Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q1 FY2019 Earnings Presentation
25 slides from Hamilton Lane's earnings presentation, Aug 7, 2018
Slide 1: Hamilton Lane Incorporated Reports First Quarter Fiscal 2019 Results
HAMILTON LANE INCORPORATED REPORTS FIRST QUARTER FISCAL 2019 RESULTS BALA CYNWYD, PENN. – August 7, 2018 – Leading private markets asset management firm Hamilton Lane Incorporated (NASDAQ: HLNE) today reported results for its first fiscal quarter ended June 30, 2018. Hamilton Lane CEO Mario Giannini
Slide 2: Forward-looking statements and contacts
subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different, including risks relating to our ability to manage growth, fund performance, risk, changes in our regulatory environment and tax status; market conditions generally;
Slide 3: Fiscal Year 2019 First Quarter Earnings Presentation
Fiscal Year 2019 First Quarter Earnings Presentation - August 7, 2018
Slide 4: Today's Speakers
Today’s Speakers Mario Giannini Erik Hirsch Randy Stilman Demetrius Sidberry Chief Executive Officer Vice Chairman Chief Financial Officer Head of Investor Relations Hamilton Lane | Global Leader in the Private Markets Page 2
Slide 5: Period Highlights
Period Highlights • Total asset footprint (assets under management/advisement) reached a record Business amount of approximately $471 billion, growing 31% compared to June 30, 2017 Performance • Assets under management and fee-earning assets under management were approximately $57 billion and $31 bi
Slide 6: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence Total Assets Under Management/Advisement ($B)1 $471B AUM � AUA ���� Q-o-Q Growth ��� AUA: 5% ��� ���� AUM: 6% ���� ��� ���� CAGR� ��� ���� ��� ��� ���� ���� ��� ��� ���� ��� ���� ��� ��� ��� ��� ���� ���� ���� ���� �� ��� �� ��� ��� ��� ��� ��� �� ���� ���� ���� �
Slide 7: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-earning AUM growth continues... Total Fee-Earning Assets Under Management ($B) 11% YoY Growth ��� ����� ����� ����� ����� ������ ������ ��� ��� ��� ��� ��G�� ��� ��� ��� ��� ��� ��� ��� ��� �� �� ��� ��� �� �� ��� �� ��� ��� ��� ��� ��� ��� ��� �� ��� �� Mar��� M
Slide 8: AUM Growth
AUM Growth 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 to • Co-investment fund ranging mandates; opportunity set further or establish relationship continue
Slide 9: Financial Highlights
Financial Highlights
Slide 10: Consolidated Revenue
Consolidated Revenue Strong revenue growth across management and advisory fees and incentive fees Management and Advisory Fees �T� Long-Ter� Growth ��o�� Gro�th� ���� ��G�� ��� 200 • Represented an average of 90% of total revenues over the past five ���� fiscal years 150 • Y-o-Y decline of 1% due to
Slide 11: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI Q�arter Long-Ter� Growth ��o�� Gro�th� ��� • Y-o-Y growth of 62% • $9M in net income attributable to HLI for the quarter ��� in Millions in ��� �� �� ��� ��� �� ���� �� ���� ���� ���� Adjusted EBITDA1 Q�arter Long-
Slide 12: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments ���� • Vast majority of our investments are those made ���� ���� ���� ���� alongside our clients ��� ���� ���� ��� ��� • For 6/30/18, the total investment balance consisted of ���
Slide 13: Fiscal Year 2019 First Quarter
Fiscal Year 2019 First Quarter Earnings Presentation - August 7, 2018
Slide 14: Appendix
Appendix
Slide 15: 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, 2017 March 31, 2018 June 30, 2018 YoY % Change QoQ % Change Revenues Management and advisory fees $51,684 $48,704 $50,979 (1%) 5% Incentive fees 1,017 28,905
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in thousands except share and per share amounts) June 30, 2017 March 31, 2018 June 30, 2018 YoY % Change QoQ % Change Adjusted EBITDA Management and advisory fees $51,684 $48,704 $50,979 (1%) 5% Total expenses 28,420 33,247 37,670 33% 13% Less:
Slide 17: Management and Advisory Fees
Management and Advisory Fees Three Months Ended (Dollars in thousands) June 30, 2017 March 31, 2018 June 30, 2018 YoY % Change QoQ % Change Management and advisory fees Customized separate accounts $18,784 $20,891 $20,387 9% (2%) Specialized funds 25,206 19,569 21,015 (17%) 7% Advisory and reporting
Slide 18: Incentive Fees
Incentive Fees Three Months Ended (Dollars in thousands) June 30, 2017 March 31, 2018 June 30, 2018 YoY % Change QoQ % Change Incentive fees Secondary Fund II $638 $ - $441 (31%) N/A Co-investment Fund II - 26,072 5,158 N/A (80%) Other specialized funds (40) 150 126 N/A (16%) Customized separate acc
Slide 19: Assets Under Management
Assets Under Management (Dollars in millions) June 30, 2017 March 31, 2018 June 30, 2018 YoY % Change QoQ % Change Assets under management / advisement Assets under management $45,788 $53,679 $56,684 24% 6% Assets under advisement 313,652 396,837 414,796 32% 5% Total assets under management / advise
Slide 20: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2018 June 30, 2018 Assets Cash and cash equivalents $47,596 $53,641 Restricted cash 1,787 1,801 Fees receivable 14,924 16,710 Prepaid expenses 2,301 3,153 Due from related parties 3,
Slide 21: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended (Dollars in thousands) June 30, 2017 June 30, 2018 Operating activities Net income $25,612 $23,103 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 437 510 Ch
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation from Net Income Three Months Ended (Dollars in thousands) June 30, 2017 March 31, 2018 June 30, 2018 Net income attributable to Hamilton Lane Incorporated $5,464 $13,498 $8,845 Income (loss) attributable to non-controlling interests in general partnerships 898
Slide 23: Gross Leverage Ratio
Gross Leverage Ratio Twelve Months Ended (Dollars in thousands) March 31, 2018 June 30, 2018 Principal amount of debt outstanding $84,513 $84,044 Adjusted EBITDA 132,586 136,529 Gross leverage ratio 0.6x 0.6x Hamilton Lane | Global Leader in the Private Markets Page 21
Slide 24: Terms
Terms Adjusted EBITDA is used to measure our profitability including carried interest. 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) inter
Slide 25: 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