Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q3 2023 Earnings Presentation
22 slides from Hamilton Lane's earnings presentation, Feb 7, 2023
Slide 1: Fiscal Year 2023 Third Quarter Results
Fiscal Year 2023 Third Quarter Results Earnings Presentation - February 7, 2023 Hamilton Lane l Global Leader in the Private Markets 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Atul Varma John Oh Chief Executive Officer Vice Chairman 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 $108 billion and $55 billion, respectively, as of December 31, 2022, increases of 10% and 19%, respectively, compared to December 31, 2021 • Management and advisory fees increased 20% compar
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $832B AUM & AUA Total Assets Under Management/Advisement ($B)1 $1,000 $98 $108 Y-o-Y Growth $800 AUM: 10 % AUA: (4)% $ 724 $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% .56% .59% $60 $55 12% $49 $50 CAGR: $46 $42 $22 $39 $40 $18 $34 $18 $31 $16 $14 $30 $11 $10 $20 $31 $33 $26 $28 $25 $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 prospective clients seeking • Secondary fund wide-ranging mandates to further or establish • Credit-oriented fund which include
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: 20% CAGR: 13% • Recurring management and advisory fees represented an average of 85% of total revenues $276 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 91 $1,500 88 > 12 years 4% $1,250 80 70 $1,000 USD in Millions 60 Vehicles 8-12 years 19% $750 40 $1,064 $500 < 5 years $952 51% 20 $497 $250 5-8 years 26% 0 $0 Dec-20 Dec-21 Dec-22 Period Ending Unrealized Carried I
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Y-o-Y Growth: (41)% Long-Term Growth • $10M in net income attributable to HLI for the quarter USD in Millions $146 $132 USD in Millions $78 1 $1 FY17 FY22 Q3 FY22 Q3 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 $552 • For 12/31/22, the total investment balance consisted of: $514 ◦ ~$366M in equity method investments in our USD in Millions $400 funds $374 $300 ◦ ~$186M in techno
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 December 31, Nine Months Ended December 31, (Dollars in thousands except share and per share amounts) 2021 2022 % Change 2021 2022 % Change Management and advisory fees $79,836 $97,355 22 % $229,653 $276,182 20 % Incentive fe
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands except share and per share amounts) 2021 2022 % Change 2021 2022 % Change Adjusted EBITDA1 Management and advisory fees $79,836 $97,355 22 % $229,653 $276,182 20 % Total expenses 50,658 6
Slide 15: Management and Advisory Fees
Management and Advisory Fees Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands) 2021 2022 % Change 2021 2022 % Change Management and advisory fees Specialized funds $38,233 $53,299 39 % $107,935 $144,099 34 % Customized separate accounts 25,982 29,571 14 % 75,416 8
Slide 16: Incentive Fees
Incentive Fees Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands) 2021 2022 % Change 2021 2022 % Change Incentive fees Direct equity funds $1,377 $5,644 310 % $3,149 $58,104 1,745 % Secondary funds 209 447 113 % 5,574 27,393 391 % Direct credit funds 359 6 (98)% 5,
Slide 17: Assets Under Management
Assets Under Management (Dollars in millions) December 31, 2021 September 30, 2022 December 31, 2022 YoY Change % QoQ Change % Assets under management / advisement Assets under management $98,131 $107,107 $107,530 10 % 0% Assets under advisement 752,917 716,515 724,364 (4)% 1% Total assets under man
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2022 December 31, 2022 Assets Cash and cash equivalents $72,138 $146,070 Restricted cash 4,023 3,116 Fees receivable 51,869 52,074 Prepaid expenses 6,858 7,078 Due from related parti
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended December 31, (Dollars in thousands) 2021 2022 Operating activities Net income $209,696 $135,750 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,744 5,600 Ch
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Nine Months Ended Reconciliation from Net Income Year Ended March 31, December 31, December 31, (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 $51,8
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