Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q1 FY2021 Earnings Presentation
23 slides from Hamilton Lane's earnings presentation, Aug 4, 2020
Slide 1: Fiscal Year 2021 First Quarter Results
Fiscal Year 2021 First Quarter Results Earnings Presentation - August 4, 2020 Hamilton Lane l Global Leader in the Private Markets Page 1
Slide 2: Today's Speakers
Today's Speakers Mario Giannini Erik Hirsch Atul Varma John Oh Chief Executive Officer Vice Chairman Chief Financial Officer Investor Relations Manager 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 $68 billion and $39 billion, respectively, as of June 30, 2020, increases of 6% and 12%, respectively, compared to June 30, 2019 • Management and advisory fees increased 11% co
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence $516B AUM & AUA Total Assets Under Management/Advisement ($B)1 $600 $68 $66 $500 Y-o-Y Growth $59 AUM: 6% AUA: 9% $50 $ 447 $422 $400 $410 :1 9% AGR $40 $374 C $300 $292 $35 $32 $200 $30 $205 $24 $22 $189 $147 $147 $16 $19 $129 $100 $11 $13 $95 $7 $79 $81 $6 $77 $
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) .57% .56% .55% .56% .57%1 .57%2 $45 $40 $39 $39 13% CAGR: $35 $35 $34 $33 $31 $14 $15 $30 $27 $12 $11 $25 $24 $10 $9 $20 $7 $15 $25 $24 $22 $23 $10 $21 $17
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 or es
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 • Recurring management and advisory fees Y-o-Y Growth: 11% CAGR: 11% represented an average of just under 90% of total $245 revenues over the past five fiscal years USD in
Slide 9: Unrealized Carried Interest
Unrealized Carried Interest Unrealized Carried Interest Unrealized Carry by Age 60 > 12 years 56 $400 60 14% < 5 years 26% 45 $300 8-12 years USD in Millions Vehicles 13% 40 $200 $366 $293 $311 20 $100 5-8 years 47% 0 $0 Jun-18 Jun-19 Jun-20 Period Ending Vehicles in Unrealized Carry Position Unreal
Slide 10: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI YTD Long-Term Growth • $3M in net income attributable to HLI for the quarter Y-o-Y Growth: (71)% • Y-o-Y decrease of 71% driven by the decline in equity in income of investees USD in Millions USD in Millions $11 $6
Slide 11: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $200 $208 • For 6/30/20, the total investment balance consisted of: $175 $195 ◦ ~$160M in equity method investments in our USD in Millions $150 $125 $154 funds $137 $100 $120 $103
Slide 12: Fiscal Year 2021 First Quarter Results
Fiscal Year 2021 First Quarter Results Earnings Presentation - August 4, 2020 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, 2019 March 31, 2020 June 30, 2020 YoY Change % QoQ Change % Management and advisory fees $60,551 $65,336 $67,267 11 % 3% Incentive fees 4,135 11,596 2,477 (40
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended (Dollars in thousands except share and per share amounts) June 30, 2019 March 31, 2020 June 30, 2020 YoY Change % QoQ Change % Adjusted EBITDA1 Management and advisory fees $60,551 $65,336 $67,267 11% 3% Total expenses 37,693 43,313 40,911 9% (6)% Less:
Slide 16: Management and Advisory Fees
Management and Advisory Fees Three Months Ended (Dollars in thousands) June 30, 2019 March 31, 2020 June 30, 2020 YoY Change % QoQ Change % Management and advisory fees Specialized funds $26,959 $30,070 $32,231 20 % 7% Customized separate accounts 21,963 23,703 23,515 7% (1)% Advisory 6,252 6,069 6,
Slide 17: Incentive Fees
Incentive Fees Three Months Ended (Dollars in thousands) June 30, 2019 March 31, 2020 June 30, 2020 YoY Change % QoQ Change % Incentive fees Secondary Fund II $166 $120 $159 (4)% 33 % Co-investment Fund II 2,324 1,438 233 (90)% (84)% Other specialized funds 149 1,555 1,826 1,122 % 17 % Customized se
Slide 18: Assets Under Management
Assets Under Management (Dollars in millions) June 30, 2019 March 31, 2020 June 30, 2020 YoY Change % QoQ Change % Assets under management / advisement Assets under management $64,304 $68,571 $68,269 6% 0% Assets under advisement 408,957 434,258 447,312 9% 3% Total assets under management /advisemen
Slide 19: Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands except share and per share amounts) March 31, 2020 June 30, 2020 Assets Cash and cash equivalents $50,124 $71,091 Restricted cash 3,086 3,147 Fees receivable 30,384 23,679 Prepaid expenses 6,988 5,917 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, 2019 June 30, 2020 Operating activities Net income $27,453 $4,968 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 802 1,004 C
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation from Net Income Year Ended March 31, Three Months Ended (Dollars in thousands) 2015 2020 June 30, 2019 March 31, 2020 June 30, 2020 Net income attributable to Hamilton Lane Incorporated $0 $60,825 $11,381 $20,648 $3,246 Income (loss) attributable to non-control
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