Exchange Commission registration fees incurred by a specific class;

 

  5.

expenses of administrative personnel and services required to support the Shareholders of a specific class;

 

  6.

Trustees’ fees incurred as a result of issues relating to a specific class;

 

  7.

Auditor’s fees, litigation expenses, and other legal fees and expenses relating to a specific class;

 

  8.

incremental transfer agent fees and shareholder servicing expenses identified as being attributable to a specific class;

 

  9.

account expenses relating solely to a specific class;

 

  10.

expenses incurred in connection with any shareholder meetings as a result of issues relating to a specific class; and

 

  11.

any such other expenses (not including advisory or custodial fees or other expenses related to the management of the Fund’s assets) actually incurred in a different amount by a class or related to a class’s receipt of services of a different kind or to a different degree than another class, including reimbursement for any expense support provided to such class.

 

C.

Voting Rights

Each share of the Fund entitles the shareholder of record to one vote. Shareholders of each class will vote separately as a class to approve any material increase in payments applicable to each class authorized under the 12b-1 Plan and on other matters for which class voting is required under applicable law. In addition, each class shall have separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class.

 

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D.

Exchanges

A class of shares of the Fund may be exchanged without payment of any exchange fee for another class of shares of the Fund at their respective net asset values, to the extent provided in the Fund’s prospectus.

 

E.

Waivers and Reimbursements

Fees and expenses may be waived or reimbursed by StepStone Group Private Wealth LLC, the Fund’s investment adviser, or any other service provider. Such waiver or reimbursement may be applicable to some or all of the classes and may be in different amounts for one or more classes.

 

F.

Income, Gains and Losses

Income and realized and unrealized capital gains and losses shall be allocated to each class on the basis of the net asset value of that class in relation to the net asset value of the Fund.

The Fund may allocate income and realized and unrealized capital gains and losses to each share based on relative net assets (settled shares) of each class, as permitted by Rule 18f-3 under the 1940 Act.

 

G.

Dividends

Dividends paid by the Fund, with respect to its classes of shares, to the extent any dividends are paid, will be calculated in the same manner, at the same time and will be in the same amount, except that any expenses relating to a class of shares will be borne exclusively by that class.

 

H.

Class Designation

Subject to approval by the Board, the Fund may alter the nomenclature for the designations of one or more of its classes of shares.

 

I.

Additional Information

This Plan is qualified by and subject to the terms of the then-current prospectus and Statement of Additional Information for the applicable classes; provided, however, that none of the terms set forth in any such prospectus and Statement of Additional Information shall be inconsistent with the terms of the classes contained in this Plan.

 

J.

Effective Date

This Plan is effective upon the date set forth above, provided that this Plan shall not become effective with respect to the Fund or a class of shares of the Fund unless first approved by a majority of the Trustees, including a majority of the Trustees who are not considered “interested persons” (as defined in the 1940 Act) of the Fund (the “Independent Trustees”). This Plan may be terminated or amended at any time with respect to the Fund or a class of shares thereof by a majority of the Independent Trustees.

 

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TRANSFER AGENCY AGREEMENT

THIS TRANSFER AGENCY AGREEMENT (the “Agreement”) is made as of this 24th day of May, 2023, by and between StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”), and UMB Fund Services, Inc., a Wisconsin corporation, its successors and assigns (the “Transfer Agent”).

WHEREAS, the Fund is a closed-end management investment company registered under the 1940 Act (as defined below) and authorized to issue Shares (as defined below); and

WHEREAS, the Fund and Transfer Agent desire to enter into an agreement pursuant to which Transfer Agent shall provide Services (as defined below) to the Fund.

NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1. Definitions In addition to any terms defined in the body of this Agreement, the following capitalized terms shall have the meanings set forth hereinafter whenever they appear in this Agreement:

“1933 Act” shall mean the Securities Act of 1933, as amended.

“1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“Authorized Person” shall mean any individual who is authorized to provide Transfer Agent with Instructions on behalf of the Fund, whose name shall be certified to Transfer Agent from time to time pursuant to Section 3(b) of this Agreement. Any officer of the Fund shall be considered an Authorized Person (unless such authority is limited in a writing from the Fund and received by Transfer Agent) and has the authority to appoint additional Authorized Persons, to limit or revoke the authority of any previously designated Authorized Person, and to certify to Transfer Agent the names of the Authorized Persons from time to time.

“Board” shall mean the Board of Trustees of the Fund.

“Commission” shall mean the U.S. Securities and Exchange Commission.

“Custodian” shall mean the financial institution appointed as custodian under the terms and conditions of a custody agreement between the financial institution and the Fund, or its successor.

“Declaration of Trust” shall mean the Declaration of Trust or other similar operational document of the Fund, as the case may be, as the same may be amended from time to time.

“Fund Business Day” shall mean each day on which the New York Stock Exchange, Inc. is open for trading.

 

1

“Investment Adviser” shall mean the investment adviser or investment advisers to the Fund and includes all sub-advisers or persons performing similar services.

“Instructions” shall mean an oral communication from an Authorized Person or a written communication signed by an Authorized Person and actually received by Transfer Agent. Instructions shall include manually executed originals, telefacsimile transmissions of manually executed originals or electronic communications.

“Offering Price” shall mean the price per share that the Shares will be offered for sale to the public calculated in accordance with the Fund’s then current Prospectus.

“Prospectus” shall mean the current prospectus and statement of additional information with respect to the Fund (including any applicable amendments and supplements thereto) actually received by Transfer Agent from the Fund with respect to which the Fund has indicated a Registration Statement has become effective under the 1933 Act and the 1940 Act.

“Registration Statement” shall mean any registration statement on Form N-2 at any time now or hereafter filed with the Commission with respect to any of the Shares and any amendments and supplements thereto which at any time shall have been or will be filed with the Commission.

“Services” shall mean the transfer agency and dividend disbursement services described on Schedule B hereto and such additional services as may be agreed to by the parties from time to time and set forth in an amendment to Schedule B.

“Shares” shall mean such shares of beneficial interest, or class thereof, of the Fund as may be issued from time to time.

“Shareholder” shall mean a record owner of Shares of the Fund.

2. Appointment and Services

(a) The Fund hereby appoints Transfer Agent as transfer agent and dividend disbursing agent of all Shares and hereby authorizes Transfer Agent to provide Services during the term of this Agreement and on the terms set forth herein. Subject to the direction and control of the Board and utilizing information provided by the Fund and its current and prior agents and service providers, Transfer Agent will provide the Services in accordance with the terms of this Agreement. Notwithstanding anything herein to the contrary, Transfer Agent shall not be required to provide any Services or information that it believes, in its sole discretion, to represent dishonest, unethical or illegal activity. In no event shall Transfer Agent provide any investment advice or recommendations to any party in connection with its Services hereunder.

(b) Transfer Agent may from time to time, in its discretion and at its own expense , appoint one or more other parties to carry out some or all of its duties under this Agreement, provided that Transfer Agent shall remain responsible to the Fund for all such delegated responsibilities in accordance with the terms and conditions of this Agreement, in the same manner and to the same extent as if Transfer Agent were itself providing such Services.

 

2

(c) Transfer Agent’s duties shall be confined to those expressly set forth herein, and no implied duties are assumed by or may be asserted against Transfer Agent hereunder. The Services do not include correcting, verifying or addressing any prior actions or inactions of the Fund or by any other current or prior agent or service provider. To the extent that Transfer Agent agrees to take such actions, those actions shall be deemed part of the Services.

(d) Transfer Agent shall not be responsible for the payment of any original issue or other taxes required to be paid by the Fund in connection with the issuance of any Shares in accordance with this Agreement.

(e) Processing and Procedures

(i) Transfer Agent agrees to accept purchase orders and repurchase requests with respect to the Shares of the Fund via postal mail, telephone, electronic delivery or personal delivery on each Fund Business Day in accordance with the Fund’s Prospectus; provided, however, that Transfer Agent shall only accept purchase orders from jurisdictions in which the Shares are qualified for sale, as indicated from time to time by the Fund or pursuant to an Instruction. Transfer Agent shall, as of the time at which the net asset value (“NAV”) of the Fund is computed as of the last business day of each calendar month, issue to the accounts specified in a purchase order in proper form and accepted by the Fund the appropriate number of full and fractional Shares based on the NAV per Share of the Fund specified in a communication received on such Fund Business Day from or on behalf of the Fund. Transfer Agent shall redeem from accounts any Shares tendered for repurchase in accordance with procedures stated in the Fund’s Prospectus or pursuant to an Instruction. Transfer Agent shall not be required to issue any Shares after it has received from an Authorized Person or from an appropriate federal or state authority written notification that the sale of Shares has been suspended or discontinued, and Transfer Agent shall be entitled to rely upon such written notification. Payment for Shares shall be in the form of a check, wire transfer, Automated Clearing House transfer (“ACH”) or such other methods to which the parties shall mutually agree.

(ii) Upon receipt of a repurchase request and monies paid to it by the Custodian in connection with a repurchase of Shares, Transfer Agent shall cancel the repurchased Shares and after making appropriate deduction for any withholding of taxes required of it by applicable federal law, make payment in accordance with the Fund’s repurchase and payment procedures described in the Prospectus.

(iii) Except as otherwise provided in this paragraph, Transfer Agent will exchange, transfer or repurchase Shares upon presentation to Transfer Agent of instructions endorsed for exchange, transfer or repurchase, accompanied by such documents as Transfer Agent deems necessary to evidence the authority of the person making such exchange, transfer or repurchase. Transfer Agent reserves the right to refuse to exchange, transfer or repurchase Shares until it is satisfied that the endorsement or instructions are valid and genuine. For that purpose, it will require, unless otherwise instructed by an Authorized Person or except as otherwise provided in this paragraph, a Medallion signature guarantee by an “Eligible Guarantor Institution” as that term is defined by Commission in Rule 17Ad-15. Transfer Agent also reserves the right to refuse to exchange, transfer or repurchase Shares until it is satisfied that the requested exchange, transfer or repurchase is legally authorized, and it shall incur no liability for the refusal, in good faith, to make exchanges, transfers or repurchases which Transfer Agent, in its judgment, deems improper or unauthorized, or until it is satisfied that there is no reasonable basis to any claims adverse to such exchange, transfer or repurchase. Notwithstanding any provision contained in this

 

3

Agreement to the contrary, Transfer Agent shall not be required or expected to require, as a condition to any exchange, transfer or repurchase of any Shares pursuant to an electronic data transmission, any documents to evidence the authority of the person requesting the exchange, transfer or repurchase and/or the payment of any stock transfer taxes, and shall be fully protected in acting in accordance with the applicable provisions of this Section 3(e).

(iv) In connection with each purchase and each repurchase of Shares, Transfer Agent shall send such statements as are prescribed by the federal securities laws applicable to transfer agents or as described in the Prospectus. It is understood that certificates for Shares have not been and will not be offered by the Fund or made available to Shareholders.

(v) Transfer Agent and the Fund shall establish procedures for effecting purchase, repurchase, exchange or transfer transactions accepted from Shareholders by methods consistent with the terms of the Prospectus. Transfer Agent may establish such additional procedures, rules and requirements governing the purchase, repurchase, exchange or transfer of Shares, as it may deem advisable and consistent with the Prospectus and industry practice. Transfer Agent, the Fund, and the Fund’s distributor (the “Distributor”) shall establish procedures for effecting commission and additional compensation to selling agents through which the Distributor has a selling group agreement or other financial arrangement with, including any periodic reporting necessary for the Distributor to perform its duties with respect to the Fund. Transfer Agent shall not be liable, and shall be held harmless by the Fund, for its actions or omissions which are consistent with the forgoing procedures if such actions and omissions do not constitute gross negligence, bad faith or willful misconduct by the Transfer Agent.

(f) Dividends and Distributions

(i) When a dividend or distribution has been declared, the Fund shall give or cause to be given to Transfer Agent a copy of a resolution of the Board that either:

(A) sets forth the date of the declaration of a dividend or distribution, the date of accrual or payment, as the case may be, thereof, the record date as of which Shareholders entitled to payment or accrual, as the case may be, shall be determined, the amount per Share of such dividend or distribution, the payment date on which all previously accrued and unpaid dividends are to be paid, and the total amount, if any, payable to Transfer Agent on such payment date; or

(B) authorizes the declaration of dividends and distributions on a daily or other periodic basis and further authorizes Transfer Agent to rely on a certificate of an Authorized Person setting forth the information described in subparagraph (A) above.

(ii) In connection with a reinvestment of a dividend or distribution of Shares of the Fund, Transfer Agent shall as of each Fund Business Day, as specified in a certificate or resolution described in subparagraph (i), issue Shares of the Fund based on the NAV per Share of the Fund specified in a communication received from or on behalf of the Fund on such Fund Business Day.

(iii) Upon the mail date specified in such certificate or resolution, as the case may be, the Fund shall, in the case of a cash dividend or distribution, cause the Custodian to deposit in an account in the name of Transfer Agent on behalf of the Fund, an amount of cash sufficient for Transfer Agent to make the payment, as of the mail date specified in such certificate or resolution, as the case may be, to the

 

4

Shareholders who were of record on the record date. Transfer Agent will, upon receipt of any such cash, make payment of such cash dividends or distributions to the Shareholders as of the record date. Transfer Agent shall not be liable for any improper payments made in accordance with a certificate or resolution described in the preceding paragraph. If Transfer Agent does not receive from the Custodian sufficient cash to make payments of any cash dividend or distribution to all Shareholders of the Fund as of the record date, Transfer Agent shall, upon notifying the Fund, withhold payment to such Shareholders until sufficient cash is provided to Transfer Agent.

(iv) It is understood that Transfer Agent in its capacity as transfer agent and dividend disbursing agent shall in no way be responsible for the determination of the rate or form of dividends or capital gain distributions due to the Shareholders pursuant to the terms of this Agreement. It is further understood that Transfer Agent shall file with the Internal Revenue Service and Shareholders such appropriate federal tax forms concerning the payment of dividend and capital gain distributions but shall in no way be responsible for the collection or withholding of taxes due on such dividends or distributions due to shareholders, except and only to the extent, required by applicable federal law.

(g) Records

(i) Transfer Agent shall keep those records specified in Schedule D hereto in the form and manner, and for such period, as it may deem advisable but not inconsistent with the rules and regulations of appropriate government authorities, in particular Rules 31a-2 and 31a-3 under the 1940 Act. Transfer Agent shall destroy records only at the direction of the Fund, and any such destruction shall comply with the provisions of Section 248.30(b) of Regulation S-P (17 CFR 248.1-248.30). Transfer Agent may deliver to the Fund from time to time at Transfer Agent’s discretion, for safekeeping or disposition by Transfer Agent in accordance with law, such records, papers and documents accumulated in the execution of its duties as transfer agent, as Transfer Agent may deem expedient, other than those which Transfer Agent is itself required to maintain pursuant to applicable laws and regulations. The Fund shall assume all responsibility for any failure thereafter to produce any record, paper, or other document so returned, if and when required. To the extent required by Section 31 of the 1940 Act and the rules and regulations thereunder, the records specified in Schedule D hereto maintained by Transfer Agent, which have not been previously delivered to the Fund pursuant to the foregoing provisions of this paragraph, shall be considered to be the property of the Fund, shall be made available upon request for inspection by the trustees, officers, employees, and auditors of the Fund. Notwithstanding anything contained herein to the contrary, Transfer Agent shall be permitted to maintain copies of any such records, papers and documents to the extent necessary to comply with the recordkeeping requirements of federal and state securities laws, tax laws and other applicable laws.

(h) Anti-Money Laundering (“AML”) Services

(i) Background Although the Fund currently is not subject to detailed anti-money laundering (“AML”) program obligations under the USA PATRIOT Act, the Fund has sought to implement appropriate controls reasonably designed to prevent the use of the Fund for money laundering or other illicit purposes. To the extent the other provisions of this Agreement require the Transfer Agent to establish, maintain and monitor accounts of investors in the Fund consistent with securities laws, the Transfer Agent shall perform reasonable actions necessary to help the Fund be in compliance with Section 352 of the USA PATRIOT Act, as follows: the Transfer Agent shall: (a) establish and implement written internal policies, procedures and controls reasonably designed to help prevent the Fund from being used

 

5

to launder money or finance terrorist activities; (b) provide for independent testing, by an employee who is not responsible for the operation of the Transfer Agent’s AML program or by an outside party, for compliance with Transfer Agent’s established AML Procedures; (c) designate a person or persons responsible for implementing and monitoring the operation and internal controls of the Transfer Agent’s AML Program; and (d) provide ongoing training of the Transfer Agent’s personnel relating to the prevention of money-laundering activities.

In order to assist its transfer agency clients with their AML responsibilities under the USA PATRIOT Act of 2001, the Bank Secrecy Act of 1970, the customer identification program rules jointly adopted by the Commission and the U.S. Treasury Department and other applicable regulations adopted thereunder (the “AML Laws”), Transfer Agent offers various tools designed to: (a) aid in the detection and reporting of potential money laundering activity by monitoring certain aspects of Shareholder activity; and (b) assist in the verification of persons opening accounts with the Fund and determine whether such persons appear on any list of known or suspected terrorists or terrorist organizations, including the Office of Foreign Assets Control (“OFAC”) Specially Designated Nationals (“SDN”) list (“AML Monitoring Activities”). In connection with the AML Monitoring Activities, Transfer Agent may encounter Shareholder activity that would require it to file a Suspicious Activity Report (“SAR”) with the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), as required by 31 CFR 103.15(a)(2) (“Suspicious Activity”). The Fund has, after review, selected various procedures and tools offered by Transfer Agent to comply with its AML and customer identification program obligations under the AML Laws (the “AML Procedures”), and desires to implement the AML Procedures as part of its overall AML program and, subject to the terms of the AML Laws, delegate to Transfer Agent the day- to-day operation of the AML Procedures on behalf of the Fund.

(ii) Delegation The Fund acknowledges that it has had an opportunity to review, consider and select the AML Procedures and the Fund has determined that the AML Procedures, as part of the Fund’s overall AML program, are reasonably designed to prevent the Fund from being used for money laundering or the financing of terrorist activities and to achieve compliance with the applicable provisions of the AML Laws. Based on this determination, the Fund hereby instructs and directs Transfer Agent to implement the AML Procedures on its behalf, as such may be amended or revised from time to time. The customer identification verification component of the AML Procedures applies only to Shareholders who are residents of the United States. The Fund hereby also delegates to Transfer Agent the authority to report Suspicious Activity to FinCEN.

(iii) SAR Filing Procedures

(A) When Transfer Agent observes any Suspicious Activity, Transfer Agent shall prepare a draft of a SAR on Form SAR-SF, and shall send a copy to the Fund for review. Transfer Agent shall complete each SAR in accordance with the procedures set forth in 31 CFR §103.15(a)(3), with the intent to satisfy the reporting obligation of both Transfer Agent and the Fund. Accordingly, the SAR shall include the name of both Transfer Agent and the Fund, and shall include the words, “joint filing” in the narrative section.

(B) The Fund shall review the SAR and provide comments, if any, to Transfer Agent within a time frame sufficient to permit Transfer Agent to file the SAR in accordance with the deadline set forth in 31 CFR §103.15(b)(3). Upon receipt of final approval from the Fund, Transfer Agent (or its affiliate) shall file the SAR in accordance with the procedures set forth in 31 CFR §103.15(b).

 

6

(C) Transfer Agent shall provide to the Fund a copy of each SAR filed, together with supporting documentation. In addition, Transfer Agent shall maintain a copy of the same for a period of at least five (5) years from the date of the SAR filing.

(D) Nothing in this Agreement shall prevent either party from making a determination that such party has an obligation under the USA PATRIOT Act of 2001 to file a SAR relating to any Suspicious Activity, and from making such filing independent of the other party hereto.

(iv) Amendment to Procedures It is contemplated that the AML Procedures will be amended from time to time by the parties as directed by the Fund as additional regulations are adopted and/or regulatory guidance is provided relating to the Fund’s AML responsibilities.

(v) Reporting Transfer Agent agrees to provide to the Fund: (i) prompt notification of any transaction or combination of transactions that Transfer Agent believes, based on the AML Procedures, evidence potential money laundering activity in connection with the Fund or any Shareholder; (ii) prompt notification of any true and complete match of a Shareholder(s) to the names included on the OFAC list or any Section 314(a) search list, or list referenced in Section 2(h)(i), above; (iii) any reports received by Transfer Agent from any government agency or applicable industry self-regulatory organization pertaining to Transfer Agent’s AML Monitoring Activities; (iv) any action taken in response to AML violations as described above; (v) quarterly reports of its monitoring and verification activities on behalf of the Fund; (vi) all updates to Transfer Agent’s AML Procedures; and (vii) a summary of the AML training provided for appropriate Transfer Agent personnel. Transfer Agent shall provide such other reports on the verification activities conducted at the direction of the Fund as may be agreed to from time to time by Transfer Agent and the Fund’s AML officer.

(vi) Inspection The Fund hereby directs, and Transfer Agent agrees to: (1) permit federal regulators access to such information and records maintained by Transfer Agent and relating to Transfer Agent’s implementation of the AML Procedures on behalf of the Fund, as they may request; and, (2) permit such federal regulators to inspect Transfer Agent’s implementation of the AML Procedures on behalf of the Fund.

(vii) Disclosure Obligations Regarding SARs Neither Transfer Agent nor the Fund shall disclose any SAR filed or the information included in a SAR to any third party other than affiliates of Transfer Agent or the Fund on a need to know basis and in accordance with applicable law, rule, regulation and interpretation, that would disclose that a SAR has been filed.

3. Representations and Deliveries

(a) The Fund shall deliver or cause the following documents to be delivered to Transfer Agent:

(1) A copy of the Declaration of Trust and By-laws and all amendments thereto, certified by a duly authorized person of the Fund;

(2) Copies of the Fund’s Registration Statement, as of the date of this Agreement, together with any applications filed in connection therewith;

 

7

(3) A certificate signed by the President and Secretary of the Fund specifying the number of authorized Shares and the number of such authorized Shares issued and currently outstanding, if any, the validity of the authorized and outstanding Shares, whether such Shares are fully paid and non- assessable, and the status of the Shares under the 1933 Act and any other applicable federal law or regulation;

(4) A certified copy of the resolutions of the Board appointing Transfer Agent and authorizing the execution of this Agreement on behalf of the Fund;

(5) A certificate containing the names of the initial Authorized Persons in a form acceptable to Transfer Agent. Any officer of the Fund shall be considered an Authorized Person (unless such authority is limited in a writing from the Fund and received by Transfer Agent) and has the authority to appoint additional Authorized Persons, to limit or revoke the authority of any previously designated Authorized Person, and to certify to Transfer Agent the names of the Authorized Persons from time to time. The certificate required by this paragraph shall be signed by an officer of the Fund and designate the names of the Fund’s initial Authorized Persons;

(6) Prior written notice of any increase or decrease in the total number of Shares authorized to be issued, or the issuance of any additional Shares of the Fund pursuant to stock dividends, stock splits, recapitalizations, capital adjustments or similar transactions, if applicable, and to deliver to Transfer Agent such documents, certificates, reports and legal opinions as it may reasonably request; and

(7) All other documents, records and information that Transfer Agent may reasonably request in order for Transfer Agent to perform the Services hereunder.

(b) The Fund represents and warrants to Transfer Agent that:

(1) It is a statutory trust duly organized and existing under the laws of the State of Delaware; it is empowered under applicable laws and by its Declaration of Trust and By-laws to enter into and perform this Agreement; and all requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.

(2) Any officer of the Fund has the authority to appoint additional Authorized Persons, to limit or revoke the authority of any previously designated Authorized Person, and to certify to Transfer Agent the names of such Authorized Persons (unless such authority is limited in a writing from the Fund and received by Transfer Agent).

(3) It is duly registered as a closed-end management investment company under the 1940 Act.

(4) A Registration Statement under the 1933 Act will be effective before the Fund will issue Shares and will remain effective during such period as the Fund is offering Shares for sale in any public offering. Additionally, appropriate state securities laws filings will be made before Shares are issued in any jurisdiction and such filings will continue to be made, with respect to Shares of the Fund being offered for sale.

 

8

(5) All outstanding Shares are validly issued, fully paid and non-assessable and when Shares are hereafter issued in accordance with the terms of the Declaration of Trust and the Fund’s Prospectus, such Shares shall be validly issued, fully paid and non-assessable.

(6) It will conduct its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained (or will timely obtain) all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule, regulation, order or judgment binding on it and no provision of its Declaration of Trust, By-laws or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.

(c) During the term of this Agreement, the Fund shall have the ongoing obligation to provide Transfer Agent with a copy of the Fund’s currently effective Prospectus as soon as it becomes effective. For purposes of this Agreement, Transfer Agent shall not be deemed to have notice of any information contained in any such Prospectus until a reasonable time after it is actually received by Transfer Agent.

(d) The Board, the administrator of the Fund (the “Administrator”) and the Investment Adviser have and retain primary responsibility for all compliance matters relating to the Fund including but not limited to (as applicable to the specific parties) compliance with the 1940 Act, the Internal Revenue Code of 1986, as amended, the USA PATRIOT Act of 2001, the Sarbanes-Oxley Act of 2002 and the policies and limitations of the Fund related to the portfolio investments as set forth in the Prospectus. Transfer Agent’s Services hereunder shall not relieve the Board, the Administrator and the Investment Adviser of their primary day-to-day responsibility for assuring such compliance. Notwithstanding the foregoing, the Transfer Agent will be responsible for its own compliance with such statutes insofar as such statutes are applicable to the Services it has agreed to provide hereunder, and will promptly notify the Fund if it becomes aware of any material non-compliance which relates to the Fund. The Transfer Agent shall provide the Fund with quarterly and annual certifications (on a calendar basis) with respect to the design and operational effectiveness of its compliance and procedures.

(e) The Fund agrees to take or cause to be taken all requisite steps to qualify the Shares for sale in all states in which the Shares shall at the time be offered for sale and require qualification. If the Fund receives notice of any stop order or other proceeding in any such state affecting such qualification or the sale of Shares, or of any stop order or other proceeding under the federal securities laws affecting the sale of Shares, the Fund will give prompt notice thereof to Transfer Agent.

(f) The Fund agrees that it shall advise Transfer Agent in writing at least thirty (30) days prior to affecting any change in any Prospectus which would increase or alter the duties and obligations of Transfer Agent hereunder, and shall proceed with such change only if it shall have received the written consent of Transfer Agent thereto, which consent shall not be unreasonably withheld.

(g) Fund Instructions

(i) The Fund shall use reasonable efforts to cause the Fund’s officers, trustees, Investment Adviser, legal counsel, independent accountants, administrator, fund accountant, Custodian and other service providers and agents, past or present, to cooperate with Transfer Agent and to provide Transfer Agent with such information, documents and communications as necessary and/or appropriate or as requested by Transfer Agent, in order to enable Transfer Agent to perform the Services. In connection with the performance of the Services, Transfer Agent shall (without investigation or verification) be

 

9

entitled, and is hereby instructed to, rely upon any and all Instructions, communications, information or documents provided to Transfer Agent by a representative of the Fund or by any of the aforementioned persons. Transfer Agent shall be entitled to rely on any document that it reasonably believes to be genuine and to have been signed or presented by the proper party. Fees charged by such persons shall be an expense of the Fund. Transfer Agent shall not be held to have notice of any change of authority of any trustee, officer, agent, representative or employee of the Fund, Investment Adviser, Authorized Person or service provider until receipt of written notice thereof from the Fund.

(ii) The Fund shall provide Transfer Agent with an updated certificate evidencing the appointment, removal or change of authority of any Authorized Person, it being understood Transfer Agent shall not be held to have notice of any change in the authority of any Authorized Person until receipt of written notice thereof from the Fund.

(iii) Transfer Agent, its officers, agents or employees shall accept Instructions given to them by any person representing or acting on behalf of the Fund only if such representative is an Authorized Person. The Fund agrees that when oral Instructions are given, it shall, upon the request of Transfer Agent, confirm such Instructions in writing.

(iv) At any time, Transfer Agent may request Instructions from the Fund with respect to any matter arising in connection with this Agreement. If such Instructions are not received within a reasonable time, then Transfer Agent may seek advice from legal counsel for the Fund at the expense of the Fund, or its own legal counsel at its own expense, and it shall not be liable for any action taken or not taken by it in good faith in accordance with such Instructions or in accordance with advice of counsel.

(h) Transfer Agent represents and warrants to the Fund that:

(i) It is a corporation duly organized and existing under the laws of the State of Wisconsin; it is empowered under applicable law and by its Articles of Incorporation and By-laws to enter into and perform this Agreement; and all requisite proceedings have been taken to authorize it to enter into and perform this Agreement.

(ii) It is conducting its business in compliance in all material respects with all applicable laws and regulations, both state and federal, and has obtained all regulatory approvals necessary to carry on its business as now conducted; there is no statute, rule regulation, order or judgment binding on it and no provision of its operating documents or any contract binding it or affecting its property which would prohibit its execution or performance of this Agreement.

(iii) Transfer Agent shall maintain a disaster recovery and business continuity plan and adequate and reliable computer and other equipment necessary and appropriate to carry out its obligations under this Agreement, including commercially reasonable cybersecurity systems, policies and procedures designed to prevent the unauthorized or inadvertent disclosure of Fund information. Upon the Fund’s reasonable request, the Transfer Agent shall provide supplemental information concerning the aspects of its cybersecurity systems, policies and procedures and disaster recovery and business continuity plan that are relevant to the Services.

(iv) It is duly registered as a transfer agent under Section 17A of the 1934 Act to the extent required.

 

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4. Fees and Expenses

(a) As compensation for the performance of the Services, the Fund agrees to pay Transfer Agent the fees set forth on Schedule C hereto. Fees shall be adjusted in accordance with Schedule C or as otherwise agreed to in writing by the parties from time to time. Fees shall be earned and paid monthly in an amount equal to at least 1/12th of the applicable annual fee. The parties may amend this Agreement to include fees for any additional services requested by the Fund, enhancements to current Services, or to add funds. The Fund agrees to pay Transfer Agent’s then current rate for Services added to, or for any enhancements to existing Services set forth on Schedule B after the execution of this Agreement. In addition, to the extent that Transfer Agent corrects, verifies or addresses any prior actions or inactions by the Fund or by any prior agent or service provider, Transfer Agent shall be entitled to additional fees as provided in Schedule C. In the event of any disagreement between this Agreement and Schedule C related to fees, the terms of Schedule C shall control.

(b) For the purpose of determining fees payable to Transfer Agent, NAV shall be computed in accordance with the Prospectus and resolutions of the Board. The fee for the period from the day of the month this Agreement is entered into until the end of that month shall be pro-rated according to the proportion that such period bears to the full monthly period. Upon any termination of this Agreement before the end of any month and subject to Section 8(b) of this Agreement, the fee for such part of a month shall be pro-rated according to the proportion which such period bears to the full monthly period and shall be payable upon the date of termination of this Agreement. Should this Agreement be terminated (other than for cause on the part of the Transfer Agent) or the Fund be liquidated, merged with or acquired by another fund or investment company, any accrued fees shall be immediately payable.

(c) Transfer Agent will bear all expenses incurred by it in connection with its performance of Services, except as otherwise provided herein. Transfer Agent shall not be required to pay or finance any costs and expenses incurred in the operation of the Fund, including, but not limited to: taxes; interest; brokerage fees and commissions; salaries, fees and expenses of officers and trustees; Commission fees and state Blue Sky fees; advisory fees; charges of custodians, administrators, fund accountants, dividend disbursing and accounting services agents and other service providers; security pricing services; insurance premiums; outside auditing and legal expenses; costs of organization and maintenance of corporate existence; taxes and fees payable to federal, state and other governmental agencies; preparation, typesetting, printing, proofing and mailing of Prospectuses, statements of additional information, supplements, notices, forms and applications and proxy materials for regulatory purposes and for distribution to current Shareholders; preparation, typesetting, printing, proofing and mailing and other costs of Shareholder reports; expenses in connection with the electronic transmission of documents and information including electronic filings with the Commission and the states; research and statistical data services; expenses incidental to holding meetings of the Fund’s Shareholders and Trustees; fees and expenses associated with internet, e-mail and other related activities; and extraordinary expenses. Expenses incurred for distribution of Shares, including, as applicable, the typesetting, printing, proofing and mailing of Prospectuses for persons who are not Shareholders, will be borne by the Fund, except for such expenses permitted to be paid under a distribution plan adopted in accordance with applicable laws.

 

11

(d) The Fund also agrees to promptly reimburse Transfer Agent for all reasonable out-of- pocket expenses or disbursements reasonably incurred by Transfer Agent in connection with the performance of Services under this Agreement. Out-of-pocket expenses shall include, but not be limited to, those items specified on Schedule C hereto. If reasonably requested by Transfer Agent, out-of-pocket expenses are payable in advance. Payment of postage expenses, if prepayment is reasonably requested, is due at least seven (7) days prior to the anticipated mail date. In the event Transfer Agent reasonably requests advance payment, Transfer Agent shall not be obligated to incur such expenses or perform the related Service(s) until payment is received.

(e) The Fund agrees to pay all amounts due hereunder within thirty (30) days of receipt of each invoice for such Services (the “Due Date”). Except as provided in Schedule C, Transfer Agent shall bill Service fees monthly, and out-of-pocket expenses as incurred (unless prepayment is requested by Transfer Agent). Transfer Agent may, at its option, arrange to have various service providers submit invoices directly to the Fund for payment of reimbursable out-of-pocket expenses.

(f) The Fund is aware that its failure to remit to Transfer Agent all amounts due on or before the Due Date will cause Transfer Agent to incur costs not contemplated by this Agreement, including, but not limited to carrying, processing and accounting charges. Accordingly, in the event that Transfer Agent does not receive any amounts due hereunder by the Due Date, the Fund agrees to pay a late charge on the overdue amount equal to one and one-half percent (1.5%) per month or the maximum amount permitted by law, whichever is less. In addition, the Fund shall pay Transfer Agent’s reasonable attorney’s fees and court costs if any amounts due Transfer Agent in the event that an attorney is engaged to assist in the collection of amounts due. The parties hereby agree that such late charge represents a fair and reasonable computation of the costs incurred by reason of the Fund’s late payment. Acceptance of such late charge shall in no event constitute a waiver by Transfer Agent of the Fund’s default or prevent Transfer Agent from exercising any other rights and remedies available to it.

(g) In the event that any charges are disputed, the Fund shall, on or before the Due Date, pay all undisputed amounts due hereunder and notify Transfer Agent in writing of any disputed charges for out-of-pocket expenses which it is disputing in good faith. Payment for such disputed charges shall be due on or before the close of the tenth (10th) Fund Business Day after the day on which Transfer Agent provides documentation which an objective observer would agree reasonably supports the disputed charges (the “Revised Due Date”). Late charges shall not begin to accrue as to charges disputed in good faith until the first day after the Revised Due Date.

(h) The Fund acknowledges that the fees charged by Transfer Agent under this Agreement reflect the allocation of risk between the parties, including the exclusion of remedies and limitations of liability in Sections 2, 3 and 6. Modifying the allocation of risk from what is stated herein would affect the fees that Transfer Agent charges. Accordingly, in consideration of those fees, the Fund agrees to the stated allocation of risk.

5. Confidential Information

Transfer Agent agrees on behalf of itself and its affiliates, partners, employees, directors and agents to treat confidentially and as proprietary information of the Fund all records and other information relative to the Fund’s Shareholders, not to use such information other than in the performance of its responsibilities and duties hereunder, and not to disclose such information except: (i) when requested to divulge such information by duly-constituted authorities or court process; (ii) when requested by a Shareholder or Shareholder’s agent with respect to information concerning an account as to which such Shareholder has either a legal or beneficial interest; (iii) when requested by the Fund, the Shareholder, the Shareholder’s

 

12

agent or the dealer of record with respect to such account; (iv) to seek to prevent fraud and/or money laundering by providing certain shareholder information to other financial institutions; (v) to an affiliate, as defined by Section 248.3(a) of Regulation S-P; or, (vi) pursuant to any other exception permitted by Sections 248.14 and 248.15 of Regulation S-P in the ordinary course of business to carry out the activities covered by the exception under which Transfer Agent received the information. In case of any requests or demands for inspection of the records of the Fund, Transfer Agent will endeavor to notify the Fund promptly and to secure instructions from a representative of the Fund as to such inspection. Records and information which have become known to the public through no wrongful act of Transfer Agent or any of its employees, agents or representatives, and information which was already in the possession of Transfer Agent prior to receipt thereof, shall not be subject to this section. Any party appointed pursuant to Section 2(b) above shall be required to observe the confidentiality obligations contained herein. Transfer Agent will implement and maintain such appropriate security measures as are necessary for the protection of confidential shareholder information. The obligations of the parties under Section 5 shall indefinitely survive the termination of this Agreement.

6. Limitation of Liability In addition to the limitations of liability contained in Sections 2 and 3 of this Agreement:

(a) Transfer Agent shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Fund in connection with the matters to which this Agreement relates, except for a loss resulting from Transfer Agent’s willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement. Furthermore, Transfer Agent shall not be liable for: (1) any action taken or omitted to be taken in accordance with or in reasonable reliance upon Instructions, communications, data, documents or information (without investigation or verification) received by Transfer Agent from any Authorized Person; or, (2) any action taken, or omission by, the Fund, Investment Adviser, any Authorized Person or any past or current service provider (not including Transfer Agent or its affiliates).

(b) Notwithstanding anything herein to the contrary, each party hereto will be excused from its obligation to perform any Service or obligation required of it hereunder solely for the duration that such performance is prevented solely by events beyond its reasonable control and shall not be liable for any default, damage, loss of data or documents, errors, delay or any other loss whatsoever caused thereby. Transfer Agent will, however, take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond its reasonable control.

(c) In no event and under no circumstances shall the Indemnified Parties (as defined below) be liable to anyone, including, without limitation, the other party, under any theory of tort, contract, strict liability or other legal or equitable theory for lost profits, exemplary, punitive, special, indirect or consequential damages for any act or failure to act under any provision of this Agreement regardless of whether such damages were foreseeable and even if advised of the possibility thereof.

(d) Notwithstanding any other provision of this Agreement, Transfer Agent shall have no duty or obligation under this Agreement to inquire into, and shall not be liable for:

(i) the legality of the issue or sale of any Shares, the sufficiency of the amount to be received therefor, or the authority of the Fund, as the case may be, to request such sale or issuance;

 

13

(ii) the legality of a transfer, exchange, purchase or repurchase of any Shares, the propriety of the amount to be paid therefor, or the authority of the Fund, as the case may be, to request such transfer, exchange or repurchase;

(iii) the legality of the declaration of any dividend by the Fund, or the legality of the issue of any Shares in payment of any stock dividend;

(iv) the legality of any recapitalization or readjustment of Shares;

(v) Transfer Agent’s acting upon telephone or electronic instructions relating to the purchase, transfer, exchange or repurchase of Shares received by Transfer Agent in accordance with procedures established in writing by Transfer Agent and the Fund; or

(vi) the offer or sale of Shares in violation of any requirement under the securities laws or regulations of any jurisdiction that such Shares be qualified for sale in such state or in violation of any stop order or determination or ruling by any state with respect to the offer or sale of such Shares in such state.

(e) Transfer Agent may, in effecting transfers and repurchases of Shares, rely upon those provisions of the Uniform Act for the Simplification of Fiduciary Security Transfers (or such other statutes which protect it and the Fund in not requiring complete fiduciary documentation) and shall not be responsible for any act done or omitted by it in good faith in reliance upon such laws. Notwithstanding the foregoing or any other provision contained in this Agreement to the contrary, Transfer Agent shall be fully protected by the Fund in not requiring any instruments, documents, assurances, endorsements or guarantees, including, without limitation, any Medallion signature guarantees, in connection with a repurchase, exchange or transfer of Shares whenever Transfer Agent reasonably believes that requiring the same would be inconsistent with the transfer, exchange and repurchase procedures described in the Prospectus.

(f) The obligations of the parties under Section 6 shall indefinitely survive the termination of this Agreement.

7. Indemnification

(a) The Fund agrees to indemnify and hold harmless Transfer Agent, its employees, agents, officers, directors, shareholders, affiliates and nominees (collectively, “Transfer Agent Indemnified Parties”) from and against any and all claims, demands, actions and suits, and any and all judgments, liabilities, losses, damages, costs, charges, attorneys’ fees and other expenses of every nature and character (“Losses”) which may be asserted against or incurred by any Transfer Agent Indemnified Party or for which any Transfer Agent Indemnified Party may be held liable (a “Claim”), arising out of or in any way relating to any of the following, except to the extent a Claim resulted from Transfer Agent’s willful misfeasance, bad faith, gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties hereunder:

(i) any action or omission of Transfer Agent;

 

14

(ii) Transfer Agent’s reasonable reliance on, implementation of, or use of Instructions, communications, data, documents or information (without investigation or verification) received by Transfer Agent from any Authorized Person;

(iii) any action taken, or omission by, the Fund, Investment Adviser, any Authorized Person or any past or current service provider (not including Transfer Agent);

(iv) the Fund’s refusal or failure to comply with the terms of this Agreement, or any Claim that arises out of the Fund’s gross negligence or misconduct or breach of any representation or warranty of the Fund made herein;

(v) the legality of the issue or sale of any Shares, the sufficiency of the amount received therefore, or the authority of the Fund, as the case may be, to have requested such sale or issuance;

(vi) the legality of the declaration of any dividend by the Fund, or the legality of the issue of any Shares in payment of any stock dividend;

(vii) the legality of any recapitalization or readjustment of Shares;

(viii) Transfer Agent’s acting upon telephone or electronic instructions relating to the purchase, transfer, exchange or repurchase of Shares received by Transfer Agent in accordance with written procedures established by Transfer Agent and the Fund;

(ix) the acceptance, processing and/or negotiation of a fraudulent payment for the purchase of Shares unless the result of Transfer Agent’s or its affiliates’ willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement. In the absence of a finding to the contrary, the acceptance, processing and/or negotiation of a fraudulent payment for the purchase, repurchase, transfer or exchange of Shares shall be presumed not to have been the result of Transfer Agent’s or its affiliates’ willful misfeasance, bad faith or gross negligence; and

(x) the offer or sale of Shares in violation of any requirement under the securities laws or regulations of any state or other jurisdiction that such Shares be qualified for sale in such state or in violation of any stop order or determination or ruling by any state with respect to the offer or sale of such Shares in such state.

(b) Transfer Agent agrees to indemnify and hold harmless the Fund, its employees, officers, and Board (collectively, the “Fund Indemnified Parties” and together with the Transfer Agent Indemnified Parties, the “Indemnified Parties”) from and against any and all Claims against the Fund Indemnified Parties arising out of or in any way relating to Transfer Agent’s willful misfeasance, bad faith or gross negligence in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement except, in each case, to the extent a Claim resulted from the Fund’s bad faith, gross negligence or willful misconduct or breach of any representation or warranty of the Fund made herein.

 

15

(c) Promptly after receipt by a party of notice of the commencement of an investigation, action, claim or proceeding, the receiving party shall, if a claim for indemnification in respect thereof is made under this section, notify the indemnifying party in writing of the commencement thereof, although the failure to do so shall not prevent recovery by the Indemnified Party. The indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such Loss, but if the indemnifying party elects to assume the defense, such defense shall be conducted by counsel chosen by the indemnifying party and approved by the Indemnified Party, which approval shall not be unreasonably withheld. In the event the indemnifying party elects to assume the defense of any such suit and retain such counsel and notifies the Indemnified Party of such election, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them subsequent to the receipt of the indemnifying party’s election. If the indemnifying party does not elect to assume the defense of any such suit, or in case the Indemnified Party does not, in the exercise of reasonable judgment, approve of counsel chosen by the indemnifying party, or in case there is a conflict of interest between the indemnifying party and the Indemnified Party, the indemnifying party will reimburse the Indemnified Party or Parties named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by them. The indemnification agreement contained in this Section 7 and the representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party, and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the benefit of each Indemnified Party and their estates and successors. The Fund agrees to promptly notify Transfer Agent of the commencement of any litigation or proceedings against the Fund or any of its officers or directors in connection with the issue and sale of any of the Shares.

(c) The obligations of the parties under this Section 7 shall indefinitely survive the termination of this Agreement.

8. Term

(a) This Agreement shall become effective with respect to the Fund as of the date hereof. Unless sooner terminated as provided herein, this Agreement shall continue in effect with respect to the Fund for a two-year period beginning on the date of this Agreement (the “Initial Term”). Thereafter, if not terminated as provided herein, the Agreement shall continue automatically in effect as to the Fund for successive one-year periods (each a “Renewal Term”).

(b) In the event this Agreement is terminated by the Fund prior to the end of the Initial Term or any subsequent Renewal Term, the Fund shall be obligated to pay Transfer Agent the remaining balance of the fees payable to Transfer Agent under this Agreement through the end of the Initial Term or Renewal Term, as applicable. Notwithstanding the foregoing, either party may terminate this Agreement: (i) at the end of the Initial Term or at the end of any successive Renewal Term by giving the other party a written notice not less than ninety (90) days’ prior to the end of the respective term; (ii) upon the material breach of the other party of any term of this Agreement if such breach is not cured within 15 business days of notice of such breach to the breaching party; and (iii) in the event of the appointment of a conservator or receiver for Transfer Agent by regulatory authorities or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction. Notwithstanding anything herein to the contrary, upon the termination of the Agreement as provided herein or the liquidation, merger or acquisition of the Fund, Transfer Agent shall deliver the records of the Fund to the Fund or its successor service provider at the expense of the Fund in a form that is consistent with Transfer Agent’s applicable license agreements, and thereafter the Fund or its designee shall be solely responsible for preserving the

 

16

records for the periods required by all applicable laws, rules and regulations. The Fund shall be responsible for all expenses associated with the movement (or duplication) of records and materials and conversion thereof to a successor service provider, including all reasonable trailing expenses incurred by Transfer Agent. In addition, in the event of termination of this Agreement, or the proposed liquidation, merger or acquisition of the Fund, and Transfer Agent’s agreement to provide additional Services in connection therewith, Transfer Agent shall provide such Services and be entitled to such compensation as the parties may mutually agree. Transfer Agent shall not reduce the level of service provided to the Fund prior to termination following notice of termination by the Fund.

(c) In the event such notice is given by the Fund pursuant to subparagraph (b), it shall be accompanied by a copy of a resolution of the Board certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating the successor transfer agent or transfer agents. In the event such notice is given by Transfer Agent, the Fund shall on or before the termination date, deliver to Transfer Agent a copy of a resolution of its Board certified by the Secretary or any Assistant Secretary designating a successor transfer agent or transfer agents. In the absence of such designation by the Fund, the Fund shall be deemed to be its own transfer agent as of the termination date and Transfer Agent shall thereby be relieved of all duties and responsibilities pursuant to this Agreement.

9. Miscellaneous

(a) Any notice required or permitted to be given by either party to the other under this Agreement shall be in writing and shall be deemed to have been given when received by the other party as set forth below. Such notices shall be sent to the addresses listed below, or to such other location as either party may from time to time designate in writing:

 

If to Transfer Agent:

    UMB Fund Services, Inc.
  

235 West Galena Street

Milwaukee, Wisconsin 53212

Attention: Legal Department

If to the Fund:

   

StepStone Private Infrastructure Fund

  

128 S Tyron St., Suite 1600

  

Charlotte, NC 28202

  

Attention: Fund Accounting Department

If notice is sent by electronic delivery or facsimile, it shall be deemed to have been given immediately (contingent upon confirmed receipt by the intended recipient). If notice is sent by first-class mail, it shall be deemed to have been given five days after it has been mailed. If notice is sent by messenger, it shall be deemed to have been given on the day it is delivered.

(b) Except as provided to the contrary herein, this Agreement may not be amended or modified in any manner except by a written agreement executed by both parties with the formality of this Agreement.

 

17

(c) This Agreement shall be governed by Delaware law, excluding the laws on conflicts of laws. To the extent that the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the applicable provisions of the 1940 Act, the latter shall control, and nothing herein shall be construed in a manner inconsistent with the 1940 Act or any rule or order of the Commission thereunder. Any provision of this Agreement which is determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In such case, the parties shall in good faith modify or substitute such provision consistent with the original intent of the parties.

(d) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original agreement but such counterparts shall together constitute but one and the same instrument. The facsimile signature of any party to this Agreement shall constitute the valid and binding execution hereof by such party.

(e) The services of Transfer Agent hereunder are not deemed exclusive. Transfer Agent may render transfer agency and dividend disbursement services and any other services to others, including other investment companies.

(f) The captions in the Agreement are included for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.

(g) This Agreement is executed by the Fund and the obligations hereunder are not binding upon any of the trustees, officers or Shareholders of the Fund individually but are binding only upon the Fund to which such obligations pertain and the assets and property of the Fund. All obligations of the Fund under this Agreement shall apply only to the Fund. The Fund’s Certificate of Trust is on file with the Secretary of State of Delaware.

(h) This Agreement and the Schedules incorporated herein constitute the full and complete understanding and agreement of Transfer Agent and the Fund and supersedes all prior negotiations, understandings and agreements with respect to transfer agency and dividend disbursement services.

(i) Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into among the parties hereto and any actions taken or omitted by any party hereunder shall not affect any rights or obligations of any other party hereunder.

(j) Transfer Agent shall retain all right, title and interest in any and all computer programs, screen formats, report formats, procedures, data bases, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, trade secrets, trademarks and other related legal rights provided, developed or utilized by Transfer Agent in connection with the Services provided by Transfer Agent to the Fund hereunder.

(k) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns. This Agreement shall not be assignable by either party without the written consent of the other party, provided; however, that Transfer Agent may, in its sole discretion and upon advance written notice to the Fund, assign all its right, title and interest in this Agreement to an affiliate, parent or subsidiary.

 

18

(l) The person signing below represents and warrants that he/she is duly authorized to execute this Agreement on behalf of the party on whose behalf such person is signing.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by a duly authorized officer as of the day, month and year first above written.

 

STEPSTONE PRIVATE INFRASTRUCTURE FUND (the “Fund”)
By:   /s/ Kimberly Zeitvogel
Title:   CFO And Treasurer
Date:   May 24, 2023

 

UMB FUND SERVICES, INC.

(“Transfer Agent”)

By:   /s/ Maureen Quill
Title:   Executive Vice President
Date:   June 8, 2023

 

19

Schedule A

to the

Transfer Agency Agreement

by and between

StepStone Private Infrastructure Fund

and

UMB Fund Services, Inc.

[RESERVED]

 

20

Schedule B

to the

Transfer Agency Agreement

by and between

StepStone Private Infrastructure Fund and

UMB Fund Services, Inc.

SERVICES

In addition to, or in connection with, the Services set forth in Section 2 of the Agreement and subject to the direction of, and utilizing information provided by, the Fund, Investment Adviser, and the Fund’s agents, Transfer Agent will provide the following Services:

Transfer Agency/Investor Servicing

 

1.

Process Investor Subscriptions

 

  a.

Monitor and receive subscription documents from investors.

 

  b.

Review subscription documents for completeness.

 

  c.

Obtain investor demographic information.

 

  d.

Receive subscription money and match to subscription document.

 

  e.

Maintain, monitor, and reconcile DDA and escrow accounts.

 

  f.

Obtain appropriate approvals and transfer money to the trading account.

 

  g.

Provide good-order, pending wire, pending sub-docs reports.

 

2.

Process Investor Redemptions

 

  a.

Monitor and receive redemption request.

 

  b.

Calculate redemption fee as appropriate.

 

  c.

Monitor tender cap and apply if applicable.

 

  d.

Calculate holdback percentage as appropriate.

 

  e.

Receive money from the trading account.

 

  f.

Obtain approvals and distribute money as appropriate.

 

  g.

Retain holdback according to Fund documents and distribute as appropriate.

 

  h.

Provide redemption and holdback reports.

 

3.

Generate investor statements and confirmations.

 

4.

Receive and respond to investor inquiries by telephone, mail, or email.

 

5.

File IRS Forms 1099, 5498, 1042, 1042-S, and 945 with shareholders and/or the IRS.

USA PATRIOT Act (AML)

 

1.

Conduct AML screening for new domestic investors, which shall include initial comparison of investor information against Identity Chek, OFAC and other watch lists; provide Fund with any exceptions. Systematically compare updates against investor name for each update of the OFAC list.

 

21

2.

File Suspicious Activity Reports, if any, with the appropriate reporting authorities.

 

3.

Provide AML certification report upon request.

Internet Services

 

1.

Provide and maintain a web portal for the fund sponsor, investors, and financial advisors to access account information.

 

2.

Allow investors to sign up for electronic document delivery.

 

3.

Send email notifications to investors when statements or regulatory documents are available online.

 

4.

Post fund documents on the portal for access by investors.

 

5.

Send email notifications to investors when documents have been posted online.

FATCA

Onboarding of Foreign Investors

 

1.

Review account opening documents, including tax certifications Form W-9 and original W-8, for FATCA-specified U.S. indicia.

 

2.

Remediate missing or invalid tax certifications.

 

3.

Set the current account up to include Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) for FATCA/non-resident alien (“NRA”) withholding as applicable.

 

4.

Transmit copy of new account documents for NRA and Foreign entities to the Fund to complete its AML/W-8 comparison.

Support and Maintenance of Existing Foreign Investor Accounts

 

1.

Act as Withholding Agent:

 

  a.

Maintain constructive receipt of the tax certifications original IRS Form W-8 and relevant documentary evidence for audit and compliance reviews.

 

  b.

Ongoing review of FATCA Global Intermediary Identification Number (GIIN) against list of Foreign Financial Institutions (FFIs) on the IRS web site.

 

  c.

Complete FATCA/NRA and back up withholding deposits to the IRS by the required due date.

 

  d.

Complete and file Tax Forms 1042 and 945.

 

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2.

Monitor and remediate for “Change of Circumstance” and/or expiration of Form W-8 certification:

 

  a.

Notify and solicit the investor for a new and compliant Form W-8 as required.

 

  b.

Notify the Fund of change of circumstance to complete its AML comparison review.

 

3.

Provide the Fund with reports and other documentation as requested.

Electronic Subscription Document Services

Implement a process for the Fund’s investors and potential investors to electronically complete and submit subscription documents for investments in interests of the Fund.

 

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Schedule C

to the

Transfer Agency Agreement

by and between

StepStone Private Infrastructure Fund and

UMB Fund Services, Inc.

FEES

Transfer Agency/Investor Servicing

 

Account Fee

 

Annual minimum account fee, per fund      $20,000  

Multi-Class Fee (all fund types)

 

First four classes      Included  
For each additional class, based on complexity, per month      $500  

Annual Per-Account Transfer Agent Fees

      Daily Funds  

•  First 500 investors, each

      $24.00  

•  Next 1,000 investors, each

      $20.00  

•  Each investor over 1,500 investors

      $10.00  

Other Fees

   

•  Tender/repurchase – per investor, per event

      $10  

•  Investor telephone calls – per minute

      $1  

•  Suspicious Activity Report filing – per occurrence

      $25  

•  Escheatment – per filing, per state

      $50  

•  Advanced Reporting Solutions – annual maintenance fee

      included  

Online Access and Web-based Document Mailing* – per fund family

   

•  One-time setup fee

      Included  

•  Monthly maintenance fee

     $1,000  

•  Per investor, per email notification

      $.15  

*  Statements, prospectuses, financial reports, etc.

   

USA PATRIOT Act (AML)

   
Annual fee, per fund      $2,000  

CCO Support Services

   
Annual fee per fund family      $3,000  

 

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Document Services

 

•  Standard applications and forms in electronic format

    no charge

•  Customized forms

    as quoted

•  Pre-printed, machine-ready statement inserts (per item)

    $.03

•  Standard single-sided statement/confirm/tax form/check (per item including .pdf)

•  First page

    $.27

•  Each additional page

    $.13

Reprocessing Charges

 

Base fee – per occurrence, per day, per fund    $500

Applies when shareholder transactions must be reprocessed as a result of incorrect or not timely NAV or dividend information caused by the Advisor or other entity unaffiliated with UMBFS

Programming and Special Project Fees

Additional fees at $200 per hour, or as quoted by project, may apply for special programming or projects to meet your servicing requirements or to create custom reports or data extracts.

Out-of-Pocket Expenses

Out-of-pocket expenses include, but are not limited to, normal recurring expenses such as pricing services; security master set- up services; corporate action services; factor services; EDGAR filing fees; design, typesetting and printing of shareholder reports and prospectuses; customized reporting; third-party data provider/research services costs (including but not limited to Gainskeeper, E&Y PFIC Analyzer, Bloomberg, GICS, MSCI, CUSIP, SEDOL); assistance in preparation of responses to IRS correspondence; statement paper; tax forms; envelopes; postage; express delivery charges; courier services; telephone charges; printing of reports; photocopying; binders; dividers; stationery; record retention/storage/retrieval; travel on behalf and request of the fund; bank account service fees and any other bank charges; DTCC/NSCC participant billing; customer identity check fees; and expenses, including but not limited to attorney’s fees, incurred in connection with responding to and complying with SEC or other regulatory investigations, inquiries or subpoenas, excluding routine examinations of UMB in its capacity as a service provider to the funds. Customized reports or excessive reporting requests may be charged in accordance with the current pricing schedule.

Complex tax vehicles such as MLPs, straddles, or other unique structures may require additional charges for review or systems.

All fees, other than basis point fees, are subject to an annual escalation equal to the increase in the Consumer Price Index– Urban Wage Earners (CPI) but not to exceed a 3% increase per year. Such escalations shall be effective commencing one year from the effective date of each Fund and the corresponding date each year thereafter. No amendment of this fee schedule shall be required with each escalation. CPI will be determined by reference to the Consumer Price Index News Release issued by the Bureau of Labor Statistics, U.S. Department of Labor.

Fees for services not contemplated by this schedule will be negotiated on a case-by-case basis.

 

25

Schedule D

to the

Transfer Agency Agreement

by and between

StepStone Private Infrastructure Fund and

UMB Fund Services, Inc.

RECORDS MAINTAINED BY TRANSFER AGENT

 

  •  

Account applications

 

  •  

Checks including check registers, reconciliation records, any adjustment records and tax withholding documentation

 

  •  

Indemnity bonds for replacement of lost or missing checks

 

  •  

Liquidation, repurchase, withdrawal and transfer requests including signature guarantees and any supporting documentation

 

  •  

Shareholder correspondence

 

  •  

Shareholder transaction records

 

  •  

Share transaction history of the Fund

 

26

LOGO

 

  

1095 Avenue of the Americas

New York, NY 10036-6797

+1 212 698 3500 Main

+1 212 698 3599 Fax

www.dechert.com

 

July 11, 2023

StepStone Private Infrastructure Fund

128 S Tryon St.

Suite 1600

Charlotte, NC 28202

Re:    Registration Statement on Form N-2

Ladies and Gentlemen:

We have acted as counsel to StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”), in connection with the preparation and filing of a Registration Statement on Form N-2 (Registration No. 333-268986) as filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), and under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and as subsequently amended on or about the date hereof (the “Registration Statement”), relating to the proposed issuance of the Fund’s common shares of beneficial interest, par value $0.001 per share (“Shares”).

In rendering the opinion expressed below, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Fund and others, and such other documents as we have deemed necessary or appropriate as a basis for rendering this opinion, including the following documents:

 

  (i)

the Registration Statement;

 

  (ii)

the Certificate of Trust of the Fund;

 

  (iii)

the Agreement and Declaration of Trust of the Fund;

 

  (iv)

the By-Laws of the Fund; and

LOGO

 

July 11, 2023

Page 2

 

  (v)

resolutions of the board of trustees of the Fund relating to, among other things, the authorization and issuance of the Shares.

As to the facts upon which this opinion is based, we have relied, to the extent we deem proper, upon certificates of public officials and certificates and written statements of officers, directors, employees and representatives of the Fund.    

In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as original documents and the conformity to original documents of all documents submitted to us as copies. In addition, we have assumed (i) the legal capacity of natural persons and (ii) the legal power and authority of all persons signing on behalf of the parties to all documents (other than the Fund).

On the basis of the foregoing and subject to the assumptions and qualifications set forth in this letter, we are of the opinion that when the Shares are issued and sold in the manner described in the Registration Statement, the Shares will be validly issued, fully paid and nonassessable.

The opinion expressed herein is limited to the Delaware Statutory Trust Act and judicial interpretations thereof. We are not members of the bar of the State of Delaware.    

We assume no obligation to advise you of any changes in the foregoing subsequent to the date of this opinion.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the caption “Legal Counsel” in the Statement of Additional Information forming a part of the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/s/ Dechert LLP

Dechert LLP

Consent of Independent Registered Public Accounting Firm

We consent to the references to our firm under the caption “Independent Registered Public Accounting Firm” in the Statement of Additional Information dated July 11, 2023 and included in this Pre-Effective Amendment No. 4 to the Registration Statement (Form N-2, File No. 333-268986) of StepStone Private Infrastructure Fund (the “Registration Statement”).

We also consent to the incorporation by reference of our report dated July 11, 2023, with respect to the financial statements of StepStone Private Infrastructure Fund as of and for the period ended June 16, 2023, into this Registration Statement, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

New York, New York

July 11, 2023

STEPSTONE PRIVATE INFRASTRUCTURE FUND

SUBSCRIPTION AGREEMENT

This Subscription Agreement is entered into this 24th day of May, 2023 by and between StepStone Private Infrastructure Fund, a Delaware statutory trust (the “Fund”), and StepStone Group LP (the “Subscriber”);

WITNESSETH:

WHEREAS, the Fund has been formed for the purposes of carrying on business as a closed-end management investment company; and

WHEREAS, the Subscriber wishes to subscribe for and purchase, and the Fund wishes to sell to the Subscriber, 10,000 Class I shares of beneficial interest (the “Shares”) for a purchase price of $10 per share.

NOW THEREFORE, IT IS AGREED:

 

  1.

The Subscriber subscribes for and agrees to purchase from the Fund 10,000 Shares for a purchase price of $10 per share. Subscriber agrees to make payment for these Shares at such time as demand for payment may be made by an officer of the Fund.

 

  2.

The Fund agrees to issue and sell said Shares to Subscriber promptly upon its receipt of the purchase price.

 

  3.

To induce the Fund to accept its subscription and issue the Shares subscribed for, the Subscriber:

a. Represents and warrants that it has no present intention of selling or redeeming the Shares subscribed for under this Subscription Agreement.

 

  4.

This Subscription Agreement and all of its provisions shall be binding upon the legal representatives, heirs, successors and assigns of the parties hereto.

 

  5.

This Agreement is executed on behalf of the Fund by the Fund’s officers as officers and not individually and the obligations imposed upon the Fund by this Subscription Agreement are not binding upon any of the Fund’s Trustees, officers or shareholders individually but are binding only upon the assets and property of the Fund.

IN WITNESS WHEREOF, this Subscription Agreement has been executed by the parties hereto as of the day and date first above written.

 

STEPSTONE PRIVATE INFRASTRUCTURE FUND
By: /s/ Robert W. Long
Name:   Robert W. Long
Title:   President
STEPSTONE GROUP LP
By: /s/ Johnny Randel
Name:   Johnny Randel
Title:   CFO

CODE OF ETHICS

FOR

STEPSTONE PRIVATE INFRASTRUCTURE FUND

STEPSTONE GROUP PRIVATE WEATH LLC

 

Section I

Statement of General Fiduciary Principles

This Code of Ethics (the “Code”) has been adopted by each of StepStone Private Infrastructure Fund (the “Fund”) and StepStone Group Private Wealth LLC, the Fund’s investment adviser (the “Adviser”), in compliance with Rule 17j-1 under the Investment Company Act of 1940 (the “Act”). The purpose of the Code is to establish standards and procedures for the detection and prevention of activities by which persons having knowledge of the investments and investment intentions of the Fund may abuse their fiduciary duty to the Fund, and otherwise to deal with the types of conflict of interest situations to which Rule 17j-1 is addressed. All Access Persons must read this Code of Ethics.

The Code is based on the principle that the trustees and officers of the Fund, and the managers, partners, officers, employees and shared employees of the Adviser, who provide services to the Fund, owe a fiduciary duty to the Fund to conduct their personal securities transactions in a manner that does not interfere with the Fund’s transactions or otherwise take unfair advantage of their relationship with the Fund. All Access Persons are expected to adhere to this general principle as well as to comply with all of the specific provisions of this Code that are applicable to them. Any Access Person who is affiliated with the Adviser or another entity that is a registered investment adviser is, in addition, expected to comply with the provisions of the code of ethics that has been adopted by the Adviser or such other investment adviser.

All Access Persons must seek to avoid any actual or potential conflicts between their personal interests and the interests of the Fund and its shareholders. In sum, all Access Persons shall place the interests of the Fund before their own personal interests.

 

Section II

Definitions

(A)     “Access Person” means any director, trustee, officer, general partner or Advisory Person (as defined below) of the Fund or the Adviser.

(B)     An “Advisory Person” of the Fund or the Adviser means: (i) any director, trustee, officer, general partner or employee of the Fund or the Adviser, or any Fund in a Control (as defined below) relationship to the Fund or the Adviser, who in connection with his or her regular functions or duties makes, participates in, or obtains information regarding the purchase or sale of any Covered Security (as defined below) by the Fund, or whose functions relate to the making of any recommendation with respect to such purchases or sales; (ii) any natural person in a Control relationship to the Fund or the Adviser, who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of any Covered Security by the Fund and (iii) any other person deemed to be an Advisory Person by the Chief Compliance Officer.

(C)     “Beneficial Ownership” is interpreted in the same manner as it would be under Rule 16a-1(a)(2) under the Securities Exchange Act of 1934 (the “1934 Act”) in determining whether a person is a beneficial owner of a security for purposes of Section 16 of the 1934 Act and the rules and regulations thereunder.

(D)     “Chief Compliance Officer” means the Chief Compliance Officer of the Fund (who also may serve as the compliance officer of the Adviser and/or one or more affiliates of the Adviser) and his or her delegate.

(E)     “Control” shall have the same meaning as that set forth in Section 2(a)(9) of the Act.

 

1

(F)     “Covered Security” means a security as defined in Section 2(a)(36) of the Act, which includes: any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.

Except that “Covered Security” does not include: (i) direct obligations of the Government of the United States; (ii) bankers’ acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt instruments, including repurchase agreements; and (iii) shares issued by open-end investment companies registered under the Act. References to a Covered Security in this Code (e.g., a prohibition or requirement applicable to the purchase or sale of a Covered Security) shall be deemed to refer to and to include any warrant for, option in, or security immediately convertible into that Covered Security, and shall also include any instrument that has an investment return or value that is based, in whole or in part, on that Covered Security (collectively, “Derivatives”). Therefore, except as otherwise specifically provided by this Code: (i) any prohibition or requirement of this Code applicable to the purchase or sale of a Covered Security shall also be applicable to the purchase or sale of a Derivative relating to that Covered Security; and (ii) any prohibition or requirement of this Code applicable to the purchase or sale of a Derivative shall also be applicable to the purchase or sale of a Covered Security relating to that Derivative.

(G)     “Independent Trustee” means a trustee of the Fund who is not an “interested person” of the Fund within the meaning of Section 2(a)(19) of the Act.

(H)     “Initial Public Offering” means an offering of securities registered under the Securities Act of 1933 (the “1933 Act”), the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the 1934 Act.

(I)     “Limited Offering” means an offering that is exempt from registration under the 1933 Act pursuant to Section 4(a)(2) or Section 4(a)(5) thereof or pursuant to Rule 504, Rule 505, or Rule 506 thereunder.

(J)     “Security Held or to be Acquired” by the Fund means: (i) any Covered Security which, within the most recent 15 days: (A) is or has been held by the Fund; or (B) is being or has been considered by the Fund or the Adviser for purchase by the Fund; and (ii) any option to purchase or sell, and any security convertible into or exchangeable for, a Covered Security described in Section II (F).

(K)     “17j-1 Organization” means the Fund or the Adviser, as the context requires.

 

Section III

Objective and General Prohibitions

Access Persons may not engage in any investment transaction under circumstances in which such Access Person benefits from or interferes with the purchase or sale of investments by the Fund. In addition, Access Persons may not use information concerning the investments or investment intentions of the Fund, or their ability to influence such investment intentions, for personal gain or in a manner detrimental to the interests of the Fund.

 

2

Access Persons may not engage in conduct that is deceitful, fraudulent or manipulative, or that involves false or misleading statements, in connection with the purchase or sale of investments by the Fund. In this regard, Access Persons should recognize that Rule 17j-1 makes it unlawful for any affiliated person of the Fund, or any affiliated person of the Adviser, in connection with the purchase or sale, directly or indirectly, by the person of a Security Held or to be Acquired by the Fund to:

 

  (i)

employ any device, scheme or artifice to defraud the Fund;

 

  (ii)

make any untrue statement of a material fact to the Fund or omit to state to the Fund a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;

 

  (iii)

engage in any act, practice or course of business that operates or would operate as a fraud or deceit upon the Fund; or

 

  (iv)

engage in any manipulative practice with respect to the Fund.

Access Persons should also recognize that a violation of this Code or of Rule 17j-1 may result in the imposition of: (1) sanctions as provided by Section VII below; or (2) administrative, civil and, in certain cases, criminal fines, sanctions or penalties.

 

Section IV

Prohibited Transactions

(A)     Other than securities purchased or acquired by a fund affiliated with the Fund and pursuant to an exemptive order under Section 57(i) of the Act permitting certain types of co-investments, an Access Person may not purchase or otherwise acquire direct or indirect Beneficial Ownership of any Covered Security, and may not sell or otherwise dispose of any Covered Security in which he or she has direct or indirect Beneficial Ownership, if he or she knows or should know at the time of entering into the transaction that: (1) the Fund has purchased or sold such Covered Security within the last 15 calendar days, or is purchasing or selling or intends to purchase or sell such Covered Security in the next 15 calendar days; or (2) the Adviser has within the last 15 calendar days considered purchasing or selling such Covered Security for the Fund or within the next 15 calendar days intends to consider purchasing or selling such Covered Security for the Fund.

(B)     No Access Person may purchase a Covered Security without first obtaining preapproval from the Chief Compliance Officer of the Fund. From time to time, the Chief Compliance Officer of the Fund or the Adviser may exempt individual Covered Securities or categories of Covered Securities from this requirement.

(C)     Access Persons of the Fund or the Adviser must obtain approval from the Fund or the Adviser, as the case may be, before directly or indirectly acquiring Beneficial Ownership in any securities in an Initial Public Offering or in a Limited Offering, except when such securities are acquired by a fund affiliated with the Fund and pursuant to an exemptive order under Section 57(i) of the Act permitting certain types of co-investments. Such approval must be obtained from the Chief Compliance Officer, unless he or she is the person seeking such approval, in which case it must be obtained from the President of the 17j-1 Organization.

(D)     No Access Person shall recommend any transaction in any Covered Securities by the Fund without having disclosed to the Chief Compliance Officer his or her interest, if any, in such Covered Securities or the issuer thereof, including: the Access Person’s Beneficial Ownership of any Covered Securities of such

 

3

issuer, except when such securities transactions are to be made by a fund affiliated with the Fund and pursuant to an exemptive order under Section 57(i) of the Act permitting certain types of co-investments; any contemplated transaction by the Access Person in such Covered Securities; any position the Access Person has with such issuer; and any present or proposed business relationship between such issuer and the Access Person (or a party in which the Access Person has a significant interest).

 

Section V

Reports by Access Persons

(A)     Personal Securities Holdings Reports.

All Access Persons shall within 10 days of the date on which they become Access Persons, and thereafter, within 30 days after the end of each calendar year, disclose the title, number of shares and principal amount of all Covered Securities in which they have a direct or indirect Beneficial Ownership as of the date the person became an Access Person, in the case of such person’s initial report, and as of the last day of the year, as to annual reports. Such report is hereinafter called a “Personal Securities Holdings Report.” Each Personal Securities Holdings Report must also disclose the name of any broker, dealer or bank with whom the Access Person maintained an account in which any securities were held for the direct or indirect benefit of the Access Person as of the date the person became an Access Person or as of the last day of the year, as the case may be. Each Personal Securities Holdings Report shall state the date it is being submitted.

(B)     Quarterly Transaction Reports.

Within 30 days after the end of each calendar quarter, each Access Person shall make a written report to the Chief Compliance Officer of all transactions occurring in the quarter in a Covered Security in which he or she had any direct or indirect Beneficial Ownership. Such report is hereinafter called a “Quarterly Securities Transaction Report.” A Quarterly Securities Transaction Report shall be in the form approved by the Chief Compliance Officer.

(C)     Independent Trustees.

Notwithstanding the reporting requirements set forth in this Section V, an Independent Trustee who would be required to make a report under this Section V solely by reason of being a trustee of the Fund is not required to file a Personal Securities Holding Report upon becoming a trustee of the Fund or annually thereafter. Such Independent Trustee also need not file a Quarterly Securities Transaction Report unless such trustee knew or, in the ordinary course of fulfilling his or her official duties as a trustee of the Fund, should have known that during the 15-day period immediately preceding or after the date of the transaction in a Covered Security by the trustee such Covered Security is or was purchased or sold by the Fund or the Fund or the Adviser considered purchasing or selling such Covered Security.

(D)     Brokerage Accounts and Statements.

Access Persons, except Independent Trustees, shall:

(1)     instruct the brokers, dealers or banks with whom they maintain such an account to provide duplicate account statements to the Chief Compliance Officer.

(2)     on an annual basis, certify that they have complied with the requirements of (1) above.

 

4

(E)     Form of Reports.

A Quarterly Securities Transaction Report may consist of broker statements or other statements that provide a list of all personal Covered Securities holdings and transactions in the time period covered by the report and contain the information required in a Quarterly Securities Transaction Report.

(F)     Responsibility to Report.

Access Persons will be informed of their obligations to report, however, it is the responsibility of each Access Person to take the initiative to comply with the requirements of this Section V. Any effort by the Fund, or by the Adviser and its affiliates, to facilitate the reporting process does not change or alter that responsibility. A person need not make a report hereunder with respect to transactions effected for, and Covered Securities held in, any account over which the person has no direct or indirect influence or control.

(G)     Where to File Reports and Forms.

(1)     All Quarterly Securities Transaction Reports and Personal Securities Holdings Reports, as well as Private Fund Securities and IPO Request and Reporting Forms, must be filed with the Chief Compliance Officer.

(2)     The Chief Compliance Officer may, from time to time, adopt new methods to submit all Quarterly Securities Transaction Reports and Personal Securities Holdings Reports, as well as Private Fund Securities and IPO Request and Reporting Forms. These new methods, which could include electronic submission of information equivalent to the information currently required under this Code, will be deemed to satisfy the reporting obligations under this Code.

(H)     Disclaimers.

Any report required by this Section V may contain a statement that the report will not be construed as an admission that the person making the report has any direct or indirect Beneficial Ownership in the Covered Security to which the report relates.

 

Section VI

Annual Certification

(A)     Access Persons.

Access Persons who are directors, trustees, managers, partners, officers or employees of the Fund or the Adviser shall be required to certify annually that they have read this Code, and that they understand the applicable code and recognize that they are subject to it. Further, such Access Persons shall be required to certify annually that they have complied with the requirements of this Code.

(B)     Board Review.

No less frequently than annually, the Fund and the Adviser must furnish to the Fund’s board of trustees, and the board must consider, a written report that: (A) describes any material issues arising under this Code or procedures since the last report to the board, including, but not limited to, information about material violations of the Code or procedures and sanctions imposed in response to violations; and (B) certifies that the Fund or the Adviser, as applicable, has adopted procedures reasonably necessary to prevent Access Persons from violating the Code.

 

5

Section VII

Sanctions

Any violation of this Code shall be subject to the imposition of such sanctions by the 17j-1 Organization as may be deemed appropriate under the circumstances to achieve the purposes of Rule 17j1 and this Code. The sanctions to be imposed shall be determined by the board of trustees, including a majority of the Independent Trustees, provided, however, that with respect to violations by persons who are directors, managers, partners, officers or employees of the Adviser (or of a Fund that controls the Adviser), the sanctions to be imposed shall be determined by the Adviser (or the controlling person thereof). Sanctions may include, but are not limited to, suspension or termination of employment, a letter of censure and/or restitution of an amount equal to the difference between the price paid or received by the Fund and the more advantageous price paid or received by the offending person.

Adopted: May 25, 2023

 

6

STEPSTONE PRIVATE INFRASTRUCTURE FUND

Rule 17j-1 Certification

Pursuant to Rule 17j-1(c)(1)(ii) under the Investment Company Act of 1940, as amended (the “1940 Act”), the undersigned hereby certifies to the Board of Trustees of StepStone Private Infrastructure Fund (the “Fund”) that the Fund, StepStone Group Private Wealth LLC, the adviser to the Fund, and StepStone Group Real Assets LP, the sub-adviser to the Fund, have adopted procedures that are reasonably necessary to prevent Access Persons (as defined in Rule 17j-1 under the 1940 Act) from violating their Codes of Ethics.

 

Date: May 25, 2023

By:

  

/s/ Christopher Ancona

Title:

  

Chief Compliance Officer

APPENDIX A

 

LOGO

StepStone Group LP

StepStone Group Real Assets LP

StepStone Group Real Estate LP

StepStone Group Europe LLP

StepStone Group Private Wealth LLC

Stepstone Group Europe Alternative Investments

Limited

StepStone Group Private Debt LLC

Code of Ethics

June 29, 2023

 

1

Table of Contents

 

I.   INTRODUCTION      3  
II.   DEFINITIONS      3  
III.   STANDARD OF BUSINESS CONDUCT      4  
IV.   PROHIBITION AGAINST INSIDER TRADING      5  
V.   REQUIRED PRE-CLEARANCE FOR INITIAL PUBLIC OFFERINGS AND PRIVATE PLACEMENTS      7  
VI.   EMPLOYEE INVESTMENTS IN FIRM-SPONSORED VEHICLES AND TRANSACTIONS      7  
VII.   COMPLIANCE PROCEDURES FOR OTHER PERSONAL SECURITIES TRANSACTIONS      8  
VIII.   CONFLICTS OF INTEREST      9  
IX.   GIFTS AND ENTERTAINMENT      12  
X.   POLITICAL CONTRIBUTIONS      13  
XI.   OUTSIDE ACTIVITIES      13  
XII.   SUPERVISED PERSONS INFORMATION DISCLOSURE      14  

 

2

I.

INTRODUCTION

StepStone Group LP (“SSG”), StepStone Group Real Assets LP (“SIRA”), StepStone Group Real Estate LP (“SRE”), StepStone Group Europe LLP (“StepStone Europe”), StepStone Group Private Wealth LLC (“SPW”), Stepstone Group Europe Alternative Investments Limited (“SGEAIL”) and StepStone Group Private Debt LLC (“SPD”) (collectively, “StepStone” or the “Firm”) each place a high value on the ethical conduct of all its Supervised Persons, as defined below. We have a fiduciary duty to clients to act solely for their benefit. All of StepStone’s Supervised Persons must put the interests of our clients before their own personal interests and must act honestly and fairly in all respects in dealings with clients. In recognition of StepStone’s desire to maintain its high ethical standards and fulfill its fiduciary duty to its clients, the Firm has adopted this Code of Ethics (this “Code”) containing provisions to prevent improper personal trading, to identify conflicts of interest and to provide a means to resolve any actual or potential conflicts in favor of the clients or, in appropriate circumstances, disclose the existence of such conflicts to them. This Code is intended to comply with the provisions of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), as well as other securities laws, and supersedes other Codes of Ethics adopted by the Firm of an earlier date.

Each Supervised Person upon hire is required to sign an initial certification acknowledging that he or she has received a copy of the Firm’s Compliance Manual, including this Code, and certifying that he or she has read and understands the policies and procedures of the Compliance Manual and Code and agrees to abide by its provisions. Thereafter, each Supervised Person shall, on an annual basis, attest that such Supervised Person continues to abide by the Firm’s Compliance Manual’s and Code’s provisions including those related to the detection and prevention of insider trading and personal securities transactions.

Continued adherence to the Code is considered a basic condition of employment or membership by StepStone. Failure to comply with the Code may result in disciplinary action, including termination of employment or membership. If you have any questions concerning the appropriateness of any course of action, you should consult with Bendukai Bouey, as the Chief Compliance Officer of SSG, SIRA, SRE, StepStone Europe, SPW and SPD (the “CCO”) or Emma Love, Chief Compliance Officer of SGEAIL (the “SGEAIL CCO” together with the CCO, the “CCOs”), each of whom is responsible for administering this Code.

 

II.

DEFINITIONS

For the purposes of this Code, the following definitions shall apply:

“Access Person” means a supervised person who has access to nonpublic information regarding clients’ purchase or sale of securities, is involved in making securities recommendations to clients or who has access to such recommendations that are nonpublic.

“Account” means any personal investment or trading account of a Supervised Person in which a Supervised Person has any Beneficial Ownership, any investment or trading account for which a Supervised Person is a trustee or custodian and any investment or trading account over which a Supervised Person can exercise any direct or indirect control or influence trading or investment decisions.

“Beneficial Ownership” means any direct or indirect financial interest in any Reportable Security (as defined below) held or shared, directly or indirectly, through any account, contract, arrangement, understanding, relationship or otherwise. A Supervised Person is presumed to be a Beneficial Owner of securities that are held by any of his or her family members or domestic partner who resides in the Supervised Person’s household or to whom the Supervised Person contributes material financial support.

“Compliance Department” means the compliance teams that administer the Firm’s compliance program led by the CCO and the SGEAIL CCO.

 

3

“Reportable Security” means any security as defined in Section 202(a)(18) of the Advisers Act, except that it does not include:

 

(i)

Direct obligations of the Government of the United States;

 

(ii)

Bankers’ acceptances, bank certificates of deposit, commercial paper and other high quality short-term debt instruments, including repurchase agreements;

 

(iii)

Shares issued by money market funds;

 

(iv)

Shares of other types of open-end registered mutual funds, unless StepStone or a control affiliate acts as the investment adviser or principal underwriter for the fund; and

 

(v)

Units of a unit investment trust if the unit investment trust is invested exclusively in mutual funds, unless StepStone or a control affiliate acts as the investment adviser or principal underwriter for the fund.

“Restricted List” is the list of publicly traded securities, captured on the Firm’s third party Compliance software provide, ComplySci, at any point in time that, due to the possession or possible possession within the Firm of information that may be material, non-public information, or for any other reason of law or policy, the CCO, or SGEAIL CCO, as applicable, has determined that StepStone Supervised Persons should not be personally purchasing or selling or purchasing or selling on behalf of any client of the Firm, as applicable.

“Supervised Person” includes members, officers and Partners (natural persons) of StepStone or its affiliates (or other persons occupying a similar status or performing similar functions); employees of StepStone or its affiliates; and any other person who provides advice on behalf of StepStone and is subject to StepStone’s supervision and control. Any temporary employee of StepStone shall not be considered a Supervised Person unless such person (i) has access to nonpublic information regarding any client’s purchase or sale of securities, or nonpublic information regarding the current or potential portfolio holdings of any fund or account that StepStone or its controlled affiliates manages; or (ii) is involved in making securities recommendations to clients. Please note that all Supervised Persons of the Firm are deemed “Access Persons” as defined by Rule 204A-1 under the Advisers Act.

 

III.

STANDARD OF BUSINESS CONDUCT

StepStone places the highest priority on maintaining its reputation for integrity and professionalism. The confidence and trust placed in the Firm and its Supervised Persons by our clients is something we value and endeavor to protect. This Code is intended to comply with the various provisions of the Advisers Act and also requires that all Supervised Persons comply with the various applicable provisions of the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and applicable rules and regulations adopted by the Securities and Exchange Commission (the “SEC”).

The Advisers Act requires the establishment and enforcement of policies and procedures reasonably designed to prevent the misuse of material, nonpublic information by investment advisers. Such policies and procedures are contained in this Code. This Code also contains policies and procedures with respect to personal securities transactions of all StepStone’s Supervised Persons. These procedures cover transactions in Accounts of Supervised Persons or that otherwise involve a Reportable Security over which a Supervised Person has Beneficial Ownership.

 

4

The Advisers Act makes it unlawful for StepStone, its agents, or its Supervised Persons to employ any device, scheme or artifice to defraud any client or prospective client, or to engage in fraudulent, deceptive or manipulative practices. This Code contains provisions that prohibit these and other enumerated activities and that are reasonably designed to detect and prevent violations of this Code, the Advisers Act, other securities laws, and the rules thereunder.

 

IV.

PROHIBITION AGAINST INSIDER TRADING

Trading securities while in possession of material, nonpublic information, or improperly communicating that information to others, may expose Supervised Persons and StepStone to stringent penalties. Criminal sanctions may include a fine and imprisonment. The SEC can recover the profits gained or losses avoided through the illegal trading, impose a penalty of up to three times the illicit windfall, and issue an order permanently barring you from the securities industry. Finally, Supervised Persons and the Firm may be sued by investors seeking to recover damages for insider trading violations. The rules and procedures contained in this Code apply to securities trading and information handling by Supervised Persons of StepStone and their immediate family and household members.

No Supervised Person may trade, either personally or on behalf of others (such as investment funds and private accounts managed by StepStone), while in the possession of material, nonpublic information, nor may a Supervised Person communicate material, nonpublic information to others in violation of the law.

Information is material where there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions. Generally, this includes any information the disclosure of which would have a substantial effect on the price of a company’s securities. No simple test exists to determine when information is material; assessments of materiality involve a highly fact-specific inquiry. For this reason, you should direct any questions about whether information is material to the CCO or SGEAIL CCO, as applicable.

Material information often relates to a company’s results and operations, including, for example, dividend changes, earnings results, changes in previously released earnings estimates, significant merger or acquisition proposals or agreements, major litigation, liquidation problems, and extraordinary management developments. Material information also may relate to the market for a company’s securities. Information about a significant order to purchase or sell securities may, in some contexts, be material. Prepublication information regarding reports in the financial media also may be material.

Information is “public” when it has been disseminated broadly to investors in the marketplace. For example, information is public after it has become available to the general public through the internet or a television or radio broadcast, a public filing with the SEC or some other government agency, the Dow Jones “tape”, The Wall Street Journal or some other publication of general circulation, and after sufficient time has passed so that the information has been widely disseminated. It is important to note that information posted on social media sites may not necessarily be considered “public” to the extent that access to such sites is limited or requires a subscription.

StepStone frequently receives material, non-public information in the course of its due diligence activities (typically, but not exclusively, in connection with potential co-investments) or as part of our research efforts. In this context, it is crucial for Supervised Persons to immediately notify the CCO or SGEAIL CCO, as applicable, if the issuer has outstanding public securities, so that they can be placed on the Restricted List. To add an issuer to our Restricted List, send the issuer name and ticker symbol to RTL@stepstonegroup.com.

 

5

In general, the Restricted List may consist of the securities of: (i) issuers or companies with respect to which the Firm has been made aware that a Supervised Person has received, expects to receive or may be in a position to receive material non-public information; (ii) issuers or companies on whose board of directors or similar body a Supervised Person serves; (iii) private entities with which the Firm has entered into a confidentiality agreement when information under such agreement may include material non-public information of a public issuer or company; (iv) companies for which any Supervised Person has received material non-public information when evaluating hedging strategies or private positions; and (v) other companies that the Firm, Supervised Persons or clients should not be trading or in which such investments should not be made for various reasons, as may be determined from time to time by the Compliance Department.

Supervised Persons should notify the CCO or SGEAIL CCO or a designee, as applicable, if the general partner or sponsor of a fund that the Firm has put into due diligence has publicly traded securities outstanding, since the due diligence process is likely to involve contact with material, non-public information. This requirement applies even if the security represents only a very small public stub, is obscure and not readily discoverable through internet searches, is listed solely on a remote foreign exchange or not listed on any exchange, and trades only very thinly or not at all. To protect yourself, our clients and the Firm, you should contact the CCO or SGEAIL CCO, as applicable, immediately if you believe that you may have received material, nonpublic information concerning a public company. After the CCO or SGEAIL CCO, as applicable, has reviewed the issue, the Firm will determine whether the information is material and nonpublic and, if so, what action the Firm will take.

Before executing any trade for yourself or others, including investment funds or private accounts managed by StepStone, or recommending a trade to others, you must determine whether you have access to material, nonpublic information. If you think that you might have access to material, nonpublic information, you are obligated to:

 

  •  

Report the information and proposed trade immediately to the CCO or SGEAIL CCO, as applicable.

 

  •  

Refrain from purchasing or selling the securities on behalf of yourself or others, including investment funds or private accounts managed by the Firm.

 

  •  

Avoid communicating the information inside or outside the Firm, other than to the CCO or SGEAIL CCO, as applicable.

Tender offers represent a particular concern in the law of insider trading for two reasons. First, tender offer activity often produces extraordinary gyrations in the price of the target company’s securities. Trading during this time period is more likely to attract regulatory attention (and produces a disproportionate percentage of insider trading cases). Second, the SEC has adopted a rule which expressly forbids trading and “tipping” while in the possession of material, nonpublic information regarding a tender offer received from the tender offeror, the target company or anyone acting on behalf of either. Supervised Persons should exercise extreme caution any time they become aware of nonpublic information relating to a tender offer.

Supervised Persons as Directors of Portfolio Companies

From time to time, the Firm will obtain representation on the boards of companies in which its clients invest. Specifically, certain Supervised Persons of the Firm may serve as a member of the board of directors of a portfolio company held by the investment vehicles sponsored by the Firm (each such Supervised Person referred to herein as a “Firm Representative”). Due to the nature of the Firm’s investment strategy, the Firm is very unlikely to have a Firm Representative who serves as a member of the board of a publicly traded company. However, serving on the board of a portfolio company, whether publicly-traded or privately-held, may create the risk of a Firm Representative coming into material, non-public information. Specifically, ways in which a Firm Representative may obtain material, non-public information include, but is not limited to, when information is acquired regarding: (i) the portfolio company itself; (ii) a public competitor of a portfolio company; (iii) a pending private transaction involving a public company; or (iv) other confidential information involving a public company within the portfolio company’s industry or sector. In light of this risk, the Firm has implemented procedures around the flow of material, non-public information if acquired by a Firm Representative, including the following controls:

 

6

  1.

In the event that a Firm Representative obtains material, non-public information, the Firm Representative is required to notify the CCO or SGEAIL CCO, as applicable, immediately;

 

  2.

Any company about which a Firm Representative obtains material, non-public information will be added to the Firm’s Restricted List;

 

  3.

A Firm Representative is prohibited from conveying material, non-public information to anyone within the Firm or any third party, including investors in the Firm’s fund clients;

 

  4.

The CCO or SGEAIL CCO, as applicable, may, from time to time, participate in the Firm Representative’s communications with investors;

 

  5.

On a periodic basis, a Firm Representative will be required to confirm that they do not have, and have not had, material, non-public information by virtue of their service on a board;

 

  6.

The CCO or SGEAIL CCO, as applicable, will conduct a targeted compliance training regarding the flow of material, non-public information for all applicable staff; and

 

  7.

In the event that the Firm has a public portfolio company, trading on behalf of clients or personally by Supervised Persons and Operating Partners, in such company will be monitored closely and adhere to the trading requirements as set forth by the policies of such public portfolio company.

Please note that with respect to a public portfolio company that has a Firm Representative, personal security transactions of Supervised Persons in such company will not be allowed, unless the Supervised Person seeking approval is the Firm Representative and he or she has furnished to the CCO or SGEAIL CCO, as applicable, documentation from the General Counsel of the public company confirming that the Firm Representative is free to trade and is not in possession of material, non-public information.

 

V.

REQUIRED PRE-CLEARANCE FOR INITIAL PUBLIC OFFERINGS AND PRIVATE PLACEMENTS

A Supervised Person must disclose on StepStone’s ComplySci web site and obtain approval of the CCO or SGEAIL CCO, as applicable, before acquiring in any Account securities in an initial public offering or securities in a limited offering or private placement (other than StepStone employee fund vehicles, as described below in Section VI.). The CCO or SGEAIL CCO, as applicable, must be provided with full details of the proposed transaction and, if approved, the position will be subject to continuous monitoring for possible future conflicts. Supervised Persons will be asked to attest on an annual basis whether they continue to hold any private placements.

 

VI.

EMPLOYEE INVESTMENTS

Subject to meeting eligibility requirements as established by the Firm from time to time, Supervised Persons may participate in commingled investment vehicles sponsored by the Firm. However, a Supervised Person may not obtain a direct interest in any transaction undertaken by the Firm, other than through participation in a commingled investment vehicle sponsored by the Firm or direct or indirect ownership of the “GP commitment” made with respect to commingled investment vehicles or separately managed accounts, or as otherwise set forth in the Firm’s Allocation Policy, set forth at Appendix B of this Manual, except as otherwise approved in writing by the CCO or their designee. Further, Supervised Persons are prohibited from investing in investment vehicles or other transactions made available to, and not pursued by, the Firm, except as otherwise approved in writing by the CCO or their designee.

 

7

VII.

COMPLIANCE PROCEDURES AND PRE-CLEARANCE FOR OTHER PERSONAL SECURITIES TRANSACTIONS

StepStone requires pre-clearance of all securities transactions. Supervised Persons are prohibited from executing the transaction if the security is included on the Restricted List.

All Supervised Persons, prior to entering any transaction in a Reportable Security in an Account, must enter on ComplySci’s trade pre-clearance screen the Reportable Security’s name, symbol, or other standard identifier, along with the type of transaction (i.e., purchase, sale or any other type of acquisition or disposition). The respective Supervised Person’s ComplySci profile will reflect approval or denial of the trade request.

Supervised Persons are prohibited from trading Reportable Securities without such approval.

Every Supervised Person shall (i) grant StepStone authorization to establish a direct feed of his or her Account statements and trade confirmations to ComplySci in order to allow the Compliance Department to surveille all trading activity; or (ii) in those instances where the Supervised Person’s broker does not provide a direct feed to ComplySci, manually forward all Account information directly to the Compliance Department. In addition, every Supervised Person shall utilize ComplySci to provide annual and exit holdings reports and quarterly Account reports to the Compliance Department, which must contain the information described below.

Initial and Annual Holdings Reports

Every Supervised Person must, no later than ten (10) days after the person becomes a Supervised Person and no later than forty-five (45) days after year-end thereafter, file a holdings report containing the following information:

 

  •  

The name of any broker, dealer or bank, Account name, number and location with whom the supervised person maintained an Account in which any securities were held for the direct or indirect benefit of the Supervised Person; and

 

  •  

The date that the report is submitted by the Supervised Person.

For initial holdings reports the information submitted must be current as of a date no more than forty-five (45) days before the person became a Supervised Person. For annual holdings reports the information submitted must be as of year-end (December 31st). These requirements may be satisfied by providing a direct feed to ComplySci for all statements for all Accounts with respect to the Supervised Person. If a Supervised Person’s broker does not provide a direct electronic feed to ComplySci, such Supervised Person must arrange for his or her broker to provide copies of Account statements directly to the Compliance Department, which will then forward such Account statements to ComplySci for inclusion in the Firm’s ComplySci site.

Quarterly Account Reports

Every Supervised Person should, no later than thirty (30) days after the end of each calendar quarter, complete on ComplySci a quarterly Account report concerning any Account of the Supervised Person. Accounts over which the Supervised Person has no direct or indirect influence or control do not need to be reported.

It is StepStone’s policy that each Supervised Person must (i) take all steps necessary to arrange for their brokerage firm or firms to establish a direct feed of all Account statements and trade confirmations to ComplySci; or (ii) in those instances where a broker will not establish a direct feed to ComplySci, send duplicate statements and confirms for all Accounts directly to the attention of the Compliance Department.

 

8

Virtually all U.S.-based brokerage firms are willing to either establish a direct electronic feed to ComplySci or provide Account statements directly to the Compliance Department for delivery to ComplySci. In certain instances, the broker may ask for a request letter from StepStone Compliance (called a “Rule 407 letter”). Please contact the Compliance Department if you need a Rule 407 letter and one will be prepared and sent to the broker.

The quarterly report will indicate either that there were no Accounts with respect to the Supervised Person open during the prior quarter or one of the following:

 

  •  

That the Supervised Person arranged for all relevant brokerage firms to (i) establish an electronic feed of Account statements and trade confirmations to ComplySci; or (ii) send duplicate statements and confirms for all Accounts for the prior quarter to the attention of the CCO, the SGEAIL CCO or a designee; or

 

  •  

That the brokerage firm has refused to establish an electronic feed to ComplySci or provide direct delivery of Account statements and trade confirmations to the CCO, SGEAIL CCO or a designee, but copies of all monthly brokerage statements for all Accounts open during the prior quarter are attached to the report or will be forwarded by the Supervised Person directly to the attention of the CCO, the SGEAIL CCO or a designee.

Any statement for an Account must list the following information:

 

  •  

The date of the transaction, the title and exchange ticker symbol or CUSIP number, the interest rate and maturity date (if applicable), the number of shares and the principal amount (if applicable) of each Reportable Security;

 

  •  

The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

 

  •  

The price of the Reportable Security at which the transaction was effected;

 

  •  

The name of the broker, dealer or bank with or through whom the transaction was effected; and

 

  •  

The date the report is submitted by the Supervised Person.

Monitoring and Review of Personal Securities Transactions

The CCO, SGEAIL CCO, or a designee will monitor and review all reports required under this Code for compliance with StepStone’s policies regarding Accounts and the applicable SEC rules and regulations. The CCO or SGEAIL CCO may also initiate inquiries of Supervised Persons regarding transactions in Reportable Securities. Supervised persons are required to cooperate with such inquiries and any monitoring or review procedures employed by StepStone. Any transactions for any accounts of the CCO or SGEAIL CCO will be reviewed and approved by another member of the Compliance Department or any other designated supervisory person.

 

VIII.

CONFLICTS OF INTEREST

General Principles

As registered investment advisers and fiduciaries to its clients, each of StepStone Group LP, StepStone Group Real Assets LP, StepStone Group Real Estate LP, StepStone Conversus LLC, Stepstone Group Europe Alternative Investments Limited and StepStone Group Private Debt LLC has an affirmative duty of utmost good faith to act solely in the best interests of the client and to make full and fair disclosure of all material facts, particularly where StepStone’s interests may conflict with those of the client. StepStone Supervised Persons are tasked with treating all information obtained during the investment process as confidential, and are not permitted to share such information with any party. Specific obligations that flow from each of StepStone Group LP’s, StepStone Group Real Assets LP’s, StepStone Group Real Estate LP’s, StepStone

 

9

Conversus LLC’s, Stepstone Group Europe Alternative Investments Limited’s and StepStone Group Private Debt LLC’s fiduciary duties and factors relating to the Firm’s fulfillment of those obligations are:

 

  •  

A duty to have a reasonable, independent basis for our investment advice. In order to avoid compromising our independence, StepStone does not receive any compensation or payments of any kind from any general partner or partnership that we consider for investment.

 

  •  

A duty to refrain from effecting personal securities transactions inconsistent with client interests. StepStone has established this Code and policies and procedures to avoid insider trading that are applicable to all Supervised Persons. StepStone Supervised Persons do not participate in the same investments recommended to clients, unless either it is required by the client pursuant to written agreement in which case StepStone will invest alongside such client in all investments recommended to such client or if overage is available.

 

  •  

A duty to be loyal to clients, placing their interest foremost in mind.

Identification of Conflicts

StepStone takes its responsibilities with respect to management of potential conflicts seriously, and has established a robust framework to ensure they are appropriately identified and managed.

All proposed client mandates are reviewed by StepStone’s legal and compliance teams before they are entered into by StepStone. The legal and compliance teams, having regard for existing mandates will make a determination as to whether or not any real or perceived conflicts exist which may impact the Firm’s ability to provide its services.

In the event that a potential conflict is identified, the exact nature of the potential conflict is ascertained and the legal and compliance team assesses the ability of StepStone to manage the potential conflict appropriately. In making this assessment, the legal and compliance team Department will liaise with the client relationship lead and the relevant Partners within the firm.

If it is determined that the potential conflict can be appropriately managed, certain protocols will be put in place to ensure that each client receives independent and objective advice. In certain circumstances, where it is determined that conflicts cannot be effectively managed without the consent of the impacted clients, StepStone will seek consent of potentially impacted clients before accepting any such role.

Managing Conflicts through Ethical Dividers

The procedures established to manage confidentiality of client information in connection with a potential conflict of interest will depend on the specific circumstances. In certain circumstances, StepStone may utilize ethical dividers to manage such potential conflicts of interest as follows:

 

  •  

An Ethical Divider Memorandum is prepared for each client team affected by the potential conflict of interest. Each member of the relevant client teams signs an Ethical Divider Memorandum to acknowledge their understanding of, and agreement to comply with, the ethical dividers which apply to their specific mandate.

 

  •  

Each of the parties is serviced by a different mandate lead;

 

  •  

Supporting professional staff deal only with one of the parties concerned;

 

  •  

Partners and staff are briefed independently and are under instructions not to discuss confidential matters with any persons outside their specific project team;

 

  •  

All hard and soft copy information relating to each engagement is maintained in a secure manner in order to ensure members of each of the potentially conflicted mandate teams do not have access to the other’s hard and soft copy information.

 

10

Allocation of Investment Opportunity

StepStone manages a variety of types of accounts with different strategies and scopes of services, as well as fee structures and other varying arrangements. In situations in which a transaction would be appropriate for multiple mandates but mutually exclusive, the mandate that acts first in time with respect to such transaction will receive priority in that regard. When the amount of an investment opportunity is limited, the Firm’s decision with regard to allocating the opportunity bears inherent conflicts. In order to mitigate these conflicts, StepStone has adopted an Allocation Policy, included as Appendix B to the Compliance Manual. It has also disclosed the potential for conflicts to clients in each of StepStone Group LP’s, StepStone Group Real Assets LP’s, StepStone Group Real Estate LP’s, StepStone Conversus LLC’s, Stepstone Group Europe Alternative Investments Limited’s and StepStone Group Private Debt LLC’s Brochure.

Investment Funds and Products

StepStone does not recommend any pooled investment products that it may establish to its advisory clients. In the event that there is interest from the client to invest in any such product, the client is responsible for making the decision to invest, either on its own or in conjunction with any non- StepStone-affiliated advisors or consultants as it sees fit. The Firm would have no participation in the decision or internal discussions of the client with respect to such investment product.

Supervision by the CCOs

The CCO and SGEAIL CCO, as applicable, each (i) provides oversight of StepStone’s compliance with applicable legal and regulatory standards; (ii) reviews all actual, potential or perceived conflicts of interest and provides mechanisms to avoid such conflicts of interest or, in the event that complete avoidance is not possible or impractical, provides adequate disclosure of the actual, potential or perceived conflicts of interest to the Firm’s clients; (iii) provides a confidential forum for Supervised Persons of StepStone to report and discuss any perceived issues with respect to the Firm’s investment process or management practices; and (iv) provides guidance to StepStone with respect to business ethics. You are encouraged to communicate with the CCO or SGEAIL CCO, as applicable, at any time with any questions with respect to the Firm’s compliance obligations or any other matter related to business ethics or regulatory compliance.

Additional Safeguards to Reduce Potential Conflicts of Interest

In order to avoid certain conflicts of interest that could be present in connection with its business, StepStone,

as a matter of policy, will not:

 

  •  

Accept revenues, soft-dollars or non-cash, in-kind benefits worth more than a nominal amount or perquisites from investment managers.

 

  •  

Provide services to investment managers (such as selling research or data from our database), as opposed to the limited partner/investor community.

 

  •  

Charge managers to be considered for investment or included in our databases.

 

  •  

Allow managers to sponsor our client meetings.

 

  •  

Recommend services or products sponsored by StepStone. Analysis and recommendation of such products and services, when requested by a client, is performed by the client, the client’s general consultant or an independent third party.

 

  •  

Act as a securities broker-dealer.

 

  •  

Have Supervised Persons that are registered representatives of a broker-dealer.

 

  •  

Make political contributions.

 

  •  

Receive revenues as placement agent or finder for managers.

 

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IX.

GIFTS AND ENTERTAINMENT

Giving, receiving or soliciting gifts in a business setting can give rise to the appearance of impropriety and, in certain settings, may result in serious financial and legal penalties. All gifts and entertainment given or received by Supervised Persons must be logged by Supervised Persons on the Firm’s ComplySci web site. Any questions concerning the policies described below should be directed to the CCO, SGEAIL CCO, or another member of the Compliance Department.

Gift Policy

 

  •  

In general, Supervised Persons may accept or give only gifts of nominal value from or to clients, prospects, vendors, or other entities with which StepStone does or may do business.

 

  •  

No gifts may be made to representatives of public pensions, sovereign wealth funds, state owned enterprises or other public bodies or entities.

 

  •  

Gifts from placement agents, finders or fund managers are not permitted. However, gifts of nominal value that may be consumed by a group may be accepted if made available to the office at large.

 

  •  

As noted above, any gift given or received must be entered on StepStone’s ComplySci web site.

 

  •  

Annually, Supervised Persons will attest to their compliance with this gift policy.

Entertainment Policy

 

  •  

To qualify as entertainment of a Supervised Person by a third party, the Supervised Person must accompany clients or be accompanied by vendors, placement agents, finders, or fund managers. Otherwise, the value of the entertainment will be treated as a gift subject to the gift policy.

 

  •  

Dining expenses or the cost of admission to entertainment events (such as sports events or the theater) should be reasonable in the circumstances and not lavish. All entertainment given or received must be entered on StepStone’s ComplySci web site.

 

  •  

Entertainment of representatives of U.S. public pensions or other U.S. public bodies or entities is not permitted without prior consent of the Compliance Department, which will record the consent in the entertainment log. Subject to compliance with the policies and procedures of the relevant party, entertainment of representatives of non-U.S. public pensions, sovereign wealth funds, state-owned enterprises or other non-U.S. public bodies or entities is permitted if under $100 per person without approval. For South Korean based public pensions, state-owned enterprises or entities, this limit is $25 per person. Entertainment expenses in excess of this threshold shall require prior consent of the Compliance Department, which will record the consent in the entertainment log. While the Compliance Department does not require confirmation of the client’s own compliance approval, Supervised Persons should note that third party policies and procedures apply in such instances.

 

  •  

A special event is a form of entertainment (often at an attractive location) where the sponsor is willing to pay for the cost or lodging of the attendees. Supervised Persons must obtain prior approval from the Compliance Department before attending a special event. In general, the Compliance Department will permit the sponsor to pay only for lodging and any attendance fees in connection with the event.

 

  •  

Annually, Supervised Persons will attest to their compliance with this entertainment policy.

Any exception to these rules must be approved by the Compliance Department and recorded in either the Firm’s entertainment log.

Prohibited Conduct

To ensure compliance with the Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act, and other similar laws in foreign jurisdictions in which the Firm operates, Supervised Persons are prohibited from directly or indirectly paying or giving, offering or promising to pay, give or authorize or approving such offer or payment, of any funds, gifts, services or anything else of any value, no matter how small, or seemingly insignificant, to any Government Official (as such term is defined under the FCPA) for any business or Firm-related reasons. For more information, please refer to Chapter XIII of the Firm’s Compliance Manual and those sections related to the Foreign Corrupt Practices Act and UK Bribery Act.

 

12

X.

POLITICAL CONTRIBUTIONS

The SEC and numerous states have adopted rules and laws addressing “pay to play” practices such as making or soliciting campaign contributions or payments to government officials to influence the awarding of investment contracts for managing public pension assets and other governmental investments.

Specifically, Rule 206(4)-5 under the Advisers Act (the “Pay-to-Play Rule”) addresses practices where an investment adviser or its supervised persons directly or indirectly make contributions or other payments to certain U.S. public officials or candidates for office with the intent of generating investment advisory business. Violations of the Pay to Play Rule can have serious implications on the Firm’s ability to manage public pension assets and other governmental investments. The Firm can be precluded from managing money for a U.S. state or local government entity or may need to return fees received or waive fees to be received from such government entity for up to two years. The Firm recognizes that it is never appropriate to make or solicit political contributions for the purpose of improperly influencing the actions of public officials.

As a consequence, Supervised Persons and their immediate family members living in their household are prohibited from making, or soliciting others to make, political contributions of any amount to any candidate or official for federal, state or local public office in the United States, as well as any political organization or PAC. This prohibition includes in-kind contributions such as volunteering for a political campaign. Supervised Persons will be required to attest to their compliance with this rule each year. Additionally, Supervised Persons may not use personal or corporate funds to make political contributions on behalf of or in the name of the Firm.

Charitable Contributions Distinguished

Contributions to a charity are not considered political contributions unless made to, through, in the name of or to a fund controlled by a federal, state or local candidate or official. This policy is not intended to impede legitimate, charitable fund-raising activities. Any questions regarding whether an organization is a charity should be directed to the CCO or the SGEAIL CCO, as applicable.

 

XI.

OUTSIDE ACTIVITIES

Engaging in business or professional investment activities outside of the scope of StepStone’s business may present serious conflicts of interest with the Firm or its clients. Such instances of outside business activities include, but are not limited to: (i) serving as an officer, director, trustee or partner of any business organization; or (ii) serving as a Supervised Person or consultant, a teacher or lecturer, a publisher of articles or a radio or television guest.

Supervised Persons are therefore required to disclose upon hire and annually thereafter all outside business activities in which the Supervised Person currently engages or proposes to engage. Supervised Persons are required to notify and obtain the advance written approval of the CCO or SGEAIL CCO, as applicable, or a designee prior to participating in any outside business activity, including serving as an officer or director of any public or private company, even if the service is at the request of StepStone. Supervised Persons should also disclose to the CCO or SGEAIL CCO, as applicable, or a designee any outside business affiliation or activity or personal interest that might present a conflict of interest or harm the reputation of the Firm. All such disclosures must be made on StepStone’s ComplySci web site.

 

13

XII.

SUPERVISED PERSONS INFORMATION DISCLOSURE

To enable the Firm to accurately make its regulatory filings and to ensure adherence to the disqualification and disclosure requirements of Rule 506 of Regulation D, Supervised Persons are required to notify the CCO or SGEAIL CCO, as applicable, if they are currently, or at any time in the future become, the subject of any of the following:

 

  •  

Arrest, summons, arraignment, guilty plea, “no contest” plea or conviction (other than minor traffic violations, but including convictions related to driving while intoxicated).

 

  •  

Bankruptcy proceeding, unsatisfied judgment or lien.

 

  •  

Any temporary or permanent restraining order.

 

  •  

A controlling person of any organization that is subject to any of the above items.

 

  •  

Refusal, denial or bar of membership from a regulatory agency, governmental body or business or professional organization.

 

  •  

Any client complaint or civil litigation or arbitration that materially impacts upon a Supervised Persons ability to perform their role.

 

  •  

Subject of any regulatory or governmental investigation or disciplinary action.

Supervised Persons will be asked to attest on an annual basis that they have not been the subject of any of these events, including those that may be deemed a disqualifying event under Rule 506.

 

14

APPENDIX B

STEPSTONE GROUP LP

STEPSTONE GROUP REAL ASSETS LP

STEPSTONE GROUP REAL ESTATE LP

STEPSTONE GROUP PRIVATE WEALTH LLC

STEPSTONE GROUP PRIVATE DEBT LLC

SWISS CAPITAL ALTERNATIVE INVESTMENTS AG

STEPSTONE GROUP EUROPE ALTERNATIVE INVESTMENTS LIMITED

ALLOCATION OF INVESTMENT OPPORTUNITIES POLICIES AND PROCEDURES Effective June 29, 2023

StepStone Group LP, StepStone Group Real Assets LP, StepStone Group Real Estate LP, StepStone Group Private Wealth LLC, StepStone Group Private Debt LLC, Swiss Capital Alternative Investments AG, and Stepstone Group Europe Alternative Investments Limited (each, a “Manager” and collectively, “StepStone”) have adopted the following policies and procedures with respect to the allocation of investment opportunities among any or all of its advisory clients, separately managed accounts, comingled funds or other clients (each, a “client”, and separately managed accounts and comingled funds each, a “Fund”) as applicable depending on the asset class and investment strategy.

 

I.

Policies and Procedures

A. It is StepStone’s policy that all investment opportunities (regardless of strategy) shall, to the extent practicable, be allocated among StepStone’s clients on a basis that over a period of time is fair and equitable to each client relative to other clients, taking into account all relevant facts and circumstances, including, without limitation and in no particular order:

 

  •  

Differences with respect to investment objectives or current investment strategies, such as objectives or strategies:

 

  •  

regarding return requirements;

 

  •  

emphasizing or limiting exposure to the investment strategy or sub-sector; regarding diversification, including strategy, industry, property type or geographic exposure;

 

  •  

remaining life of the investment vehicle;

 

  •  

regarding specific mandates, such as geographic sub-sectors, emerging managers, middle-market buy-outs, mega buy-outs, venture capital, real estate and others;

 

  •  

differences in the level of fees assessed by a GP; or

 

  •  

differences in the level of control offered to the client.

 

  •  

Differences with respect to the capital available for investment by each client overall and specifically with respect to the specific investment’s strategy, geography or other sub-sector as identified above or otherwise identified by StepStone at the time the investment is reviewed.

 

  •  

Differences with respect to portfolio plans, including annual deployment plans.

 

  •  

Differences in the risk profile of the opportunity at the time that it is available and evaluated by StepStone for any particular client.

 

  •  

Whether a client has an existing investment in, or relationship to, the investment being allocated (or the sponsor of such investment).

 

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  •  

Minimum and maximum investment amounts.

 

  •  

The source of the opportunity – different treatment may be warranted if the opportunity is sourced by a client for its own account or directed by a GP to a particular client account.

 

  •  

The specific requirements of the investment being allocated (e.g., eligibility requirements based on the entity type, domicile or tax characteristics of any given client; the sponsor of such investment (or seller/issuer) exercising discretion to accept or reject certain clients).

 

  •  

Potential conflicts of interest (including whether a client has an existing investment in the opportunity in question).

 

  •  

Operational efficiencies.

 

  •  

Tax, legal or regulatory considerations.

 

  •  

Current and anticipated market conditions.

Portfolio construction, including allocation suitability, is reviewed and approved by each asset class’s Portfolio Management Risk Committee. Portfolio construction is inclusive of anticipated annual capital deployment per account and min/max thresholds per investment.

B. Allocation Among Multiple Clients or Funds. In the event that an investment opportunity has to be allocated among various clients after taking into account all relevant facts and circumstances as outlined I.A. above then the allocation shall be made pro-rata among all such clients based on the proportion that the capital available for investment by each client in the particular investment bears to the total amount of capital available for investment by all clients in the particular investment. Notwithstanding the foregoing, StepStone uses best efforts to defer the allocation of third-party fund investments to the sponsor of the opportunity and advocates to such sponsor that it fully satisfies each client’s requested allocation.

. Allocation of Overage offered by StepStone. Depending on the size and other relevant factors associated with an investment opportunity (regardless of asset class or strategy), investment allocation decisions may be further made with respect to potential co-investment in the investment opportunity (including through a co-investment vehicle formed to facilitate such investment) by a current client in an ‘overage’ relationship, a prospective client, other third party, or otherwise (each, in such capacity, a “third party co-investor”) or employees of StepStone or any entities which such employees beneficially own (each, a “StepStone Supervised Person”). In making this determination, StepStone will first ensure that (i) the client(s) receive the full amount of their desired allocation prior to offering any co-investment to a third-party co-investor, and (ii) in turn, such third-party co-investors receive the full amount of their desired allocation prior to any StepStone Supervised Persons. The criteria described above shall be utilized to make this determination. Following this allocation determination, the relevant investment team, in consultation with Legal, may evaluate possible third-party co-investors and StepStone Supervised Persons based on all relevant factors, including those specific to the investment opportunity. The factors to be considered as part of a holistic analysis may include, but are not limited to:

 

  1.

strategic value of a prospective third party co-investor or StepStone Supervised Person to the underlying investment opportunity;

 

  2.

how quickly a prospective third party co-investor or StepStone Supervised Person is able to conduct its own due diligence and provide a commitment with respect to an investment opportunity;

 

  3.

whether the prospective third party co-investor or StepStone Supervised Person has the financial and other resources to make the investment;

 

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  0.

whether the prospective third party co-investor or StepStone Supervised Person has indicated a desire to make investments of the type offered by the investment opportunity;

 

  1.

whether the prospective third party co-investor or StepStone Supervised Person will represent a good syndicate partner in connection with the clients’ investment;

 

  2.

any requirements or restrictions relating to co-investment opportunities in the clients’ governing documents or “side letters” with investors in any client; and

 

  3.

any other factor determined by the relevant investment team, in consultation with the Chief Compliance Officer, to be relevant to the relationship of a particular investment opportunity to a given prospective third party co-investor or StepStone Supervised Person.

 

  4.

Any overage investment by a third party co-investor or StepStone Supervised Person must be approved by the Chief Compliance Officer, in conjunction with members of the respective asset class leadership team.

For the avoidance of doubt, this Section 1.C shall be supplemented by section 3 of the side letter dated July 7, 2021 among, inter alia, StepStone Group LP and Shareholder Representative Services LLC; that is, the individuals named therein may participate in overage opportunities subject to such side letter and review and approval by the Chief Compliance Officer.

E. Disposition Opportunities. To the extent that multiple clients hold an interest in the same investment, it is StepStone’s policy that disposition opportunities with respect to that investment will, to the extent practicable, be allocated among such clients on a basis that over a period of time is fair and equitable to each client relative to other clients, taking into account all relevant facts and circumstances, including, without limitation and in no particular order:

 

  1.

the relative ownership percentages of the clients in the applicable investment;

 

  2.

the strategies, guidelines and restrictions applicable to each client under its governing documents;

 

  3.

the relevant provisions in a client’s governing documents or in other agreements related to the client’s investment in such issuer (such as “tag-along” and “piggyback” rights);

 

  4.

liquidity needs for each client and the investment cycle of a particular client;

 

  5.

respective holding periods for the investment;

 

  6.

the nature and size of the disposition opportunity;

 

  7.

current and anticipated market conditions; and

 

  8.

tax, legal or regulatory considerations.

F. Exceptions

 

  (i)

StepStone may depart from the foregoing investment allocation policies in a particular circumstance if the relevant investment team, in consultation with the Chief Compliance Officer, determines that for good reason it would be appropriate to do so, and such a departure would nonetheless be consistent with StepStone’s fiduciary obligations to its clients and Funds. In the event of any exception, a memorandum documenting the rationale for such exception will be saved in the allocation backup folder in SPI, or, in the case of StepStone Group Private Debt LLC, Swiss Capital Alternative Investments AG, and Stepstone Group Europe Alternative Investments Limited, elsewhere as permitted by the relevant Chief Compliance Officer, in either case, in accordance with Rule 204-2 under the Investment Advisers Act of 1940, as amended (“Advisers Act”).

 

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  (ii)

Further, each Manager may adopt allocation procedures specific to the relevant asset class and clients of such Manager. Notwithstanding anything herein to the contrary, in the event the provisions of any applicable Manager allocation procedure shall conflict with the foregoing allocation policies, the provisions of the applicable Manager allocation procedure shall control.

 

  (iii)

Notwithstanding anything herein to the contrary, in the event the provisions of any applicable client governing documents shall conflict with the foregoing allocation policies, the provisions of the applicable client governing documents shall control.

 

II.

Administration

The relevant Head of Fund Accounting, or their designee, shall be responsible for the management of the investment allocation process among clients. Managers other than StepStone Group Private Debt LLC, Swiss Capital Alternative Investments AG, and Stepstone Group Europe Alternative Investments Limited shall, in the case of investments other than Fund investments, allocate investments using StepStone’s SPI allocation tool. Whenever an investment opportunity has to be allocated among various clients after taking into account all relevant facts and circumstances as set forth in Section I above the relevant Head of Fund Accounting, in conjunction with the Chief Compliance Officer, shall approve the allocation. Overage co- investment allocations shall be memorialized by the investment team in the file relating to the relevant investment and maintained in accordance with Rule 204-2 under the Advisers Act.

 

III.

Review

The Chief Compliance Officer or their delegate shall review certain of StepStone’s allocations of investment opportunities among clients from time to time as necessary to determine compliance with the foregoing policy. Moreover, the Chief Compliance Officer shall review this policy annually in accordance with Rule 206(4)-7 under the Advisers Act to determine its adequacy and the effectiveness of its implementation.

 

IV.

Interpretation

Any reference to the relevant Head of Fund Accounting or Chief Compliance Officer shall refer to

such person or his/her designee, as applicable.

 

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StepStone Group Valuation Guidelines

StepStone has implemented a valuation policy that is compliant with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures and therefore compliant with generally accepted accounting principles (“GAAP”).

Fair Value, as defined in ASC 820, is “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement (or reporting) date.” The objective is to estimate the exchange price at which a hypothetical willing buyer and willing seller would agree to transact in the principal market, or if no principal market, the most advantageous market as of the measurement (or reporting) date.

Valuations of private investments are subjective and often require judgments to be made in the estimation of value. StepStone will use all information available and in some cases, make certain judgments that may differ from others that are valuing the same or similar investments. Estimates of the fair value of a private equity investment at any point in time may differ materially from the ultimate value, if any, realized on the investment.

ASC 820 establishes a “fair value hierarchy” to prioritize the assumptions or inputs market participants use in arriving at the fair value estimate and to enhance the consistency and comparability of the related disclosure. In determining a fair value estimate, market participants are to use the highest level of inputs available as defined by the hierarchy below. In certain cases, fair value estimates may be based on inputs from more than one level.

 

  •  

Level 1: Quoted prices in active markets for identical assets or liabilities

 

  •  

Level 1 is the highest level of input where the fair value is calculated using a market price times the quantity held

 

  •  

Level 2: Observable prices in active markets for similar assets or liabilities

 

  •  

Assumptions are made in arriving at the fair value estimate based on market data obtained from independent sources

 

  •  

Level 3: Unobservable inputs

 

  •  

Assumptions are made in arriving at the fair value estimate based on the best information available

The majority of private investments fall under Level 3 given the unobservable nature of the asset class.

ASC 820 also permits a reporting entity to measure the fair value of certain investments using the net asset value per share of the investments, as a Practical Expedient. StepStone will generally value investments in Private Funds or Limited Partnership Investments using the Practical Expedient. Investments reported using the Practical Expedient are excluded from the fair value hierarchy of ASC 820 as the fair value is measured based on the net asset value.

A. Publicly Traded Securities

For securities or investments that are quoted, traded or exchanged in an accessible, active market, StepStone will value the asset by multiplying the number of securities held x the closing price as of the measurement (or reporting) date from the relevant market exchange. StepStone does not apply any liquidity or restriction discount regardless of ownership structure or the ability to control the sale of the asset.

 

 

 

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B. Private Fund or Limited Partnership (“LP”) Investments

For investments in private funds (“Fund”) or Limited Partnerships (“LP”), StepStone will generally use the capital account value provided by the General Partner (“GP”) as the fair value (the “Practical Expedient Value”) reported in the financial statements of StepStone managed entities. StepStone funds may invest in Private Company Investments (Section C), Real Estate (Section D), and Credit/Debt/Preferred Equity (Section E), that are held through an entity that also uses the Practical Expedient Value as the fair value. StepStone believes that the most logical starting point for the fair value of a Fund investment is the GP reported value because the GP has access to full information on the underlying portfolio asset’s past performance and expectations of the future, ongoing access and interaction with the portfolio asset management, and the GP often has the ability to influence activities of the asset and the ultimate outcome for the investment.

While StepStone does not generally receive enough detailed information to adequately value the underlying portfolio investments, a review is conducted to evaluate the GP valuation methodology and process to determine if the Practical Expedient Value provided is reasonable and consistent with the principles of ASC 820. If StepStone believes that the capital account value does not appropriately reflect fair value, the Practical Expedient Value reported in the financial statements will be adjusted.

For investments where StepStone relies on the Practical Expedient Value, StepStone generally reviews the attributes of the annual audits of these investments in alignment with AICPA considerations for the most significant investments driving the value of the Fund investment portfolios.

In certain cases, StepStone vehicles may acquire a Fund investment from a pre-existing investor (a “Secondary” investment). Transactions of Secondary investments are often completed at a value other than the reported capital account value. Upon completion of the purchase, StepStone will generally value the asset in the financial statements at the fair value estimate of the capital account value as determined through the above described process. Any discount or premium paid for the Secondary, would be reflected as unrealized gain or loss within the financial statements as of the first reporting date following the purchase.

From time to time, StepStone may enter an agreement to sell an investment or portfolio of investments. In such case, StepStone would generally use the agreed upon sales price as the basis of the fair value reported in the financial statements ahead of the transaction close.

StepStone may use an estimated or draft Practical Expedient Value received from a GP or roll forward a valuation from a prior quarter adjusted for cash activity if a capital account balance statement is not received by the time periodic reporting is issued. The estimate will be reviewed for reasonableness based on the financial performance of the fund or company and market.

 

 

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C.

Private Company Investments

In the estimation of fair value for a private company investment (typically single company assets held through a co-investment structure or direct holding in a private equity, growth equity or venture focused investments), StepStone will often mirror the valuation of the lead or managing sponsor of the private company investment. Similar to the rationale discussed in the Fund section above, the lead sponsor managing the investment will typically have significantly more information about the financial performance of the company and can usually be influential in the company’s direction and the ultimate outcome of the investment performance. For PE Co-investments, StepStone will review the assumptions and judgments made by the lead sponsor in estimating fair value by preparing a valuation model for the year end valuations. StepStone will also prepare a valuation model on a quarterly basis for any PE Co-investment on the Watch List*. For the remaining quarters, StepStone will generally mark its investment to be in line with the lead sponsor by applying the investment return multiple provided by the sponsor to our invested capital. For certain asset classes, including growth equity and venture investments, valuations models are prepared quarterly in addition to the annual valuation model. StepStone will make any adjustments deemed necessary to appropriately reflect fair value in the financial statements of the StepStone managed entities.

For investments where the year-end audit is not received in time to be used for the StepStone Fund’s audit, Stepstone will prepare a valuation model as described above. For these situations, once the audit is received, StepStone will perform back testing to ensure the internally prepared valuations is reasonable compared to the audited financial statements. If StepStone concludes the two valuations are reasonable, StepStone will then use the Practical Expedient Value provided by the GP for the remaining quarters of the year.

The estimation of value for a private company can be derived using a number of methods including: discounting the expected cash flows of the investment; valuing the net assets of the company; reviewing comparable precedent transactions involving similar companies; and using a performance multiple or market based approach. In the performance multiple approach, an appropriate multiple is generally applied toward an operating metric, such as earnings before interest, depreciation, and amortization (“EBITDA”) or revenue, to determine the total value (generally referred to as “enterprise value”) of the company. Performance multiples will be based on the most relevant multiple to the company being valued and will generally consist of either current average public company multiples for similar companies in the industry, or current average multiples for recent private transactions of similar companies in the industry. In certain cases, the original acquisition multiple may be appropriate if relevant public or private transaction multiples cannot be ascertained. Multiples should be adjusted for differences in growth prospects and risk attributes. The obligations of the company (typically debt or other forms of financing) will be deducted from the enterprise value and cash or other significant assets will be added. The net amount remaining after satisfying the obligations of the company will be the value available to equity holders. The equity holders may have characteristics differentiating the preference of different classes (preferred vs. common) that are considered in determining the fair value of the specific security owned by StepStone managed funds. Generally, the common stock equivalent methodology is utilized for determining the fair value of the specific security owned. However, the facts and circumstances of each investment are considered to ensure the investment is carried at fair value.

 

 

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For venture or growth equity investments in which a market based approach is not yet relevant given the operating metrics of the company, StepStone will frequently use the enterprise value used in the most recent equity financing round in determining the estimated fair value. The following items will be considered when valuing an investment based on the most recent equity financing:

 

  •  

Investment valuations are increased or decreased based on subsequent material equity financings that may include one or more unrelated sophisticated investors, regardless of StepStone’s participation. Valuations based on a significant investment by a strategic investor paying a premium due to benefits accruing uniquely to itself are reduced by an estimate of such premium. StepStone will also consider inside-only led rounds if the inside-only led round is considered indicative of the current valuation.

 

  •  

If a private financing round will be completed with a high degree of certainty within a short time after the valuation date, and the pricing of the transaction has been substantially agreed, the valuation of the direct company should be adjusted to reflect the General Partner’s best estimate of the valuation established by the prospective financing. In the case of an increase in value, the financing will normally close before the date that the financial statements are issued. If a direct company executes a sale agreement within a short time after the valuation date and before the financial statements are issued, the valuation should be adjusted to reflect an appropriate discount to the sale price. In the case of a sale, the valuation should be adjusted to reflect escrow provisions and other factors which may impact the final sales proceeds.

 

  •  

The fair value may be reduced if a direct company is performing significantly below expectations at the investment date or last financing round, or there has been a significant reduction in general valuations, such that the General Partner believes that there has been a material and continuing reduction in the value of the investment.

 

  •  

Valuations may be increased absent a financing if a direct company has achieved sustainable positive operating performance and market based performance multiples indicate that a material increase in value has occurred. Increases in valuations based on market multiples would generally not occur within one year of an investment or subsequent equity financing which has established fair value.

 

D.

Real Estate

The estimation of value for private real estate assets can be derived using a number of methods including: discounting the expected cash flows of the investment; valuing the net assets of the company; reviewing comparable precedent transactions involving similar assets; and using a capitalization rate or market based approach.

In the capitalization rate approach, an appropriate yield is generally applied to the assets net operating income (“NOI”), to determine the total value (generally referred to as “gross asset value”) of the assets. The obligations of the vehicle (typically debt) will be deducted from the gross asset value and cash or other significant assets will be added. The net amount remaining after satisfying the obligations of the company will be the value available to equity holders. The equity holders may have characteristics differentiating the preference of different classes (preferred vs. common, manager carried interest) that are considered in determining the fair value of the specific security owned.

In certain cases, StepStone may independently calculate the value of a private vehicle investment using an approached deemed appropriate for the investment or elect to engage third party appraisals to value the assets. In all cases, valuations included in financial reporting from StepStone will be at a value StepStone believes is representative of “fair value” based on available information.

 

 

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E.

Credit/Debt/Preferred Equity

In determining the estimated fair value of preferred equity or credit/debt related securities for which there is no actively traded market, StepStone’s estimate of fair value will consider such factors as the current interest rate environment relative to that of the investment held, the tenor of maturity date of the investment, the operating performance of the issuer, the concern for maintaining any covenant levels embedded in the instrument, the ability of the issuer to call the security (and the associated redemption price) and the general overall credit quality of the security over the life of the investment.

These instruments are often held at accreted cost or “par” if there has been no material change to the above factors relative to what was anticipated at the time the original securities were priced and structured. However, fair value will be evaluated against the current returns an investor could obtain in the current market for an instrument issued with similar credit and return characteristics.

 

F.

Investment Partnerships in Infrastructure and Real Assets

For the estimation of fair value for Investment Partnerships in private companies that do not fall under item C above (e.g. for Investment Partnerships in infrastructure assets), StepStone will develop a tailored process for undertaking valuations in accordance with GAAP and the client’s requirements as applicable. The process will typically involve using a third-party independent valuation firm (the “Valuer”) selected through a request-for-proposal (“RFP”) process that StepStone can manage with the client (and based on the client’s specifications). A new Valuer is generally selected on a predetermined schedule (e.g. every three or four years).

Throughout each independent valuation process, StepStone will work with the management team of the company to update the business plan, forecasts and financial model, and then liaise with the Valuer as needed throughout its valuation process. The frequency of the independent valuations will be determined in accordance with the client’s requirements but will generally be performed at least annually. For Investment Partnerships in infrastructure assets, the valuation methodology will typically be based on a discounted cash flow to equity basis, with other valuation approaches (such as the EBITDA multiple approach) being used as additional methods of support.

For within-cycle valuations, StepStone will undertake an internal valuation process by calculating a roll-forward valuation, typically based upon the same discount rate used in the most recent independent valuation, or if prior to the first independent valuation date, then the acquisition case expected return, in both cases, taking into consideration any material changes in the business or market from the most recent valuation. Where it is determined that it may not be appropriate to roll-forward an asset’s value, the investment team may recommend to the Valuation Committee to apply a 0% roll-forward rate or prescribe an alternate value either through engagement of an independent Valuer or by other means, sufficient to satisfy the requirements of GAAP (or equivalent Fair Value accounting standards) and the Valuation Committee. The relevant investment team members for a particular asset will undertake or manage this internal valuation process, which shall be subject to oversight by finance/investment operations.

 

 

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* StepStone Group’s PE Co-investment business has a real-time Watch List for investments that are currently or anticipated to be materially underperforming and are viewed as having the potential to impair capital. Investments are added to the Watch List when there is a material deterioration in current financial performance or there are changes in the industry prospects that could have a material adverse impact on future financial performance. Changes in valuation based on movements in public markets are not reflected in the watch list, unless there is the belief that investment’s valuation will be permanently impaired resulting in a potential loss of capital. Investments can be added to the Watch List at any time with approval of the PE Co-investment Business Co-Heads and can be removed only once per quarter based on discussion with the PE Valuation Committee. Watch list is updated and maintained on a quarterly basis by evaluating the factors above and recommendation by the valuation committee members

 

 

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APPENDIX D

 

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StepStone Group Inc.

and its consolidated subsidiaries

Business Continuity / Disaster Recovery Plan

February 2022

Contingency planning involves advance planning and preparations that are necessary to minimize loss and ensure continuity of an organization’s core business procedures and critical operations in the event of a disaster or business interruption. The purpose of this Disaster Recovery Plan (the “Plan”) is to outline measures necessary to ensure an acceptable level of performance of the core business procedures and critical operations of StepStone Group LP, StepStone Group Real Assets LP, StepStone Group Real Estate LP, StepStone Group Europe LLP, StepStone Conversus LLC and Stepstone Group Europe Alternative Investments Limited (collectively, “StepStone” or the “Company”) in the event of an area disaster or other incident causing a business interruption. StepStone has identified its core business procedures and critical operations as those related to monitoring the investments of StepStone’s clients, maintaining books and records of StepStone and its clients, and otherwise servicing StepStone’s clients. The Plan has been designed to enable StepStone to continue to perform these procedures and operations during a business interruption. Local offices may use different methodologies when implementing business continuity arrangements – in this regard a separate policy is available upon request.

StepStone has designed work flow and processes in such a manner as to allow for high flexibility in working remotely. StepStone has created mechanisms to enable personnel to maintain execution of job responsibilities.

StepStone uses a number of third party service providers to conduct the Company’s core business activities. The Plan is designed to incorporate both the activities of StepStone and certain financial institutions and third-party service providers that StepStone has identified as a core service provider in conducting Core Activities (“Core Third Party Service Provider”).

 

  •  

Banking/Financial Institutions:

StepStone uses a number of financial institutions for banking activity and custodial activity for products including: JPM Chase Bank, N.A.; Citibank, N.A.; Silicon Valley Bank; Comerica Bank; Pacific Western Bank; ING Bank; BMO Financial Group; First Republic Bank; National Australia Bank; Goldman Sachs; Mizuho Bank; Morgan Stanley Smith Barney LLC; and Merrill Lynch.

The services of each of these institutions are accessible either through online client access portals or via telephone. Activities with these institutions can be managed remotely and do not require an authorized user to be in a physical StepStone location or use StepStone specific equipment.

 

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Service Providers:

Fund Administration: StepStone uses a number of third party service providers in the management of products. The most critical of these service providers are third party fund administrators (“Fund Administrators”) including: Bank of Montreal; Citi Private Equity Services, Inc.; Credit Suisse; First Caribbean International Bank; FLSV Fund Administration Services, LLC; SEI Global Services, Inc.; IPES (Guernsey) Limited; Aztec Financial Services (Guernsey) Limited; RBS Global Banking Lux; and Royal Bank of Scotland. The Fund Administrators provide accounting and reporting services for products managed by StepStone.

Each of the Fund Administrators has established data security, data backup, and disaster recovery plans. The oversight of these relationships and activity can be managed remotely and does not require personnel to be in a physical StepStone location.

The Plan employs two levels of disaster contingency planning at StepStone.

 

  a)

First, to the extent possible, StepStone seeks to maintain and/or recover its core business procedures and operations internally.

 

  b)

Second, StepStone has instituted plans to guard against large scale disasters causing significant business interruption.

Internal Recovery

StepStone’s most critical systems are cloud-based and hosted on Microsoft Azure and Amazon Web Services (“AWS”). Both Azure and AWS have built-in redundancy and replicate in multiple availability zones to protect data and infrastructure. In the event of an outage at Azure or AWS, StepStone can move to a back-up availability zone and maintain its normal operations with minimal to no downtime. Within the public cloud infrastructure nightly backups of all systems are performed for point-in-time recovery.

To reduce latency with cloud-based servers, StepStone maintains on-site file servers located in its offices around the world. Employees interact with these on-site file servers directly with all changes synced back to Azure storage. In the event of an outage or failure of an on-site file server, employees are automatically redirected to the next closest server. Azure maintains three copies of production data stored in three physical locations. Backups are performed on a continual basis with snapshots executed every five minutes.

Critical systems are designed to be recovered internally in all but the most serious of circumstances. StepStone has developed the following internal recovery procedures that allow StepStone to minimize business disruption during routine outages such as power loss or hardware failure:

 

  •  

StepStone and the Critical Third-Party Service Providers conduct back-up procedures for client data of StepStone daily.

 

  •  

StepStone and the Critical Third-Party Service Providers have made provisions for other telecommunications carriers to be available for diverse routing capabilities and maintain other fail-over solutions for data communications and telephones.

 

  •  

StepStone and the Critical Third-Party Service Providers have access to standby hardware and other equipment necessary for operating critical systems.

 

  •  

StepStone and the Critical Third-Party Service Providers maintain Internet redundancy via multiple carriers leveraging different physical mediums where possible.

 

  •  

All employees of StepStone are equipped with mobile phones and laptops with remote access to firm systems.

 

  •  

StepStone provides a virtual desktop environment as a secondary form of remote access to compliment secure VPN connections.

 

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External Recovery

While there is a considerable amount of focus placed on internal recovery and redundant infrastructure with regard to StepStone, StepStone recognizes that large scale disasters, government orders or other types of business interruptions could occur. To guard against the risk of a significant business interruption, StepStone has taken the following steps:

 

  •  

Storage of Back-up Data and Systems: StepStone’s most critical systems and data are backed-up daily and stored in its cloud-based environments hosted on Azure and AWS. Daily back-ups are retained for a minimum of 31 days, and monthly back-ups are retained permanently. In the event of a failure or catastrophic loss occurring to the cloud-based environments hosted on Azure or AWS, the back-ups would allow for a quick recovery.

 

  •  

Cross site data replication: StepStone utilizes software that replicates all file shares, in real time, across all offices. In the event of a disaster or other business interruption that prevents access to any business location all data is immediately available in another location.

 

  •  

Remote Access: All StepStone locations allow employees to work remotely and access data and email. With VPN connectivity employees can reach StepStone’s internal network from anywhere in the world with an internet connection. A secure virtual desktop environment provides a secondary means on remotely accessing firm systems.

 

  •  

Communications: Key personnel have been issued cell phones to maintain communication in the event of office closure. Office telephone lines can be forwarded to another office or mobile device as needed to maintain client and investor communications. StepStone also leverages internet-based communication tools including Microsoft Teams and WebEx.

 

  •  

Identification of Critical Third-Party Service Providers: StepStone has identified the firms listed earlier in this Plan as Critical Third-Party Service Providers. StepStone has reviewed with each of the Critical Third-Party Service Providers StepStone’s expectations therewith in the event of a significant business interruption.

 

  •  

Alternate Business Location: All of StepStone employees are able to work remotely via internet connections that provide access to StepStone’s network and information management systems from anywhere in the world. In the event of a disaster or other business interruption that prevents access to our business location we would expect to continue operations from each individual’s home in the event of an event that renders any of StepStone’s current offices uninhabitable (the “Alternate Business Location”).

 

  •  

Operating Procedures During Significant Business Interruption: StepStone has designated Jason Ment and Jose Fernandez, Co-COOs, as the persons responsible for ensuring systems are accessible from the Alternate Business Location conditioned on internet access and cellular service to provide critical business operations in the event of an event that renders any of StepStone’s current offices uninhabitable.

 

  •  

Communication with Employees: StepStone has contracted with Preparis, Inc. to provide a system for locating, communicating with, and tracking responses from, staff during a disaster or significant business interruption. Jason Ment and Jose Fernandez, Co-COOs, have been designated as the persons responsible for seeing that the communication is sent, although he may delegate this responsibility to others, depending on the location and nature of the event. Either a predefined template or a newly composed message can be used. The message can be communicated through one or multiple types of alert (SMS text, e-mail and voice) and can be one way or a response can be requested. Recipients can be selected by location, business role or individual name. Responses can be tracked and a follow-up message sent to those who have not responded after a period of time.

 

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Communications with Third Parties: StepStone has established procedures for communicating with clients, investors, third-party service providers and regulators in the event of a significant business interruption.

 

  •  

StepStone intends to communicate with its clients and investors from the Alternate Business Location via telephone, email, its investor portal and website, and/or through press releases. Jason Ment and Jose Fernandez, Co-COOs have been designated to oversee and coordinate such communications. The communications would include updates on StepStone’s recovery operations, the status of clients’ assets and methods by which clients and investors may contact StepStone during the disaster.

 

  •  

StepStone has designated Jason Ment and Jose Fernandez, Co-COOs, as the persons responsible for overseeing communication with the Critical Third-Party Service Providers and StepStone’s vendors from the Alternate Business Location during a significant business interruption to (i) assess the effect of the business interruption on the services provided by such parties; and (ii) arrange for the continuation or resumption of critical services. A list containing contact and other key information for the Critical Third-Party Service Providers and StepStone’s vendors is available on StepStone’s network and in its offices.

 

  •  

StepStone has designated John McGuinness, CCO, as the person responsible for communicating with the Securities and Exchange Commission and other regulators during a significant business interruption.

Loss of Key Personnel

The Firm is aware that certain staff competencies are critical to continuing the Firm’s operations. To the extent possible, the Firm has duplicated these competencies by adequately training certain members of management as critical persons so they are properly prepared to take on a supervisory role in the event that critical persons are lost. In the event of the death or disability of a key member of management of StepStone as the result of a disaster, his or her responsibilities shall be assumed by one or more of the remaining members of management of StepStone.

Other

 

  •  

Annual Review of Plan—the Plan will be reviewed and updated, if necessary, on an annual basis.

 

  •  

Annual Review by StepStone of Disaster Recovery Plans of Critical Third-Party Service Providers— StepStone will review with each of the Critical Third-Party Service Providers their disaster recovery plans.

 

25

v3.23.2
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Cover [Abstract]  
Entity Central Index Key 0001957892
Amendment Flag false
Entity Inv Company Type N-2
Securities Act File Number 333-268986
Investment Company Act File Number 811-23848
Document Type N-2/A
Document Registration Statement true
Pre-Effective Amendment true
Pre-Effective Amendment Number 4
Investment Company Act Registration true
Investment Company Registration Amendment true
Investment Company Registration Amendment Number 4
Entity Registrant Name StepStone Private Infrastructure Fund
Entity Address, Address Line One 128 S Tryon St., Suite 1600
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28202
City Area Code 704
Local Phone Number 215-4300
Approximate Date of Commencement of Proposed Sale to Public As soon as practicable after the effective date of this Registration Statement
Dividend or Interest Reinvestment Plan Only false
Delayed or Continuous Offering true
Effective Upon Filing, 462(e) false
Additional Securities Effective, 413(b) false
Effective when Declared, Section 8(c) false
New Effective Date for Previous Filing false
Additional Securities. 462(b) false
No Substantive Changes, 462(c) false
Exhibits Only, 462(d) false
Registered Closed-End Fund [Flag] true
Business Development Company [Flag] false
Interval Fund [Flag] true
Primary Shelf Qualified [Flag] false
Entity Well-known Seasoned Issuer No
Entity Emerging Growth Company false
New CEF or BDC Registrant [Flag] true
Fee Table [Abstract]  
Shareholder Transaction Expenses [Table Text Block]
     Class T      Class S      Class D      Class I  
SHAREHOLDER FEES
            
Maximum sales load (percentage of purchase amount)(1)
      3.50%        3.50%        None        None  
Maximum early repurchase fee(2)
      2.00%        2.00%        2.00%        2.00%  
ANNUAL FUND OPERATING EXPENSES
(as a percentage of the Fund’s average net assets)
            
Management Fee
      1.60%        1.60%        1.60%        1.60%  
Acquired Fund Fees and Expenses (3)
      0.75%        0.75%        0.75%        0.75%  
Interest Payments on Borrowed Funds (4)
      0.05%        0.05%        0.05%        0.05%  
Distribution and/or Shareholder Servicing Fees
      0.85%        0.85%        0.25%        0.00%  
Other Expenses (5), (6)
      1.41%        1.41%        1.41%        1.41%  
Total Annual Fund Operating Expenses
     4.67%        4.67%        4.07%        3.82%  
Less Expense Limitation and Reimbursement (7)
      0.25%        0.25%        0.25%        0.25%  
Total Annual Net Expenses (8)
      4.41%        4.41%        3.81%        3.57%  
(1)
Investors purchasing Class T and Class S Shares may be charged a sales load of up to 3.50% of the investment amount. For Class T Shares, the 3.50% includes a maximum of 3.00% for upfront selling commission and 0.50% for the dealer fee. The table assumes the maximum sales load is charged. A Selling Agent may, in its discretion, waive all or a portion of the sales load for certain investors. See “Plan of Distribution.”
(2)
A 2.00% Early Repurchase Fee payable to the Fund will be charged with respect to the repurchase of a Shareholder’s Shares at any time prior to the day immediately preceding the one‑year anniversary of the Shareholder’s purchase of the Shares (on a “first in‑first out” basis). An Early Repurchase Fee payable by a Shareholder may be waived by the Fund, in circumstances where the Board of Trustees determines that doing so is in the best interests of the Fund and in a manner as will not discriminate unfairly against any Shareholder. The Early Repurchase Fee will be retained by the Fund for the benefit of the remaining Shareholders.
Other Transaction Expenses [Abstract]  
Annual Expenses [Table Text Block]
     Class T      Class S      Class D      Class I  
SHAREHOLDER FEES
            
Maximum sales load (percentage of purchase amount)(1)
      3.50%        3.50%        None        None  
Maximum early repurchase fee(2)
      2.00%        2.00%        2.00%        2.00%  
ANNUAL FUND OPERATING EXPENSES
(as a percentage of the Fund’s average net assets)
            
Management Fee
      1.60%        1.60%        1.60%        1.60%  
Acquired Fund Fees and Expenses (3)
      0.75%        0.75%        0.75%        0.75%  
Interest Payments on Borrowed Funds (4)
      0.05%        0.05%        0.05%        0.05%  
Distribution and/or Shareholder Servicing Fees
      0.85%        0.85%        0.25%        0.00%  
Other Expenses (5), (6)
      1.41%        1.41%        1.41%        1.41%  
Total Annual Fund Operating Expenses
     4.67%        4.67%        4.07%        3.82%  
Less Expense Limitation and Reimbursement (7)
      0.25%        0.25%        0.25%        0.25%  
Total Annual Net Expenses (8)
      4.41%        4.41%        3.81%        3.57%  
(3)
The Acquired Fund Fees and Expenses are based on estimated amounts for the Fund’s first 12 months of operations. Some or all of the Investment Funds in which the Fund intends to invest charge carried interests, incentive fees or allocations based on the Investment Funds’ performance. The Investment Funds in which the Fund intends to invest generally charge a management fee of 1.00% to 2.00% based on committed capital, and approximately 15% to 20% of net profits as a carried interest allocation. The Acquired Fund Fees and Expenses disclosed above are based on historic returns of the Investment Funds in which the Fund anticipates investing during the first 12 months of operations, which may change substantially over time, therefore, significantly affect Acquired Fund Fees and Expenses. The 0.75% shown as Acquired Fund Fees and Expenses reflects operating expenses of the Investment Funds (e.g., management fees, administration fees and professional and other direct, fixed fees and expenses of the Investment Funds) after refunds, excluding any performance-based fees or allocations paid by the Investment Funds that are paid solely on the realization and/or distribution of gains, or on the sum of such gains and unrealized appreciation of assets distributed in‑kind, as such fees and allocations for a particular period may be unrelated to the cost of investing in the Investment Funds.
(4)
The Advisers expect to utilize a credit facility in the first twelve months of the Fund’s operations. Expenses may include, but are not limited to, upfront credit facility fees, undrawn fees, and interest payments.
(5)
Other Expenses include all other expenses incurred by the Fund, such as its organizational and offering expenses, certain administrative costs and expenses relating to the offering and sale of Shares. Other Expenses are estimated for the first 12 months of operations. For more details regarding the Fund’s estimated organizational and offering expenses, please see “Fund Expenses – Organizational and Offering Expenses.”
(6)
Includes amounts paid under an administration agreement (the “Administration Agreement”) between the Fund and StepStone Private Wealth as administrator (the “Administrator”). Under the Administration Agreement, the Fund pays the Administrator an administration fee (the “Administration Fee”) in an amount up to 0.23% on an annualized basis of the Fund’s net assets. From the proceeds of the Administration Fee, the Administrator pays UMB Fund Services, Inc. (the “Sub‑Administrator”) a sub‑administration fee (the “Sub‑Administration Fee”) in an amount up to 0.08% on an annualized basis of the Fund’s net assets, subject to a minimum annual fee. The Sub‑Administration Fee is paid pursuant to a sub‑administration agreement and a fund accounting agreement each between the Administrator and the Sub‑Administrator. The Administration Fee will be accrued daily based on the value of the net assets of the Fund as of the close of business on each business day (including any assets in respect of shares that will be repurchased by the Fund on such date) and payable in arrears within ten business days after the end of the month. The Sub‑Administration Fee is calculated in a manner substantially similar to the Administration Fee and is payable monthly in arrears.
(7)
The Adviser has entered into an Expense Limitation and Reimbursement Agreement with the Fund for the one‑year term beginning on the initial closing date for subscriptions for Shares and ending on the one‑year anniversary thereof. The Adviser may extend the Limitation Period for a period of one year on an annual basis. The Expense Limitation and Reimbursement Agreement limits the amount of the Fund’s aggregate ordinary operating expenses, excluding certain Specified Expenses listed below, borne by the Fund during the Limitation Period to an amount not to exceed 1.00% for Class T, S, D and I Shares, on an annualized basis, of the Fund’s daily net assets or the Expense Cap. “Specified Expenses” that are not covered by the Expense Limitation and Reimbursement Agreement include: (i) the Management Fee; (ii) all fees and expenses of Private Market Assets and other investments in which the Fund invests (including the underlying fees of the Private Market Assets and other investments (the Acquired Fund Fees and Expenses)); (iii) transactional costs, including legal costs and brokerage commissions, associated with the acquisition and disposition of Private Market Assets and other investments; (iv) interest payments incurred on borrowing by the Fund; (v) fees and expenses incurred in connection with a credit facility, if any, obtained by the Fund; (vi) distribution and/or shareholder servicing fees, as applicable; (vii) taxes; and (viii) extraordinary expenses resulting from events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or similar proceeding, indemnification expenses, and expenses in connection with holding and/or soliciting proxies for all annual and other meetings of Shareholders. See “Fund Expenses” for additional information. If the Fund’s aggregate ordinary operating expenses, exclusive of the Specified Expenses, in respect of any Class of Shares for any day exceeding the Expense Cap applicable to that Class of Shares, the Adviser will waive its Management Fee and/or reimburse the Fund for expenses to the extent necessary to eliminate such excess. The Adviser may also directly pay expenses on behalf of the Fund and waive reimbursement under the Expense Limitation and Reimbursement Agreement. To the extent that the Adviser waives its Management Fee, reimburses expenses to the Fund or pays expenses directly on behalf of the Fund, it is permitted to recoup from the Fund any such amounts for a period not to exceed three years from the month in which such fees and expenses were waived, reimbursed, or paid, even if such recoupment occurs after the termination of the Limitation Period. However, the Adviser may only recoup the waived fees, reimbursed expenses or directly paid expenses in respect of the applicable Class of Shares if (i) the aggregate ordinary operating expenses have fallen to a level below the relevant Expense Cap and (ii) the recouped amount does not raise the level of aggregate ordinary operating expenses plus waived fees, reimbursed expenses or directly paid expenses in respect of a Class of Shares in the month of recoupment to a level that exceeds any Expense Cap applicable at that time.
(8)
Annual Net Expenses include expenses limited by the Fund’s Expense Limitation and Reimbursement Agreement.
Other Annual Expenses [Abstract]  
Expense Example [Table Text Block]
EXAMPLE:
You would pay the following fees and expenses on a $1,000 investment, assuming a 5.00% annual return, and the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
If You SOLD Your Shares
                  
      1 Year        3 Years        5 Years        10 Years  
Class T
    $ 78        $ 164        $ 251        $ 473  
Class S
    $ 78        $ 164        $ 251        $ 473  
Class D
    $ 38        $ 116        $ 196        $ 404  
Class I
    $ 36        $ 109        $ 185        $ 384  
If You HELD Your Shares
      1 Year        3 Years        5 Years        10 Years  
Class T
    $ 78        $ 164        $ 251        $ 473  
Class S
    $ 78        $ 164        $ 251        $ 473  
Class D
    $ 38        $ 116        $ 196        $ 404  
Class I
    $ 36        $ 109        $ 185        $ 384  
The examples should not be considered a representation of future expenses, and actual expenses may be greater or less than those shown. The examples above exclude the Early Repurchase Fee which would apply if your Shares were repurchased within one year of their purchase. If your Shares are repurchased in Year 1, you would incur the 2.00% Early Repurchase Fee. Moreover, the rate of return of the Fund may be greater or less than the hypothetical 5.00% return used in the Example.
The purpose of the table above is to assist investors in understanding the various fees and expenses Shareholders will bear directly or indirectly. For a more complete description of the various fees and expenses of the Fund, see “Fund Expenses,” “Management Fee” and “Purchases of Shares.”
Purpose of Fee Table , Note [Text Block]
The following table illustrates the fees and expenses that the Fund expects to incur, and that Shareholders can expect to bear, directly or indirectly during the 12 months ending June 30, 2024 assuming estimated net assets of the Fund of $400,000,000 on June 30, 2024.
To invest in Class T Shares, Class S Shares or Class D Shares of the Fund, a prospective investor generally must maintain or open a brokerage account with a financial institution where a selling agreement has been established (“Selling Agent”). Any costs associated with opening such an account are not reflected in the following table or the Examples below. Investors should contact their broker or other financial professional for more information about the costs associated with opening such an account.
Other Expenses, Note [Text Block] Other Expenses include all other expenses incurred by the Fund, such as its organizational and offering expenses, certain administrative costs and expenses relating to the offering and sale of Shares. Other Expenses are estimated for the first 12 months of operations. For more details regarding the Fund’s estimated organizational and offering expenses, please see “Fund Expenses – Organizational and Offering Expenses.”
General Description of Registrant [Abstract]  
Investment Objectives and Practices [Text Block]
INVESTMENT PROGRAM
Investment Objectives
The Fund’s investment objectives are to seek current income and long-term capital appreciation by offering investors access to a global investment portfolio of private infrastructure assets.
Investment Strategy
The principal elements of the Fund’s investment strategy include: (i) allocating the assets of the Fund largely among Infrastructure Assets via Secondary Investments, Co‑Investments, and to a modest extent, Primary Investments, including Seasoned Primaries; (ii) seeking to manage the Fund’s investment level and liquidity using a commitment strategy which will balance total returns with reoccurring distributions and liquidity targets; and (iii) managing risk through ongoing monitoring of the Fund’s portfolio and active portfolio construction. Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any borrowing for investment purposes, in Infrastructure Assets. This policy is non‑fundamental and can be changed without Shareholder approval upon 60 days’ prior notice.
Asset Allocation. StepStone employs an asset allocation strategy that seeks to benefit from the spread of the Fund’s investments across infrastructure investments that vary across industry sectors and geographies. Infrastructure investments are generally characterized as core, core plus and value‑add investment strategies, as further described below. The Fund’s Infrastructure Assets will include both core plus and value‑add investment strategies.
●
Core: Considered the most stable form of infrastructure equity investing, as these assets tend to be the most essential to society or otherwise largely risk mitigated through a higher degree of cash flow predictability. Returns are derived primarily from income, with limited upside through capital gains, and assets are commonly held for the longer term (more than seven years). Revenues and cash flow are generally governed by either rate regulation or long-term contracts with highly creditworthy counterparties, such as governments, municipalities and major industrial companies.
●
Core Plus: These assets have some similarities with core infrastructure; however, there is generally more variability associated with the cash flows of core plus assets. Income is still typically a component of overall returns, but there is potential for greater capital appreciation. The holding period for core plus assets is typically more than six years. Core plus infrastructure may involve asset expansion or platform growth but the majority of value is typically derived from a relatively mature asset base. Core plus could also reflect a “build to core” strategy, where the assets would have a higher risk-return profile during a development, construction, and early operations stage, but ultimately qualify as a core asset for the long-term hold period.
●
Value‑Add: These investments typically include assets that have a material growth, expansion or repositioning orientation. The holding period for most value‑add infrastructure typically ranges from five to seven years. Returns are primarily from capital appreciation rather than ongoing income.
Commitment Strategy. The Advisers plans to manage the Fund’s commitment strategy to reduce the amount of uninvested cash (or “cash drag”) associated with the underlying investments with consideration for the potential liquidity needs of the Fund. The Adviser will balance the ultimate allocation across investment types while seeking to mitigate the “J‑Curve,” the period between the initial investment and the time that meaningful appreciation is expected.
The Fund intends to rely heavily on purchases of Secondary Investments where all or a substantial portion of the capital has already been invested and Co‑Investments where the capital is largely deployed at the time of commitment. Secondary Investments often receive earlier distributions and the returns from these investments generally do not exhibit the same delayed cash flow and return “J‑Curve” performance associated with Primary Investments. In addition, Secondary Investments may enable the Fund to deploy capital more readily with less blind pool risk than investments in typical Primary Investments.
The commitment strategy will aim to keep the Fund substantially invested and to minimize cash drag where possible by making commitments based on anticipated future distributions from investments. The commitment strategy will also take other anticipated cash flows into account, such as those relating to new subscriptions, the redemption of Shares by Shareholders and distributions to Shareholders. To forecast portfolio cash flows, the Advisers will utilize a proprietary model that incorporates historical data, actual portfolio observations, insights, and forecasts by the Advisers.
Risk Management. The long-term nature of infrastructure investments requires a commitment to ongoing risk management. The Advisers seek to monitor the performance of the Fund’s assets and developments at the level of the individual portfolio companies that are material positions held by the Fund. By tracking commitments, capital calls, distributions, valuations, and other pertinent details, the Advisers will seek to use a range of techniques to reduce the risk associated with the commitment strategy. These techniques may include, without limitation:
●
Investing across assets at different parts of fund lifecycles through the use of Secondary Investments, Co‑Investments and Primary Investments.
●
Managing cash and liquid assets to meet the Fund’s liquidity needs.
●
Modeling and actively monitoring cash flows to avoid cash drag and maintain maximum appropriate levels of investment and commitment.
●
Seeking to establish credit lines to provide backup liquidity to be in the position to satisfy liquidity needs, including redemption requests under the share repurchase program, consistent with the limitations and requirements of the 1940 Act.
To enhance the Fund’s liquidity, particularly in times of possible net outflows through the redemption of Shares by Shareholders, the Advisers may from time to time determine to sell certain of the Fund’s assets. In implementing the Fund’s liquidity management program, so as to minimize cash drag while providing the necessary liquidity to support the Fund’s private markets investment strategies and potential redemption of Shares, the Advisers may invest a portion of the Fund’s assets in securities and vehicles that are intended to provide an investment return while offering better liquidity than typical private markets investments. The liquid assets may include both fixed income and equities as well as public and private vehicles that derive their investment returns from fixed income and equity securities.
The Fund’s strategy involves investing in a range of Infrastructure Assets across multiple sponsors and investment types. The portfolio will consist of Infrastructure Assets that vary across industry sectors and geographies allocated strategically by StepStone.
The Fund intends to make direct and indirect investments in equity and debt interests across a variety of Infrastructure Assets such as:
●
Communication and digital infrastructure (e.g., towers, data centers and fiber).
●
Natural capital (e.g., sustainable agriculture and sustainable forestry).
●
Power generation and midstream (e.g., gas generation, fuel transportation and storage).
●
Renewables and energy transition investments (e.g., wind and solar, energy storage and distributed energy).
●
Social infrastructure (e.g., waste management, healthcare and education).
●
Transportation and logistics (e.g., toll roads, airports and seaports).
●
Utilities (e.g., electricity distribution and transmission, district heating and cooling and water).
The Fund will look to access attractive industry themes and tailwinds by tracking the evolving market and the emerging strategies of a diverse pool of Investment Managers. Outlined below are examples of current sector
themes expected to support key investment focus areas of the Fund.
Private Infrastructure Themes
LOGO
In select cases, the Fund may allocate a portion of its investments to other private market asset classes, including but not limited to real estate, private equity and private debt. The Fund will also seek to construct a balanced portfolio across mainly developed economies, with a focus on North America and Europe. While maintaining a generally balanced portfolio across these exposures is a focus of the Fund’s investment strategy, the Advisers will also be continuously assessing the relative attractiveness of the risk / return profile of each Fund opportunity and will look to tactically tilt the portfolio in situations where market dynamics make it attractive to do so, while still seeking to avoid over-concentration. Risks associated with investment in geographical locations, emerging markets and sector concentration are further described in the “Types of Investments and Related Risks” section below.
The Fund’s investment objectives and strategies are non‑fundamental and may be changed without Shareholder approval. For a complete description of the Fund’s fundamental policies, see “Fundamental Policies” and “Other Fundamental Policies” in the Fund’s Statement of Additional Information.
Real Assets Asset Class
The real assets asset class includes infrastructure, natural capital and natural resource investments, among other hard asset categories. A common thread across the sub‑strategies is that investments typically feature hard assets that are often capital intensive, as well as a component of current yield and an expected insulation of the underlying asset’s appreciation against the effects of inflation. The mix of current yield and growth across the underlying assets will vary depending on the specific asset class and stage of development of the underlying assets.
Infrastructure refers to a broad category of investments typically featuring attractive investment characteristics such as essential services or high barriers to entry, relatively durable demand, regulated returns or long term contracted cash flow and long useful lives, with an expected component of current yield as assets mature and often an insulation of the underlying assets against the effects of inflation. Infrastructure assets may include, among other asset types, communication/digital infrastructure, power generation and midstream, renewables & energy transition investments, social infrastructure, transportation and logistics and utilities.
Natural capital is viewed as an attractive complement to the Fund’s other assets, with its focus on sustainable agriculture, sustainable forestry and other sustainable natural assets. Sustainable agriculture consists of investments in farmland and related supply chain assets, along with biological assets (e.g., crops and livestock) that produce food, fiber, and renewable energy feedstocks. These investments focus on sustainably leveraging the productive capacity of the land base, and supply chains to transform and distribute production to processors, retailers, and industrial buyers, as well as related appreciation of farmland and supply chain assets. Sustainable forestry investments focus on safely and sustainably producing raw materials necessary for production of goods while leveraging sustainable business practices. These materials include outputs such as timber products and pulp for the manufacture of paper products. These investments, along with other real asset investments, have often shown historical returns with a positive correlation to inflation, a low or negative correlation to public and private equities and debt, and low volatility in their overall return profile with resilient asset value attributes through economic and financial cycles.5
While most Infrastructure Assets benefit in some way from defensive characteristics, in the form of essential services, barriers to entry, contracted cash flows or regulated returns, the risk and return profile of infrastructure investments does differ across sectors and strategies, and assets are often grouped into a few key categories, reflecting these differences.
Expected Positioning of Select Sectors6
LOGO
Real Estate Asset Class
Private real estate is a common term for unregistered real estate investments made through privately negotiated transactions. Similar to investments in the infrastructure asset class, real estate investments generally provide investment returns with a mix of current yield and growth across the underlying assets. The ultimate mix will
5 According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities with correlation coefficients of 0.0, ‑0.1 and –0.1, respectively. Source: MSCI, Bloomberg, Burgiss, NCREIF, Cliffwater, HFRI, J.P. Morgan Asset Management, May 31, 2022.
6 For illustrative purposes only. Sectors may differ in risk and return from the above. Target gross returns are hypothetical and are neither guarantees nor predictions or projections of future performance. Future performance indications and financial market scenarios are no guarantee of current or future performance. There can be no assurance that such target will be achieved or that the investment will be able to implement its investment strategy, achieve its investment objectives or avoid substantial losses.
vary depending on the stage of development of the underlying assets. Real estate investments are typically equity investments in the underlying real estate property, but in some cases, may also involve the debt/mortgages supporting the properties.
Private Equity Asset Class
Private equity is a common term for investments that are typically made in non‑public companies through bespoke, privately negotiated transactions. Private equity investments may be structured using a range of financial instruments, including common and preferred equity, subordinated debt and warrants, or other instruments, depending on the strategy of the investor and the financing requirements of the company. Investments in private equity have grown significantly over the last 20 years, driven principally by large institutional investors seeking increased returns and portfolio efficiency. Large pension funds, endowments and other sophisticated institutional investors commonly invest a meaningful portion of their overall portfolios in private equity.
The private equity market is diverse and can be divided into several different segments, each of which may exhibit distinct characteristics based on combinations of various factors. These include the type and financing stage of the investment, the geographic region in which the investment is made and the vintage year. The Fund may invest in all segments of private equity on a global basis.
Private Debt Asset Class
Private debt is a common term for loans and similar investments typically made in private companies that are generally negotiated directly with the borrower. Private debt investments may be structured using a range of financial instruments, including but not limited to, first and second lien senior secured loans, unitranche debt, unsecured debt, and structurally subordinated instruments. From time to time these investments might include equity features such as warrants, options, common stock or preferred stock, depending on the strategy of the investor and the financing requirements of the company or asset. The Fund’s private debt investments may be rated below investment grade by rating agencies or would be rated below investment grade if they were rated and are sometimes referred to as “junk.” Below investment grade securities have predominantly speculative characteristics and may carry a greater risk with respect to a borrower’s capacity to pay interest and repay principal. The global capital markets have undergone substantial structural changes since the 2008-2009 global financial crisis. Where once banks were dominant providers of credit, their relative size is in secular decline, thus creating an opportunity for other providers of capital. In addition, a new regulatory regime surrounding bank balance sheets has placed greater emphasis on the private non‑bank lending sector — this capital is increasingly provided by pension funds and insurance companies who maintain an allocation to this asset class. The Fund may invest in all forms of private debt on a global basis.
Why Infrastructure
The Advisers believe investors should consider the following factors when considering an investment in the Fund.
Essential Services are Resilient to Economic Cycles: User demand patterns for Infrastructure Assets tend to be relatively stable given the essential nature of these services. Therefore, we believe they tend to exhibit a lower correlation to economic cycles. According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities.7
Inflation Hedge: Most regulated infrastructure assets, and many non‑regulated infrastructure assets, include inflation-indexed user pricing which effectively passes on the impact of inflation to the end‑user. We believe that infrastructure assets tend to perform better in inflationary environments as inflationary increases in revenue typically outpace inflationary increases in expenses, given the relatively high margins that are typical of infrastructure investments.
7 According to MSCI Private Infrastructure Index, global core infrastructure has low or no correlation to global private equity, global public bonds and global equities with correlation coefficients of 0.0, ‑0.1 and –0.1, respectively. Source: MSCI, Bloomberg, Burgiss, NCREIF, Cliffwater, HFRI, J.P. Morgan Asset Management, May 31, 2022.
Diversified End‑User Base: The ultimate end‑users of infrastructure assets are generally a widely diversified group of individuals, such as local populations and communities and worldwide travelers utilizing essential services which reduces some risks associated with market and customer concentration and variability in demand.
High Barriers to Entry: Infrastructure typically requires a high level of initial capital investment and have relatively long useful lives, and this acts as a significant impediment to potential competitors entering the market. We believe that these assets may enjoy monopolistic or quasi-monopolistic market positioning, and it may be economically unsound, or legally prohibited, to build a competing facility, such as an airport, toll-road or timberland farm.
Long-term Cash Flow Predictability: Regulated and heavily contracted business models often provide long-term revenue visibility to infrastructure investments.
Sustainability Tailwinds: Infrastructure assets are playing an important role in the transition to net zero emissions supporting decarbonization across numerous industries, in particular energy generation and storage, transportation and carbon sequestration through natural capital related opportunities.
Key Trends in Infrastructure
Infrastructure Assets can be broadly described as economic and social necessities that deliver services and products needed to improve society’s quality of life, social well-being, and safety. The U.S. economy, for example, relies on a vast network of transportation, power and communications infrastructure; however, much of the systems currently in place were built decades ago, and economists assert that delays and rising maintenance costs are limiting economic performance. Many are reaching the end of their lifespan and are potentially overstretched. In addition to the threat to human safety, inadequately maintained roads, trains, and waterways substantially limit economic productivity. Similar infrastructure investment opportunities exist in other major economies around the world.
Infrastructure is not only an essential part of healthy and productive communities and economies today but is also one of the most important areas of investment for addressing the challenges of tomorrow. Challenges around climate change, communication, healthcare and urbanization may be addressed through major public and private investment in infrastructure. It is estimated that the world needs approximately $94 trillion of infrastructure investment to support population growth, urbanization, and refurbishments through 2040.8 We believe this substantial need for infrastructure investment is driven by the overall growth of the global economy and by a number of global, secular trends, such as:
Digitalization: Connectivity and data consumption have become essential to everyday life and are fundamental to global economic activity and growth. Data is the core currency of the digital economy, and its consumption continues to grow exponentially, which drives and sustains the need to invest in areas such as mobile towers, data centers, fiber optics and digital services.
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Mobile Towers: Telecommunications infrastructure, or wireless and cellular infrastructure, connects all facets of economic activity. A societal desire for mobility is driving wireless carriers to build denser networks in order to meet speed and capacity demands, which in turn require new cell sites, more equipment, more fiber, and higher bandwidth connectivity.
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Data Centers: Rapid growth in the demand for data consumption and storage is driving an expansion of data centers worldwide. The Internet of Things (IoT), online gaming, 5G connectivity, autonomous driving capabilities, big data analytics, among others, are key trends driving the need for more reliable, energy-efficient and secure data storage. The amount of data created, captured, copied and consumed globally is expected to double in size by 2026.9 Modern data centers are rapidly evolving from centralized, on‑premise facilities managed by IT departments to hyperscale data centers hosting public cloud services. While investments in data centers require regional strategies, we believe the need for additional data center investment is nearly universal.
8 Global Infrastructure Outlook: Infrastructure Investment Needs, June 2018.
9 Worldwide IDC Global Data Sphere Forecast, 2022–2026: Enterprise Organizations Driving Most of the Data Growth, May 2022.
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Fiber Optics: Only 63% of the world’s population is connected to the internet.10 As a result of the large unconnected populations, there is significant growth opportunity and investment potential in expanding internet access and increasing adoption, as well as the need to upgrade existing connections to improve reliability and speed. Estimates suggest that the total attainable market size of connecting the next four billion people is upwards of $300 billion annually.11 Building out the fiber optic networks will require substantial investment from private companies.
Decarbonization: The importance of decarbonization has emerged as an essential part of the global economy and will require substantial investment in decarbonization technology.
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Renewable Energy Transition: The global energy mix is shifting from fossil fuels to renewables. There is an abundance of both public and private organizations with a commitment to decarbonize the economy or “reach net zero” by 2050. This will require substantial investments in physical infrastructure assets including clean and renewable energy systems such as wind, solar and hydro, energy efficiency, energy storage, clean transportation, green building systems, waste management and recycling, sustainable agriculture and aquaculture along with systems and technology to enable support for biodiversity and ecosystems.
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Electrification Revolution: The electrification trend could be one of the biggest growth opportunities in the industrial economy in light of the number of areas that may need to be developed, expanded or modernized. Within two decades, cars, buildings and systems will use clean electricity backed by renewable energy sources. With several new electrification themes converging, residential, commercial and municipal markets may need to revamp their outdated systems, store energy and modernize power grids.
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Internet of Things (“IoT”): To increase infrastructure and capacity, while decreasing carbon emissions in cities, we believe that a paradigm shift will occur. Cities will likely use digitization and wireless technology to operate smarter, producing and distributing energy more efficiently and prioritizing renewable energy. By leveraging IoT, municipal assets can be monitored in real-time and controlled remotely, residents can actively track their energy consumption, for example through smart metering infrastructure, and cities can control when and where power is needed.
Demographics: We believe that a substantial portion of U.S. infrastructure is in a state of disrepair, due to years of underinvestment and changing urbanization trends. Suburbs, medium‑sized cities, and even small towns are experiencing significant growth, straining already limited budgets and policymakers are looking to private investment to build and repair critical infrastructure.
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Growing Population: By the year 2050, the global population is expected to increase by another 20%, to more than 9.7 billion people.12 An increasing population is likely to increase demand for services, increase infrastructure usage, expand seasons of consumption for certain goods and services and decrease available downtime for maintenance and repairs. The need to accommodate this increase in the global population will drive substantial investment in new and existing infrastructure.
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Urbanization: We believe that continued urbanization in advanced economies will be one of the biggest drivers of infrastructure spending over the next few decades. According to the World Economic Forum,13 more than half the global population lives in cities, a figure that is expected to rise to 80% by 2050. Rising urban migration and the continued expansion of mega cities globally may require sustained infrastructure investment in railroads, highways, bridges, ports, airports, water, power, energy and telecommunications.
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Changing Generational Preferences: Younger generations often have different expectations for infrastructure than older citizens. Support for mass transit and public transportation is often as much as 10% higher among Millennials than Baby Boomers. Millennials also plan to monitor their consumption more closely and hope to adopt new energy products and services, including renewable sources like solar and wind.
10 We Are Social: More Than 5 million People Now Use the Internet, 4/27/2022.
11 USAID: Barriers to Investing in Last-Mile Connectivity, May 2020.
12 United Nations: Department of Economic and Social Affairs, 2017.
13 World Economic Forum: Cities and Urbanization, 4/26/2022.
Changing generational preferences should have a substantial influence over future decisions to not only modernize transportation systems and utilities but also incentivize their use.
Investment Types
The Fund intends to make investments in equity and debt interests in Infrastructure Assets through the various investment types described below.
Secondary Investments
Secondary Investments typically refer to investments in either individual operating companies, projects or properties and existing private investment funds through the acquisition of an existing interest by one investor from another in a negotiated transaction. In so doing, the buyer will acquire the existing interest and take on any future funding obligations in exchange for future returns and distributions. Secondaries include the growing general partner led secondary market, which has evolved toward strip sales and continuation vehicles with general partners structuring a vehicle that allows for continued participation in the growth of the remaining assets, or a specific asset, beyond a fund’s traditional exit time frame. Secondaries may also include newly established private markets funds that are fully funded at the time of the Fund’s acquisition.
Secondary Investments may be acquired at a discount to the Investment Fund’s NAV. As a result, Secondary Investments acquired at a discount may result in unrealized gains at the time the Fund next calculates its daily NAV. Because Secondary Investments are generally made when a Primary Investment is three‑to‑seven years into its investment period and has deployed a significant portion of its capital into portfolio companies, these investments are viewed as more mature. Since its inception, the Firm has invested in Secondary Investments that were 70‑75% deployed on average. Thus, they are not typically expected to exhibit the initial decline in NAV associated with primaries and may reduce the impact of the “J‑Curve” associated with private markets investing.
Open-Ended Funds typically refer to investments in evergreen or long duration structures, where the interest of one or multiple investors is acquired by another investor, or an interest is acquired by an investor through the provision of growth capital, in both cases typically at NAV. For the purposes of the Fund strategy, Open-Ended Funds are considered Secondary Investments, given they are, similarly, the acquisition of an interest in what is typically a mature portfolio, and all, or the majority, of capital is deployed at the time of investment, and therefore the impact of the “J‑Curve” is expected to be mitigated. There can be no assurance that any or all Secondary Investments made by the Fund will exhibit this pattern of investment returns, and realization of later gains is dependent upon the performance of each Investment Fund’s portfolio investments.
The market for purchasing Investment Funds on the secondary market may be very limited and competitive, and the strategies and Investment Funds to which the Fund wishes to allocate capital may not be available for secondary investment at any given time. Purchases of Investment Funds on the secondary market may be heavily negotiated and may create additional transaction costs for the Fund.
The secondary market continues to evolve and expand. Secondaries may include various structures by which the Fund gains exposure to the private markets including those described above and others that share some of the same characteristics. The Fund may invest in the equity or debt of structured transactions such as collateralized fund obligations or similar investment vehicles (“CFOs”) that own existing funds and co‑investments. The Fund may also invest in open‑end or closed‑end funds and similar investment vehicles, which may be evergreen funds with existing assets at the time of the Fund’s investment.
Co‑Investments
Co‑Investments involve directly acquiring an equity or debt interest in an operating company, project or property generally alongside an investment by an Investment Manager or another Investment Manager that leads the transaction. Co‑Investments are generally structured such that the lead and co‑investors collectively hold a controlling interest of the operating company, project or property. Capital committed to a Co‑Investment is typically invested immediately, mitigating J‑Curve and creating a more predictable cash flow dynamic, but equity Co‑Investments may also involve a commitment to fund additional capital under certain circumstances.
Primary Investments
Primary Investments, or “primaries,” refer to investments in newly established private market funds that are early in their lifecycle and have typically not yet begun investing. Primary investments are made during an initial fundraising period in the form of capital commitments, which are then called down by the Fund and utilized to finance its investments in portfolio companies during a predefined period. A private markets fund’s NAV will typically exhibit a “J‑Curve,” undergoing a decline in the early portion of the fund’s lifecycle as investment-related expenses and fees accrue prior to the realization of investment gains from portfolio investments, with the trend typically reversing in the later portion of the fund’s lifecycle as portfolio investments are sold and gains from investments are realized and distributed. There can be no assurance that any or all primary investments made by the Fund will exhibit this pattern of investment returns and realization of later gains is dependent upon the performance and disposition of each Primary Investment’s portfolio investments. Real asset and private equity Primary Investments typically range in duration from ten‑to‑twelve years, including extensions, while private debt primary investments typically range in duration from eight‑to‑ten years. Underlying investments in portfolio investments generally have a three‑to‑six‑year range of duration with potentially shorter periods for private debt or longer for infrastructure investments.
Primary Investments are generally closed‑end funds and only accept new investments during a finite period. Typically, Investment Managers will not launch new funds more frequently than every two‑to‑four years. Market leaders generally offer multiple primary investments each year, but they may not offer funds within a given geography or that pursue a certain strategy in any particular year. Accordingly, many funds managed by top‑tier private market firms will be unavailable for a primary investment at any given time. Because of the limited timeframe of opportunity for investment in any given fund, having a well-established relationship with an Investment Manager is critically important for primary investors.
Primary Investments includes Seasoned Primaries, which are made later in an Investment Fund’s lifecycle than typical primaries, these investments, like secondaries, may receive earlier distributions, and the investment returns from these investments may exhibit less of a delayed cash flow and return “J‑Curve” than other Primary Investments. In addition, Seasoned Primaries may enable the Fund to deploy capital more readily with less blind pool risk than investments in typical primaries.
General Due Diligence
StepStone uses a range of resources to identify and source promising Infrastructure Assets. StepStone’s investment approach is based on the extensive diligence conducted by its research professionals while leveraging the capabilities of the entire StepStone organization and its potential access to superior information.
StepStone focuses on identifying opportunities at the intersection of high-quality opportunities, Investment Manager expertise and the Firm’s informational advantage. StepStone will assess the relative attractiveness of different strategies, sectors and geographies based on durable investment themes that it believes will outperform over the Fund’s long-term investment horizon. Shorter-term opportunistic allocations will also be utilized to seek to capitalize on near-term market trends.
The due diligence process is driven by StepStone’s entire global team, which meets bi‑weekly to review, prioritize and analyze investment opportunities. Investment review typically involves a contribution from StepStone’s sector experts, Investment Manager and/or Investment Manager coverage teams and the assigned deal team. Once a deal has been identified as a potential transaction, the deal team summarizes the opportunity in a report. Each report is reviewed, and the team prioritizes the opportunity accordingly. StepStone’s investment committee, which composes of senior investment professionals responsible for making final investment approvals and ensuring that there is consistency across investment decisions and client portfolios, will conduct a detailed review of each investment that has advanced into the due diligence stage, with the due diligence report serving as a framework for these discussions. Through this process, StepStone can identify the most attractive opportunities and focus their resources on the most promising transactions
The Fund’s investment due diligence process generally is expected to include these elements:
Secondary Investments
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Independent financial modeling on an asset‑by‑asset basis (each underlying portfolio company), where applicable, to validate both projected multiple and internal rate of return assumptions.
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Research and analysis of the assets, sectors and strategies related to the Investment Fund, and the effect on underlying portfolio positions.
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Assessment of the managerial capability of the Investment Manager and the quality of the Investment Fund, including the Investment Manager’s ability and bandwidth for managing the existing portfolio towards liquidity.
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ESG and Operational Due Diligence.
Co‑Investments
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Independent financial modeling as a means of testing and validating the business plan assumptions and projections, exit returns and valuations.
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Comparative analysis through review and the assigning of a risk score, considering key quantitative and qualitative risk factors including, but not limited to, regulatory risk, technology risk and market risk.
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Industry research (including evaluation of market size, potential growth and competitive dynamics).
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Assessment of the Investment Manager’s suitability for the investment and the managerial capability and depth at the underlying asset level.
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ESG and Operational Due Diligence.
Primary Investments
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Evaluation of the Investment Manager’s experience and resources to establish their ability to implement its investment strategy, through team, platform and performance assessments, discussions with third party references (including the Investment Manager community, limited partner community, and portfolio company founders), Investment Manager interviews, and other fund manager meetings.
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Evaluation of the proposed investment strategy for appropriateness to the investment environment.
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Detailed review of the Investment Managers prior track record, including individual investment partner level attribution, and projection modeling for historical funds.
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Assessment of operational support and bandwidth for managing the existing portfolio.
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ESG and Operational Due Diligence.
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Evaluation of fund terms with a particular focus on alignment of interests between the Investment Manager and limited partners.
For each transaction, the assigned investment team gathers and reviews available information on the historical track record and all underlying assets. To facilitate this process, StepStone utilizes the SPI platform, which tracks over 16,000 general partners across 42,000 Investment Funds garnered from the over 4,700 annual Investment Manager meetings the Firm holds per year. This database is populated with information StepStone has gathered from Investment Manager partner meetings, due diligence materials, quarterly reports, annual meetings, marketing materials and other sources. Through these sources, StepStone believes that it has access to significantly more information than most investors and provides a distinctive advantage when evaluating a potential investment.
The Advisers also continue to monitor the assets by meeting with Investment Managers, attending annual meetings, serving on portfolio companies’ investment boards, reviewing financial reports and meeting with portfolio
companies’ management teams. Based on these interactions, the Advisers will periodically update expectations of return and liquidity of each asset of the Fund.
ESG Due Diligence
As demonstration of its commitment to responsible investing (“RI”), the Firm became a signatory to the United Nations Principles for Responsible Investment (“UN PRI”) in 2013, adopted a responsible investment policy (“Responsible Investment”) in 2014 and joined the Task Force on Climate-related Financial Disclosures (“TCFD”) in 2019. The Firm’s RI policy is approved by the (“RI Committee”) under delegated authority from the Board of the Firm. It is enforced by the Firm’s Investment Committees (“Investment Committee” or “IC”) and applies to the Firm’s various private markets asset classes and investment strategies. This policy encompasses a comprehensive assessment at both the general partner and asset level of non‑financial factors across environmental, social, governance dimensions. The Firm’s RI Policy is available upon request.
Process Overview. The Firm has fully integrated an RI process into its investment due diligence and decision-making across all asset classes and strategies at the Firm. Every investment due diligence conducted by the Firm undergoes an ESG evaluation at multiple levels. Each investment memo presented to the relevant Investment Committee must contain a dedicated RI section that has been completed by the investment due diligence team, with the disclosure and analysis approved by the RI Committee. Investments may fail to progress as a result of ESG considerations at varied points in the process, including at the Investment Committee. Post-investment, the Firm also seeks engagement with investment managers to advocate for and support their ESG process improvements as well as their specific RI initiatives with respect to individual assets and positioning them for exit. The Firm seeks to be engaged on RI issues where it has a board seat or limited partner advisory committee membership.
Responsible Investment Integrated in the Due Diligence Process. The Firm’s has established an RI due diligence process that applies across the Firm tailored for each asset class and strategy (i.e., private equity, real estate, private credit and infrastructure, along with a distinct approach for co‑investments and secondaries). This RI due diligence is integrated into the Firm’s investment due diligence process and sits alongside the Firm’s comprehensive operational due diligence process. The Firm’s teams evaluate each fund manager and/or investee company on their RI policy, implementation and monitoring framework using a variety of tools from its due diligence questionnaire and onsite interviews, to reference checking and evaluation of the historical track record at the general partner and at the asset level where relevant. For the final Investment Committee materials, investment teams include a comprehensive ESG analysis, which includes specific examples from the manager’s investment process and portfolio. The Firm has been utilizing an RI general partner scorecard since 2018. In May 2019, this scorecard became a mandatory component of all primary fund underwriting across all asset classes. The ESG score focuses on (i) commitment, (ii) accountability, (iii) investment process, from screening through ownership, (iv) training, and (v) reporting and transparency. Specific information is collected and analyzed with regard to climate, modern slavery, and diversity through the scoring process for all investments. With regard to infrastructure investments, there is a specific focus on environmental considerations and labor practices, among other topics. These topics are incorporated into the investment decision process, ongoing monitoring and management of investments but are not solely determinative of investment decisions. As a result, the Fund may make investments that do not have favorable ESG characteristics or high ESG ratings.
Portfolio Allocation
In allocating the Fund’s capital, the Advisers will seek to maximize the risk adjusted returns to the Shareholders. The overall portfolio construction seeks to achieve targeted returns while also being able to provide 5% quarterly liquidity, and also minimizing volatility for investors. Capital is allocated within differing types of infrastructure investments to optimize risk, return, volatility, correlation and liquidity using equity and debt investments with varying levels of duration. Portfolio allocations are achieved through using a combination of Secondary Investments, Co‑Investments and Primary Investments. Existing and new investments are dynamically evaluated to assess the blended risk, return and liquidity profile of the Fund.
In allocating the Fund’s capital, the Advisers will seek to use the resources and capabilities they have assembled to build a diversified portfolio of investments that will seek to mitigate the effects of the J‑Curve to maximize risk adjusted returns to the Shareholders. Portfolio construction is the first level of the risk management process. At a high level, the planning for portfolio construction is intended to consider medium- to long-term secular and macroeconomic risks, and how they are likely to impact the infrastructure market. A fundamental premise of the
Fund’s investment strategy is to prioritize a proactive sourcing approach for all forms of Infrastructure Assets, driven by a thoughtful portfolio construction plan.
The projected asset allocation targets reflect the current assessment of sub‑sectors within the context of an appropriately diversified portfolio. Over shorter periods, the portfolio composition may reflect the allocation of capital more opportunistically in accordance with the Fund’s investment objectives. The Advisers currently expect that the Fund’s asset allocation will tilt more heavily toward Secondary Investments and Co‑Investments.
Asset Allocation Targets
Investment Type
Target Range
Secondary Investments
 40‑80%
Co‑Investments
 20‑50%
Primary Investments
 0‑10%
Asset Class
Target Range
Infrastructure Assets
 90‑100%
Other Assets
 0‑10%
Geographic Region
Target Range
North America
 40‑70%
Europe
 20‑50%
Rest of World
 5‑15%
The Fund’s assets will be global, although the Fund expects to invest principally in North America-domiciled and European-domiciled investments. Over time, the Fund may have exposure to developing or emerging markets. There can be no assurance that all investment types will be available, will be consistent with the Fund’s investment objectives, will satisfy the Advisers’ pricing and due diligence considerations or will be selected for the Fund.
While the Fund will actively pursue Co‑Investments, the Fund’s allocations to Investment Funds may be made in the form of capital commitments which are called down by an Investment Fund over time. Thus, in general, the Fund’s private markets allocation will consist of both funded and unfunded commitments. Only the funded private market commitments are reflected in the Fund’s NAV. Over time, the allocation ranges and commitment strategy may be adjusted based on the Advisers’ analysis of the private markets, the Fund’s existing portfolio at the relevant time, and other pertinent factors.
The Firm’s Allocation Policy
Allocation decisions may arise when there is more demand from the Fund and other clients of the Firm for a particular investment opportunity, such as the capacity in an Investment Fund or a Co‑Investment, than supply. The Firm employs an allocation policy designed to ensure that all of its clients will be treated fairly and equitably over time. The Fund’s portfolio manager has discretion to lower the allocation as appropriate for portfolio construction purposes.
With respect to Primary Investments, the Firm uses its best efforts to defer the allocation decision to the relevant Investment Manager, mitigating the potential conflict. With regard to secondary purchases of Investment Funds, the Firm typically manages the allocation of the transactions across its clients. Under the Firm’s allocation policy, if clients are similarly situated, considering all relevant facts and circumstances, allocations will be made pro rata based on the deployment pace for each client determined in accordance with the Firm’s standard operational processes and specified in each client’s annual portfolio plan. Allocation of Co‑Investments is a hybrid of the Firm’s approach on Investment Funds; in certain cases, Co‑Investments are allocated by the Investment Manager leading the transaction, while in others, the Firm has the ability to allocate the transaction across its clients, in which case the allocation method outlined with respect to secondaries is used. Due to these processes, the Firm does not believe there
is a material risk of a conflict arising in the area of allocations that would disadvantage the Fund relative to another client. With respect to evergreen funds such as the Fund, the Firm may evaluate the deployment pace, investment budget and portfolio plan of such client more frequently than annually.
Importantly, the Firm’s allocation process is managed independently by the Finance team and ratified by the Firm’s Legal and Compliance department.
Leverage
In the near term, leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares.
The 1940 Act requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time the investment company incurs the indebtedness (the “Asset Coverage Requirement”). This requirement means that the value of the investment company’s total indebtedness may not exceed one third the value of its total assets (including the indebtedness). The 1940 Act also requires that dividends may not be declared if this Asset Coverage Requirement is breached. The Fund’s borrowings will at all times be subject to the Asset Coverage Requirement.
The Fund’s assets may also utilize leverage in their investment activities. Borrowings at the individual investment level are not subject to the Asset Coverage Requirement. Accordingly, the Fund’s portfolio may be exposed to the risk of highly leveraged investment programs of certain assets and the volatility of the value of Shares may be great, especially during times of a “credit crunch” and/or general market turmoil, such as that experienced during late 2008 or the current global pandemic. In general, the use of leverage by the Fund’s assets may increase the volatility of their values and of the value of the Shares. See “Types of Investments and Related Risks — Investment Related Risks — Leverage Utilized by the Fund.”
Risk Factors [Table Text Block]
TYPES OF INVESTMENTS AND RELATED RISKS
General
The value of the Fund’s total net assets may be expected to fluctuate in response to fluctuations in the value of the Infrastructure Assets in which the Fund invests. Discussed below are the investments generally made by Investment Funds and the principal risks that the Advisers and the Fund believe are associated with those investments. These principal risks will, in turn, have an effect on the Fund. In addition, the Fund may also make these types of investments pending the investment of assets in Infrastructure Assets or to maintain the liquidity necessary to effect repurchases of Shares. When the Fund takes a defensive position or otherwise makes these types of investments, it may not achieve its investment objectives.
Principal Investment Related Risks
General Economic and Market Conditions. The value of the Fund’s total net assets should be expected to fluctuate. To the extent that the Fund’s portfolio is concentrated in securities of a single issuer or issuers in a single sector, the risk of any investment decision is increased. The use of leverage is likely to cause the Fund’s average net assets to appreciate or depreciate at a greater rate than if leverage were not used.
An investment in the Fund involves a high degree of risk, including the risk that the Shareholder’s entire investment may be lost. The Fund’s performance depends largely upon the Advisers’ selection of Infrastructure Assets, the allocation of offering proceeds thereto and the performance of the Infrastructure Assets. The Fund’s investment activities involve the risks associated with private market investments generally. Risks include adverse changes in national or international economic conditions, adverse local market conditions, the financial conditions of portfolio companies, changes in the availability or terms of financing, changes in interest rates, exchange rates, corporate tax rates and other operating expenses, environmental laws and regulations, and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of certain industries or the availability of purchasers to acquire companies, and dependence on cash flow, as well as acts of God, uninsurable losses, war, terrorism, earthquakes, hurricanes or floods and other factors which are beyond the control of the Fund or the Private Market
Assets. Unexpected volatility or lack of liquidity, such as the general market conditions that had prevailed in 2008, could impair the Fund’s profitability or result in its suffering losses.
No Operating History. The Fund is a newly formed non‑diversified, closed‑end management investment company with no performance history that Shareholders can use to evaluate the Fund’s investment performance. The initial operating expenses for a newly formed fund, including start‑up costs, which may be significant, may be higher than the expenses of an established fund. In addition, Infrastructure Assets may, in some cases, be newly organized with limited operating histories upon which to evaluate their performance.
Closed‑end Interval Fund. The Fund is a non‑diversified, closed‑end management investment company structured as an “interval fund” and designed primarily for long-term investors. The Fund is not intended to be a typical traded investment. There is no secondary market for the Fund’s Shares and the Fund expects that no secondary market will develop in the foreseeable future. An investor should not invest in the Fund if the investor needs a liquid investment. Closed‑end funds differ from open‑end management investment companies, commonly known as mutual funds, in that investors in a closed‑end fund do not have the right to redeem their shares on a daily basis at a price based on NAV. Although the Fund, as a fundamental policy, will make quarterly offers to repurchase between 5% and 25% of its outstanding Shares at NAV, the number of Shares tendered in connection with a repurchase offer may exceed the number of Shares the Fund has offered to repurchase, in which case not all of your Shares tendered in that offer will be repurchased. In connection with any given repurchase offer, it is likely that the Fund may offer to repurchase only the minimum amount of 5% of its outstanding Shares. Hence, you may not be able to sell your Shares when and/or in the amount that you desire.
Availability of Investment Opportunities. The business of identifying and structuring investments of the types contemplated by the Fund is competitive and involves a high degree of uncertainty. The availability of investment opportunities generally is subject to market conditions as well as, in some cases, the prevailing regulatory or political climate. No assurance can be given that the Fund will be able to identify and complete attractive investments in the future or that it will be able to fully invest its subscriptions.
Similarly, identification of attractive investment opportunities by Investment Managers is difficult and involves a high degree of uncertainty. Even if an attractive investment opportunity is identified by an Investment Manager, it may not be permitted to take advantage of the opportunity to the fullest extent desired. Other investment vehicles sponsored, managed or advised by the Advisers and their affiliates may seek investment opportunities similar to those the Fund may be seeking. The Advisers will allocate fairly between the Fund and such other investment vehicles any investment opportunities that may be appropriate for the Fund and such other investment vehicles. See “Conflicts of Interest — The Advisers.”
Leverage Utilized by the Fund. The Fund may borrow money in connection with its investment activities and to otherwise provide the Fund with liquidity — i.e., the Fund may utilize leverage. Specifically, the Fund may borrow money through a credit facility or other arrangements to fund investments in Infrastructure Assets up to the limits of the Asset Coverage Requirement. Leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares. The Fund is expected to enter into the credit agreement for such purposes. See “Investment Program—Leverage.”
The use of leverage is speculative and involves certain risks. Although leverage will increase the Fund’s investment return if the Fund’s interest in an asset purchased with borrowed funds earns a greater return than the interest expense the Fund pays for the use of those funds, the use of leverage will decrease the return on the Fund if the Fund fails to earn as much on its investment purchased with borrowed funds as it pays for the use of those funds. The use of leverage will in this way magnify the volatility of changes in the value of an investment in the Fund, especially in times of a “credit crunch” or during general market turmoil, such as that experienced during late 2008. The Fund may be required to maintain minimum average balances in connection with its borrowings or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate. In addition, a lender to the Fund may terminate or refuse to renew any credit facility into which the Fund has entered. If the Fund is unable to access additional credit, it may be forced to sell its interests in Investment Funds at inopportune times, which may further depress the returns of the Fund.
The 1940 Act’s Asset Coverage Requirement requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time the investment company incurs the indebtedness. This requirement means that the value of the investment company’s total indebtedness may not exceed one third of the value of its total assets (including the indebtedness). The 1940 Act also requires that dividends may not be declared if this Asset Coverage Requirement is breached. The Fund’s borrowings will at all times be subject to the Asset Coverage Requirement.
Private Equity Investments. Private equity is a common term for investments that are typically made in private or public companies through privately negotiated transactions, and generally involve equity-related finance intended to bring about some kind of change in an operating company (e.g., providing growth capital, recapitalizing a company or financing an acquisition). Private equity funds, often organized as limited partnerships, are the most common vehicles for making private equity investments, although the Fund may also invest directly in an operating company as a lead investor or syndicate partner to an Investment Manager. The investments held by Investment Funds and Primary Investments made by the Fund involve the same types of risks associated with an investment in any operating company. However, securities of private equity funds, as well as the underlying companies these funds invest in, tend to be more illiquid, and highly speculative. Private equity has generally been dependent on the availability of debt or equity financing to fund the acquisitions of their investments. Depending on market conditions, however, the availability of such financing may be reduced dramatically, limiting the ability of private equity funds to obtain the required financing or reducing their expected rate of return.
The regulatory environment for private investment funds continues to evolve, and changes in the regulation of private investment funds may adversely affect the value of the Fund’s investments and the ability of the Fund to implement its investment strategy (including the use of leverage). The financial services industry generally and the activities of private investment funds and their investment advisers, in particular, have been the subject of increasing legislative and regulatory scrutiny. Such scrutiny may increase the Fund’s and/or the Advisers’ legal, compliance, administrative and other related burdens and costs as well as regulatory oversight or involvement in the Fund and/or the Advisers’ business. There can be no assurances that the Fund or the Advisers will not in the future be subject to regulatory review or discipline. The effects of any regulatory changes or developments on the Fund may affect the manner in which it is managed and may be substantial and adverse.
Investments in the Debt Securities of Small or Middle-Market Portfolio Companies. Our investments may consist of loans to small and/or less well-established privately held companies. While smaller private companies may have potential for rapid growth, investments in private companies pose significantly greater risks than investments in public companies. For example, private companies:
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have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress;
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may have limited financial resources and may be unable to meet their obligations under their debt securities, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of realizing any guarantees that may have obtained in connection with the investment;
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may have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
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generally, are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on the Investment Fund that has invested in the portfolio company; and
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generally, have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
Investments in smaller capitalization companies often involve significantly greater risks than the securities of larger, better-known companies because they may lack the management expertise, financial resources, product diversification and competitive strengths of larger companies. The prices of the securities of smaller companies may be subject to more abrupt or erratic market movements than those of larger, more established companies, as these securities typically are less liquid, traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. In addition, when selling large positions in small capitalization securities, the seller may have to sell holdings at discounts from quoted prices or may have to make a series of small sales over a period of time. Further, smaller capitalization companies may be particularly affected by interest rate increases, as they may find it more difficult to borrow money to continue or expand operations or may have difficulty in repaying any loans.
In addition, investments in private companies tend to be less liquid. The securities of many of the companies in which we invest are not publicly traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over‑the‑counter secondary market for institutional investors only. Such securities may be subject to legal and other restrictions on resale. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of target portfolio companies may affect our investment returns.
Infrastructure Sector Risk. The Fund will invest, directly or indirectly, in infrastructure. Because the Fund concentrates (i.e., invests more than 25% of its assets) its investments in Infrastructure Assets, the Fund may be subject to greater risks and market fluctuations than a fund whose portfolio has exposure to a broader range of industries. Infrastructure Assets may be subject to a variety of risks, not all of which can be foreseen or quantified, including: (i) the burdens of ownership of infrastructure: (ii) local, national and international political and economic conditions; (iii) the supply and demand for services from and access to infrastructure; (iv) the financial condition of users and suppliers of Infrastructure Assets; (v) changes in interest rates and the availability of funds which may render the purchase, sale or refinancing of Infrastructure Assets difficult or impracticable; (vi) changes in regulations, planning laws and other governmental rules; (vii) changes in fiscal and monetary policies; (viii) under-insured or uninsurable losses, such as force majeure acts and terrorist events; (ix) reduced investment in public and private infrastructure projects; and (x) other factors which are beyond the reasonable control of the Fund. Many of the foregoing factors could cause fluctuations in usage, expenses and revenues, causing the value of investments to decline and a material adverse effect on an Investment Fund’s or Co‑Investment’s performance.
Specific Infrastructure Assets in which the Fund invests may be subject to the following additional risks:
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Communication infrastructure companies are subject to risks involving changes in government regulation, competition, dependency on patent protection, equipment incompatibility, changing consumer preferences, technological obsolescence and large capital expenditures and debt burdens.
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Energy infrastructure companies are subject to adverse changes in fuel prices, the effects of energy conservation policies and other risks, such as increased regulation, negative effects of economic slowdowns, reduced demand, cleanup and litigation costs as a result of environmental damage, changing and international politics and regulatory policies of various governments. Natural disasters or terrorist attacks damaging sources of energy supplies will also negatively impact energy infrastructure companies.
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Social infrastructure companies/issuers are subject to government regulation and the costs of compliance with such regulations and delays or failures in receiving required regulatory approvals. The enactment of new or additional regulatory requirements may negatively affect the business of a social infrastructure company.
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Transportation infrastructure companies can be significantly affected by economic changes, fuel prices, labor relations, insurance costs and government regulations. Transportation infrastructure companies will also be negatively impacted by natural disasters or terrorist attacks.
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Utilities company revenues and costs are subject to regulation by states and other regulators. Regulatory authorities also may restrict a company’s access to new markets. Utilities companies may incur unexpected increases in fuel and other operating costs. Utilities companies are also subject to
considerable costs associated with environmental compliance, nuclear waste clean‑up and safety regulation.
Real Estate Investments. The Fund will invest, directly or indirectly, in real estate. The decline in the broader credit markets following the market turmoil in 2008 related to the sub‑prime mortgage dislocation caused the global financial markets to become more volatile and the United States real estate market was dramatically impacted as a result. Future dislocations in the real estate credit markets with the broad-based stress in the global real estate industry could create a difficult operating environment for owners of real estate in the near term and investors should be aware that the general risks of investing in real estate may be magnified.
Real estate is subject to risks associated with the ownership of real estate, including (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing and (ix) changes in interest rates. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company’s operations and market value in periods of rising interest rates. The value of securities of companies in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.
There are also special risks associated with particular real estate sectors, or real estate operations generally, as described below:
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Retail Properties. Retail properties are affected by the overall health of the economy and may be adversely affected by, among other things, the growth of alternative forms of retailing, bankruptcy, departure or cessation of operations of a tenant, a shift in consumer demand due to demographic changes, changes in spending patterns and lease terminations.
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Office Properties. Office properties are affected by the overall health of the economy, and other factors such as a downturn in the businesses operated by their tenants, obsolescence and non‑competitiveness.
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Industrial Properties. Industrial properties are affected by the overall health of the economy and other factors such as downturns in the manufacture, processing and shipping of goods.
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Hospitality Properties. The risks of hotel, motel and similar hospitality properties include, among other things, the necessity of a high level of continuing capital expenditures, competition, increases in operating costs which may not be offset by increases in revenues, dependence on business and commercial travelers and tourism, increases in fuel costs and other expenses of travel, and adverse effects of general and local economic conditions. Hotel properties tend to be more sensitive to adverse economic conditions and competition than many other commercial properties.
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Healthcare Properties. Healthcare properties and healthcare providers are affected by several significant factors, including federal, state and local laws governing licenses, certification, adequacy of care, pharmaceutical distribution, rates, equipment, personnel and other factors regarding operations, continued availability of revenue from government reimbursement programs and competition on a local and regional basis. The failure of any healthcare operator to comply with governmental laws and regulations may affect its ability to operate its facility or receive government reimbursements.
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Multifamily Properties. The value and successful operation of a multifamily property may be affected by a number of factors such as the location of the property, the ability of the management team, the level of mortgage interest rates, the presence of competing properties, adverse economic conditions in the locale, oversupply and rent control laws or other laws affecting such properties.
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Residential Properties. Residential properties can be significantly affected by the national, regional and local real estate markets. This segment of the real estate industry also is sensitive to interest rate
fluctuations which can cause changes in the availability of mortgage capital and directly affect the purchasing power of potential homebuyers. Thus, residential properties can be significantly affected by changes in government spending, consumer confidence, demographic patterns and the level of new and existing home sales.
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Shopping Centers. Shopping center properties are dependent upon the successful operations and financial condition of their tenants, particularly certain of their major tenants, and could be adversely affected by bankruptcy of those tenants. In some cases, a tenant may lease a significant portion of the space in one center, and the filing of bankruptcy could cause significant revenue loss, including the loss of revenue from smaller tenants with co‑tenancy rights. Like others in the commercial real estate industry, community centers are subject to environmental risks and interest rate risk. They also face the need to enter into new leases or renew leases on favorable terms to generate rental revenues. Community center properties could be adversely affected by changes in the local markets where their properties are located, as well as by adverse changes in national economic and market conditions.
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Self-Storage Properties. The value and successful operation of a self-storage property may be affected by a number of factors, such as the ability of the management team, the location of the property, the presence of competing properties, changes in traffic patterns and effects of general and local economic conditions with respect to rental rates and occupancy levels.
Other factors may contribute to the risk of real estate investments:
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Development Issues. Real estate property development creates exposure to risks, such as the risk that there will be insufficient tenant demand to occupy newly developed properties, and the risk that prices of construction materials or construction labor may rise materially during the development.
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Lack of Insurance. Real estate investments may fail to carry comprehensive liability, fire, flood, earthquake extended coverage and rental loss insurance, or insurance in place may be subject to various policy specifications, limits and deductibles. Should any type of uninsured loss occur, the real estate investments could lose its investment in, and anticipated profits and cash flows from, a number of properties and, as a result, adversely affect the Fund’s investment performance.
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Dependence on Tenants. The value of real estate investments’ properties and the ability of these investments to make distributions to their shareholders depends upon the ability of the tenants at the properties to generate enough income in excess of their tenant operating expenses to make their lease payments. Changes beyond the control of the real estate investments may adversely affect their tenants’ ability to make their lease payments and, in such event, would substantially reduce both their income from operations and ability to make distributions that directly or indirectly impact the Fund.
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Financial Leverage. Real estate investments may be highly leveraged and financial covenants may affect the ability of real estate investments to operate effectively.
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Environmental Issues. In connection with the ownership (direct or indirect), operation, management and development of real properties that may contain hazardous or toxic substances, a real estate investment may be considered an owner, operator or responsible party of such properties and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines and liabilities for injuries to persons and property. The existence of any such material environmental liability could have a material adverse effect on the results of operations and cash flow of any such real estate investment and, as a result, the amount available to make distributions on shares of the Fund could be reduced.
Energy Sector Risk. The Fund’s assets may include energy sector investments, thereby exposing the Fund to risks associated with this sector. Increases or decreases in the commodity supply or demand and resulting changes in pricing related to natural gas, natural gas liquids, crude oil, coal or other energy commodities, may have a significant
impact on the assets focused on this sector. Additionally, the energy sector is a highly regulated industry both domestically and internationally which can also have a material impact on the investments in this sector. Other factors that may adversely affect the value of securities of companies in the energy sector include operational risks, challenges to exploration and production, competition, inability to make accretive acquisitions, significant accident or event that is not fully insured at a company, natural depletion of reserves, and other unforeseen natural disasters.
Energy sector investments are affected by worldwide energy prices and costs related to energy production. These investments may have significant operations in areas at risk for natural disasters, social unrest and environmental damage. These investments may also be at risk for increased government regulation and intervention, energy conservation efforts, litigation and negative publicity and perception.
Utilities Sector. The Fund’s assets may include utilities sector investments, thereby exposing the Fund to risks associated with this sector. Rates charged by traditional regulated utility companies are generally subject to review and limitation by governmental regulatory commissions, and the timing of rate changes will adversely affect such companies’ earnings and dividends when costs are rising. Other factors that may adversely affect the value of securities of companies in the utilities sector include interest rate changes, supply and demand fluctuations, technological developments, natural resources conservation, and changes in commodity prices, which may be caused by supply and demand fluctuations or other market forces.
Special Situations and Distressed Investments. We may, directly or indirectly, invest in securities and other obligations of companies that are in special situations involving significant financial or business distress, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant returns, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful investment in distressed assets is unusually high. There is no assurance that we or an Investment Manager will correctly evaluate the value of the assets securing these debt investments or the prospects for a successful reorganization or similar action in respect of any company. In any reorganization or liquidation proceeding relating to such companies, the Fund may lose its entire investment, may be required to accept cash or securities with a value less than the original investment and/or may be required to accept payment over an extended period of time. Troubled company investments and other distressed asset-based investments require active monitoring.
Venture Capital and Growth Equity. We may invest in venture capital and growth equity. Venture capital is usually classified by investments in private companies that have a limited operating history, are attempting to develop or commercialize unproven technologies or implement novel business plans or are not otherwise developed sufficiently to be self-sustaining financially or to become public. Although these investments may offer the opportunity for significant gains, such investments involve a high degree of business and financial risk that can result in substantial losses.
Growth equity is usually classified by investments in private companies that have achieved product-market fit but may still need capital to achieve the desired level of scale before having access to the public markets for financing. As a result of the risks associated with advancing the company’s growth plan, investors can expect a higher return than might be available in the public markets, but also need to recognize the business and financial risks that remain in advancing the company’s commercial aspirations. For both venture capital and growth equity companies, the risks are generally greater than the risks of investing in public companies that may be at a later stage of development.
Agriculture and Forestry Sector Risk. Investments in agriculture/farmland are subject to various risks, including adverse changes in national or international economic conditions, adverse local market conditions, adverse natural conditions such as storms, floods, drought, windstorms, hail, temperature extremes, frosts, soil erosion, infestations and blights, failure of irrigation or other mechanical systems used to cultivate the land, financial conditions of tenants, marketability of any particular kind of crop that may be influenced, among other things, by changing consumer tastes and preferences, import and export restrictions or tariffs, casualty or condemnation losses, government subsidy or production programs, buyers and sellers of properties, availability of excess supply of property relative to demand, changes in availability of debt financing, changes in interest rates, real estate tax rates and other
operating expenses, environmental laws and regulations, governmental regulation of and risks associated with the use of fertilizers, pesticides, herbicides and other chemicals used in commercial agriculture, zoning laws and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of properties, risk due to dependence on cash flow, as well as acts of God, uninsurable losses and other factors which are beyond the control of the Fund or an Investment Fund.
In addition, the forestry and timber industry is highly cyclical and the market value of timber investments is strongly affected by changes in international economic conditions, interest rates, weather cycles, changing demographics, environmental conditions and government regulations, among other factors. For example, the volume and value of timber that can be harvested from timberlands is limited by natural disasters, fire, volcanic eruptions, insect infestation, disease, ice storms, windstorms, flooding and other events and weather conditions and changes in climate conditions could intensify the effects of any of these factors. Many companies in the timber and forestry industry do not insure against damages to their timberlands. This industry is also subject to stringent U.S. federal, state and local environmental, health and safety laws and regulations. Significant timber deposits are located in emerging markets countries where corruption and security may raise significant risks.
Financial Institutions Risk. Financial institutions in which the Fund may invest, directly or indirectly, are subject to extensive government regulation. This regulation may limit both the amount and types of loans and other financial commitments a financial institution can make, and the interest rates and fees it can charge. In addition, interest and investment rates are highly sensitive and are determined by many factors beyond a financial institution’s control, including general and local economic conditions (such as inflation, recession, money supply and unemployment) and the monetary and fiscal policies of various governmental agencies such as the Federal Reserve Board. These limitations may have a significant impact on the profitability of a financial institution since profitability is attributable, at least in part, to the institution’s ability to make financial commitments such as loans. Profitability of a financial institution is largely dependent upon the availability and cost of the institution’s funds and can fluctuate significantly when interest rates change.
U.S. and global markets recently have experienced increased volatility, including as a result of the recent failures of certain U.S. and non‑U.S. banks, which could be harmful to a Fund and issuers in which it invests. For example, if a bank in which the Fund or issuer has an account fails, any cash or other assets in bank accounts may be temporarily inaccessible or permanently lost by the Fund or issuer. If a bank that provides a subscription line credit facility, asset-based facility, other credit facility and/or other services to an issuer fails, the issuer could be unable to draw funds under its credit facilities or obtain replacement credit facilities or other services from other lending institutions with similar terms. Even if banks used by issuers in which the Fund invests remain solvent, continued volatility in the banking sector could cause or intensify an economic recession, increase the costs of banking services or result in the issuers being unable to obtain or refinance indebtedness at all or on as favorable terms as could otherwise have been obtained. Conditions in the banking sector are evolving, and the scope of any potential impacts to the Fund and issuers, both from market conditions and also potential legislative or regulatory responses, are uncertain. Continued market volatility and uncertainty and/or a downturn in market and economic and financial conditions, as a result of developments in the banking industry or otherwise (including as a result of delayed access to cash or credit facilities), could have an adverse impact on the Fund and issuers in which it invests.
Geographic Concentration Risks. Our investments may be concentrated in specific geographic regions. This focus may constrain the liquidity and the number of portfolio companies available for investment. In addition, our investments will be disproportionately exposed to the risks associated with the region of concentration.
Emerging Markets. We may invest, directly and indirectly, in companies located in emerging industrialized or less developed countries or that derive their revenues principally from such countries. Risks particularly relevant to such emerging markets may include greater dependence on exports and the corresponding importance of international trade, higher risk of inflation, more extensive controls on foreign investment and limitations on repatriation of invested capital, increased likelihood of governmental involvement in, and control over, the economies, decisions by the relevant government to cease its support of economic reform programs or to impose restrictions, and less established laws and regulations regarding fiduciary duties of officers and directors and protection of investors.
China is an emerging market and has demonstrated significantly higher volatility from time to time in comparison to developed markets. Investments in Chinese securities, including certain Hong Kong-listed and U.S.-listed securities, subject the Fund to risks specific to China. These risks include: (i) the risk of more frequent (and potentially widespread) trading suspensions and government interventions with respect to Chinese issuers, resulting in liquidity risk, price volatility, greater market execution risk, and valuation risk; (ii) the risk of currency fluctuations, currency non‑convertibility, currency revaluations and other currency exchange rate fluctuations or blockage; (iii) the risk of intervention by the Chinese government in the Chinese securities markets; (iv) the risk of nationalization or expropriation of assets; (v) the risk that the Chinese government may decide not to continue to support economic reform programs; (vi) the risk of limitations on the use of brokers; (vii) the risk of interest rate fluctuations and higher rates of inflation; (viii) the risk that the U.S. government or other governments may sanction Chinese issuers or otherwise prohibit U.S. persons (such as the Fund) from investing in certain Chinese issuers; and (ix) the risk of market volatility caused by any potential regional or territorial conflicts, including military conflicts, or natural or other disasters. Recent developments in relations between the United States and China have heightened concerns of increased tariffs and restrictions on trade between the two countries. It is unclear whether further tariffs and sanctions may be imposed or other escalating actions may be taken in the future, which could negatively impact the Fund. In addition, China is alleged to have participated in state-sponsored cyberattacks against foreign companies and foreign governments. Actual and threatened responses to such activity and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers of securities in which the Fund may invest. As a result of different legal standards, the Fund faces the risk of being unable to enforce its rights with respect to holdings in Chinese securities and the information about the Chinese securities in which the Fund may invest may be less reliable or complete. Chinese companies with securities listed on U.S. exchanges may be delisted if they do not meet U.S. accounting standards and auditor oversight requirements, which could significantly decrease the liquidity and value of the securities.
Sector Concentration. We may invest in an Investment Fund that concentrates its investments in specific industry sectors. This focus may constrain the liquidity and the number of portfolio companies available for investment by an Investment Fund. In addition, the investments of such an Investment Fund will be disproportionately exposed to the risks associated with the industry sectors of concentration.
Technology Sector. Certain technology companies may have limited product lines, markets or financial resources, or may depend on a limited management group. In addition, these companies are strongly affected by worldwide technological developments, and their products and services may not be economically successful or may quickly become outdated.
Financial Sector. Financial services companies are subject to extensive governmental regulation that may limit the amounts and types of loans and other financial commitments they can make, and the interest rates and fees they can charge. Profitability of such companies is generally dependent on the availability and cost of capital, and it can fluctuate as a result of increased competition or changing interest rates. In addition, events in the financial sector over the past several years have resulted in reduced liquidity in credit and a high degree of volatility in the financial markets. This situation has negatively affected many financial services companies, such as by causing such companies’ values to decline.
Currency Risk. Infrastructure Assets may include direct and indirect investments in a number of different currencies. Any returns on, and the value of such investments may, therefore, be materially affected by exchange rate fluctuations, local exchange control, limited liquidity of the relevant foreign exchange markets, the convertibility of the currencies in question and/or other factors. A decline in the value of the currencies in which the Infrastructure Assets are denominated against the U.S. dollar may result in a decrease in the Fund’s NAV. The Advisers will not elect to hedge the value of investments made by the Fund against currency fluctuations. Accordingly, the performance of the Fund could be adversely affected by such currency fluctuations.
Non‑U.S. Risk. Certain Infrastructure Assets may include assets outside of the United States. Non‑U.S. securities or instruments involve certain factors not typically associated with investing in U.S. securities or instruments, including risks relating to (i) currency exchange matters, including fluctuations in the rate of exchange between the U.S. dollar and the various non‑U.S. currencies in which the Fund’s non‑U.S. investments are denominated, and costs associated with conversion of investment principal and income from one currency into another; (ii) differences in conventions relating to documentation, settlement, corporate actions, stakeholder rights and
other matters; (iii) differences between the U.S. and non‑U.S. securities markets, including higher rates of inflation, higher transaction costs and potential price volatility in, and relative illiquidity of, some non‑U.S. securities markets; (iv) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less governmental supervision and regulation in some countries; (v) certain economic, social and political risks, including potential exchange control regulations and restrictions on non‑U.S. investment and repatriation of capital, the risks of political, economic or social instability, including the risk of sovereign defaults, and the possibility of expropriation or confiscatory taxation and adverse economic and political development; (vi) the possible imposition of non‑U.S. taxes on income and gains recognized with respect to such securities or instruments; (vii) differing, and potentially less well developed or well-tested laws regarding creditor’s rights (including the rights of secured parties), corporate governance, fiduciary duties and the protection of investors; (viii) difficulty in enforcing contractual obligations; (ix) differences in the legal and regulatory environment or enhanced legal and regulatory compliance; (x) reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; (xi) political hostility to investments by foreign or private investment fund investors; and (xii) less publicly available information.
Additionally, certain Infrastructure Assets may include or invest in foreign portfolio companies that do not maintain internal management accounts or adopt financial budgeting, internal audit or internal control procedures to standards normally expected of companies in the United States. Accordingly, information supplied regarding the Private Market Assets may be incomplete, inaccurate and/or significantly delayed. The Fund and the Investment Funds may therefore be unable to take or influence timely actions necessary to rectify management deficiencies in such portfolio companies, which may ultimately have an adverse impact on the NAV of the Fund.
The Fund’s Infrastructure Assets could be negatively impacted by the current hostilities in Eastern Europe, including direct and indirect effects on their operations and financial condition. In the event these hostilities escalate, the impact could more significant. Certain of the Infrastructure Assets in which the Fund may invest may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, as a result of recent events involving Ukraine and Russia, the United States and other countries have imposed economic sanctions on Russian sovereign debt and on certain Russian individuals, financial institutions, and others. Sanctions could result in Russia taking counter measures or retaliatory actions which may further impair the value and liquidity of Russian securities. These sanctions could also impair the Fund’s ability to meet its investment objectives. For example, the Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, the sanctions may require the Fund to freeze its existing investments in companies operating in or having dealings with sanctioned countries, prohibiting the Fund from selling or otherwise transacting in these investments. This could impact the Fund’s ability to sell securities or other financial instruments as needed to meet shareholder redemptions. The Fund could seek to suspend redemptions in the event that an emergency exists in which it is not reasonably practicable for the Fund to dispose of its securities or to determine the value of its net assets.
Illiquidity of Infrastructure Assets. There is no regular market for interest in Infrastructure Assets, which typically must be sold in privately negotiated transactions. Any such sales would likely require the consent of the applicable Investment Manager or portfolio company and could occur at a discount to the stated NAV. If the Advisers determine to cause the Fund to sell its interests in an Infrastructure Asset, the Fund may be unable to sell such interests quickly, if at all, and could therefore be obligated to continue to hold such interests for an extended period of time.
Investments in Non‑Voting Stock; Inability to Vote. Under certain circumstances, the Fund may hold its interests in the Infrastructure Assets in non‑voting form or limit its voting rights to a certain percentage. In such cases, where only voting securities are available for purchase, the Fund will generally seek to create by contract the same result as owning a non‑voting security by agreeing to relinquish or limit the right to vote in respect of its investment. The Fund will not receive any consideration in return for entering into a voting waiver arrangement. To the extent that the Fund contractually foregoes the right to vote the relevant securities, the Fund will not be able to vote or may be able to vote only to a limited extent on matters that may be adverse to the Fund’s interests. As a result, the Fund’s influence on a Infrastructure Assets could be diminished, which may consequently adversely affect the Fund and its Shareholders.
Nature of Portfolio Companies. Infrastructure Assets will include direct and indirect investments in various companies, projects, and businesses. This may include portfolio companies in the early phases of development, which can be highly risky due to the lack of a significant operating history, fully developed product lines, experienced
management, or a proven market for their products. The Fund’s investments may also include portfolio companies that are in a state of distress or which have a poor record and which are undergoing restructuring or changes in management, and there can be no assurances that such restructuring or changes will be successful. The management of such portfolio companies may depend on one or two key individuals, and the loss of the services of any of such individuals may adversely affect the performance of such portfolio companies.
Investments in the Debt Securities of Small or Middle-Market Portfolio Companies. Our investments may consist of loans to small and/or less well-established privately held companies. While smaller private companies may have potential for rapid growth, investments in private companies pose significantly greater risks than investments in public companies. For example, private companies:
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have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress;
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may have limited financial resources and may be unable to meet their obligations under their debt securities, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of realizing any guarantees that may have obtained in connection with the investment;
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may have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
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generally, are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on the Investment Fund that has invested in the portfolio company; and
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generally, have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
Investments in smaller capitalization companies often involve significantly greater risks than the securities of larger, better-known companies because they may lack the management expertise, financial resources, product diversification and competitive strengths of larger companies. The prices of the securities of smaller companies may be subject to more abrupt or erratic market movements than those of larger, more established companies, as these securities typically are less liquid, traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. In addition, when selling large positions in small capitalization securities, the seller may have to sell holdings at discounts from quoted prices or may have to make a series of small sales over a period of time.
In addition, investments in private companies tend to be less liquid. The securities of many of the companies in which we invest are not publicly traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over‑the‑counter secondary market for institutional investors only. Such securities may be subject to legal and other restrictions on resale. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of target portfolio companies may affect our investment returns.
First Lien Senior Secured Loans, Second Lien Senior Secured Loans and Unitranche Debt. When we invest, directly or indirectly, in first lien senior secured loans, second lien senior secured loans, and unitranche debt of portfolio companies, we will generally seek to take a security interest in the available assets of those portfolio companies, including the equity interests of the portfolio companies’ subsidiaries. There is a risk that the collateral securing these loans may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. To the extent a debt investment is collateralized by the securities of a portfolio company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency of the portfolio company. Also, in some circumstances, the Fund’s lien may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a
portfolio company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Loans that are under- collateralized involve a greater risk of loss. Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should the remedies be enforced. Finally, particularly with respect to a unitranche debt structure, unitranche debt will generally have higher leverage levels than a standard first lien term loan.
Mezzanine Investments. We may, directly or indirectly, invest in mezzanine loans. Structurally, mezzanine loans usually rank subordinate in priority of payment to senior debt, such as senior bank debt, and are often unsecured. However, mezzanine loans rank senior to common and preferred equity in a borrower’s capital structure. Mezzanine debt is often used in leveraged buyout and real estate finance transactions. Typically, mezzanine loans have elements of both debt and equity instruments, offering the fixed returns in the form of interest payments associated with senior debt, while providing lenders an opportunity to participate in the capital appreciation of a borrower, if any, through an equity interest. This equity interest typically takes the form of warrants. Due to their higher risk profile and often less restrictive covenants as compared to senior loans, mezzanine loans generally earn a higher return than senior secured loans. The warrants associated with mezzanine loans are typically detachable, which allows lenders to receive repayment of their principal on an agreed amortization schedule while retaining their equity interest in the borrower. Mezzanine loans also may include a “put” feature, which permits the holder to sell its equity interest back to the borrower at a price determined through an agreed-upon formula. Mezzanine investments may be issued with or without registration rights. Similar to other high yield securities, maturities of mezzanine investments are typically seven to ten years, but the expected average life is significantly shorter at three to six years. Mezzanine investments are usually unsecured and subordinate to other debt obligations of an issuer.
Risks Associated with Covenant-Lite Loans. A significant number of leveraged loans in the market may consist of loans that do not contain financial maintenance covenants (“Covenant-Lite Loans”). While the Fund does not intend to invest in Covenant-Lite Loans as part of its principal investment strategy, it is possible that such loans may comprise a small portion of the Fund’s portfolio. Such loans do not require the borrower to maintain debt service or other financial ratios. Ownership of Covenant-Lite Loans may expose the Fund to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation than is the case with loans that also contain financial maintenance covenants.
High Yield Securities and Distressed Securities. Our Private Market Assets may include investments in fixed income securities rated investment grade or non‑investment grade (commonly referred to as high yield securities or “junk” securities) and may include investments in unrated fixed income securities. Non‑investment grade securities are fixed income securities rated below Baa by Moody’s Investors Service, Inc. (“Moody’s”) or below BBB by Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies, Inc. (“S&P”), or if unrated considered by an Investment Manager to be equivalent quality. Non‑investment grade debt securities in the lowest rating categories or unrated debt securities determined to be of comparable quality may involve a substantial risk of default or may be in default. Private Market Assets in non‑investment grade securities expose it to a substantial degree of credit risk. Non‑investment grade securities may be issued by companies that are restructuring, are smaller and less creditworthy or are more highly indebted than other companies, and therefore they may have more difficulty making scheduled payments of principal and interest. Non‑investment grade securities are subject to greater risk of loss of income and principal than higher rated securities and may be considered speculative. Non‑investment grade securities may experience reduced liquidity, and sudden and substantial decreases in price. An economic downturn affecting an issuer of non‑investment grade debt securities may result in an increased incidence of default. In the event of a default, an Investment Fund or the Fund may incur additional expenses to seek recovery. In addition, the market for lower grade debt securities may be thinner and less active than for higher grade debt securities.
Certain Infrastructure Assets may be in transition, out of favor, financially leveraged or troubled, or potentially troubled, and may be or have recently been involved in major strategic actions, restructurings, bankruptcy, reorganization or liquidation. The characteristics of these companies can cause their securities to be particularly risky, although they also may offer the potential for high returns. These companies’ securities may be considered speculative, and the ability of the companies to pay their debts on schedule could be affected by adverse interest rate movements, changes in the general economic climate, economic factors affecting a particular industry or specific developments within the companies. These securities may also present a substantial risk of default. An Investment Fund’s or the Fund’s investment in any instrument is subject to no minimum credit standard and a significant portion of the
obligations and preferred stock in which an Investment Fund or the Fund may invest may be non‑investment grade (commonly referred to as junk securities), which may result in the Investment Fund or the Fund experiencing greater risks than it would if investing in higher rated instruments.
Primary Investments. The market for Primary Investments may be very limited and competitive, and the Primary Investments to which the Fund wishes to allocate capital may not be available at any given time. Primary Investments may be heavily negotiated and may create additional transaction costs for the Fund. Primary Investments are more concentrated than investments in Investment Funds, which hold multiple portfolio companies.
LIBOR Risk. The Fund’s investments, payment obligations and financing terms may be based on floating rates, such as certain London Interbank Offer Rates (collectively, “LIBOR”), Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). Certain LIBORs were generally phased out by the end of 2021, and some regulated entities have ceased to enter into new LIBOR-based contracts beginning January 1, 2022. There remains uncertainty regarding the future use of LIBOR, and the nature of any replacement rate. However, it is possible that the most widely used LIBORs may continue until mid‑2023. As such, the potential effect of a transition away from LIBOR on the Fund or the LIBOR-based instruments in which the Fund invests cannot yet be determined, and it is not possible to completely identify or predict any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere.
The termination of certain Reference Rates presents risks to the Fund. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by the Fund or on its overall financial condition or results of operations. In addition, any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect the Fund’s performance and/or NAV. The transition process away from LIBOR may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. The transition process may also result in a reduction in the value of certain instruments held by the Fund or reduce the effectiveness of related Fund transactions. While some instruments in which the Fund invests may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate setting methodology, not all instruments in which the Fund invests may have such provisions and there is significant uncertainty regarding the effectiveness of any such alternative methodologies. Any potential effects of the transition away from LIBOR on the Fund or on financial instruments in which the Fund invests, as well as other unforeseen effects, could result in losses to the Fund. Since the usefulness of LIBOR as a benchmark or reference rate could deteriorate during the transition period, these effects could occur prior to and/or subsequent to mid‑2023.
The risks set out above are heightened with respect to investments in LIBOR-based products that do not include a fall back provision that addresses how interest rates will be determined if LIBOR stops being published. Other important factors include the pace of the transition, the specific terms of alternative Reference Rates accepted in the market, the depth of the market for investments based on alternative reference rates, and the Advisers’ ability to develop appropriate investment and compliance systems capable of addressing alternative Reference Rates.
Force Majeure Risk. Issuers may be affected by force majeure events (i.e., events beyond the control of the party claiming that the event has occurred, including, without limitation, acts of God, fire, flood, earthquakes, outbreaks of an infectious disease, pandemic or any other serious public health concern, war, terrorism and labor strikes). Some force majeure events may adversely affect the ability of a party (including an issuer or a counterparty to the Fund or an issuer) to perform its obligations until it is able to remedy the force majeure event. In addition, the cost to an issuer or the Fund of repairing or replacing damaged assets resulting from such force majeure event could be considerable. Certain force majeure events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy and international business activity generally, or in any of the countries in which the Fund may invest specifically. Additionally, a major governmental intervention into industry, including the nationalization of an industry or the assertion of control over one or more issuers or its assets, could result in a loss to the Fund, including if its investment in such issuer is canceled, unwound or acquired (which could be without what the Fund considers to be adequate compensation). Any of the foregoing may therefore adversely affect the performance of the Fund and its investments.
The outbreak of a novel coronavirus (“SARS‑CoV‑2”) and related respiratory disease (“COVID‑19”) has recently led, and for an unknown period of time will continue to lead, to disruptions in local, regional, national and
global markets and economies affected thereby. The COVID‑19 outbreak has resulted in numerous deaths and the imposition of both local and more widespread “work from home” and other quarantine measures, mandatory closures of businesses deemed “non‑essential,” border closures and other travel restrictions, labor shortages, a decline in consumer demand for certain goods and services, commercial disruption on a global scale, and general concern and uncertainty, all of which have caused social unrest and significant volatility in financial markets. The future impact of COVID‑19 is currently unknown. The effects to public health, business and market conditions resulting from the COVID‑19 pandemic may have a significant negative impact on the performance of the Fund’s investments, including exacerbating other pre‑existing political, social and economic risks.
Similar consequences could arise with respect to other infectious diseases.
Principal Risks Related to Infrastructure Assets
Infrastructure Investments Generally. The Fund seeks to generate above-market risk-adjusted returns through co‑investments with third-party sponsors, merchant banks, institutional investors or strategic acquirers, some or all of which may have more resources than the Fund, and which may have investment in infrastructure and infrastructure-related assets.
Investments will be subject to the risks incidental to the indirect ownership and operation of infrastructure assets, including risks associated with the general economic climate, geographic or market concentration, climatic risks, the ability of the third-party sponsors to manage the investment, government regulations, national and international political circumstances and fluctuations in interest rates, rates of inflation or commodities’ prices such as oil. Since investments in infrastructure and similar assets, like many other types of long-term investments, have historically experienced significant fluctuations and cycles in value, specific market conditions may result in temporary or permanent reductions in the value of an investment.
In addition, general economic conditions in relevant jurisdictions, as well as conditions of domestic and international financial markets, may adversely affect operations of the third-party co‑investors and in turn, the Fund. In particular, because of the long time‑lag between the approval of a project and its actual funding, a well-conceived project may, as a result of changes in investor sentiment, the financial markets, economic, or other conditions prior to its completion, become an economically unattractive investment.
There can be no assurance that the Investments will be profitable or generate cash flow sufficient to provide a return on or recovery of amounts invested therein.
Sector Risks. Portfolio companies may operate in highly competitive markets dominated by firms with substantially greater financial and possibly better technical resources than the portfolio companies in which the Fund invests. Portfolio companies in which the Fund invests may also be subject to additional infrastructure sector risks, including (i) the risk that technology employed will be not be effective or efficient, (ii) the risk of equipment failures, failure to perform according to design specifications, failure to meet expected levels of efficiency, fuel interruptions, loss of sale and supply contracts; (iii) changes in power or fuel contract prices, bankruptcy of or defaults by key customers, suppliers or other counterparties, and tort liability; (iv) risk of changes of values of infrastructure sector companies; (v) risks associated with employment of personnel and unionized labor; (vi) political and regulatory considerations and popular sentiments that could affect the ability of the Fund to buy or sell investments on favorable terms; and (vii) other unanticipated events which adversely affect operations.
The occurrence of events related to any of the foregoing could have a material adverse effect on the Fund and its Co‑Investments. These and other inherent business risks could affect the performance and value of Co‑Investments.
Environmental, Health and Safety Risks. Infrastructure assets are typically subject to numerous statutes, rules and regulations relating to protection of the environment and worker and public health and safety. Certain statutes, rules and regulations might require Co‑Investments to address environmental contamination, including soil and groundwater contamination, resulting from the release of fuel, hazardous materials or other pollutants, to control other forms of environmental pollution such as air, surface water, wastewater, and noise pollution, or otherwise to incur significant capital or operating expenditures to comply with environmental, health, and safety requirements. Any current or past non‑compliance with such requirements could subject the underlying assets of a Co‑Investment to
material administrative, civil, or criminal penalties or other liabilities. Further, under various statutes, rules and regulations of certain jurisdictions, a current or previous owner or operator of real property may be liable for the costs of investigation, monitoring, removal or remediation of hazardous materials, in some cases whether or not the owner or operator knew of or was responsible for the presence of hazardous materials. The presence of hazardous materials on a property could also result in personal injury or property damage or similar claims by private parties. Persons who arrange for the disposal or treatment of hazardous materials may also be liable for the costs of removal or remediation of these materials at the disposal or treatment facility, whether or not that facility is or ever was owned or operated by that person.
The long-term trend toward increasingly stringent environmental, health, and safety regulation could continue in the future, resulting in substantial additional costs on Co‑Investments to comply with new requirements. In addition, because infrastructure assets can have a substantial environmental impact, community and environmental groups may protest about the development or operation of a Co‑Investment, and these protests may induce government action to the detriment of performance of the Co‑Investment. Further, ordinary operation or occurrence of an accident with respect to a Co‑Investment could cause significant damage to the environment or harm to public health or safety, which may result in significant financial distress to the particular asset and ultimately affect the return on the Fund’s investment therein.
While StepStone and the Investment Manager intend to exercise reasonable care to select Co‑Investments that have underlying assets that do not present a material risk of current or future environmental, health, or safety liabilities, StepStone and the Investment Manager cannot rule the possibility that such liabilities may arise as a result of a large number of factors, including changes in laws or regulations and the existence of conditions that were unknown at the time of acquisition. Environmental, health, or safety liabilities could have a material adverse effect on the results of operations, financial condition, liquidity and prospects of the Co‑Investments, and on the overall value of such Co‑Investments.
Terrorism Risk. The Fund may invest directly or indirectly in significant strategic assets. Strategic assets are assets that have a national or regional profile and may have monopolistic or oligopolistic characteristics. The very nature of these assets could generate additional risk not common in other industry sectors and could expose them to a greater risk of being the subject of a terrorist attack than other assets or businesses. Any terrorist attacks that occur at or near infrastructure facilities would likely cause significant harm to employees, assets and, potentially, the surrounding community. Insurers may offer a limited amount of or no insurance coverage for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. A terrorist attack involving the property of an infrastructure asset, or property under control of a portfolio company, may result in liability far in excess of available insurance coverage. A terrorist attack on an infrastructure asset may also have adverse consequences for all assets of that type, including the underlying assets in a Co‑Investment. For example, as a result of a terrorist attack in the vicinity of an infrastructure asset, the infrastructure asset may be forced to increase preventative security measures or expand its insurance coverage, adversely affecting the profitability of investment in that asset. Similarly, a terrorist attack could cause reduced patronage, usage and demand for an entire class of infrastructure assets or for infrastructure investments in the region of the terrorist attack, which could adversely affect the profitability of the Co‑Investments.
Climate Risk. Global climate change is widely considered to be a significant threat to the global economy. Infrastructure assets in particular may face risks from the physical effects of climate change, such as risks posed by increasing frequency or severity of extreme weather events and rising sea levels and temperatures. Additionally, the Paris Agreement and other initiatives by international, U.S. federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose infrastructure assets to so‑called “transition risks” in addition to physical risks, such as: (i) regulatory and litigation risk (e.g., changing legal requirements that could result in increased permitting and compliance costs, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to climate impacts); (ii) technology and market risk (e.g., declining market for products and services seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions); and (iii) reputational risk (e.g., risks tied to changing customer or community perceptions of an asset’s relative contribution to greenhouse gas emissions). StepStone and the Investment Manager cannot rule out the possibility that climate risks could result in unanticipated delays or expenses and, under certain circumstances, could prevent completion of investment activities once undertaken, any of which could have a material adverse effect on a Co‑Investment or the Fund.
Regulatory and Legal Risks. Certain of the Co‑Investments may be in entities that are subject to substantial regulation by governmental agencies. The nature of this regulation exposes the owners of infrastructure assets to a higher level of regulatory control than typically imposed on other businesses. In addition, their operations may often rely on governmental licenses, concessions, leases or contracts that are generally very complex and may result in disputes over interpretation or enforceability. Even though most permits and licenses are obtained prior to the commencement of full project operations, many of these licenses and permits have to be maintained over the project’s life. If the Fund or portfolio companies fail to comply with these regulations or contractual obligations, they could be subject to monetary penalties or they may lose their rights to operate the underlying infrastructure assets, or both. Where their ability to operate an infrastructure asset is subject to a concession or lease from the government, the concession or lease may restrict their ability to operate the asset in a way that maximizes cash flows and profitability. Government entities generally have significant influence over such companies in respect of the various contractual and regulatory relationships they may have, and these government entities may exercise their authority in a manner that causes delays in the operation of the business of the infrastructure investments, obstacles to pursuit of the infrastructure investments’ strategy or increased administrative expenses. In this regard, the nature and extent of government regulation can also be a key driver of value and returns. Furthermore, permits or special rulings may be required on taxation, financial and regulatory related issues.
The concessions of certain Co‑Investments are granted by government bodies and are subject to special risks, including the risk that the relevant government bodies will exercise sovereign rights and take actions contrary to the rights of the Fund or the relevant portfolio company under the relevant concession agreement. Indeed, to the extent that Fund invests in assets that are governed by lease or concession agreements with governmental authorities, there is a risk that these authorities may not be able to honor their obligations under the agreement, especially over the long term. The lease or concession may also contain clauses more favorable to the government counterparty than a typical commercial contract. For instance, the lease or concession may enable the government to terminate the lease or concession in certain circumstances (such as default by the Fund or by a portfolio company) without requiring the government counterparty to pay adequate compensation. In addition, there can be no assurance that the relevant government bodies will not legislate, impose regulations or taxes or change applicable laws or act contrary to the law in a way that would materially and adversely affect the business of the Co‑Investments. Indeed, government counterparties may have the discretion to change or increase regulation of the operations of the Co‑Investments or to implement laws, regulations or policies affecting their operations, separate from any contractual rights that the government counterparties may have. Governments have considerable discretion in implementing regulations and policies that could impact Co‑Investments, and because infrastructure assets provide basic, everyday services, and face limited competition, governments may be influenced by political considerations and make decisions that adversely affect Co‑Investments and their operations. Activities not currently regulated may in the future be regulated.
In addition, infrastructure investments may be subject to rate regulation by government agencies because of their unique position as the sole or predominant providers of services that are often essential to the community. As a result, certain infrastructure investments might be subject to unfavorable price regulation by government agencies. Political oversight of the sector is also likely to remain pervasive and unpredictable and, for political reasons, governments may attempt to take actions which may negatively affect the operations, revenue, profitability or contractual relationships of infrastructure investments, including through expropriation.
Certain infrastructure investments may need to use public ways or may operate under easements. Under the terms of agreements governing the use of public ways or easements, government authorities may retain the right to restrict the use of such public ways or easements or to require portfolio companies to remove, modify, replace or relocate their facilities at the portfolio company’s expense. If a government authority exercises these rights, the portfolio company could incur significant costs and its ability to provide service to its customers could be disrupted, which could adversely impact the performance of the relevant Co‑Investment.
Infrastructure assets are often governed by highly complex legal contracts and documents. As a result, the risks of a dispute over interpretation or enforceability of the legal contracts and documentation and consequent costs and delays may be higher than for other types of investments. Such risks may be increased by the uncertainty of laws and their application in certain jurisdictions in which the Fund will invest. The Fund may be adversely affected by future changes in laws and regulations.
Other legal risks relate to environmental issues and industrial actions or to actions by special interest groups and actions or litigation relating to the acquisition, ownership, operation and disposition of the Co‑Investments that
may adversely affect the Co‑Investment or the value thereof. The risk of such actions or litigation may be higher with regard to infrastructure investments (which may be of a public and/or quasi-monopoly nature) compared to other investments.
Demand and Usage Risk. The Fund may directly or indirectly invest in assets with demand, usage and throughput risk. Residual demand, usage and throughput risk can affect the performance of Co‑Investments. For example, some of the Co‑Investments may be subject to seasonal variations, and accordingly, the Fund’s operating results for any such Co‑Investment in any particular quarter may not be indicative of the results that can be expected for such Co‑Investment throughout the entire year. To the extent that StepStone’s and the Investment Manager’s assumptions regarding the demand, usage and throughput of assets prove incorrect, returns to the Fund could be adversely affected.
Users of the infrastructure operated by Co‑Investments may react negatively to any adjustments to applicable tolls or other usage-related fee rates, or public pressure may cause relevant government authorities to challenge the tolls or other usage-related fee rates. Users of infrastructure may react adversely to tolls or other usage-related fee rates, for example, by avoiding using the infrastructure or refusing to pay the tolls or other usage-related fee, resulting in lower volumes and reduced usage revenues. In addition, adverse public opinion, or lobbying efforts by specific interest groups, could result in governmental pressure on Co‑Investments to reduce their tolls or other usage-related fee rates, or to forego planned tolls or other usage-related fee rate increases. StepStone and the Investment Manager cannot guarantee that government bodies with which Co‑Investments have concession agreements will not try to exempt certain users’ categories from tolls or other usage-related fees or negotiate lower tolls or other usage-related fee rates. If public pressure or government action forces Co‑Investments to restrict their tolls or other usage-related fee rate increases or to reduce their tolls or other usage-related fee rates, and they are not able to secure adequate compensation to restore the economic balance of the relevant concession agreement, the Fund’s business, financial condition and results of operations could be materially and adversely affected.
The Fund may invest in Co‑Investments that derive substantially all of their revenues from collecting tolls or other usage-related fees from users of such infrastructure. The tolls or other usage-related fees that are applicable to such infrastructure are set forth in the respective concession agreements entered into by or on behalf of the Fund or the relevant portfolio company and the relevant government body.
After execution of a concession agreement, the relevant government bodies may seek to limit such Co‑Investments’ ability to increase, or may seek to reduce, tolls or other usage-related fee rates outside the scope of the respective concession agreements, as a result of factors such as general economic conditions, negative consumer perceptions of increases in tolls or other usage-related fee rates, the prevailing rate of inflation, volume and public sentiment about prevailing tolls or other usage-related fee rates.
Valuation of the Fund’s Interests in Investment Funds. The valuation of the Fund’s investments in Investment Funds is ordinarily determined based upon valuations provided by the Investment Managers on a quarterly basis. Although such valuations are provided on a quarterly basis, the Fund will provide valuations, and will issue Shares, on a daily basis. A large percentage of the securities in which the Fund invests will not have a readily ascertainable market price and will be fair valued by the Investment Manager. In this regard, an Investment Manager may face a conflict of interest in valuing the securities, as their value may affect the Investment Manager’s compensation or its ability to raise additional funds. No assurances can be given regarding the valuation methodology or the sufficiency of systems utilized by any Investment Manager, the accuracy of the valuations provided by the Investment Managers, that the Investment Managers will comply with their own internal policies or procedures for keeping records or making valuations, or that the Investment Managers’ policies and procedures and systems will not change without notice to the Fund. As a result, an Investment Manager’s valuation of the securities may fail to match the amount ultimately realized with respect to the disposition of such securities.
An Investment Manager’s information could also be inaccurate due to fraudulent activity, mis‑valuation or inadvertent error. The Fund may not uncover errors in valuation for a significant period of time, if ever.
Valuations Subject to Adjustment. The Fund determines its NAV daily based upon the quarterly valuations reported by the Investment Managers, which may not reflect market or other events occurring subsequent to the quarter‑end. The Fund will fair value its holdings in Investment Funds to reflect such events, consistent with its valuation policies; however, there is no guarantee the Fund will correctly fair value such investments. Additionally,
the valuations reported by Investment Managers may be subject to later adjustment or revision. For example, fiscal year‑end NAV calculations of the Investment Funds may be revised as a result of audits by their independent auditors. Other adjustments may occur from time to time. Because such adjustments or revisions, whether increasing or decreasing the NAV of the Fund, and therefore the Fund, at the time they occur, relate to information available only at the time of the adjustment or revision, the adjustment or revision may not affect the amount of the repurchase proceeds of the Fund received by Shareholders who had their Shares repurchased prior to such adjustments and received their repurchase proceeds. As a result, to the extent that such subsequently adjusted valuations from the Investment Managers or revisions to the NAV of an Investment Fund adversely affect the Fund’s NAV, the remaining outstanding Shares may be adversely affected by prior repurchases to the benefit of Shareholders who had their Shares repurchased at a NAV higher than the adjusted amount. Conversely, any increases in the NAV resulting from such subsequently adjusted valuations may be entirely for the benefit of the outstanding Shares and to the detriment of Shareholders who previously had their Shares repurchased at a NAV lower than the adjusted amount. The same principles apply to the purchase of Shares. New Shareholders may be affected in a similar way.
Termination of the Fund’s Interest in an Investment Fund. An Investment Fund may, among other things, terminate the Fund’s interest in that Investment Fund (causing a forfeiture of all or a portion of such interest) if the Fund fails to satisfy any capital call by that Investment Fund or if the continued participation of the Fund in the Investment Fund would have a material adverse effect on the Investment Fund or its assets. The Fund’s over-commitment strategy may increase the risk that the Fund is unable to satisfy a capital call from an Investment Fund.
General Risks of Secondary Investments. The overall performance of the Fund’s Secondary Investments will depend in part on the acquisition price paid, which may be negotiated based on incomplete or imperfect information. There is a risk that investors exiting a Co‑Investment or an Investment Fund through a secondary transaction may possess superior knowledge regarding the value of their investment, and the Fund may pay more for a secondary investment than it would have if it were also privy to such information. Certain Secondary Investments may be purchased as a portfolio, and in such cases the Fund may not be able to carve out from such purchases those investments that the Advisers consider (for commercial, tax, legal or other reasons) less attractive. Where the Fund acquires a secondary Investment Fund, the Fund will generally not have the ability to modify or amend such secondary Investment Fund’s constituent documents (e.g., limited partnership agreements) or otherwise negotiate the economic terms of the interests being acquired. In addition, the costs and resources required to investigate the commercial, tax and legal issues relating to secondary investments may be greater than those relating to primary investments.
Where the Fund acquires a secondary Investment Fund, the Fund may acquire contingent liabilities associated with such interest. Specifically, where the seller has received distributions from the relevant secondary Investment Fund and, subsequently, that secondary Investment Fund recalls any portion of such distributions, the Fund (as the purchaser of the interest to which such distributions are attributable) may be obligated to pay an amount equivalent to such distributions to such secondary Investment Fund. While the Fund may be able, in turn, to make a claim against the seller of the interest for any monies so paid to the secondary Investment Fund, there can be no assurance that the Fund would have such right or prevail in any such claim.
The Fund may acquire Secondary Investments as a member of a purchasing syndicate, in which case the Fund may be exposed to additional risks including, among other things: (i) counterparty risk, (ii) reputation risk, (iii) breach of confidentiality by a syndicate member, and (iv) execution risk.
Additionally, the Fund may acquire interests in Secondary Investments through structured transactions such as collateralized fund obligations (“CFOs”) or similar investment vehicles that own existing secondaries and co‑investments. These structures may impose additional administrative costs that the Fund would not have incurred had it invested in Secondary Investments directly. Secondary Investments held inside of a CFO may be subject to the risks and benefits of leverage at the CFO level. If the Fund acquires interests in a secondary Investment Fund through a CFO, the Fund may be limited in its ability to enforce its rights against such secondary Investment Fund.
Commitment Strategy. The Fund may maintain a sizeable cash position in anticipation of funding capital calls. The Fund will be required to make incremental contributions pursuant to capital calls issued from time to time by Investment Funds. The overall impact on performance due to holding a portion of the investment portfolio in cash or cash equivalents could be negative.
The Fund will employ an “over-commitment” strategy, which could result in an insufficient cash supply to fund unfunded commitments to Investment Funds. Such a short fall would have negative impacts on the Fund, including an adverse impact on the Fund’s ability to pay for redemptions of Shares by Shareholders, pay distributions or to meet expenses generally. Moreover, if the Fund defaults on its unfunded commitments or fails to satisfy capital calls in a timely manner then, generally, it will be subject to significant penalties, including the complete forfeiture of the Fund’s investment in the Investment Fund. Any failure by the Fund to make timely capital contributions in respect of its unfunded commitments may (i) impair the ability of the Fund to pursue its investment program, (ii) force the Fund to borrow, indirectly cause the Fund, and, indirectly, the Shareholders to be subject to certain penalties from the Investment Funds (including the complete forfeiture of the Fund’s investment in an Investment Fund), or (iv) otherwise impair the value of the Fund’s investments (including the devaluation of the Fund).
Allocation Risk. The Firm advises clients and sponsors, administers, manages and/or advises traditional and non‑traditional investment funds and investment programs, accounts and businesses (collectively, together with any new or successor funds, programs, accounts or businesses, the “Related Investment Accounts”). Certain Related Investment Accounts may have investment objectives and/or utilize investment strategies that are similar or comparable to those of the Fund (the “Related Funds”). As a result, certain investments may be appropriate for the Fund and also for other Related Investment Accounts.
Decisions as to the allocation of investment opportunities among the Fund and other Related Investment Accounts present numerous inherent conflicts of interest, particularly where an investment opportunity has limited availability. In order to address these conflicts of interest, the Firm adopted allocation policies and procedures that were designed to require that all investment allocation decisions made by the investment team are being made fairly and equitably among Related Investment Accounts over time.
Subject to applicable law, the Firm will allocate opportunities among the Fund and the Related Investment Accounts in its sole discretion. The Firm will determine such allocations among its Related Investment Accounts in its sole discretion in accordance with their respective guidelines and based on such factors and considerations as it deems appropriate. Subject to the foregoing and the paragraph below, available capacity with respect to each investment opportunity generally will be allocated among the various Related Investment Accounts for which the investment has been approved pro rata.
The 1940 Act imposes significant limits on co‑investments with affiliates of the Fund. The Advisers and the Fund have obtained an exemptive order from the SEC that permits the Fund to co‑invest alongside its affiliates in privately negotiated investments. However, the SEC exemptive order contains certain conditions that limit or restrict the Fund’s ability to participate in such transactions, including, without limitation, where the Firm’s advised funds have an existing investment in the operating company or Investment Fund. Additionally, third parties, such as the Investment Managers of Primary Investments, may not prioritize an allocation to the Fund when faced with a more established pool of capital also competing for allocation. Ultimately, an inability to receive the desired allocation to certain Infrastructure Assets could represent a risk to the Fund’s ability to achieve the desired investment returns. See “Investment Program — The Firm’s Allocation Policy.”
Non‑Diversified Status. The Fund is a “non‑diversified” investment company for purposes of the 1940 Act, which means that it is not subject to percentage limitations under the 1940 Act on the percentage of its assets that may be invested in the securities of any one issuer. The Fund’s NAV may therefore be subject to greater volatility than that of an investment company that is subject to such a limitation on diversification. In addition, while the Fund is a “non‑diversified” fund for purposes of the 1940 Act, the Fund intends to maintain its qualification to be treated as a RIC under the Code. To qualify as a RIC under the Code, the Fund must, among other things, diversify its holdings so that, at the end of each quarter of each taxable year, (A) at least 50% of the market value of the Fund’s assets is represented by cash, cash items, U.S. government securities, securities of other regulated investment companies and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and 10% of the outstanding voting securities of such issuer and (B) not more than 25% of the market value of the Fund’s total assets is invested in the securities (other than U.S. government securities and the securities of other regulated investment companies) of (1) any one issuer, (2) any two or more issuers that the Fund controls and that are determined to be engaged in the same business or similar or related trades or businesses, or (3) any one or more “qualified publicly traded partnerships.” As such, the Advisers typically endeavor to limit the Fund’s investments in any one Investment Fund to no more than 25% of the Fund’s gross assets (measured at the time of purchase).
“J‑Curve” Performance Risk. Investment Funds typically exhibit “J‑Curve” performance, such that an Investment Fund’s NAV typically declines moderately or flattens during the early portion of the Investment Fund’s lifecycle as investment-related fees and expenses accrue prior to the realization of investment gains. As the Investment Fund matures and as assets are sold, the Advisers believe that the pattern typically reverses with increasing NAV and distributions. There can be no assurance, however, that any or all of the Investment Funds in which the Fund invests will exhibit this pattern of investment returns.
Capital Stock, Long-Term Debt, and Other Securities [Abstract]  
Outstanding Securities [Table Text Block]
Outstanding Securities
The following table sets forth information about the Fund’s outstanding Shares as of July 11, 2023:
     Amount Authorized   
Amount Held by the
Fund for its Own
Account
 
            Amount Outstanding        
Class T Shares
    Unlimited    None    -
Class S Shares
    Unlimited    None    -
Class D Shares
    Unlimited    None    -
Class I Shares
    Unlimited    None    10,000
General Economic and Market Conditions [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
General Economic and Market Conditions. The value of the Fund’s total net assets should be expected to fluctuate. To the extent that the Fund’s portfolio is concentrated in securities of a single issuer or issuers in a single sector, the risk of any investment decision is increased. The use of leverage is likely to cause the Fund’s average net assets to appreciate or depreciate at a greater rate than if leverage were not used.
An investment in the Fund involves a high degree of risk, including the risk that the Shareholder’s entire investment may be lost. The Fund’s performance depends largely upon the Advisers’ selection of Infrastructure Assets, the allocation of offering proceeds thereto and the performance of the Infrastructure Assets. The Fund’s investment activities involve the risks associated with private market investments generally. Risks include adverse changes in national or international economic conditions, adverse local market conditions, the financial conditions of portfolio companies, changes in the availability or terms of financing, changes in interest rates, exchange rates, corporate tax rates and other operating expenses, environmental laws and regulations, and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of certain industries or the availability of purchasers to acquire companies, and dependence on cash flow, as well as acts of God, uninsurable losses, war, terrorism, earthquakes, hurricanes or floods and other factors which are beyond the control of the Fund or the Private Market
Assets. Unexpected volatility or lack of liquidity, such as the general market conditions that had prevailed in 2008, could impair the Fund’s profitability or result in its suffering losses.
No Operating History [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
No Operating History. The Fund is a newly formed non‑diversified, closed‑end management investment company with no performance history that Shareholders can use to evaluate the Fund’s investment performance. The initial operating expenses for a newly formed fund, including start‑up costs, which may be significant, may be higher than the expenses of an established fund. In addition, Infrastructure Assets may, in some cases, be newly organized with limited operating histories upon which to evaluate their performance.
Closed end Interval Fund [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Closed‑end Interval Fund. The Fund is a non‑diversified, closed‑end management investment company structured as an “interval fund” and designed primarily for long-term investors. The Fund is not intended to be a typical traded investment. There is no secondary market for the Fund’s Shares and the Fund expects that no secondary market will develop in the foreseeable future. An investor should not invest in the Fund if the investor needs a liquid investment. Closed‑end funds differ from open‑end management investment companies, commonly known as mutual funds, in that investors in a closed‑end fund do not have the right to redeem their shares on a daily basis at a price based on NAV. Although the Fund, as a fundamental policy, will make quarterly offers to repurchase between 5% and 25% of its outstanding Shares at NAV, the number of Shares tendered in connection with a repurchase offer may exceed the number of Shares the Fund has offered to repurchase, in which case not all of your Shares tendered in that offer will be repurchased. In connection with any given repurchase offer, it is likely that the Fund may offer to repurchase only the minimum amount of 5% of its outstanding Shares. Hence, you may not be able to sell your Shares when and/or in the amount that you desire.
Availability of Investment Opportunities [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Availability of Investment Opportunities. The business of identifying and structuring investments of the types contemplated by the Fund is competitive and involves a high degree of uncertainty. The availability of investment opportunities generally is subject to market conditions as well as, in some cases, the prevailing regulatory or political climate. No assurance can be given that the Fund will be able to identify and complete attractive investments in the future or that it will be able to fully invest its subscriptions.
Similarly, identification of attractive investment opportunities by Investment Managers is difficult and involves a high degree of uncertainty. Even if an attractive investment opportunity is identified by an Investment Manager, it may not be permitted to take advantage of the opportunity to the fullest extent desired. Other investment vehicles sponsored, managed or advised by the Advisers and their affiliates may seek investment opportunities similar to those the Fund may be seeking. The Advisers will allocate fairly between the Fund and such other investment vehicles any investment opportunities that may be appropriate for the Fund and such other investment vehicles. See “Conflicts of Interest — The Advisers.”
Leverage Utilized by the Fund [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Leverage Utilized by the Fund. The Fund may borrow money in connection with its investment activities and to otherwise provide the Fund with liquidity — i.e., the Fund may utilize leverage. Specifically, the Fund may borrow money through a credit facility or other arrangements to fund investments in Infrastructure Assets up to the limits of the Asset Coverage Requirement. Leverage may be used to provide the Fund with temporary liquidity to acquire investments in advance of the Fund’s receipt of proceeds from the realization of other assets or additional sales of Shares. The Fund is expected to enter into the credit agreement for such purposes. See “Investment Program—Leverage.”
The use of leverage is speculative and involves certain risks. Although leverage will increase the Fund’s investment return if the Fund’s interest in an asset purchased with borrowed funds earns a greater return than the interest expense the Fund pays for the use of those funds, the use of leverage will decrease the return on the Fund if the Fund fails to earn as much on its investment purchased with borrowed funds as it pays for the use of those funds. The use of leverage will in this way magnify the volatility of changes in the value of an investment in the Fund, especially in times of a “credit crunch” or during general market turmoil, such as that experienced during late 2008. The Fund may be required to maintain minimum average balances in connection with its borrowings or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate. In addition, a lender to the Fund may terminate or refuse to renew any credit facility into which the Fund has entered. If the Fund is unable to access additional credit, it may be forced to sell its interests in Investment Funds at inopportune times, which may further depress the returns of the Fund.
The 1940 Act’s Asset Coverage Requirement requires a registered investment company to satisfy an asset coverage requirement of 300% of its indebtedness, including amounts borrowed, measured at the time the investment company incurs the indebtedness. This requirement means that the value of the investment company’s total indebtedness may not exceed one third of the value of its total assets (including the indebtedness). The 1940 Act also requires that dividends may not be declared if this Asset Coverage Requirement is breached. The Fund’s borrowings will at all times be subject to the Asset Coverage Requirement.
Private Equity Investments [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Private Equity Investments. Private equity is a common term for investments that are typically made in private or public companies through privately negotiated transactions, and generally involve equity-related finance intended to bring about some kind of change in an operating company (e.g., providing growth capital, recapitalizing a company or financing an acquisition). Private equity funds, often organized as limited partnerships, are the most common vehicles for making private equity investments, although the Fund may also invest directly in an operating company as a lead investor or syndicate partner to an Investment Manager. The investments held by Investment Funds and Primary Investments made by the Fund involve the same types of risks associated with an investment in any operating company. However, securities of private equity funds, as well as the underlying companies these funds invest in, tend to be more illiquid, and highly speculative. Private equity has generally been dependent on the availability of debt or equity financing to fund the acquisitions of their investments. Depending on market conditions, however, the availability of such financing may be reduced dramatically, limiting the ability of private equity funds to obtain the required financing or reducing their expected rate of return.
The regulatory environment for private investment funds continues to evolve, and changes in the regulation of private investment funds may adversely affect the value of the Fund’s investments and the ability of the Fund to implement its investment strategy (including the use of leverage). The financial services industry generally and the activities of private investment funds and their investment advisers, in particular, have been the subject of increasing legislative and regulatory scrutiny. Such scrutiny may increase the Fund’s and/or the Advisers’ legal, compliance, administrative and other related burdens and costs as well as regulatory oversight or involvement in the Fund and/or the Advisers’ business. There can be no assurances that the Fund or the Advisers will not in the future be subject to regulatory review or discipline. The effects of any regulatory changes or developments on the Fund may affect the manner in which it is managed and may be substantial and adverse.
Investments in the Debt Securities of Small or Middle Market Portfolio Companies [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Investments in the Debt Securities of Small or Middle-Market Portfolio Companies. Our investments may consist of loans to small and/or less well-established privately held companies. While smaller private companies may have potential for rapid growth, investments in private companies pose significantly greater risks than investments in public companies. For example, private companies:
●
have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress;
●
may have limited financial resources and may be unable to meet their obligations under their debt securities, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of realizing any guarantees that may have obtained in connection with the investment;
●
may have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
●
generally, are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on the Investment Fund that has invested in the portfolio company; and
●
generally, have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
Investments in smaller capitalization companies often involve significantly greater risks than the securities of larger, better-known companies because they may lack the management expertise, financial resources, product diversification and competitive strengths of larger companies. The prices of the securities of smaller companies may be subject to more abrupt or erratic market movements than those of larger, more established companies, as these securities typically are less liquid, traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. In addition, when selling large positions in small capitalization securities, the seller may have to sell holdings at discounts from quoted prices or may have to make a series of small sales over a period of time. Further, smaller capitalization companies may be particularly affected by interest rate increases, as they may find it more difficult to borrow money to continue or expand operations or may have difficulty in repaying any loans.
In addition, investments in private companies tend to be less liquid. The securities of many of the companies in which we invest are not publicly traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over‑the‑counter secondary market for institutional investors only. Such securities may be subject to legal and other restrictions on resale. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of target portfolio companies may affect our investment returns.
Investments in the Debt Securities of Small or Middle-Market Portfolio Companies. Our investments may consist of loans to small and/or less well-established privately held companies. While smaller private companies may have potential for rapid growth, investments in private companies pose significantly greater risks than investments in public companies. For example, private companies:
●
have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress;
●
may have limited financial resources and may be unable to meet their obligations under their debt securities, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of realizing any guarantees that may have obtained in connection with the investment;
●
may have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
●
generally, are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on the Investment Fund that has invested in the portfolio company; and
●
generally, have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
Investments in smaller capitalization companies often involve significantly greater risks than the securities of larger, better-known companies because they may lack the management expertise, financial resources, product diversification and competitive strengths of larger companies. The prices of the securities of smaller companies may be subject to more abrupt or erratic market movements than those of larger, more established companies, as these securities typically are less liquid, traded in lower volume and the issuers typically are more subject to changes in earnings and prospects. In addition, when selling large positions in small capitalization securities, the seller may have to sell holdings at discounts from quoted prices or may have to make a series of small sales over a period of time.
In addition, investments in private companies tend to be less liquid. The securities of many of the companies in which we invest are not publicly traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over‑the‑counter secondary market for institutional investors only. Such securities may be subject to legal and other restrictions on resale. As such, we may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. As a result, the relative lack of liquidity and the potential diminished capital resources of target portfolio companies may affect our investment returns.
Infrastructure Sector Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Infrastructure Sector Risk. The Fund will invest, directly or indirectly, in infrastructure. Because the Fund concentrates (i.e., invests more than 25% of its assets) its investments in Infrastructure Assets, the Fund may be subject to greater risks and market fluctuations than a fund whose portfolio has exposure to a broader range of industries. Infrastructure Assets may be subject to a variety of risks, not all of which can be foreseen or quantified, including: (i) the burdens of ownership of infrastructure: (ii) local, national and international political and economic conditions; (iii) the supply and demand for services from and access to infrastructure; (iv) the financial condition of users and suppliers of Infrastructure Assets; (v) changes in interest rates and the availability of funds which may render the purchase, sale or refinancing of Infrastructure Assets difficult or impracticable; (vi) changes in regulations, planning laws and other governmental rules; (vii) changes in fiscal and monetary policies; (viii) under-insured or uninsurable losses, such as force majeure acts and terrorist events; (ix) reduced investment in public and private infrastructure projects; and (x) other factors which are beyond the reasonable control of the Fund. Many of the foregoing factors could cause fluctuations in usage, expenses and revenues, causing the value of investments to decline and a material adverse effect on an Investment Fund’s or Co‑Investment’s performance.
Specific Infrastructure Assets in which the Fund invests may be subject to the following additional risks:
●
Communication infrastructure companies are subject to risks involving changes in government regulation, competition, dependency on patent protection, equipment incompatibility, changing consumer preferences, technological obsolescence and large capital expenditures and debt burdens.
●
Energy infrastructure companies are subject to adverse changes in fuel prices, the effects of energy conservation policies and other risks, such as increased regulation, negative effects of economic slowdowns, reduced demand, cleanup and litigation costs as a result of environmental damage, changing and international politics and regulatory policies of various governments. Natural disasters or terrorist attacks damaging sources of energy supplies will also negatively impact energy infrastructure companies.
●
Social infrastructure companies/issuers are subject to government regulation and the costs of compliance with such regulations and delays or failures in receiving required regulatory approvals. The enactment of new or additional regulatory requirements may negatively affect the business of a social infrastructure company.
●
Transportation infrastructure companies can be significantly affected by economic changes, fuel prices, labor relations, insurance costs and government regulations. Transportation infrastructure companies will also be negatively impacted by natural disasters or terrorist attacks.
●
Utilities company revenues and costs are subject to regulation by states and other regulators. Regulatory authorities also may restrict a company’s access to new markets. Utilities companies may incur unexpected increases in fuel and other operating costs. Utilities companies are also subject to
considerable costs associated with environmental compliance, nuclear waste clean‑up and safety regulation.
Real Estate Investments [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Real Estate Investments. The Fund will invest, directly or indirectly, in real estate. The decline in the broader credit markets following the market turmoil in 2008 related to the sub‑prime mortgage dislocation caused the global financial markets to become more volatile and the United States real estate market was dramatically impacted as a result. Future dislocations in the real estate credit markets with the broad-based stress in the global real estate industry could create a difficult operating environment for owners of real estate in the near term and investors should be aware that the general risks of investing in real estate may be magnified.
Real estate is subject to risks associated with the ownership of real estate, including (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) the availability of financing and (ix) changes in interest rates. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company’s operations and market value in periods of rising interest rates. The value of securities of companies in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.
There are also special risks associated with particular real estate sectors, or real estate operations generally, as described below:
●
Retail Properties. Retail properties are affected by the overall health of the economy and may be adversely affected by, among other things, the growth of alternative forms of retailing, bankruptcy, departure or cessation of operations of a tenant, a shift in consumer demand due to demographic changes, changes in spending patterns and lease terminations.
●
Office Properties. Office properties are affected by the overall health of the economy, and other factors such as a downturn in the businesses operated by their tenants, obsolescence and non‑competitiveness.
●
Industrial Properties. Industrial properties are affected by the overall health of the economy and other factors such as downturns in the manufacture, processing and shipping of goods.
●
Hospitality Properties. The risks of hotel, motel and similar hospitality properties include, among other things, the necessity of a high level of continuing capital expenditures, competition, increases in operating costs which may not be offset by increases in revenues, dependence on business and commercial travelers and tourism, increases in fuel costs and other expenses of travel, and adverse effects of general and local economic conditions. Hotel properties tend to be more sensitive to adverse economic conditions and competition than many other commercial properties.
●
Healthcare Properties. Healthcare properties and healthcare providers are affected by several significant factors, including federal, state and local laws governing licenses, certification, adequacy of care, pharmaceutical distribution, rates, equipment, personnel and other factors regarding operations, continued availability of revenue from government reimbursement programs and competition on a local and regional basis. The failure of any healthcare operator to comply with governmental laws and regulations may affect its ability to operate its facility or receive government reimbursements.
●
Multifamily Properties. The value and successful operation of a multifamily property may be affected by a number of factors such as the location of the property, the ability of the management team, the level of mortgage interest rates, the presence of competing properties, adverse economic conditions in the locale, oversupply and rent control laws or other laws affecting such properties.
●
Residential Properties. Residential properties can be significantly affected by the national, regional and local real estate markets. This segment of the real estate industry also is sensitive to interest rate
fluctuations which can cause changes in the availability of mortgage capital and directly affect the purchasing power of potential homebuyers. Thus, residential properties can be significantly affected by changes in government spending, consumer confidence, demographic patterns and the level of new and existing home sales.
●
Shopping Centers. Shopping center properties are dependent upon the successful operations and financial condition of their tenants, particularly certain of their major tenants, and could be adversely affected by bankruptcy of those tenants. In some cases, a tenant may lease a significant portion of the space in one center, and the filing of bankruptcy could cause significant revenue loss, including the loss of revenue from smaller tenants with co‑tenancy rights. Like others in the commercial real estate industry, community centers are subject to environmental risks and interest rate risk. They also face the need to enter into new leases or renew leases on favorable terms to generate rental revenues. Community center properties could be adversely affected by changes in the local markets where their properties are located, as well as by adverse changes in national economic and market conditions.
●
Self-Storage Properties. The value and successful operation of a self-storage property may be affected by a number of factors, such as the ability of the management team, the location of the property, the presence of competing properties, changes in traffic patterns and effects of general and local economic conditions with respect to rental rates and occupancy levels.
Other factors may contribute to the risk of real estate investments:
●
Development Issues. Real estate property development creates exposure to risks, such as the risk that there will be insufficient tenant demand to occupy newly developed properties, and the risk that prices of construction materials or construction labor may rise materially during the development.
●
Lack of Insurance. Real estate investments may fail to carry comprehensive liability, fire, flood, earthquake extended coverage and rental loss insurance, or insurance in place may be subject to various policy specifications, limits and deductibles. Should any type of uninsured loss occur, the real estate investments could lose its investment in, and anticipated profits and cash flows from, a number of properties and, as a result, adversely affect the Fund’s investment performance.
●
Dependence on Tenants. The value of real estate investments’ properties and the ability of these investments to make distributions to their shareholders depends upon the ability of the tenants at the properties to generate enough income in excess of their tenant operating expenses to make their lease payments. Changes beyond the control of the real estate investments may adversely affect their tenants’ ability to make their lease payments and, in such event, would substantially reduce both their income from operations and ability to make distributions that directly or indirectly impact the Fund.
●
Financial Leverage. Real estate investments may be highly leveraged and financial covenants may affect the ability of real estate investments to operate effectively.
●
Environmental Issues. In connection with the ownership (direct or indirect), operation, management and development of real properties that may contain hazardous or toxic substances, a real estate investment may be considered an owner, operator or responsible party of such properties and, therefore, may be potentially liable for removal or remediation costs, as well as certain other costs, including governmental fines and liabilities for injuries to persons and property. The existence of any such material environmental liability could have a material adverse effect on the results of operations and cash flow of any such real estate investment and, as a result, the amount available to make distributions on shares of the Fund could be reduced.
Energy Sector Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Energy Sector Risk. The Fund’s assets may include energy sector investments, thereby exposing the Fund to risks associated with this sector. Increases or decreases in the commodity supply or demand and resulting changes in pricing related to natural gas, natural gas liquids, crude oil, coal or other energy commodities, may have a significant
impact on the assets focused on this sector. Additionally, the energy sector is a highly regulated industry both domestically and internationally which can also have a material impact on the investments in this sector. Other factors that may adversely affect the value of securities of companies in the energy sector include operational risks, challenges to exploration and production, competition, inability to make accretive acquisitions, significant accident or event that is not fully insured at a company, natural depletion of reserves, and other unforeseen natural disasters.
Energy sector investments are affected by worldwide energy prices and costs related to energy production. These investments may have significant operations in areas at risk for natural disasters, social unrest and environmental damage. These investments may also be at risk for increased government regulation and intervention, energy conservation efforts, litigation and negative publicity and perception.
Utilities Sector [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Utilities Sector. The Fund’s assets may include utilities sector investments, thereby exposing the Fund to risks associated with this sector. Rates charged by traditional regulated utility companies are generally subject to review and limitation by governmental regulatory commissions, and the timing of rate changes will adversely affect such companies’ earnings and dividends when costs are rising. Other factors that may adversely affect the value of securities of companies in the utilities sector include interest rate changes, supply and demand fluctuations, technological developments, natural resources conservation, and changes in commodity prices, which may be caused by supply and demand fluctuations or other market forces.
Special Situations and Distressed Investments [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Special Situations and Distressed Investments. We may, directly or indirectly, invest in securities and other obligations of companies that are in special situations involving significant financial or business distress, including companies involved in bankruptcy or other reorganization and liquidation proceedings. Although such investments may result in significant returns, they involve a substantial degree of risk. The level of analytical sophistication, both financial and legal, necessary for successful investment in distressed assets is unusually high. There is no assurance that we or an Investment Manager will correctly evaluate the value of the assets securing these debt investments or the prospects for a successful reorganization or similar action in respect of any company. In any reorganization or liquidation proceeding relating to such companies, the Fund may lose its entire investment, may be required to accept cash or securities with a value less than the original investment and/or may be required to accept payment over an extended period of time. Troubled company investments and other distressed asset-based investments require active monitoring.
Venture Capital and Growth Equity [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Venture Capital and Growth Equity. We may invest in venture capital and growth equity. Venture capital is usually classified by investments in private companies that have a limited operating history, are attempting to develop or commercialize unproven technologies or implement novel business plans or are not otherwise developed sufficiently to be self-sustaining financially or to become public. Although these investments may offer the opportunity for significant gains, such investments involve a high degree of business and financial risk that can result in substantial losses.
Growth equity is usually classified by investments in private companies that have achieved product-market fit but may still need capital to achieve the desired level of scale before having access to the public markets for financing. As a result of the risks associated with advancing the company’s growth plan, investors can expect a higher return than might be available in the public markets, but also need to recognize the business and financial risks that remain in advancing the company’s commercial aspirations. For both venture capital and growth equity companies, the risks are generally greater than the risks of investing in public companies that may be at a later stage of development.
Agriculture and Forestry Sector Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Agriculture and Forestry Sector Risk. Investments in agriculture/farmland are subject to various risks, including adverse changes in national or international economic conditions, adverse local market conditions, adverse natural conditions such as storms, floods, drought, windstorms, hail, temperature extremes, frosts, soil erosion, infestations and blights, failure of irrigation or other mechanical systems used to cultivate the land, financial conditions of tenants, marketability of any particular kind of crop that may be influenced, among other things, by changing consumer tastes and preferences, import and export restrictions or tariffs, casualty or condemnation losses, government subsidy or production programs, buyers and sellers of properties, availability of excess supply of property relative to demand, changes in availability of debt financing, changes in interest rates, real estate tax rates and other
operating expenses, environmental laws and regulations, governmental regulation of and risks associated with the use of fertilizers, pesticides, herbicides and other chemicals used in commercial agriculture, zoning laws and other governmental rules and fiscal policies, energy prices, changes in the relative popularity of properties, risk due to dependence on cash flow, as well as acts of God, uninsurable losses and other factors which are beyond the control of the Fund or an Investment Fund.
In addition, the forestry and timber industry is highly cyclical and the market value of timber investments is strongly affected by changes in international economic conditions, interest rates, weather cycles, changing demographics, environmental conditions and government regulations, among other factors. For example, the volume and value of timber that can be harvested from timberlands is limited by natural disasters, fire, volcanic eruptions, insect infestation, disease, ice storms, windstorms, flooding and other events and weather conditions and changes in climate conditions could intensify the effects of any of these factors. Many companies in the timber and forestry industry do not insure against damages to their timberlands. This industry is also subject to stringent U.S. federal, state and local environmental, health and safety laws and regulations. Significant timber deposits are located in emerging markets countries where corruption and security may raise significant risks.
Financial Institutions Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Financial Institutions Risk. Financial institutions in which the Fund may invest, directly or indirectly, are subject to extensive government regulation. This regulation may limit both the amount and types of loans and other financial commitments a financial institution can make, and the interest rates and fees it can charge. In addition, interest and investment rates are highly sensitive and are determined by many factors beyond a financial institution’s control, including general and local economic conditions (such as inflation, recession, money supply and unemployment) and the monetary and fiscal policies of various governmental agencies such as the Federal Reserve Board. These limitations may have a significant impact on the profitability of a financial institution since profitability is attributable, at least in part, to the institution’s ability to make financial commitments such as loans. Profitability of a financial institution is largely dependent upon the availability and cost of the institution’s funds and can fluctuate significantly when interest rates change.
U.S. and global markets recently have experienced increased volatility, including as a result of the recent failures of certain U.S. and non‑U.S. banks, which could be harmful to a Fund and issuers in which it invests. For example, if a bank in which the Fund or issuer has an account fails, any cash or other assets in bank accounts may be temporarily inaccessible or permanently lost by the Fund or issuer. If a bank that provides a subscription line credit facility, asset-based facility, other credit facility and/or other services to an issuer fails, the issuer could be unable to draw funds under its credit facilities or obtain replacement credit facilities or other services from other lending institutions with similar terms. Even if banks used by issuers in which the Fund invests remain solvent, continued volatility in the banking sector could cause or intensify an economic recession, increase the costs of banking services or result in the issuers being unable to obtain or refinance indebtedness at all or on as favorable terms as could otherwise have been obtained. Conditions in the banking sector are evolving, and the scope of any potential impacts to the Fund and issuers, both from market conditions and also potential legislative or regulatory responses, are uncertain. Continued market volatility and uncertainty and/or a downturn in market and economic and financial conditions, as a result of developments in the banking industry or otherwise (including as a result of delayed access to cash or credit facilities), could have an adverse impact on the Fund and issuers in which it invests.
Geographic Concentration Risks [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Geographic Concentration Risks. Our investments may be concentrated in specific geographic regions. This focus may constrain the liquidity and the number of portfolio companies available for investment. In addition, our investments will be disproportionately exposed to the risks associated with the region of concentration.
Emerging Markets [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Emerging Markets. We may invest, directly and indirectly, in companies located in emerging industrialized or less developed countries or that derive their revenues principally from such countries. Risks particularly relevant to such emerging markets may include greater dependence on exports and the corresponding importance of international trade, higher risk of inflation, more extensive controls on foreign investment and limitations on repatriation of invested capital, increased likelihood of governmental involvement in, and control over, the economies, decisions by the relevant government to cease its support of economic reform programs or to impose restrictions, and less established laws and regulations regarding fiduciary duties of officers and directors and protection of investors.
China is an emerging market and has demonstrated significantly higher volatility from time to time in comparison to developed markets. Investments in Chinese securities, including certain Hong Kong-listed and U.S.-listed securities, subject the Fund to risks specific to China. These risks include: (i) the risk of more frequent (and potentially widespread) trading suspensions and government interventions with respect to Chinese issuers, resulting in liquidity risk, price volatility, greater market execution risk, and valuation risk; (ii) the risk of currency fluctuations, currency non‑convertibility, currency revaluations and other currency exchange rate fluctuations or blockage; (iii) the risk of intervention by the Chinese government in the Chinese securities markets; (iv) the risk of nationalization or expropriation of assets; (v) the risk that the Chinese government may decide not to continue to support economic reform programs; (vi) the risk of limitations on the use of brokers; (vii) the risk of interest rate fluctuations and higher rates of inflation; (viii) the risk that the U.S. government or other governments may sanction Chinese issuers or otherwise prohibit U.S. persons (such as the Fund) from investing in certain Chinese issuers; and (ix) the risk of market volatility caused by any potential regional or territorial conflicts, including military conflicts, or natural or other disasters. Recent developments in relations between the United States and China have heightened concerns of increased tariffs and restrictions on trade between the two countries. It is unclear whether further tariffs and sanctions may be imposed or other escalating actions may be taken in the future, which could negatively impact the Fund. In addition, China is alleged to have participated in state-sponsored cyberattacks against foreign companies and foreign governments. Actual and threatened responses to such activity and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers of securities in which the Fund may invest. As a result of different legal standards, the Fund faces the risk of being unable to enforce its rights with respect to holdings in Chinese securities and the information about the Chinese securities in which the Fund may invest may be less reliable or complete. Chinese companies with securities listed on U.S. exchanges may be delisted if they do not meet U.S. accounting standards and auditor oversight requirements, which could significantly decrease the liquidity and value of the securities.
Sector Concentration [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Sector Concentration. We may invest in an Investment Fund that concentrates its investments in specific industry sectors. This focus may constrain the liquidity and the number of portfolio companies available for investment by an Investment Fund. In addition, the investments of such an Investment Fund will be disproportionately exposed to the risks associated with the industry sectors of concentration.
Technology Sector [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Technology Sector. Certain technology companies may have limited product lines, markets or financial resources, or may depend on a limited management group. In addition, these companies are strongly affected by worldwide technological developments, and their products and services may not be economically successful or may quickly become outdated.
Financial Sector [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Financial Sector. Financial services companies are subject to extensive governmental regulation that may limit the amounts and types of loans and other financial commitments they can make, and the interest rates and fees they can charge. Profitability of such companies is generally dependent on the availability and cost of capital, and it can fluctuate as a result of increased competition or changing interest rates. In addition, events in the financial sector over the past several years have resulted in reduced liquidity in credit and a high degree of volatility in the financial markets. This situation has negatively affected many financial services companies, such as by causing such companies’ values to decline.
Currency Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Currency Risk. Infrastructure Assets may include direct and indirect investments in a number of different currencies. Any returns on, and the value of such investments may, therefore, be materially affected by exchange rate fluctuations, local exchange control, limited liquidity of the relevant foreign exchange markets, the convertibility of the currencies in question and/or other factors. A decline in the value of the currencies in which the Infrastructure Assets are denominated against the U.S. dollar may result in a decrease in the Fund’s NAV. The Advisers will not elect to hedge the value of investments made by the Fund against currency fluctuations. Accordingly, the performance of the Fund could be adversely affected by such currency fluctuations.
Non US Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Non‑U.S. Risk. Certain Infrastructure Assets may include assets outside of the United States. Non‑U.S. securities or instruments involve certain factors not typically associated with investing in U.S. securities or instruments, including risks relating to (i) currency exchange matters, including fluctuations in the rate of exchange between the U.S. dollar and the various non‑U.S. currencies in which the Fund’s non‑U.S. investments are denominated, and costs associated with conversion of investment principal and income from one currency into another; (ii) differences in conventions relating to documentation, settlement, corporate actions, stakeholder rights and
other matters; (iii) differences between the U.S. and non‑U.S. securities markets, including higher rates of inflation, higher transaction costs and potential price volatility in, and relative illiquidity of, some non‑U.S. securities markets; (iv) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less governmental supervision and regulation in some countries; (v) certain economic, social and political risks, including potential exchange control regulations and restrictions on non‑U.S. investment and repatriation of capital, the risks of political, economic or social instability, including the risk of sovereign defaults, and the possibility of expropriation or confiscatory taxation and adverse economic and political development; (vi) the possible imposition of non‑U.S. taxes on income and gains recognized with respect to such securities or instruments; (vii) differing, and potentially less well developed or well-tested laws regarding creditor’s rights (including the rights of secured parties), corporate governance, fiduciary duties and the protection of investors; (viii) difficulty in enforcing contractual obligations; (ix) differences in the legal and regulatory environment or enhanced legal and regulatory compliance; (x) reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; (xi) political hostility to investments by foreign or private investment fund investors; and (xii) less publicly available information.
Additionally, certain Infrastructure Assets may include or invest in foreign portfolio companies that do not maintain internal management accounts or adopt financial budgeting, internal audit or internal control procedures to standards normally expected of companies in the United States. Accordingly, information supplied regarding the Private Market Assets may be incomplete, inaccurate and/or significantly delayed. The Fund and the Investment Funds may therefore be unable to take or influence timely actions necessary to rectify management deficiencies in such portfolio companies, which may ultimately have an adverse impact on the NAV of the Fund.
The Fund’s Infrastructure Assets could be negatively impacted by the current hostilities in Eastern Europe, including direct and indirect effects on their operations and financial condition. In the event these hostilities escalate, the impact could more significant. Certain of the Infrastructure Assets in which the Fund may invest may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, as a result of recent events involving Ukraine and Russia, the United States and other countries have imposed economic sanctions on Russian sovereign debt and on certain Russian individuals, financial institutions, and others. Sanctions could result in Russia taking counter measures or retaliatory actions which may further impair the value and liquidity of Russian securities. These sanctions could also impair the Fund’s ability to meet its investment objectives. For example, the Fund may be prohibited from investing in securities issued by companies subject to such sanctions. In addition, the sanctions may require the Fund to freeze its existing investments in companies operating in or having dealings with sanctioned countries, prohibiting the Fund from selling or otherwise transacting in these investments. This could impact the Fund’s ability to sell securities or other financial instruments as needed to meet shareholder redemptions. The Fund could seek to suspend redemptions in the event that an emergency exists in which it is not reasonably practicable for the Fund to dispose of its securities or to determine the value of its net assets.
Illiquidity of Infrastructure Assets [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Illiquidity of Infrastructure Assets. There is no regular market for interest in Infrastructure Assets, which typically must be sold in privately negotiated transactions. Any such sales would likely require the consent of the applicable Investment Manager or portfolio company and could occur at a discount to the stated NAV. If the Advisers determine to cause the Fund to sell its interests in an Infrastructure Asset, the Fund may be unable to sell such interests quickly, if at all, and could therefore be obligated to continue to hold such interests for an extended period of time.
Investments in Non Voting Stock Inability to Vote [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Investments in Non‑Voting Stock; Inability to Vote. Under certain circumstances, the Fund may hold its interests in the Infrastructure Assets in non‑voting form or limit its voting rights to a certain percentage. In such cases, where only voting securities are available for purchase, the Fund will generally seek to create by contract the same result as owning a non‑voting security by agreeing to relinquish or limit the right to vote in respect of its investment. The Fund will not receive any consideration in return for entering into a voting waiver arrangement. To the extent that the Fund contractually foregoes the right to vote the relevant securities, the Fund will not be able to vote or may be able to vote only to a limited extent on matters that may be adverse to the Fund’s interests. As a result, the Fund’s influence on a Infrastructure Assets could be diminished, which may consequently adversely affect the Fund and its Shareholders.
Nature of Portfolio Companies [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Nature of Portfolio Companies. Infrastructure Assets will include direct and indirect investments in various companies, projects, and businesses. This may include portfolio companies in the early phases of development, which can be highly risky due to the lack of a significant operating history, fully developed product lines, experienced
management, or a proven market for their products. The Fund’s investments may also include portfolio companies that are in a state of distress or which have a poor record and which are undergoing restructuring or changes in management, and there can be no assurances that such restructuring or changes will be successful. The management of such portfolio companies may depend on one or two key individuals, and the loss of the services of any of such individuals may adversely affect the performance of such portfolio companies.
First Lien Senior Secured Loans Second Lien Senior Secured Loans and Unitranche Debt [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
First Lien Senior Secured Loans, Second Lien Senior Secured Loans and Unitranche Debt. When we invest, directly or indirectly, in first lien senior secured loans, second lien senior secured loans, and unitranche debt of portfolio companies, we will generally seek to take a security interest in the available assets of those portfolio companies, including the equity interests of the portfolio companies’ subsidiaries. There is a risk that the collateral securing these loans may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. To the extent a debt investment is collateralized by the securities of a portfolio company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency of the portfolio company. Also, in some circumstances, the Fund’s lien may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a
portfolio company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Loans that are under- collateralized involve a greater risk of loss. Consequently, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should the remedies be enforced. Finally, particularly with respect to a unitranche debt structure, unitranche debt will generally have higher leverage levels than a standard first lien term loan.
Mezzanine Investments [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Mezzanine Investments. We may, directly or indirectly, invest in mezzanine loans. Structurally, mezzanine loans usually rank subordinate in priority of payment to senior debt, such as senior bank debt, and are often unsecured. However, mezzanine loans rank senior to common and preferred equity in a borrower’s capital structure. Mezzanine debt is often used in leveraged buyout and real estate finance transactions. Typically, mezzanine loans have elements of both debt and equity instruments, offering the fixed returns in the form of interest payments associated with senior debt, while providing lenders an opportunity to participate in the capital appreciation of a borrower, if any, through an equity interest. This equity interest typically takes the form of warrants. Due to their higher risk profile and often less restrictive covenants as compared to senior loans, mezzanine loans generally earn a higher return than senior secured loans. The warrants associated with mezzanine loans are typically detachable, which allows lenders to receive repayment of their principal on an agreed amortization schedule while retaining their equity interest in the borrower. Mezzanine loans also may include a “put” feature, which permits the holder to sell its equity interest back to the borrower at a price determined through an agreed-upon formula. Mezzanine investments may be issued with or without registration rights. Similar to other high yield securities, maturities of mezzanine investments are typically seven to ten years, but the expected average life is significantly shorter at three to six years. Mezzanine investments are usually unsecured and subordinate to other debt obligations of an issuer.
Risks Associated with Covenant Lite Loans [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Risks Associated with Covenant-Lite Loans. A significant number of leveraged loans in the market may consist of loans that do not contain financial maintenance covenants (“Covenant-Lite Loans”). While the Fund does not intend to invest in Covenant-Lite Loans as part of its principal investment strategy, it is possible that such loans may comprise a small portion of the Fund’s portfolio. Such loans do not require the borrower to maintain debt service or other financial ratios. Ownership of Covenant-Lite Loans may expose the Fund to different risks, including with respect to liquidity, price volatility, ability to restructure loans, credit risks and less protective loan documentation than is the case with loans that also contain financial maintenance covenants.
High Yield Securities and Distressed Securities [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
High Yield Securities and Distressed Securities. Our Private Market Assets may include investments in fixed income securities rated investment grade or non‑investment grade (commonly referred to as high yield securities or “junk” securities) and may include investments in unrated fixed income securities. Non‑investment grade securities are fixed income securities rated below Baa by Moody’s Investors Service, Inc. (“Moody’s”) or below BBB by Standard & Poor’s Rating Group, a division of The McGraw-Hill Companies, Inc. (“S&P”), or if unrated considered by an Investment Manager to be equivalent quality. Non‑investment grade debt securities in the lowest rating categories or unrated debt securities determined to be of comparable quality may involve a substantial risk of default or may be in default. Private Market Assets in non‑investment grade securities expose it to a substantial degree of credit risk. Non‑investment grade securities may be issued by companies that are restructuring, are smaller and less creditworthy or are more highly indebted than other companies, and therefore they may have more difficulty making scheduled payments of principal and interest. Non‑investment grade securities are subject to greater risk of loss of income and principal than higher rated securities and may be considered speculative. Non‑investment grade securities may experience reduced liquidity, and sudden and substantial decreases in price. An economic downturn affecting an issuer of non‑investment grade debt securities may result in an increased incidence of default. In the event of a default, an Investment Fund or the Fund may incur additional expenses to seek recovery. In addition, the market for lower grade debt securities may be thinner and less active than for higher grade debt securities.
Certain Infrastructure Assets may be in transition, out of favor, financially leveraged or troubled, or potentially troubled, and may be or have recently been involved in major strategic actions, restructurings, bankruptcy, reorganization or liquidation. The characteristics of these companies can cause their securities to be particularly risky, although they also may offer the potential for high returns. These companies’ securities may be considered speculative, and the ability of the companies to pay their debts on schedule could be affected by adverse interest rate movements, changes in the general economic climate, economic factors affecting a particular industry or specific developments within the companies. These securities may also present a substantial risk of default. An Investment Fund’s or the Fund’s investment in any instrument is subject to no minimum credit standard and a significant portion of the
obligations and preferred stock in which an Investment Fund or the Fund may invest may be non‑investment grade (commonly referred to as junk securities), which may result in the Investment Fund or the Fund experiencing greater risks than it would if investing in higher rated instruments.
Primary Investments [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Primary Investments. The market for Primary Investments may be very limited and competitive, and the Primary Investments to which the Fund wishes to allocate capital may not be available at any given time. Primary Investments may be heavily negotiated and may create additional transaction costs for the Fund. Primary Investments are more concentrated than investments in Investment Funds, which hold multiple portfolio companies.
LIBOR Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
LIBOR Risk. The Fund’s investments, payment obligations and financing terms may be based on floating rates, such as certain London Interbank Offer Rates (collectively, “LIBOR”), Euro Interbank Offered Rate and other similar types of reference rates (each, a “Reference Rate”). Certain LIBORs were generally phased out by the end of 2021, and some regulated entities have ceased to enter into new LIBOR-based contracts beginning January 1, 2022. There remains uncertainty regarding the future use of LIBOR, and the nature of any replacement rate. However, it is possible that the most widely used LIBORs may continue until mid‑2023. As such, the potential effect of a transition away from LIBOR on the Fund or the LIBOR-based instruments in which the Fund invests cannot yet be determined, and it is not possible to completely identify or predict any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere.
The termination of certain Reference Rates presents risks to the Fund. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by the Fund or on its overall financial condition or results of operations. In addition, any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect the Fund’s performance and/or NAV. The transition process away from LIBOR may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. The transition process may also result in a reduction in the value of certain instruments held by the Fund or reduce the effectiveness of related Fund transactions. While some instruments in which the Fund invests may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate setting methodology, not all instruments in which the Fund invests may have such provisions and there is significant uncertainty regarding the effectiveness of any such alternative methodologies. Any potential effects of the transition away from LIBOR on the Fund or on financial instruments in which the Fund invests, as well as other unforeseen effects, could result in losses to the Fund. Since the usefulness of LIBOR as a benchmark or reference rate could deteriorate during the transition period, these effects could occur prior to and/or subsequent to mid‑2023.
The risks set out above are heightened with respect to investments in LIBOR-based products that do not include a fall back provision that addresses how interest rates will be determined if LIBOR stops being published. Other important factors include the pace of the transition, the specific terms of alternative Reference Rates accepted in the market, the depth of the market for investments based on alternative reference rates, and the Advisers’ ability to develop appropriate investment and compliance systems capable of addressing alternative Reference Rates.
Force Majeure Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Force Majeure Risk. Issuers may be affected by force majeure events (i.e., events beyond the control of the party claiming that the event has occurred, including, without limitation, acts of God, fire, flood, earthquakes, outbreaks of an infectious disease, pandemic or any other serious public health concern, war, terrorism and labor strikes). Some force majeure events may adversely affect the ability of a party (including an issuer or a counterparty to the Fund or an issuer) to perform its obligations until it is able to remedy the force majeure event. In addition, the cost to an issuer or the Fund of repairing or replacing damaged assets resulting from such force majeure event could be considerable. Certain force majeure events (such as war or an outbreak of an infectious disease) could have a broader negative impact on the world economy and international business activity generally, or in any of the countries in which the Fund may invest specifically. Additionally, a major governmental intervention into industry, including the nationalization of an industry or the assertion of control over one or more issuers or its assets, could result in a loss to the Fund, including if its investment in such issuer is canceled, unwound or acquired (which could be without what the Fund considers to be adequate compensation). Any of the foregoing may therefore adversely affect the performance of the Fund and its investments.
The outbreak of a novel coronavirus (“SARS‑CoV‑2”) and related respiratory disease (“COVID‑19”) has recently led, and for an unknown period of time will continue to lead, to disruptions in local, regional, national and
global markets and economies affected thereby. The COVID‑19 outbreak has resulted in numerous deaths and the imposition of both local and more widespread “work from home” and other quarantine measures, mandatory closures of businesses deemed “non‑essential,” border closures and other travel restrictions, labor shortages, a decline in consumer demand for certain goods and services, commercial disruption on a global scale, and general concern and uncertainty, all of which have caused social unrest and significant volatility in financial markets. The future impact of COVID‑19 is currently unknown. The effects to public health, business and market conditions resulting from the COVID‑19 pandemic may have a significant negative impact on the performance of the Fund’s investments, including exacerbating other pre‑existing political, social and economic risks.
Similar consequences could arise with respect to other infectious diseases.
Infrastructure Investments Generally [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Infrastructure Investments Generally. The Fund seeks to generate above-market risk-adjusted returns through co‑investments with third-party sponsors, merchant banks, institutional investors or strategic acquirers, some or all of which may have more resources than the Fund, and which may have investment in infrastructure and infrastructure-related assets.
Investments will be subject to the risks incidental to the indirect ownership and operation of infrastructure assets, including risks associated with the general economic climate, geographic or market concentration, climatic risks, the ability of the third-party sponsors to manage the investment, government regulations, national and international political circumstances and fluctuations in interest rates, rates of inflation or commodities’ prices such as oil. Since investments in infrastructure and similar assets, like many other types of long-term investments, have historically experienced significant fluctuations and cycles in value, specific market conditions may result in temporary or permanent reductions in the value of an investment.
In addition, general economic conditions in relevant jurisdictions, as well as conditions of domestic and international financial markets, may adversely affect operations of the third-party co‑investors and in turn, the Fund. In particular, because of the long time‑lag between the approval of a project and its actual funding, a well-conceived project may, as a result of changes in investor sentiment, the financial markets, economic, or other conditions prior to its completion, become an economically unattractive investment.
There can be no assurance that the Investments will be profitable or generate cash flow sufficient to provide a return on or recovery of amounts invested therein.
Sector Risks [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Sector Risks. Portfolio companies may operate in highly competitive markets dominated by firms with substantially greater financial and possibly better technical resources than the portfolio companies in which the Fund invests. Portfolio companies in which the Fund invests may also be subject to additional infrastructure sector risks, including (i) the risk that technology employed will be not be effective or efficient, (ii) the risk of equipment failures, failure to perform according to design specifications, failure to meet expected levels of efficiency, fuel interruptions, loss of sale and supply contracts; (iii) changes in power or fuel contract prices, bankruptcy of or defaults by key customers, suppliers or other counterparties, and tort liability; (iv) risk of changes of values of infrastructure sector companies; (v) risks associated with employment of personnel and unionized labor; (vi) political and regulatory considerations and popular sentiments that could affect the ability of the Fund to buy or sell investments on favorable terms; and (vii) other unanticipated events which adversely affect operations.
The occurrence of events related to any of the foregoing could have a material adverse effect on the Fund and its Co‑Investments. These and other inherent business risks could affect the performance and value of Co‑Investments.
Environmental Health and Safety Risks [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Environmental, Health and Safety Risks. Infrastructure assets are typically subject to numerous statutes, rules and regulations relating to protection of the environment and worker and public health and safety. Certain statutes, rules and regulations might require Co‑Investments to address environmental contamination, including soil and groundwater contamination, resulting from the release of fuel, hazardous materials or other pollutants, to control other forms of environmental pollution such as air, surface water, wastewater, and noise pollution, or otherwise to incur significant capital or operating expenditures to comply with environmental, health, and safety requirements. Any current or past non‑compliance with such requirements could subject the underlying assets of a Co‑Investment to
material administrative, civil, or criminal penalties or other liabilities. Further, under various statutes, rules and regulations of certain jurisdictions, a current or previous owner or operator of real property may be liable for the costs of investigation, monitoring, removal or remediation of hazardous materials, in some cases whether or not the owner or operator knew of or was responsible for the presence of hazardous materials. The presence of hazardous materials on a property could also result in personal injury or property damage or similar claims by private parties. Persons who arrange for the disposal or treatment of hazardous materials may also be liable for the costs of removal or remediation of these materials at the disposal or treatment facility, whether or not that facility is or ever was owned or operated by that person.
The long-term trend toward increasingly stringent environmental, health, and safety regulation could continue in the future, resulting in substantial additional costs on Co‑Investments to comply with new requirements. In addition, because infrastructure assets can have a substantial environmental impact, community and environmental groups may protest about the development or operation of a Co‑Investment, and these protests may induce government action to the detriment of performance of the Co‑Investment. Further, ordinary operation or occurrence of an accident with respect to a Co‑Investment could cause significant damage to the environment or harm to public health or safety, which may result in significant financial distress to the particular asset and ultimately affect the return on the Fund’s investment therein.
While StepStone and the Investment Manager intend to exercise reasonable care to select Co‑Investments that have underlying assets that do not present a material risk of current or future environmental, health, or safety liabilities, StepStone and the Investment Manager cannot rule the possibility that such liabilities may arise as a result of a large number of factors, including changes in laws or regulations and the existence of conditions that were unknown at the time of acquisition. Environmental, health, or safety liabilities could have a material adverse effect on the results of operations, financial condition, liquidity and prospects of the Co‑Investments, and on the overall value of such Co‑Investments.
Terrorism Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Terrorism Risk. The Fund may invest directly or indirectly in significant strategic assets. Strategic assets are assets that have a national or regional profile and may have monopolistic or oligopolistic characteristics. The very nature of these assets could generate additional risk not common in other industry sectors and could expose them to a greater risk of being the subject of a terrorist attack than other assets or businesses. Any terrorist attacks that occur at or near infrastructure facilities would likely cause significant harm to employees, assets and, potentially, the surrounding community. Insurers may offer a limited amount of or no insurance coverage for liability to persons other than employees or passengers for claims resulting from acts of terrorism, war or similar events. A terrorist attack involving the property of an infrastructure asset, or property under control of a portfolio company, may result in liability far in excess of available insurance coverage. A terrorist attack on an infrastructure asset may also have adverse consequences for all assets of that type, including the underlying assets in a Co‑Investment. For example, as a result of a terrorist attack in the vicinity of an infrastructure asset, the infrastructure asset may be forced to increase preventative security measures or expand its insurance coverage, adversely affecting the profitability of investment in that asset. Similarly, a terrorist attack could cause reduced patronage, usage and demand for an entire class of infrastructure assets or for infrastructure investments in the region of the terrorist attack, which could adversely affect the profitability of the Co‑Investments.
Climate Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Climate Risk. Global climate change is widely considered to be a significant threat to the global economy. Infrastructure assets in particular may face risks from the physical effects of climate change, such as risks posed by increasing frequency or severity of extreme weather events and rising sea levels and temperatures. Additionally, the Paris Agreement and other initiatives by international, U.S. federal, state, and regional policymakers and regulatory authorities as well as private actors seeking to reduce greenhouse gas emissions may expose infrastructure assets to so‑called “transition risks” in addition to physical risks, such as: (i) regulatory and litigation risk (e.g., changing legal requirements that could result in increased permitting and compliance costs, changes in business operations, or the discontinuance of certain operations, and litigation seeking monetary or injunctive relief related to climate impacts); (ii) technology and market risk (e.g., declining market for products and services seen as greenhouse gas intensive or less effective than alternatives in reducing greenhouse gas emissions); and (iii) reputational risk (e.g., risks tied to changing customer or community perceptions of an asset’s relative contribution to greenhouse gas emissions). StepStone and the Investment Manager cannot rule out the possibility that climate risks could result in unanticipated delays or expenses and, under certain circumstances, could prevent completion of investment activities once undertaken, any of which could have a material adverse effect on a Co‑Investment or the Fund.
Regulatory and Legal Risks [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Regulatory and Legal Risks. Certain of the Co‑Investments may be in entities that are subject to substantial regulation by governmental agencies. The nature of this regulation exposes the owners of infrastructure assets to a higher level of regulatory control than typically imposed on other businesses. In addition, their operations may often rely on governmental licenses, concessions, leases or contracts that are generally very complex and may result in disputes over interpretation or enforceability. Even though most permits and licenses are obtained prior to the commencement of full project operations, many of these licenses and permits have to be maintained over the project’s life. If the Fund or portfolio companies fail to comply with these regulations or contractual obligations, they could be subject to monetary penalties or they may lose their rights to operate the underlying infrastructure assets, or both. Where their ability to operate an infrastructure asset is subject to a concession or lease from the government, the concession or lease may restrict their ability to operate the asset in a way that maximizes cash flows and profitability. Government entities generally have significant influence over such companies in respect of the various contractual and regulatory relationships they may have, and these government entities may exercise their authority in a manner that causes delays in the operation of the business of the infrastructure investments, obstacles to pursuit of the infrastructure investments’ strategy or increased administrative expenses. In this regard, the nature and extent of government regulation can also be a key driver of value and returns. Furthermore, permits or special rulings may be required on taxation, financial and regulatory related issues.
The concessions of certain Co‑Investments are granted by government bodies and are subject to special risks, including the risk that the relevant government bodies will exercise sovereign rights and take actions contrary to the rights of the Fund or the relevant portfolio company under the relevant concession agreement. Indeed, to the extent that Fund invests in assets that are governed by lease or concession agreements with governmental authorities, there is a risk that these authorities may not be able to honor their obligations under the agreement, especially over the long term. The lease or concession may also contain clauses more favorable to the government counterparty than a typical commercial contract. For instance, the lease or concession may enable the government to terminate the lease or concession in certain circumstances (such as default by the Fund or by a portfolio company) without requiring the government counterparty to pay adequate compensation. In addition, there can be no assurance that the relevant government bodies will not legislate, impose regulations or taxes or change applicable laws or act contrary to the law in a way that would materially and adversely affect the business of the Co‑Investments. Indeed, government counterparties may have the discretion to change or increase regulation of the operations of the Co‑Investments or to implement laws, regulations or policies affecting their operations, separate from any contractual rights that the government counterparties may have. Governments have considerable discretion in implementing regulations and policies that could impact Co‑Investments, and because infrastructure assets provide basic, everyday services, and face limited competition, governments may be influenced by political considerations and make decisions that adversely affect Co‑Investments and their operations. Activities not currently regulated may in the future be regulated.
In addition, infrastructure investments may be subject to rate regulation by government agencies because of their unique position as the sole or predominant providers of services that are often essential to the community. As a result, certain infrastructure investments might be subject to unfavorable price regulation by government agencies. Political oversight of the sector is also likely to remain pervasive and unpredictable and, for political reasons, governments may attempt to take actions which may negatively affect the operations, revenue, profitability or contractual relationships of infrastructure investments, including through expropriation.
Certain infrastructure investments may need to use public ways or may operate under easements. Under the terms of agreements governing the use of public ways or easements, government authorities may retain the right to restrict the use of such public ways or easements or to require portfolio companies to remove, modify, replace or relocate their facilities at the portfolio company’s expense. If a government authority exercises these rights, the portfolio company could incur significant costs and its ability to provide service to its customers could be disrupted, which could adversely impact the performance of the relevant Co‑Investment.
Infrastructure assets are often governed by highly complex legal contracts and documents. As a result, the risks of a dispute over interpretation or enforceability of the legal contracts and documentation and consequent costs and delays may be higher than for other types of investments. Such risks may be increased by the uncertainty of laws and their application in certain jurisdictions in which the Fund will invest. The Fund may be adversely affected by future changes in laws and regulations.
Other legal risks relate to environmental issues and industrial actions or to actions by special interest groups and actions or litigation relating to the acquisition, ownership, operation and disposition of the Co‑Investments that
may adversely affect the Co‑Investment or the value thereof. The risk of such actions or litigation may be higher with regard to infrastructure investments (which may be of a public and/or quasi-monopoly nature) compared to other investments.
Demand and Usage Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Demand and Usage Risk. The Fund may directly or indirectly invest in assets with demand, usage and throughput risk. Residual demand, usage and throughput risk can affect the performance of Co‑Investments. For example, some of the Co‑Investments may be subject to seasonal variations, and accordingly, the Fund’s operating results for any such Co‑Investment in any particular quarter may not be indicative of the results that can be expected for such Co‑Investment throughout the entire year. To the extent that StepStone’s and the Investment Manager’s assumptions regarding the demand, usage and throughput of assets prove incorrect, returns to the Fund could be adversely affected.
Users of the infrastructure operated by Co‑Investments may react negatively to any adjustments to applicable tolls or other usage-related fee rates, or public pressure may cause relevant government authorities to challenge the tolls or other usage-related fee rates. Users of infrastructure may react adversely to tolls or other usage-related fee rates, for example, by avoiding using the infrastructure or refusing to pay the tolls or other usage-related fee, resulting in lower volumes and reduced usage revenues. In addition, adverse public opinion, or lobbying efforts by specific interest groups, could result in governmental pressure on Co‑Investments to reduce their tolls or other usage-related fee rates, or to forego planned tolls or other usage-related fee rate increases. StepStone and the Investment Manager cannot guarantee that government bodies with which Co‑Investments have concession agreements will not try to exempt certain users’ categories from tolls or other usage-related fees or negotiate lower tolls or other usage-related fee rates. If public pressure or government action forces Co‑Investments to restrict their tolls or other usage-related fee rate increases or to reduce their tolls or other usage-related fee rates, and they are not able to secure adequate compensation to restore the economic balance of the relevant concession agreement, the Fund’s business, financial condition and results of operations could be materially and adversely affected.
The Fund may invest in Co‑Investments that derive substantially all of their revenues from collecting tolls or other usage-related fees from users of such infrastructure. The tolls or other usage-related fees that are applicable to such infrastructure are set forth in the respective concession agreements entered into by or on behalf of the Fund or the relevant portfolio company and the relevant government body.
After execution of a concession agreement, the relevant government bodies may seek to limit such Co‑Investments’ ability to increase, or may seek to reduce, tolls or other usage-related fee rates outside the scope of the respective concession agreements, as a result of factors such as general economic conditions, negative consumer perceptions of increases in tolls or other usage-related fee rates, the prevailing rate of inflation, volume and public sentiment about prevailing tolls or other usage-related fee rates.
Valuation of the Funds Interests in Investment Funds [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Valuation of the Fund’s Interests in Investment Funds. The valuation of the Fund’s investments in Investment Funds is ordinarily determined based upon valuations provided by the Investment Managers on a quarterly basis. Although such valuations are provided on a quarterly basis, the Fund will provide valuations, and will issue Shares, on a daily basis. A large percentage of the securities in which the Fund invests will not have a readily ascertainable market price and will be fair valued by the Investment Manager. In this regard, an Investment Manager may face a conflict of interest in valuing the securities, as their value may affect the Investment Manager’s compensation or its ability to raise additional funds. No assurances can be given regarding the valuation methodology or the sufficiency of systems utilized by any Investment Manager, the accuracy of the valuations provided by the Investment Managers, that the Investment Managers will comply with their own internal policies or procedures for keeping records or making valuations, or that the Investment Managers’ policies and procedures and systems will not change without notice to the Fund. As a result, an Investment Manager’s valuation of the securities may fail to match the amount ultimately realized with respect to the disposition of such securities.
An Investment Manager’s information could also be inaccurate due to fraudulent activity, mis‑valuation or inadvertent error. The Fund may not uncover errors in valuation for a significant period of time, if ever.
Valuations Subject to Adjustment [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Valuations Subject to Adjustment. The Fund determines its NAV daily based upon the quarterly valuations reported by the Investment Managers, which may not reflect market or other events occurring subsequent to the quarter‑end. The Fund will fair value its holdings in Investment Funds to reflect such events, consistent with its valuation policies; however, there is no guarantee the Fund will correctly fair value such investments. Additionally,
the valuations reported by Investment Managers may be subject to later adjustment or revision. For example, fiscal year‑end NAV calculations of the Investment Funds may be revised as a result of audits by their independent auditors. Other adjustments may occur from time to time. Because such adjustments or revisions, whether increasing or decreasing the NAV of the Fund, and therefore the Fund, at the time they occur, relate to information available only at the time of the adjustment or revision, the adjustment or revision may not affect the amount of the repurchase proceeds of the Fund received by Shareholders who had their Shares repurchased prior to such adjustments and received their repurchase proceeds. As a result, to the extent that such subsequently adjusted valuations from the Investment Managers or revisions to the NAV of an Investment Fund adversely affect the Fund’s NAV, the remaining outstanding Shares may be adversely affected by prior repurchases to the benefit of Shareholders who had their Shares repurchased at a NAV higher than the adjusted amount. Conversely, any increases in the NAV resulting from such subsequently adjusted valuations may be entirely for the benefit of the outstanding Shares and to the detriment of Shareholders who previously had their Shares repurchased at a NAV lower than the adjusted amount. The same principles apply to the purchase of Shares. New Shareholders may be affected in a similar way.
Termination of the Funds Interest in an Investment Fund [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Termination of the Fund’s Interest in an Investment Fund. An Investment Fund may, among other things, terminate the Fund’s interest in that Investment Fund (causing a forfeiture of all or a portion of such interest) if the Fund fails to satisfy any capital call by that Investment Fund or if the continued participation of the Fund in the Investment Fund would have a material adverse effect on the Investment Fund or its assets. The Fund’s over-commitment strategy may increase the risk that the Fund is unable to satisfy a capital call from an Investment Fund.
General Risks of Secondary Investments [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
General Risks of Secondary Investments. The overall performance of the Fund’s Secondary Investments will depend in part on the acquisition price paid, which may be negotiated based on incomplete or imperfect information. There is a risk that investors exiting a Co‑Investment or an Investment Fund through a secondary transaction may possess superior knowledge regarding the value of their investment, and the Fund may pay more for a secondary investment than it would have if it were also privy to such information. Certain Secondary Investments may be purchased as a portfolio, and in such cases the Fund may not be able to carve out from such purchases those investments that the Advisers consider (for commercial, tax, legal or other reasons) less attractive. Where the Fund acquires a secondary Investment Fund, the Fund will generally not have the ability to modify or amend such secondary Investment Fund’s constituent documents (e.g., limited partnership agreements) or otherwise negotiate the economic terms of the interests being acquired. In addition, the costs and resources required to investigate the commercial, tax and legal issues relating to secondary investments may be greater than those relating to primary investments.
Where the Fund acquires a secondary Investment Fund, the Fund may acquire contingent liabilities associated with such interest. Specifically, where the seller has received distributions from the relevant secondary Investment Fund and, subsequently, that secondary Investment Fund recalls any portion of such distributions, the Fund (as the purchaser of the interest to which such distributions are attributable) may be obligated to pay an amount equivalent to such distributions to such secondary Investment Fund. While the Fund may be able, in turn, to make a claim against the seller of the interest for any monies so paid to the secondary Investment Fund, there can be no assurance that the Fund would have such right or prevail in any such claim.
The Fund may acquire Secondary Investments as a member of a purchasing syndicate, in which case the Fund may be exposed to additional risks including, among other things: (i) counterparty risk, (ii) reputation risk, (iii) breach of confidentiality by a syndicate member, and (iv) execution risk.
Additionally, the Fund may acquire interests in Secondary Investments through structured transactions such as collateralized fund obligations (“CFOs”) or similar investment vehicles that own existing secondaries and co‑investments. These structures may impose additional administrative costs that the Fund would not have incurred had it invested in Secondary Investments directly. Secondary Investments held inside of a CFO may be subject to the risks and benefits of leverage at the CFO level. If the Fund acquires interests in a secondary Investment Fund through a CFO, the Fund may be limited in its ability to enforce its rights against such secondary Investment Fund.
Commitment Strategy [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Commitment Strategy. The Fund may maintain a sizeable cash position in anticipation of funding capital calls. The Fund will be required to make incremental contributions pursuant to capital calls issued from time to time by Investment Funds. The overall impact on performance due to holding a portion of the investment portfolio in cash or cash equivalents could be negative.
The Fund will employ an “over-commitment” strategy, which could result in an insufficient cash supply to fund unfunded commitments to Investment Funds. Such a short fall would have negative impacts on the Fund, including an adverse impact on the Fund’s ability to pay for redemptions of Shares by Shareholders, pay distributions or to meet expenses generally. Moreover, if the Fund defaults on its unfunded commitments or fails to satisfy capital calls in a timely manner then, generally, it will be subject to significant penalties, including the complete forfeiture of the Fund’s investment in the Investment Fund. Any failure by the Fund to make timely capital contributions in respect of its unfunded commitments may (i) impair the ability of the Fund to pursue its investment program, (ii) force the Fund to borrow, indirectly cause the Fund, and, indirectly, the Shareholders to be subject to certain penalties from the Investment Funds (including the complete forfeiture of the Fund’s investment in an Investment Fund), or (iv) otherwise impair the value of the Fund’s investments (including the devaluation of the Fund).
Allocation Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Allocation Risk. The Firm advises clients and sponsors, administers, manages and/or advises traditional and non‑traditional investment funds and investment programs, accounts and businesses (collectively, together with any new or successor funds, programs, accounts or businesses, the “Related Investment Accounts”). Certain Related Investment Accounts may have investment objectives and/or utilize investment strategies that are similar or comparable to those of the Fund (the “Related Funds”). As a result, certain investments may be appropriate for the Fund and also for other Related Investment Accounts.
Decisions as to the allocation of investment opportunities among the Fund and other Related Investment Accounts present numerous inherent conflicts of interest, particularly where an investment opportunity has limited availability. In order to address these conflicts of interest, the Firm adopted allocation policies and procedures that were designed to require that all investment allocation decisions made by the investment team are being made fairly and equitably among Related Investment Accounts over time.
Subject to applicable law, the Firm will allocate opportunities among the Fund and the Related Investment Accounts in its sole discretion. The Firm will determine such allocations among its Related Investment Accounts in its sole discretion in accordance with their respective guidelines and based on such factors and considerations as it deems appropriate. Subject to the foregoing and the paragraph below, available capacity with respect to each investment opportunity generally will be allocated among the various Related Investment Accounts for which the investment has been approved pro rata.
The 1940 Act imposes significant limits on co‑investments with affiliates of the Fund. The Advisers and the Fund have obtained an exemptive order from the SEC that permits the Fund to co‑invest alongside its affiliates in privately negotiated investments. However, the SEC exemptive order contains certain conditions that limit or restrict the Fund’s ability to participate in such transactions, including, without limitation, where the Firm’s advised funds have an existing investment in the operating company or Investment Fund. Additionally, third parties, such as the Investment Managers of Primary Investments, may not prioritize an allocation to the Fund when faced with a more established pool of capital also competing for allocation. Ultimately, an inability to receive the desired allocation to certain Infrastructure Assets could represent a risk to the Fund’s ability to achieve the desired investment returns. See “Investment Program — The Firm’s Allocation Policy.”
Non Diversified Status [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
Non‑Diversified Status. The Fund is a “non‑diversified” investment company for purposes of the 1940 Act, which means that it is not subject to percentage limitations under the 1940 Act on the percentage of its assets that may be invested in the securities of any one issuer. The Fund’s NAV may therefore be subject to greater volatility than that of an investment company that is subject to such a limitation on diversification. In addition, while the Fund is a “non‑diversified” fund for purposes of the 1940 Act, the Fund intends to maintain its qualification to be treated as a RIC under the Code. To qualify as a RIC under the Code, the Fund must, among other things, diversify its holdings so that, at the end of each quarter of each taxable year, (A) at least 50% of the market value of the Fund’s assets is represented by cash, cash items, U.S. government securities, securities of other regulated investment companies and other securities, with such other securities of any one issuer limited for the purposes of this calculation to an amount not greater than 5% of the value of the Fund’s total assets and 10% of the outstanding voting securities of such issuer and (B) not more than 25% of the market value of the Fund’s total assets is invested in the securities (other than U.S. government securities and the securities of other regulated investment companies) of (1) any one issuer, (2) any two or more issuers that the Fund controls and that are determined to be engaged in the same business or similar or related trades or businesses, or (3) any one or more “qualified publicly traded partnerships.” As such, the Advisers typically endeavor to limit the Fund’s investments in any one Investment Fund to no more than 25% of the Fund’s gross assets (measured at the time of purchase).
J Curve Performance Risk [Member]  
General Description of Registrant [Abstract]  
Risk [Text Block]
“J‑Curve” Performance Risk. Investment Funds typically exhibit “J‑Curve” performance, such that an Investment Fund’s NAV typically declines moderately or flattens during the early portion of the Investment Fund’s lifecycle as investment-related fees and expenses accrue prior to the realization of investment gains. As the Investment Fund matures and as assets are sold, the Advisers believe that the pattern typically reverses with increasing NAV and distributions. There can be no assurance, however, that any or all of the Investment Funds in which the Fund invests will exhibit this pattern of investment returns.
Business Contact [Member]  
Cover [Abstract]  
Entity Address, Address Line One 128 S Tryon St., Suite 880
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28202
Contact Personnel Name Robert W. Long
Class T Shares [Member]  
Fee Table [Abstract]  
Sales Load [Percent] 3.50% [1]
Other Transaction Expenses [Abstract]  
Other Transaction Expenses [Percent] 2.00% [2]
Management Fees [Percent] 1.60%
Distribution/Servicing Fees [Percent] 0.85%
Acquired Fund Fees and Expenses [Percent] 0.75% [3]
Other Annual Expenses [Abstract]  
Other Annual Expense 1 [Percent] 0.05% [4]
Other Annual Expenses [Percent] 1.41% [5],[6]
Total Annual Expenses [Percent] 4.67%
Waivers and Reimbursements of Fees [Percent] 0.25% [7]
Net Expense over Assets [Percent] 4.41% [8]
Expense Example, Year 01 $ 78
Expense Example, Years 1 to 3 164
Expense Example, Years 1 to 5 251
Expense Example, Years 1 to 10 $ 473
Capital Stock, Long-Term Debt, and Other Securities [Abstract]  
Outstanding Security, Title [Text Block] Class T Shares
Outstanding Security, Held [Shares] | shares
Outstanding Security, Not Held [Shares] | shares
Class S Shares [Member]  
Fee Table [Abstract]  
Sales Load [Percent] 3.50% [1]
Other Transaction Expenses [Abstract]  
Other Transaction Expenses [Percent] 2.00% [2]
Management Fees [Percent] 1.60%
Distribution/Servicing Fees [Percent] 0.85%
Acquired Fund Fees and Expenses [Percent] 0.75% [3]
Other Annual Expenses [Abstract]  
Other Annual Expense 1 [Percent] 0.05% [4]
Other Annual Expenses [Percent] 1.41% [5],[6]
Total Annual Expenses [Percent] 4.67%
Waivers and Reimbursements of Fees [Percent] 0.25% [7]
Net Expense over Assets [Percent] 4.41% [8]
Expense Example, Year 01 $ 78
Expense Example, Years 1 to 3 164
Expense Example, Years 1 to 5 251
Expense Example, Years 1 to 10 $ 473
Capital Stock, Long-Term Debt, and Other Securities [Abstract]  
Outstanding Security, Title [Text Block] Class S Shares
Outstanding Security, Held [Shares] | shares
Outstanding Security, Not Held [Shares] | shares
Class D Shares [Member]  
Fee Table [Abstract]  
Sales Load [Percent] 0.00% [1]
Other Transaction Expenses [Abstract]  
Other Transaction Expenses [Percent] 2.00% [2]
Management Fees [Percent] 1.60%
Distribution/Servicing Fees [Percent] 0.25%
Acquired Fund Fees and Expenses [Percent] 0.75% [3]
Other Annual Expenses [Abstract]  
Other Annual Expense 1 [Percent] 0.05% [4]
Other Annual Expenses [Percent] 1.41% [5],[6]
Total Annual Expenses [Percent] 4.07%
Waivers and Reimbursements of Fees [Percent] 0.25% [7]
Net Expense over Assets [Percent] 3.81% [8]
Expense Example, Year 01 $ 38
Expense Example, Years 1 to 3 116
Expense Example, Years 1 to 5 196
Expense Example, Years 1 to 10 $ 404
Capital Stock, Long-Term Debt, and Other Securities [Abstract]  
Outstanding Security, Title [Text Block] Class D Shares
Outstanding Security, Held [Shares] | shares
Outstanding Security, Not Held [Shares] | shares
Class I Shares [Member]  
Fee Table [Abstract]  
Sales Load [Percent] 0.00% [1]
Other Transaction Expenses [Abstract]  
Other Transaction Expenses [Percent] 2.00% [2]
Management Fees [Percent] 1.60%
Distribution/Servicing Fees [Percent] 0.00%
Acquired Fund Fees and Expenses [Percent] 0.75% [3]
Other Annual Expenses [Abstract]  
Other Annual Expense 1 [Percent] 0.05% [4]
Other Annual Expenses [Percent] 1.41% [5],[6]
Total Annual Expenses [Percent] 3.82%
Waivers and Reimbursements of Fees [Percent] 0.25% [7]
Net Expense over Assets [Percent] 3.57% [8]
Expense Example, Year 01 $ 36
Expense Example, Years 1 to 3 109
Expense Example, Years 1 to 5 185
Expense Example, Years 1 to 10 $ 384
Capital Stock, Long-Term Debt, and Other Securities [Abstract]  
Outstanding Security, Title [Text Block] Class I Shares
Outstanding Security, Held [Shares] | shares
Outstanding Security, Not Held [Shares] | shares 10,000
Class T Shares Repurchased [Member]  
Other Annual Expenses [Abstract]  
Expense Example, Year 01 $ 78
Expense Example, Years 1 to 3 164
Expense Example, Years 1 to 5 251
Expense Example, Years 1 to 10 473
Class S Shares Repurchased [Member]  
Other Annual Expenses [Abstract]  
Expense Example, Year 01 78
Expense Example, Years 1 to 3 164
Expense Example, Years 1 to 5 251
Expense Example, Years 1 to 10 473
Class D Shares Repurchased [Member]  
Other Annual Expenses [Abstract]  
Expense Example, Year 01 38
Expense Example, Years 1 to 3 116
Expense Example, Years 1 to 5 196
Expense Example, Years 1 to 10 404
Class I Shares Repurchased [Member]  
Other Annual Expenses [Abstract]  
Expense Example, Year 01 36
Expense Example, Years 1 to 3 109
Expense Example, Years 1 to 5 185
Expense Example, Years 1 to 10 $ 384
[1] Investors purchasing Class T and Class S Shares may be charged a sales load of up to 3.50% of the investment amount. For Class T Shares, the 3.50% includes a maximum of 3.00% for upfront selling commission and 0.50% for the dealer fee. The table assumes the maximum sales load is charged. A Selling Agent may, in its discretion, waive all or a portion of the sales load for certain investors. See “Plan of Distribution.”
[2] A 2.00% Early Repurchase Fee payable to the Fund will be charged with respect to the repurchase of a Shareholder’s Shares at any time prior to the day immediately preceding the one‑year anniversary of the Shareholder’s purchase of the Shares (on a “first in‑first out” basis). An Early Repurchase Fee payable by a Shareholder may be waived by the Fund, in circumstances where the Board of Trustees determines that doing so is in the best interests of the Fund and in a manner as will not discriminate unfairly against any Shareholder. The Early Repurchase Fee will be retained by the Fund for the benefit of the remaining Shareholders.
[3] The Acquired Fund Fees and Expenses are based on estimated amounts for the Fund’s first 12 months of operations. Some or all of the Investment Funds in which the Fund intends to invest charge carried interests, incentive fees or allocations based on the Investment Funds’ performance. The Investment Funds in which the Fund intends to invest generally charge a management fee of 1.00% to 2.00% based on committed capital, and approximately 15% to 20% of net profits as a carried interest allocation. The Acquired Fund Fees and Expenses disclosed above are based on historic returns of the Investment Funds in which the Fund anticipates investing during the first 12 months of operations, which may change substantially over time, therefore, significantly affect Acquired Fund Fees and Expenses. The 0.75% shown as Acquired Fund Fees and Expenses reflects operating expenses of the Investment Funds (e.g., management fees, administration fees and professional and other direct, fixed fees and expenses of the Investment Funds) after refunds, excluding any performance-based fees or allocations paid by the Investment Funds that are paid solely on the realization and/or distribution of gains, or on the sum of such gains and unrealized appreciation of assets distributed in‑kind, as such fees and allocations for a particular period may be unrelated to the cost of investing in the Investment Funds.
[4] The Advisers expect to utilize a credit facility in the first twelve months of the Fund’s operations. Expenses may include, but are not limited to, upfront credit facility fees, undrawn fees, and interest payments.
[5] Includes amounts paid under an administration agreement (the “Administration Agreement”) between the Fund and StepStone Private Wealth as administrator (the “Administrator”). Under the Administration Agreement, the Fund pays the Administrator an administration fee (the “Administration Fee”) in an amount up to 0.23% on an annualized basis of the Fund’s net assets. From the proceeds of the Administration Fee, the Administrator pays UMB Fund Services, Inc. (the “Sub‑Administrator”) a sub‑administration fee (the “Sub‑Administration Fee”) in an amount up to 0.08% on an annualized basis of the Fund’s net assets, subject to a minimum annual fee. The Sub‑Administration Fee is paid pursuant to a sub‑administration agreement and a fund accounting agreement each between the Administrator and the Sub‑Administrator. The Administration Fee will be accrued daily based on the value of the net assets of the Fund as of the close of business on each business day (including any assets in respect of shares that will be repurchased by the Fund on such date) and payable in arrears within ten business days after the end of the month. The Sub‑Administration Fee is calculated in a manner substantially similar to the Administration Fee and is payable monthly in arrears.
[6] Other Expenses include all other expenses incurred by the Fund, such as its organizational and offering expenses, certain administrative costs and expenses relating to the offering and sale of Shares. Other Expenses are estimated for the first 12 months of operations. For more details regarding the Fund’s estimated organizational and offering expenses, please see “Fund Expenses – Organizational and Offering Expenses.”
[7] The Adviser has entered into an Expense Limitation and Reimbursement Agreement with the Fund for the one‑year term beginning on the initial closing date for subscriptions for Shares and ending on the one‑year anniversary thereof. The Adviser may extend the Limitation Period for a period of one year on an annual basis. The Expense Limitation and Reimbursement Agreement limits the amount of the Fund’s aggregate ordinary operating expenses, excluding certain Specified Expenses listed below, borne by the Fund during the Limitation Period to an amount not to exceed 1.00% for Class T, S, D and I Shares, on an annualized basis, of the Fund’s daily net assets or the Expense Cap. “Specified Expenses” that are not covered by the Expense Limitation and Reimbursement Agreement include: (i) the Management Fee; (ii) all fees and expenses of Private Market Assets and other investments in which the Fund invests (including the underlying fees of the Private Market Assets and other investments (the Acquired Fund Fees and Expenses)); (iii) transactional costs, including legal costs and brokerage commissions, associated with the acquisition and disposition of Private Market Assets and other investments; (iv) interest payments incurred on borrowing by the Fund; (v) fees and expenses incurred in connection with a credit facility, if any, obtained by the Fund; (vi) distribution and/or shareholder servicing fees, as applicable; (vii) taxes; and (viii) extraordinary expenses resulting from events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, including, without limitation, costs incurred in connection with any claim, litigation, arbitration, mediation, government investigation or similar proceeding, indemnification expenses, and expenses in connection with holding and/or soliciting proxies for all annual and other meetings of Shareholders. See “Fund Expenses” for additional information. If the Fund’s aggregate ordinary operating expenses, exclusive of the Specified Expenses, in respect of any Class of Shares for any day exceeding the Expense Cap applicable to that Class of Shares, the Adviser will waive its Management Fee and/or reimburse the Fund for expenses to the extent necessary to eliminate such excess. The Adviser may also directly pay expenses on behalf of the Fund and waive reimbursement under the Expense Limitation and Reimbursement Agreement. To the extent that the Adviser waives its Management Fee, reimburses expenses to the Fund or pays expenses directly on behalf of the Fund, it is permitted to recoup from the Fund any such amounts for a period not to exceed three years from the month in which such fees and expenses were waived, reimbursed, or paid, even if such recoupment occurs after the termination of the Limitation Period. However, the Adviser may only recoup the waived fees, reimbursed expenses or directly paid expenses in respect of the applicable Class of Shares if (i) the aggregate ordinary operating expenses have fallen to a level below the relevant Expense Cap and (ii) the recouped amount does not raise the level of aggregate ordinary operating expenses plus waived fees, reimbursed expenses or directly paid expenses in respect of a Class of Shares in the month of recoupment to a level that exceeds any Expense Cap applicable at that time.
[8] Annual Net Expenses include expenses limited by the Fund’s Expense Limitation and Reimbursement Agreement. 

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LOGO

 

1095 Avenue of the Americas

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www.dechert.com

 

 

 

RICHARD HOROWITZ

 

richard.horowitz@dechert.com

+1 212 698 3525 Direct

+1 212 698 0452 Fax

July 11, 2023

VIA EDGAR

U.S. Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549-4720

Re:         StepStone Private Infrastructure Fund (File Nos. 333-268986 and 811-23848)

Ladies and Gentlemen:

Enclosed for filing on behalf of StepStone Private Infrastructure Fund (the “Fund”), a closed-end management investment company, is Pre-Effective Amendment No. 4 to the Fund’s registration statement under the Securities Act of 1933 and the Investment Company Act of 1940 (“1940 Act”) on Form N-2 (“Registration Statement”). This filing is being made for the purpose of (i) completing certain items required to be included in the Registration Statement; and (ii) making certain non-material changes to the Registration Statement.

If you have any questions relating to this filing, please do not hesitate to contact me at (212) 698-3525.

 

Sincerely,

/s/ Richard Horowitz

Richard Horowitz