Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q3 FY2022 Earnings Presentation
23 slides from Hamilton Lane's earnings presentation, Feb 1, 2022
Slide 1: Fiscal Year 2022 Third Quarter Results
Fiscal Year 2022 Third Quarter Results Earnings Presentation - February 1, 2022 Hamilton Lane l Global Leader in the Private Markets 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Brian Gildea Atul Varma John Oh Chief Executive Officer Vice Chairman Global Head of Investments 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 $98 billion and $46 billion, respectively, as of December 31, 2021, increases of 29% and 15%, respectively, compared to December 31, 2020 • Management and advisory fees increased 10% compare
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $851B AUM & AUA Total Assets Under Management/Advisement ($B)1 $1,000 Y-o-Y Growth $98 $800 AUM: 29 % AUA: 30 % $76 $ 753 $600 R: 21% CAG $66 $59 $581 $50 $400 $422 $410 $40 $374 $35 $32 $292 $200 $24 $30 $205 $22 $16 $189 $19 $147 $13 $147 $11 $6 $7 $95 $81 $129
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues and annual fee rates are stable Total Fee-Earning Assets Under Management ($B) .56% .55% .56% .60% .58%1 .56% $50 $46 12% CAGR: $42 $39 $40 $40 $18 $34 $31 $16 $14 $15 $30 $27 $11 $10 $9 $20 $26 $28 $25 $25 $10 $21 $22 $18 $0 Mar-17 M
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 • Direct equity fund ranging mandates which include technology-driven reporting, to further o
Slide 7: AUM Breakout
AUM Breakout Trailing 3Y Private Markets Fundraising 1 HLNE Discretionary AUM 2, 3, 4 2016 100% Real Assets, 18% Private Credit, 14% 75% Private Equity, 68% 50% Current Real Assets, 12% 25% Private Credit, 14% —% 2016 2017 2018 2019 2020 2021 Private Equity Private Credit Real Assets Private Equity,
Slide 8: Financial Highlights
Financial Highlights Hamilton Lane l Global Leader in the Private Markets 8
Slide 9: Consolidated Revenue
Consolidated Revenue Strong revenue growth across management and advisory fees Management and Advisory Fees YTD Y-o-Y Growth: 10% Long-Term Growth • Recurring management and advisory fees CAGR: 13% represented an average of just under 90% of total $230 $289 revenues over the past five fiscal years U
Slide 10: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 120 > 12 years $1,250 3% 100 88 $1,000 80 70 8-12 years USD in Millions 63 12% Vehicles $750 60 < 5 years $1,064 $500 44% 40 20 $497 $250 $409 5-8 years 41% 0 $0 Dec-19 Dec-20 Dec-21 Period Ending Unrealized Carried Inte
Slide 11: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Y-o-Y Growth: 127% Long-Term Growth • $52M in net income attributable to HLI for the quarter USD in Millions USD in Millions $132 $98 $58 N/A1 Q3 FY21 Q3 FY22 FY16 FY21 Adjusted EBITDA2 YTD Long-Term Growth • Y
Slide 12: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $500 $492 • For 12/31/21, the total investment balance consisted of: $400 ◦ ~$311M in equity method investments in our USD in Millions $374 funds $300 $200 ◦ ~$180M in technology
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 December 31, Nine Months Ended December 31, (Dollars in thousands except share and per share amounts) 2020 2021 % Change 2020 2021 % Change Management and advisory fees $75,279 $79,836 6% $208,913 $229,653 10 % Incentive fees
Slide 15: 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) 2020 2021 % Change 2020 2021 % Change 1 Adjusted EBITDA Management and advisory fees $75,279 $79,836 6% $208,913 $229,653 10 % Total expenses 41,864 50
Slide 16: Management and Advisory Fees
Management and Advisory Fees Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands) 2020 2021 % Change 2020 2021 % Change Management and advisory fees Specialized funds $38,155 $38,233 0% $102,103 $107,935 6% Customized separate accounts 23,285 25,982 12 % 70,600 75,41
Slide 17: Incentive Fees
Incentive Fees Three Months Ended December 31, Nine Months Ended December 31, (Dollars in thousands) 2020 2021 % Change 2020 2021 % Change Incentive fees Secondary Fund II $638 $209 (67)% $919 $239 (74)% Co-investment Fund II 624 1,378 121 % 17,333 3,149 (82)% Other specialized funds 5,540 6,556 18
Slide 18: Assets Under Management
Assets Under Management (Dollars in millions) December 31, 2020 September 30, 2021 December 31, 2021 YoY Change % QoQ Change % Assets under management / advisement Assets under management $75,777 $96,042 $98,131 29 % 2% Assets under advisement 580,984 709,129 752,917 30 % 6% Total assets under manag
Slide 19: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2021 December 31, 2021 Assets Cash and cash equivalents $87,025 $78,838 Restricted cash 3,041 3,315 Fees receivable 29,202 47,085 Prepaid expenses 6,143 5,912 Due from related partie
Slide 20: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended December 31, (Dollars in thousands) 2020 2021 Operating activities Net income $104,200 $209,696 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,982 3,744 Ch
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Nine Months Ended Reconciliation from Net Income Year Ended March 31, December 31, December 31, (Dollars in thousands except share and per share amounts) 2016 2021 2020 2021 2020 2021 Net income attributable to Hamilton Lane Incorporated $0 $98,022 $33,203
Slide 22: 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 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