Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q3 2024 Earnings Presentation
22 slides from Hamilton Lane's earnings presentation, Feb 6, 2024
Slide 1: Fiscal Year 2024 Third Quarter Results
Fiscal Year 2024 Third Quarter Results February 6, 2024
Slide 2: Today's Speakers
Today's Speakers Erik Hirsch Juan Delgado-Moreira Jeff Armbrister John Oh Co-CEO Co-CEO Chief Financial Officer Head of Shareholder Relations Hamilton Lane | 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 $120 billion and $63 billion, respectively, as of December 31, 2023, increases of 12% and 15%, respectively, compared to December 31, 2022 • Management and advisory fees increased 19% compar
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $903B AUM & AUA 1 Total Assets Under Management/Advisement ($B) $1,000 $120 $98 $108 Y-o-Y Growth $800 AUM: 12 % AUA: 8% $783 $76 R: 19% $753 $724 G CA $600 $66 $581 $59 $50 $400 $410 $422 $40 $374 $35 $32 $292 $24 $30 $200 $22 $205 $189 $13 $16 $19 $147 $147 $11
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) .56% .60% .56% .59% .59% .62% $70 $63 $57 $60 $55 : 14% CAGR $49 $50 $26 $42 $23 $39 $22 $40 $18 $34 $16 $14 $30 $11 $20 $35 $37 $31 $33 $25 $26 $10 $22 $0
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 to • Secondary fund wide-ranging mandates which further or establish • Credit-oriented fund include
Slide 7: Financial Highlights
Financial Highlights
Slide 8: Consolidated Revenue
Consolidated Revenue Strong growth across management and advisory fees Management and Advisory Fees YTD Long-Term Growth Y-o-Y Change: 19% CAGR: 14% • Recurring management and advisory fees represented an average of 85% of total revenues $372 over the past five fiscal years USD in Millions $328 USD
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 99 100 91 $1,500 88 > 12 years $1,250 4% 80 $1,000 USD in Millions 60 Vehicles 8-12 years $750 17% 40 < 5 years $1,064 $1,126 42% $952 $500 20 $250 0 $0 5-8 years Dec-21 Dec-22 Dec-23 37% Period Ending Unrealized Carried
Slide 10: Consolidated Earnings
Consolidated Earnings Stable long-term growth Net Income Attributable to HLI YTD Long-Term Growth Y-o-Y Change: 19% USD in Millions $92 USD in Millions $78 • $20M in net income attributable to HLI for the $109 quarter $17 Q3 FY23 Q3 FY24 FY18 FY23 Adjusted EBITDA1 YTD Long-Term Growth Y-o-Y Change:
Slide 11: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $700 $600 $604 • For 12/31/23, the total investment balance USD in Millions $500 $588 $514 consisted primarily of: $400 $300 $374 ◦ ~$392M in investments in our funds $200 $208 ◦
Slide 12: Appendix
Appendix
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) 2022 2023 % Change 2022 2023 % Change Management and advisory fees $97,355 $113,641 17 % $276,182 $328,232 19 % Incentive f
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) 2022 2023 % Change 2022 2023 % Change 1 Adjusted EBITDA Management and advisory fees $97,355 $113,641 17 % $276,182 $328,232 19 % Revenue related to co
Slide 15: Management and Advisory Fees
Management and Advisory Fees Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands) 2022 2023 % Change 2022 2023 % Change Management and advisory fees Specialized funds $53,299 $64,871 22 % $144,099 $184,972 28 % Customized separate accounts 29,571 32,943 11 % 87,329 9
Slide 16: Incentive Fees
Incentive Fees Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands) 2022 2023 % Change 2022 2023 % Change Incentive fees Direct equity funds $5,644 $— (100) % $58,104 $3,444 (94) % Secondary funds 447 — (100) % 27,393 12,046 (56) % Direct credit funds 6 — (100) % 7,6
Slide 17: Assets Under Management
Assets Under Management December 31, September 30, December 31, (Dollars in millions) 2022 2023 2023 YoY % Change QoQ % Change Assets under management / advisement Assets under management $107,530 $119,182 $119,953 12 % 1 % Assets under advisement 724,364 734,804 782,892 8 % 7 % Total assets under m
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) March 31, 2023 December 31, 2023 Assets Cash and cash equivalents $99,686 $164,450 Restricted cash 4,804 4,985 Fees receivable 47,140 67,751 Prepaid expenses 9,817 9,418 Due from related parties 7,186 9,969 Furniture, fixtures
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended December 31, (Dollars in thousands) 2022 2023 Operating activities Net income $135,750 $150,382 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,600 5,774 Ch
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Year Ended March 31, Three Months Ended Nine Months Ended Reconciliation from Net Income December 31, December 31, (Dollars in thousands except share and per share amounts) 2018 2023 2022 2023 2022 2023 Net income attributable to Hamilton Lane Incorporated $17,341 $109,120 $9
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