Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q2 2024 Earnings Presentation
22 slides from Hamilton Lane's earnings presentation, Nov 7, 2023
Slide 1: Fiscal Year 2024 Second Quarter Results
Fiscal Year 2024 Second Quarter Results Earnings Presentation - November 7, 2023 Hamilton Lane l Global Leader in the Private Markets 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Jeff Armbrister John Oh Chief Executive Officer Vice Chairman Chief Financial Officer Principal - Shareholder Relations 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 $119 billion and $61 billion, respectively, as of September 30, 2023, increases of 11% and 17%, respectively, compared to September 30, 2022 • Management and advisory fees increased 20% comp
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $854B AUM & AUA 1 Total Assets Under Management/Advisement ($B) $1,000 $98 $119 $108 Y-o-Y Growth $800 AUM: 11 % AUA: 3% $76 $735 $724 R: 18% $753 $600 CAG $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) $70 .56% .60% .56% .59% .58% .62% $61 $60 $57 : 14% CAGR $53 $49 $50 $25 $42 $23 $39 $20 $40 $18 $34 $16 $14 $30 $11 $20 $35 $36 $31 $32 $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 • 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 growth across management and advisory fees Management and Advisory Fees Long-Term Growth YTD Y-o-Y Change: 20% CAGR: 14% • Recurring management and advisory fees represented an average of 85% of total revenues $215 $372 over the past five fiscal years USD in Millions USD
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carry by Age Unrealized Carried Interest 98 100 90 $1,500 86 > 12 years 3% $1,250 80 $1,000 USD in Millions 60 8-12 years Vehicles 20% $750 < 5 years 40 $1,151 42% $990 $985 $500 20 $250 5-8 years 0 $0 35% Sep-21 Sep-22 Sep-23 Period Ending Unrealized Carried I
Slide 10: Consolidated Earnings
Consolidated Earnings Stable long-term growth Net Income Attributable to HLI YTD Y-o-Y Change: 7% Long-Term Growth • $42M in net income attributable to HLI for the quarter USD in Millions USD in Millions $73 $68 $109 $17 FY18 FY23 Q2 FY23 Q2 FY24 Adjusted EBITDA1 YTD Long-Term Growth • Y-o-Y decreas
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 $677 • For 9/30/23, the total investment balance consisted $500 $588 primarily of: USD in Millions $514 ◦ ~$396M in investments in our funds $400 $300 $374 ◦ ~$209M in t
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) 2022 2023 % Change 2022 2023 % Change Management and advisory fees $92,880 $109,184 18 % $178,826 $214,592 20 % Incentive
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) 2022 2023 % Change 2022 2023 % Change Adjusted EBITDA1 Management and advisory fees $92,880 $109,184 18 % $178,826 $214,592 20 % Revenue related to co
Slide 15: Management and Advisory Fees
Management and Advisory Fees Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands) 2022 2023 % Change 2022 2023 % Change Management and advisory fees Specialized funds $47,150 $62,386 32 % $90,799 $120,102 32 % Customized separate accounts 29,383 32,040 9% 57,758 63,
Slide 16: Incentive Fees
Incentive Fees Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands) 2022 2023 % Change 2022 2023 % Change Incentive fees Direct equity funds $27,609 $1,113 (96)% $52,460 $3,444 (93)% Secondary funds 14,988 3,969 (74)% 26,947 12,046 (55)% Direct credit funds 5,507 (4
Slide 17: Assets Under Management
Assets Under Management (Dollars in millions) September 30, 2022 June 30, 2023 September 30, 2023 YoY % Change QoQ % Change Assets under management / advisement Assets under management $107,107 $117,064 $119,182 11 % 2 % Assets under advisement 716,515 700,651 734,804 3% 5 % Total assets under manag
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) March 31, 2023 September 30, 2023 Assets Cash and cash equivalents $99,686 $128,098 Restricted cash 4,804 4,965 Fees receivable 47,140 61,800 Prepaid expenses 9,817 6,534 Due from related parties 7,186 7,822 Furniture, fixtures
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended September 30, (Dollars in thousands) 2022 2023 Operating activities Net income $113,866 $115,850 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,577 3,736 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) 2018 2023 2022 2023 2022 2023 Net income attributable to Hamilton Lane Incorporated $17,341 $109,120 $
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