Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q1 FY2020 Earnings Presentation
23 slides from Hamilton Lane's earnings presentation, Aug 6, 2019
Slide 1: Fiscal Year 2020 First Quarter Results
Fiscal Year 2020 First Quarter Results Earnings Presentation - August 6, 2019 Hamilton Lane l Global Leader in the Private Markets Page 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Randy Stilman Chief Executive Officer Vice Chairman Chief Financial Officer 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 $64 billion and $35 billion, respectively, as of June 30, 2019, increases of 13% and 14% respectively, compared to June 30, 2018 • Management and advisory fees have increased 1
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $473B AUM & AUA Total Assets Under Management/Advisement ($B)1 $500 $64 Q-o-Q Growth $59 AUM: 5% $50 AUA: (3)% $400 20% $410 $ 409 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% .54%1 .57%2 $40 $35 $35 $34 $33 1% CAGR: 1 $31 $31 $30 $27 $12 $11 $24 $10 $25 $10 $21 $22 $9 $20 $7 $5 $15 $22 $23 $10 $21 $20 $17 $18
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 estab
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: 19% CAGR: 11% revenues over the past five fiscal years $218 • Y-o-Y increase of 19% USD in Millions USD i
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 60 60 $400 > 12 years $350 6% 50 45 < 5 years 41 $300 27% 8-12 years 40 USD in Millions 24% $250 Vehicles 30 $200 $366 $293 $150 20 $266 $100 10 5-8 years $50 43% 0 $0 Jun-17 Jun-18 Jun-19 Period Ending Vehicles in Unrea
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI Long-Term Growth YTD • $11M in net income attributable to HLI for the Y-o-Y Growth: 29% quarter USD in Millions USD in Millions $11 $9 $34 N/A1 Q1 FY19 Q1 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 • For 6/30/19, the total investment balance consisted of: $150 $168 $154 ◦ ~$144M in equity method investments in our USD in Millions $125 $137 $120 funds $100 $103 $103 $75
Slide 12: Fiscal Year 2020 First Quarter Results
Fiscal Year 2020 First Quarter Results Earnings Presentation - August 6, 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 (Dollars in thousands except share and per share amounts) June 30, 2018 March 31, 2019 June 30, 2019 YoY Change % QoQ Change % Revenues Management and advisory fees $50,979 $57,929 $60,551 19 % 5% Incentive fees 12,383 9,059
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in thousands except share and per share amounts) June 30, 2018 March 31, 2019 June 30, 2019 YoY Change % QoQ Change % 1 Adjusted EBITDA Management and advisory fees $50,979 $57,929 $60,551 19 % 5% Total expenses 37,670 38,060 37,693 0% (1)% Les
Slide 16: Management and Advisory Fees
Management and Advisory Fees Three Months Ended (Dollars in thousands) June 30, 2018 March 31, 2019 June 30, 2019 YoY % Change QoQ % Change Management and advisory fees Customized separate accounts $20,387 $22,158 $21,963 8% (1)% Specialized funds 21,015 25,892 26,959 28% 4% Advisory, reporting and
Slide 17: Incentive Fees
Incentive Fees Three Months Ended (Dollars in thousands) June 30, 2018 March 31, 2019 June 30, 2019 YoY % Change QoQ % Change Incentive fees Secondary Fund II $441 $204 $166 (62)% (19)% Co-investment Fund II 5,158 1,790 2,324 (55)% 30 % Other specialized funds 126 5,657 149 18 % (97)% Customized sep
Slide 18: Assets Under Management
Assets Under Management (Dollars in thousands) June 30, 2018 March 31, 2019 June 30, 2019 YoY % Change QoQ % Change Assets under management / advisement Assets under management $56,684 $61,130 $64,304 13 % 5% Assets under advisement 414,796 422,475 408,957 (1)% (3)% Total assets under management /ad
Slide 19: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2019 June 30, 2019 Assets Cash and cash equivalents $49,357 $58,871 Restricted cash 2,233 2,502 Fees receivable 20,320 19,647 Prepaid expenses 4,714 4,802 Due from related parties 2,
Slide 20: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended (Dollars in thousands) June 30, 2018 June 30, 2019 Operating activities Net income $23,103 $27,453 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 510 802 Ch
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation from Net Income Year Ended March 31, Three Months Ended (Dollars in thousands) 2014 2019 June 30, 2018 March 31, 2019 June 30, 2019 Net income attributable to Hamilton Lane Incorporated $0 $33,573 $8,845 $8,048 $11,381 Income (loss) attributable to non-controll
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