Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q2 2023 Earnings Presentation
22 slides from Hamilton Lane's earnings presentation, Nov 1, 2022
Slide 1: Fiscal Year 2023 Second Quarter Results
Fiscal Year 2023 Second Quarter Results Earnings Presentation - November 1, 2022 Hamilton Lane l Global Leader in the Private Markets 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Brian Gildea Atul Varma John Oh Chief Executive Officer Vice Chairman Managing Director - Investments Chief Financial Officer Investor Relations Manager Hamilton Lane l Global Leader in the Private Markets 2
Slide 3: Period Highlights
Period Highlights Business Performance • Assets under management and fee-earning assets under management were $107 billion and $53 billion, respectively, as of September 30, 2022, increases of 12% and 18%, respectively, compared to September 30, 2021 • Management and advisory fees increased 19% comp
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $824B AUM & AUA Total Assets Under Management/Advisement ($B)1 $1,000 $98 $107 Y-o-Y Growth $800 AUM: 12 % AUA: 1% $ 717 $753 R: 19% $76 $600 CAG $66 $59 $581 $50 $400 $422 $410 $40 $374 $35 $32 $292 $200 $24 $30 $22 $205 $16 $189 $19 $147 $13 $147 $11 $6 $7 $95 $
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) .55% .56% .60% .56% .55% .58% $60 $53 12% $49 $50 CAGR: $45 $42 $39 $20 $40 $18 $34 $17 $31 $16 $14 $30 $11 $10 $20 $31 $32 $25 $26 $27 $10 $21 $22 $0 Mar-
Slide 6: AUM & AUA Drivers
AUM & AUA Drivers AUM AUA Customized Specialized Advisory Separate Accounts Funds Services Diverse mix of existing and Select funds in market: Typically larger clients with wide- prospective clients seeking • Direct equity fund ranging mandates which include technology-driven reporting, to further o
Slide 7: Financial Highlights
Financial Highlights Hamilton Lane l Global Leader in the Private Markets 7
Slide 8: Consolidated Revenue
Consolidated Revenue Strong revenue growth across management and advisory fees Management and Advisory Fees Long-Term Growth YTD Y-o-Y Growth: 19% CAGR: 13% • Recurring management and advisory fees represented an average of 85% of total revenues $179 over the past five fiscal years USD in Millions U
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 100 90 $1,500 > 12 years 86 5% $1,250 80 61 $1,000 USD in Millions 60 Vehicles 8-12 years $750 19% 40 < 5 years $990 $985 $500 49% 20 $250 $410 5-8 years 0 $0 27% Sep-20 Sep-21 Sep-22 Period Ending Unrealized Carried Int
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Y-o-Y Growth: (15)% Long-Term Growth • $35M in net income attributable to HLI for the quarter USD in Millions $80 $146 USD in Millions $68 1 $1 FY17 FY22 Q2 FY22 Q2 FY23 2 Adjusted EBITDA YTD Long-Term Growth •
Slide 11: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $600 $500 $568 • For 9/30/22, the total investment balance consisted of: $514 ◦ ~$360M in equity method investments in our USD in Millions $400 funds $374 $300 ◦ ~$208M in technol
Slide 12: Appendix
Appendix Hamilton Lane l Global Leader in the Private Markets 12
Slide 13: Condensed Consolidated Statements of Income (Unaudited)
Condensed Consolidated Statements of Income (Unaudited) Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands except share and per share amounts) 2021 2022 % Change 2021 2022 % Change Management and advisory fees $75,934 $92,880 22 % $149,818 $178,826 19 % Incentive f
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands except share and per share amounts) 2021 2022 % Change 2021 2022 % Change Adjusted EBITDA1 Management and advisory fees $75,934 $92,880 22 % $149,818 $178,826 19 % Total expenses 49,819
Slide 15: Management and Advisory Fees
Management and Advisory Fees Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands) 2021 2022 % Change 2021 2022 % Change Management and advisory fees Specialized funds $36,314 $47,150 30 % $69,702 $90,799 30 % Customized separate accounts 24,934 29,383 18 % 49,434 57
Slide 16: Incentive Fees
Incentive Fees Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands) 2021 2022 % Change 2021 2022 % Change Incentive fees Direct equity funds $(976) $27,609 N/A $1,771 $52,460 2,862 % Secondary funds 5,335 14,988 181 % 5,365 26,947 402 % Direct credit funds 5,114 5,5
Slide 17: Assets Under Management
Assets Under Management (Dollars in millions) September 30, 2021 June 30, 2022 September 30, 2022 YoY Change % QoQ Change % Assets under management / advisement Assets under management $96,042 $108,034 $107,107 12 % (1)% Assets under advisement 709,129 724,160 716,515 1% (1)% Total assets under mana
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2022 September 30, 2022 Assets Cash and cash equivalents $72,138 $121,764 Restricted cash 4,023 3,078 Fees receivable 51,869 47,496 Prepaid expenses 6,858 5,520 Due from related part
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended September 30, (Dollars in thousands) 2021 2022 Operating activities Net income $129,501 $113,866 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,452 3,577 Ch
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Six Months Ended Reconciliation from Net Income Year Ended March 31, September 30, September 30, (Dollars in thousands except share and per share amounts) 2017 2022 2021 2022 2021 2022 Net income attributable to Hamilton Lane Incorporated $612 $145,986 $52,
Slide 21: Terms
Terms Adjusted EBITDA is an internal measure of profitability. We believe Adjusted EBITDA is useful to investors because it enables them to better evaluate the performance of our core business across reporting periods. Adjusted EBITDA represents net income excluding (a) interest expense on our outst
Slide 22: Disclosures
Disclosures Some of the statements in this presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as "will", "exp