Hamilton Lane Incorporated · NASDAQ:HLNE
Hamilton Lane — Q1 FY2019 Earnings Presentation
23 slides from Hamilton Lane's earnings presentation, Aug 7, 2018
Slide 1: Fiscal Year 2019 First Quarter Earnings Presentation
Fiscal Year 2019 First Quarter Earnings Presentation - August 7, 2018
Slide 2: 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 3: 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 $31 bi
Slide 4: Growing Asset Footprint & Influence
Growing Asset Footprint & Influence Total Assets Under Management/Advisement ($B)1 $471B AUM & AUA $500 Q-o-Q Growth $57 AUA: 5% $50 $400 AUM: 6% $415 $40 $374 CAGR: 21% $300 $35 $32 $292 $200 $30 $24 $205 $22 $189 $16 $19 $11 $13 $147 $147 $100 $129 $7 $79 $95 $81 $6 $77 $36 $51 $0 2005 2006 2007 2
Slide 5: Fee-Earning AUM Driving Revenues
Fee-Earning AUM Driving Revenues Fee-earning AUM growth continues... Total Fee-Earning Assets Under Management ($B) 11% YoY Growth $40 0.55% 0.56% 0.57% 0.56% 0.65%¹ 0.54%² $35 $31 $31 $30 3% CAGR: 1 $27 $28 $25 $24 $10 $10 $22 $9 $9 $20 $19 $7 $6 $15 $5 $10 $21 $20 $17 $18 $18 $16 $5 $14 $0 Mar-14
Slide 6: 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 7: Financial Highlights
Financial Highlights
Slide 8: 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: (1%) CAGR: 12% • Represented an average of 90% of total revenues over the past five 200 fiscal years USD in Millions $195 150 • Y-o-Y decl
Slide 9: Consolidated Earnings
Consolidated Earnings Profitability stable and growing Net Income Attributable to HLI Quarter Long-Term Growth Y-o-Y Growth: 62% • Y-o-Y growth of 62% USD in Millions • $9M in net income attributable to HLI for the quarter $5 $9 N/A $17 Q1 FY18 Q1 FY19 FY13 FY18 Adjusted EBITDA1 Quarter Long-Term Gr
Slide 10: Other Key Items
Other Key Items Strong balance sheet with investments in our own products and a modest amount of leverage... Investments $150 • Vast majority of our investments are those made $120 $137 $141 alongside our clients USD in Millions $120 $90 $103 $103 $92 $60 • For 6/30/18, the total investment balance
Slide 11: Fiscal Year 2019 First Quarter
Fiscal Year 2019 First Quarter Earnings Presentation - August 7, 2018
Slide 12: Appendix
Appendix
Slide 13: 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 14: 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 15: 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 16: 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 acco
Slide 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 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