Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — FY2020 Earnings Presentation
23 slides from Hamilton Lane's earnings presentation, May 28, 2020
Slide 1: Fiscal Year 2020 Fourth Quarter and Full Year Results
Fiscal Year 2020 Fourth Quarter and Full Year Results Earnings Presentation - May 28, 2020 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 approximately $69 billion and $39 billion, respectively, as of March 31, 2020, increases of 12% and 15%, respectively, compared to March 31, 2019 • Management and advisory fees increased 12%
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $503B AUM & AUA 1 Total Assets Under Management/Advisement ($B) $69 $66 $500 $59 Y-o-Y Growth $50 AUM: 12% $434 $400 $422 AUA: 3% $410 $40 $374 % R : 19 $300 CAG $35 $292 $32 $200 $30 $24 $205 $22 $189 $16 $19 $147 $147 $100 $11 $13 $129 $6 $7 $95 $77 $79 $81 $36
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) $45 .57% .56% .55% .56% $40 $39 3% $35 CAGR: 1 $34 $31 $14 $30 $27 $11 $25 $24 $10 $9 $20 $7 $15 $25 $21 $22 $10 $17 $18 $5 $0 Mar-16 Mar-17 Mar-18 Mar-19
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 • Secondary fund ranging mandates which include technology-driven reporting, to further or es
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: 12% CAGR: 11% • Recurring management and advisory fees represented an average of just under 90% of total revenues over the past five fiscal years USD in Mill
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 75 65 $500 60 56 > 12 years $400 14% 45 USD in Millions 45 Vehicles < 5 years $300 8-12 years 34% 10% 30 $441 $200 $304 $326 15 $100 5-8 years 0 $0 42% Mar-18 Mar-19 Mar-20 Period Ending Unrealized Carried Interest Vehic
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Long-Term Growth • $61M in net income attributable to HLI for FY20 Y-o-Y Growth: 81% • $21M in net income attributable to HLI for the quarter USD in Millions USD in Millions $61 $61 $34 N/A1 FY19 FY20 FY15 FY20
Slide 11: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $200 $208 $175 • For 3/31/20, the total investment balance consisted of: $150 ◦ ~$176M in equity method investments in our USD in Millions $154 $125 $137 funds $100 $120 $103 $103
Slide 12: Fiscal Year 2020 Fourth Quarter and Full Year Results
Fiscal Year 2020 Fourth Quarter and Full Year Results Earnings Presentation - May 28, 2020 Hamilton Lane l Global Leader in the Private Markets 12
Slide 13: Appendix
Appendix Hamilton Lane l Global Leader in the Private Markets 13
Slide 14: 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) 2019 2020 % Change 2019 2020 % Change Revenues Management and advisory fees $57,929 $65,336 13% $217,773 $244,920 12 % Incentive fees 9,
Slide 15: 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) 2019 2020 % Change 2019 2020 % Change Adjusted EBITDA1 Management and advisory fees $57,929 $65,336 13% $217,773 $244,920 12 % Total expenses 38,060 43,313 14% 147,
Slide 16: Management and Advisory Fees
Management and Advisory Fees Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2019 2020 % Change 2019 2020 % Change Management and advisory fees Specialized funds $25,892 $30,070 16 % $93,056 $111,803 20 % Customized separate accounts 22,158 23,703 7 % 85,245 90,750 6 % Advis
Slide 17: Incentive Fees
Incentive Fees Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2019 2020 % Change 2019 2020 % Change Incentive fees Secondary Fund II $204 $120 (25) % $1,529 $832 (46) % Co-investment Fund II 1,790 1,437 (43) % 16,748 7,691 (54) % Other specialized funds 5,657 1,555 59 % 7,4
Slide 18: Assets Under Management
Assets Under Management YoY % QoQ % (Dollars in millions) March 31, 2019 December 31, 2019 March 31, 2020 Change Change Assets under management / advisement Assets under management $61,130 $66,271 $68,571 12 % 3 % Assets under advisement 422,475 421,799 434,258 3 % 3 % 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 March 31, 2020 Assets Cash and cash equivalents $49,357 $50,124 Restricted cash 2,233 3,086 Fees receivable 20,320 30,384 Prepaid expenses 4,714 6,988 Due from related parties 2
Slide 20: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Year Ended March 31, (Dollars in thousands) 2018 2019 2020 Operating activities Net income $106,297 $98,997 $126,776 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,891 2,979
Slide 21: 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) 2015 2020 2019 2020 2019 2020 Net income attributable to Hamilton Lane Incorporated $0 $60,825 $8,048 $20,648 $33,573 $60,825 Income (loss) attributabl
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