Slide 1: Fiscal Year 2017 Fourth Quarter and Full Year Results
Fiscal Year 2017 Fourth Quarter and Full Year Results Earnings Call Presentation - June 12, 2017
Slide 2: Today's Speakers
Today’s Speakers Mario Giannini Erik Hirsch Hartley Rogers Chief Executive Officer Vice Chairman Chairman Randy Stilman Demetrius Sidberry Chief Financial Officer Head of Investor Relations Page 2
Slide 3: Period Highlights
Period Highlights • Successfully completed our initial public offering in March 2017, raising $218.5 million in gross proceeds, including the exercise of the underwriters’ over-allotment option Business • Total asset footprint (assets under management/advisement) reached a record amount of $342 bill
Slide 4: Leading, Global Private Markets Solutions Provider
Leading, Global Private Markets Solutions Provider B u yo u t Gr ow t th di E re r y Fu n d s rim a qu P C it y ~$42B ure Rea Infra st r uc t Private Markets Funds l E st ate Investors/Limited of AUM1 Partners (LPs) t i on s ~$300B Private Companies Co- Inv sac Ven e st s r an of AUA1 rc e me t yT u
Slide 5: What We Do for Our Clients
What We Do for Our Clients Our value proposition Customized Specialized Funds Distribution Separate Accounts Management Primaries, secondaries, Tailored solutions through direct/co-investments, fund- Active portfolio managed investment of-funds and white-label management of private accounts products
Slide 6: Who We Work For
Who We Work For Our global client base includes institutional investors of all sizes and with different needs... Sample clients include... Public Sovereign Endowment Pensions Wealth Funds Funds Some of the largest Some of the world’s Wide range of colleges, pension funds in the U.S. largest SWFs uni
Slide 7: Highly Diversified Client Mix
Highly Diversified Client Mix Diversified revenue stream with no single client representing more than 5% of management and advisory fee revenues FY17 Clients and Investors by Type Sticky Client Base HNW/ Public Pension Family Office 14% • ~12 year average term for specialized products 17% • Seven ye
Slide 8: Strong Market Backdrop
Strong Market Backdrop Global Pension Fund Assets Total Assets and Liability Gaps in U.S. Pensions in USD Trillions in USD Trillions $60 6% 56.6 Total 66% $50 8,187 4,276 $40 4% State and 67% Local 11% 37.1 3,818 1,879 $30 29.4 Federal 44% $20 1,515 1,890 21.3 $10 85% Private 2,855 507 $0 2004 2007
Slide 9: Selecting Managers Has Become More Challenging
Selecting Managers Has Become More Challenging 20 years ago, the private …today it is not. markets industry was small and Managers in existence in 2016 concentrated… Managers in existence in 1995 226 Managers (361 Funds) ($36B raised) 1,001 Managers (2,385 funds) ($601B raised) North America - Buyou
Slide 10: The Hamilton Lane Story
The Hamilton Lane Story Expanding Market leading Deep, talented, Growing asset private markets footprint aligned team base allocations Our Approach + Desire to Industry Tailwinds Increasingly Global, blue-chip Solutions focused consolidate complex offering client base service partners set Continued
Slide 11: Key Business Highlights
Key Business Highlights
Slide 12: Key Topics
Key Topics 1 Asset footprint expansion 2 Investible opportunities remain robust 3 Exposure across the private markets 4 Data matters Page 12
Slide 13: Growing Asset Footprint & Influence
1 Growing Asset Footprint & Influence Total Assets Under Management/Advisement ($B)1 $342B AUM & AUA $350 $42 $40 $300 $250 $35 0% $200 AG R: 2 $32 C $300 $24 $30 $150 $292 $22 $16 $19 $100 $11 $13 $205 $189 $7 $147 $147 $129 $50 $6 $95 $77 $79 $81 $36 $51 $0 2005 2006 2007 2008 2009 2010 2011 2012
Slide 14: Fee-Earning AUM Driving Revenues
1 Fee-Earning AUM Driving Revenues Total Fee-Earning Assets Under Management ($B)1 $40 Total Management Fee Revenues as a % of Average FEAUM $35 0.58% 0.55% 0.56% 0.57% $30 % CAGR: 14 $27 $25 $24 $22 $7 $9 12% Y-o-Y Growth $20 $19 $6 $16 $5 $18 $15 $17 $5 $16 $14 $10 $11 $5 $0 Mar-13 Mar-14 Mar-15 M
Slide 15: Robust Deal Flow Continues
2 Robust Deal Flow Continues We are one of the largest investors in the private markets globally Primaries Secondaries Co-Investments +700 Funds Nearly 300 Over 300 Transactions Companies Deal Flow 6% 2% 11% Hit Rate Hit Rate Hit Rate $25B $732M $1.2B Invested or Significantly Influenced ...but we a
Slide 16: Where Have We Invested
3 Where Have We Invested The private markets present a multitude of investment opportunities across varying strategies and geographies By Strategy1 By Fund Size1,3 Other Mega Natural 10%2 11% Resources Corporate Finance/ 8% Small Buyout 28% Real Estate 45% Large 6% 21% Venture 3% Mezzanine SMID 3% N
Slide 17: Robust Data Advantage Informs Our Investment Decisions
4 Robust Data Advantage Informs Our Investment Decisions Hamilton Lane Proprietary Advantages for Our Clients 40 Benchmarks Vintage Years Aggregation of Industry & Fund-Level Data Creates Market Intelligence ~$3T Our Wealth of Proprietary Total Fund Commitments Information Manager Selection + 3,300+
Slide 18: Financial Highlights
Financial Highlights
Slide 19: Consolidated Revenues
Consolidated Revenues Revenues continue to be driven primarily by management and advisory fees Management and Advisory Fees • Represented an average of 93% of total revenues over $200 the past five fiscal years CAGR: 11% USD in Millions $150 $158 $173 • Y-o-Y growth of 10%; Q-o-Q growth of 18% $146
Slide 20: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Adjusted EBITDA1 • Y-o-Y growth of 22% $100 • FY16 Adjusted EBITDA includes $20M of compensation CAGR: 11% USD in Millions $80 $83 expenses related to incentive fees that were not $60 $74 recognized from a U.S. GAAP perspective in FY16 $64 $68 $
Slide 21: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $120 $120 USD in Millions $100 $80 $92 $103 $103 • Vast majority of our investments are those made $60 $78 alongside our clients $40 $20 $0 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Gros
Slide 22: Other Developments
Other Developments New Board Members Leslie F. Varon • Previously served as Chief Financial Officer of Xerox Corporation • Throughout her 37-year career at Xerox, Ms. Varon held other roles including serving as Vice President of Investor Relations and Vice President of Finance & Corporate Controller
Slide 23: Fiscal Year 2017 Fourth Quarter and Full Year Results
Fiscal Year 2017 Fourth Quarter and Full Year Results Earnings Call Presentation - June 12, 2017
Slide 24: Appendix
Appendix
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended March 31, Year Ended March 31, (Dollars in thousands except share and per share amounts) 2016 2017 2013 2014 2015 2016 2017 Net income attributable to Hamilton Lane Incorporated $- $612 $- $- $- $- $612 Income (loss) attributable to non-controlling interest
Slide 26: Gross Leverage Ratio
Gross Leverage Ratio Year Ended March 31, (Dollars in thousands) 2016 2017 Senior secured term loan payable - principal amount $248,700 $86,100 Adjusted EBITDA 67,785 83,031 Gross leverage ratio 3.7x 1.0x Page 26
Slide 27: 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