Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q2 FY2020 Earnings Presentation
23 slides from Hamilton Lane's earnings presentation, Nov 5, 2019
Slide 1: Fiscal Year 2020 Second Quarter Results
Fiscal Year 2020 Second Quarter Results Earnings Presentation - November 5, 2019 Hamilton Lane l Global Leader in the Private Markets Page 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Jeff Meeker Chief Executive Officer Vice Chairman Chief Client Officer Randy Stilman John Oh Chief Financial Officer Investor Relations Manager Hamilton Lane l Global Leader in the Private Markets Page 2
Slide 3: Period Highlights
Period Highlights Business Performance • Assets under management and fee-earning assets under management were approximately $66 billion and $36 billion, respectively, as of September 30, 2019, increases of 13% and 14%, respectively, compared to September 30, 2018 • Management and advisory fees incre
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence ~$481B AUM & AUA Total Assets Under Management/Advisement ($B)1 $500 $66 Y-o-Y Growth $59 AUM: 13% $50 AUA: 5% $400 $ 416 19% $410 R: CAG $40 $374 $300 $292 $35 $32 $200 $24 $30 $205 $189 $22 $147 $147 $16 $19 $11 $13 $129 $100 $7 $95 $79 $81 $6 $77 $51 $36 $0 200
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) .56% .57% .56% .55% .55%1 .57%2 $40 $36 $35 $34 $33 1% $32 CAGR: 1 $31 $30 $13 $27 $11 $10 $11 $25 $24 $21 $9 $20 $7 $5 $15 $22 $23 $10 $21 $21 $17 $18 $16
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 ranging mandates which include • Secondary fund technology-driven reporting, to further or es
Slide 7: Financial Highlights
Financial Highlights Hamilton Lane l Global Leader in the Private Markets Page 7
Slide 8: Consolidated Revenue
Consolidated Revenue Strong revenue growth across management and advisory fees Management and Advisory Fees YTD Long-Term Growth • Represented an average of just under 90% of total Y-o-Y Growth: 15% CAGR: 11% revenues over the past five fiscal years $218 • Y-o-Y increase of 15% USD in Millions USD i
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 59 60 52 > 12 years $400 6% 50 43 < 5 years 8-12 years 30% 40 $300 23% USD in Millions Vehicles 30 $382 $200 $333 20 $300 $100 10 5-8 years 41% 0 $0 Sep-17 Sep-18 Sep-19 Period Ending Vehicles in Unrealized Carry Positio
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI Long-Term Growth YTD • $15M in net income attributable to HLI for the Y-o-Y Growth: 33% quarter $27 USD in Millions USD in Millions $20 $34 N/A1 Q2 FY19 Q2 FY20 FY14 FY19 Adjusted EBITDA2 YTD Long-Term Growth Y-o-Y
Slide 11: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $175 $174 • For 9/30/19, the total investment balance consisted of: $150 ◦ ~$152M in equity method investments in our $154 USD in Millions $125 $137 $120 funds $100 $103 $103 $75
Slide 12: Fiscal Year 2020 Second Quarter Results
Fiscal Year 2020 Second Quarter Results Earnings Presentation - November 5, 2019 Hamilton Lane l Global Leader in the Private Markets Page 12
Slide 13: Appendix
Appendix Hamilton Lane l Global Leader in the Private Markets Page 13
Slide 14: 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) 2018 2019 % Change 2018 2019 % Change Revenues Management and advisory fees $53,248 $59,196 11% $104,227 $119,747 15 % Inc
Slide 15: 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) 2018 2019 % Change 2018 2019 % Change Adjusted EBITDA1 Management and advisory fees $53,248 $59,196 11% $104,227 $119,747 15 % Total expenses 34,466 3
Slide 16: Management and Advisory Fees
Management and Advisory Fees Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands) 2018 2019 % Change 2018 2019 % Change Management and advisory fees Specialized funds $22,736 $26,985 19 % $43,751 $53,944 23 % Customized separate accounts 21,106 22,466 6% 41,493 44,4
Slide 17: Incentive Fees
Incentive Fees Three Months Ended September 30, Six Months Ended September 30, (Dollars in thousands) 2018 2019 % Change 2018 2019 % Change Incentive fees Secondary Fund II $142 $387 173 % $583 $553 (5)% Co-investment Fund II 1,182 1,429 21 % 6,340 3,753 (41)% Other specialized funds 761 3,164 316 %
Slide 18: Assets Under Management
Assets Under Management YoY % QoQ % (Dollars in millions) September 30, 2018 June 30, 2019 September 30, 2019 Change Change Assets under management / advisement Assets under management $58,092 $64,304 $65,680 13 % 2% Assets under advisement 394,083 408,957 415,675 5% 2% Total assets under management
Slide 19: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2019 September 30, 2019 Assets Cash and cash equivalents $49,357 $71,899 Restricted cash 2,233 3,184 Fees receivable 20,320 17,628 Prepaid expenses 4,714 5,401 Due from related parti
Slide 20: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended September 30, (Dollars in thousands) 2018 2019 Operating activities Net income $55,675 $59,726 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,141 1,608 Chan
Slide 21: 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) 2014 2019 2018 2019 2018 2019 Net income attributable to Hamilton Lane Incorporated $0 $33,573 $11,222 $15,299 $20,067 $26,680 Income att
Slide 22: Terms
Terms Adjusted EBITDA is our primary 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
Slide 23: 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