Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q4 2023 Earnings Presentation
22 slides from Hamilton Lane's earnings presentation, May 25, 2023
Slide 1: Fiscal Year 2023 Fourth Quarter and Full Year Results
Fiscal Year 2023 Fourth Quarter and Full Year Results Earnings Presentation - May 25, 2023 Hamilton Lane l Global Leader in the Private Markets 1
Slide 2: Today's Speakers
Today's Speakers Erik Hirsch Brian Gildea Atul Varma John Oh Vice Chairman Managing Director - Investments 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 approximately $112 billion and $57 billion, respectively, as of March 31, 2023, increases of 5% and 17%, respectively, compared to March 31, 2022 • Management and advisory fees increased 18%
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $857B AUM & AUA Total Assets Under Management/Advisement ($B)1 $1,000 $98 $108 $112 Y-o-Y Growth $800 AUM: 5% AUA: (6%) $76 $745 $724 % : 19 $753 A G R $600 C $66 $581 $59 $50 $400 $410 $422 $40 $374 $35 $32 $292 $24 $30 $200 $22 $205 $189 $13 $16 $19 $147 $147 $1
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) $70 .56% .60% .56% .59% $60 $57 4% CAGR: 1 $49 $50 $42 $23 $39 $40 $18 $34 $16 $14 $30 $11 $20 $35 $31 $25 $26 $10 $22 $0 Mar-19 Mar-20 Mar-21 Mar-22 Mar-2
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 YTD Long-Term Growth Y-o-Y Growth: 18% CAGR: 14% • Recurring management and advisory fees represented an average of over 80% of total $372 $372 revenues over the past five fiscal years USD in
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 100 92 $1,500 90 > 12 years 78 4% $1,250 80 $1,000 8-12 years USD in Millions 60 19% Vehicles $750 < 5 years 40% 40 $1,191 $1,022 $500 20 $649 $250 5-8 years 0 $0 37% Mar-21 Mar-22 Mar-23 Period Ending Unrealized Carried
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Y-o-Y Growth: (25)% Long-Term Growth • $31M in net income attributable to HLI for the quarter USD in Millions USD in Millions $146 $109 $109 $17 FY22 FY23 FY18 FY23 1 Adjusted EBITDA Long-Term Growth YTD 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 $600 $588 • For 3/31/23, the total investment balance consisted of: $500 $514 ◦ ~$398M in investments in our funds USD in Millions $400 $374 $300 ◦ ~$190M in technology related an
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 March 31, Year Ended March 31, (Dollars in thousands except share and per share amounts) 2022 2023 % Change 2022 2023 % Change Revenues Management and advisory fees $84,575 $95,692 13% $314,228 $371,874 18 % Incentive fees 13
Slide 14: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, Year Ended March 31, (Dollars in thousands except share and per share amounts) 2022 2023 % Change 2022 2023 % Change Adjusted EBITDA1 Management and advisory fees $84,575 $95,692 13 % $314,228 $371,874 18 % Revenue related to consolidated fund
Slide 15: Management and Advisory Fees
Management and Advisory Fees Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2022 2023 % Change 2022 2023 % Change Management and advisory fees Specialized funds $42,144 $52,169 24 % $150,079 $196,268 31 % Customized separate accounts 27,813 30,434 9% 103,229 117,763 14 % Ad
Slide 16: Incentive Fees
Incentive Fees Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2022 2023 % Change 2022 2023 % Change Incentive fees Direct equity funds $2,410 $2,368 (2)% $5,558 $60,472 988 % Secondary funds — 8,933 N/A 5,574 36,326 552 % Direct credit funds 19 1,497 7,780 % 5,496 9,135 66
Slide 17: Assets Under Management
Assets Under Management YoY % QoQ % (Dollars in millions) March 31, 2022 December 31, 2022 March 31, 2023 Change Change Assets under management / advisement Assets under management $106,382 $107,530 $111,901 5% 4% Assets under advisement 794,732 724,364 744,770 (6)% 3% Total assets under management
Slide 18: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) March 31, 2022 March 31, 2023 Assets Cash and cash equivalents $72,138 $99,686 Restricted cash 4,023 4,804 Fees receivable 51,869 47,140 Prepaid expenses 6,858 9,817 Due from related parties 1,872 7,186 Furniture, fixtures and
Slide 19: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Year Ended March 31, (Dollars in thousands) 2021 2022 2023 Operating activities Net income $168,785 $247,253 $187,185 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,134 5,49
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Year Ended Three Months Ended Year Ended Reconciliation from Net Income March 31, March 31, March 31, (Dollars in thousands) 2018 2023 2022 2023 2022 2023 Net income attributable to Hamilton Lane Incorporated $17,341 $109,120 $13,825 $31,086 $145,986 $109,120 Income attributa
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