Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — FY2019 Earnings Presentation
24 slides from Hamilton Lane's earnings presentation, May 29, 2019
Slide 1: Fiscal Year 2019 Fourth Quarter and Full Year Results
Fiscal Year 2019 Fourth Quarter and Full Year Results Earnings Presentation - May 29, 2019
Slide 2: Today's Speakers
Today’s Speakers Mario Giannini Erik Hirsch Randy Stilman Jackie Rantanen Chief Executive Officer Vice Chairman Chief Financial Officer Head of Product Management Hamilton Lane | Global Leader in the Private Markets Page 2
Slide 3: Period Highlights
Period Highlights Business Performance • Total asset footprint (assets under management/advisement) reached approximately $484 billion, growing 7% compared to March 31, 2018 • Assets under management and fee-earning assets under management were approximately $61 billion and $34 billion, respectively
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $484B Total Assets Under Management/Advisement ($B)1 AUM & AUA $500 Y-o-Y Growth $61 $59 AUA: 6% AUM: 14% $50 $400 $422 $410 $374 $40 $300 CAGR: 20% $35 $292 $32 $200 $24 $30 $205 $189 $22 $147 $147 $16 $19 $129 $100 $11 $13 $7 $95 $77 $79 $81 $6 $51 $36 $0 2005 2
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-Earning AUM growth continues... Total Fee-Earning Assets Under Management ($B) $40 0.56% 0.57% 0.56% 0.55% $35 $34 CAGR: 11% $31 $30 $27 $11 $25 $24 $10 $22 $9 $20 $7 $5 $15 $10 $22 $18 $21 $17 $5 $16 $0 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Customized Separate Acco
Slide 6: Separate Account Re-ups
Separate Account Re-ups • A total of 20 existing clients elected to allocate an additional tranche of capital in FY19 (a “re-up”) • The average size of those re-ups was over $130 million and the average age of clients re-upping was 6 years • Re-upping clients represented 9 different countries and in
Slide 7: 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 which include further or establish relationship with techno
Slide 8: Financial Highlights
Financial Highlights
Slide 9: Consolidated Revenue
Consolidated Revenue Strong revenue growth across management and advisory fees and incentive fees Management and Advisory Fees YTD Long-Term Growth Y-o-Y Growth: 12% CAGR: 11% • Represented an average of just under 90% of total revenues over the 220 $218 $218 past five fiscal years USD in Millions $
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Long-Term Growth Y-o-Y Growth: 94% USD in Millions • $8M in net income attributable to HLI for the quarter $34 $34 $17 N/A FY18 FY19 FY14 FY19 Adjusted EBITDA1 YTD Long-Term Growth Y-o-Y Growth: (11)% CAGR: 13%
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 $150 $154 $125 • For 3/31/19, the total investment balance consisted of ~$134M in USD in Millions $137 $100 $120 equity method investments in our funds and ~$20M in technolog
Slide 12: Fiscal Year 2019 Fourth Quarter and Full Year Results
Fiscal Year 2019 Fourth Quarter and Full Year Results Earnings Presentation - May 29, 2019
Slide 13: Appendix
Appendix
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) 2018 2019 % Change 2018 2019 % Change Revenues Management and advisory fees 48,704 57,929 19% 195,030 217,773 12% Incentive fees 28,905
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) 2018 2019 % Change 2018 2019 % Change Adjusted EBITDA Management and advisory fees $48,704 $57,929 19% $195,030 $217,773 12% Total expenses 33,247 38,060 14% 121,08
Slide 16: Management and Advisory Fees
Management and Advisory Fees Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2018 2019 % Change 2018 2019 % Change Management and advisory fees Customized separate accounts $20,891 $22,158 6% $79,144 $85,245 8% Specialized funds 19,569 25,892 32% 83,151 93,056 12% Advisory a
Slide 17: Incentive Fees
Incentive Fees Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2018 2019 % Change 2018 2019 % Change Incentive fees Secondary Fund II $- $204 N/A $2,239 $1,529 (32)% Co-investment Fund II 26,072 1,790 (93)% 40,650 16,748 (59)% Other specialized funds 150 5,657 3667% 1,012 7,
Slide 18: Assets Under Management
Assets Under Management (Dollars in millions) March 31, 2018 December 31, 2018 March 31, 2019 YoY % Change QoQ % Change Assets under management / advisement Assets under management $53,679 $58,840 $61,130 14% 4% Assets under advisement 396,837 409,924 422,475 6% 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, 2018 March 31, 2019 Assets Cash and cash equivalents $47,596 $49,357 Restricted cash 1,787 2,233 Fees receivable 14,924 20,320 Prepaid expenses 2,301 4,714 Due from related parties 3
Slide 20: Condensed Consolidated Statements of Cash Flows (Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited) Year Ended March 31, (Dollars in thousands) 2017 2018 2019 Operating activities Net income $74,438 $106,297 $98,997 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,915 1,891
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation from Net Income Three Months Ended March 31, Year Ended March 31, (Dollars in thousands) 2018 2019 2018 2019 Net income attributable to Hamilton Lane Incorporated $13,498 $8,048 $17,341 $33,573 Income (loss) attributable to non-controlling interests in general
Slide 22: Gross Leverage Ratio
Gross Leverage Ratio Twelve Months Ended (Dollars in thousands) March 31, 2018 March 31, 2019 Principal amount of debt outstanding $84,513 $71,250 Adjusted EBITDA 132,586 117,736 Gross leverage ratio 0.6x 0.6x Hamilton Lane | Global Leader in the Private Markets Page 22
Slide 23: 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 24: 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