Cover Page
Cover Page - shares | 9 Months Ended | |
Dec. 31, 2019 | Feb. 03, 2020 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-38021 | |
Entity Registrant Name | HAMILTON LANE INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-2482738 | |
Entity Address, Address Line One | One Presidential Blvd., | |
Entity Address, Address Line Two | 4th Floor | |
Entity Address, City or Town | Bala Cynwyd, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19004 | |
City Area Code | 610 | |
Local Phone Number | 934-2222 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | |
Trading Symbol | HLNE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001433642 | |
Current Fiscal Year End Date | --03-31 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 29,834,709 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 22,049,727 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 81,599 | $ 49,357 |
Restricted cash | 3,095 | 2,233 |
Fees receivable | 19,456 | 20,320 |
Prepaid expenses | 4,587 | 4,714 |
Due from related parties | 2,667 | 2,628 |
Furniture, fixtures and equipment, net | 7,280 | 8,108 |
Lease right-of-use assets, net | 8,596 | |
Investments | 193,168 | 154,491 |
Deferred income taxes | 138,378 | 107,726 |
Other assets | 10,553 | 11,014 |
Total assets | 469,379 | 360,591 |
Liabilities and Equity | ||
Accounts payable | 2,511 | 2,619 |
Accrued compensation and benefits | 26,301 | 12,216 |
Deferred incentive fee revenue | 3,704 | 3,704 |
Debt | 67,245 | 70,954 |
Accrued members’ distributions | 10,505 | 17,081 |
Payable to related parties pursuant to tax receivable agreement | 101,404 | 69,636 |
Dividends payable | 8,026 | 5,673 |
Lease liabilities | 9,397 | |
Other liabilities (includes $16,395 and $0 at fair value) | 23,936 | 8,986 |
Total liabilities | 253,029 | 190,869 |
Commitments and Contingencies | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued | 0 | 0 |
Additional paid-in-capital | 109,050 | 92,482 |
Accumulated other comprehensive income | 2 | 7 |
Total Hamilton Lane Incorporated stockholders’ equity | 143,573 | 110,226 |
Total equity | 216,350 | 169,722 |
Total liabilities and equity | 469,379 | 360,591 |
Common Class A | ||
Liabilities and Equity | ||
Common stock | 30 | 27 |
Common Class B | ||
Liabilities and Equity | ||
Common stock | 22 | 24 |
General Partnerships | ||
Liabilities and Equity | ||
Stockholders' equity attributable to noncontrolling interest | 5,441 | 5,716 |
Hamilton Lane Advisors, L.L.C. | ||
Liabilities and Equity | ||
Retained earnings | 34,469 | 17,686 |
Stockholders' equity attributable to noncontrolling interest | $ 67,336 | $ 53,780 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Class of Stock [Line Items] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Secured financing | $ 16,395 | $ 0 |
Common Class A | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 29,835,713 | 27,367,477 |
Common stock, shares outstanding (in shares) | 29,835,713 | 27,367,477 |
Common Class B | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 22,049,727 | 23,516,439 |
Common stock, shares outstanding (in shares) | 22,049,727 | 23,516,439 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | ||||
Total revenues | $ 68,138 | $ 65,996 | $ 197,116 | $ 185,191 |
Expenses | ||||
Compensation and benefits | 23,369 | 23,843 | 70,368 | 73,236 |
General, administrative and other | 15,877 | 13,916 | 43,938 | 36,659 |
Total expenses | 39,246 | 37,759 | 114,306 | 109,895 |
Other income (expense) | ||||
Equity in income of investees | 4,454 | 4,934 | 14,331 | 10,096 |
Interest expense | (651) | (767) | (2,213) | (2,260) |
Interest income | 196 | 82 | 624 | 167 |
Non-operating income | 97 | 8,892 | 4,175 | 20,951 |
Total other income (expense) | 4,096 | 13,141 | 16,917 | 28,954 |
Income before income taxes | 32,988 | 41,378 | 99,727 | 104,250 |
Income tax expense | 4,551 | 18,463 | 11,564 | 25,660 |
Net income | 28,437 | 22,915 | 88,163 | 78,590 |
Net income attributable to Hamilton Lane Incorporated | $ 13,497 | $ 5,458 | $ 40,177 | $ 25,525 |
Common Class A | ||||
Other income (expense) | ||||
Basic earnings per share of Class A common stock (in dollars per share) | $ 0.46 | $ 0.22 | $ 1.45 | $ 1.09 |
Diluted earnings per share of Class A common stock (in dollars per share) | 0.46 | 0.22 | 1.44 | 1.08 |
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.275 | $ 0.2125 | $ 0.825 | $ 0.6375 |
General Partnerships | ||||
Other income (expense) | ||||
Less: (Loss) income attributable to non-controlling interests | $ 44 | $ 681 | $ 593 | $ 1,075 |
Hamilton Lane Advisors, L.L.C. | ||||
Other income (expense) | ||||
Less: (Loss) income attributable to non-controlling interests | 14,896 | 16,776 | 47,393 | 51,990 |
Management and advisory fees | ||||
Revenues | ||||
Total revenues | 59,837 | 55,617 | 179,584 | 159,844 |
Incentive fees | ||||
Revenues | ||||
Total revenues | $ 8,301 | $ 10,379 | $ 17,532 | $ 25,347 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net income | $ 28,437 | $ 22,915 | $ 88,163 | $ 78,590 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation | 16 | 23 | (13) | 23 |
Total other comprehensive income (loss), net of tax | 16 | 23 | (13) | 23 |
Comprehensive income | 28,453 | 22,938 | 88,150 | 78,613 |
Less: | ||||
Total comprehensive income attributable to Hamilton Lane Incorporated | 13,506 | 5,469 | 40,172 | 25,536 |
General Partnerships | ||||
Less: | ||||
Comprehensive income (loss) attributable to non-controlling interests | 44 | 681 | 593 | 1,075 |
Hamilton Lane Advisors, L.L.C. | ||||
Less: | ||||
Comprehensive income (loss) attributable to non-controlling interests | $ 14,903 | $ 16,788 | $ 47,385 | $ 52,002 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income | General PartnershipsNoncontrolling Interests | Hamilton Lane Advisors, L.L.C.Noncontrolling Interests |
Beginning balance at Mar. 31, 2018 | $ 136,074 | $ 22 | $ 26 | $ 73,829 | $ 4,549 | $ 0 | $ 7,266 | $ 50,382 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 78,590 | 25,525 | 1,075 | 51,990 | ||||
Other comprehensive loss | 23 | 11 | 12 | |||||
Equity-based compensation | 4,824 | 2,129 | 2,695 | |||||
Issuance of shares for contingent compensation payout | 425 | 1 | 200 | 224 | ||||
Repurchase of Class A shares for employee tax withholding | (174) | (73) | (101) | |||||
Deferred tax adjustment | 7,191 | 7,191 | ||||||
Dividends declared | (14,783) | (14,783) | ||||||
Capital contributions from (distributions to) non-controlling interests, net | (1,787) | (1,787) | ||||||
Member distributions | (38,247) | (38,247) | ||||||
Secondary offering | (2) | 3 | (2) | 5,891 | (5,894) | |||
Equity reallocation between controlling and non-controlling interests | 0 | (1,344) | 1,344 | |||||
Ending balance at Dec. 31, 2018 | 173,131 | 26 | 24 | 88,234 | 15,311 | 11 | 6,554 | 62,971 |
Beginning balance at Sep. 30, 2018 | 162,147 | 25 | 24 | 86,089 | 15,178 | 0 | 6,873 | 53,958 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 22,915 | 5,458 | 681 | 16,776 | ||||
Other comprehensive loss | 23 | 11 | 12 | |||||
Equity-based compensation | 1,604 | 760 | 844 | |||||
Issuance of shares for contingent compensation payout | 425 | 1 | 200 | 224 | ||||
Deferred tax adjustment | 1,021 | 1,021 | ||||||
Dividends declared | (5,325) | (5,325) | ||||||
Capital contributions from (distributions to) non-controlling interests, net | (1,000) | (1,000) | ||||||
Member distributions | (8,679) | (8,679) | ||||||
Secondary offering | 0 | |||||||
Equity reallocation between controlling and non-controlling interests | 0 | 164 | (164) | |||||
Ending balance at Dec. 31, 2018 | 173,131 | 26 | 24 | 88,234 | 15,311 | 11 | 6,554 | 62,971 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative-effect adjustment from adoption of accounting guidance | 997 | |||||||
Beginning balance at Mar. 31, 2019 | 169,722 | 27 | 24 | 92,482 | 17,686 | 7 | 5,716 | 53,780 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 88,163 | 40,177 | 593 | 47,393 | ||||
Other comprehensive loss | (13) | (5) | (8) | |||||
Equity-based compensation | 5,283 | 2,758 | 2,525 | |||||
Issuance of shares for contingent compensation payout | 425 | 214 | 211 | |||||
Repurchase of Class A shares for employee tax withholding | (45) | (23) | (22) | |||||
Deferred tax adjustment | 6,231 | 6,231 | ||||||
Dividends declared | (23,394) | (23,394) | ||||||
Capital contributions from (distributions to) non-controlling interests, net | (868) | (868) | ||||||
Member distributions | (30,037) | (30,037) | ||||||
Secondary offering | (2) | 3 | (2) | 6,367 | (6,370) | |||
Employee Share Purchase Plan share issuance | 885 | 462 | 423 | |||||
Equity reallocation between controlling and non-controlling interests | 0 | 559 | (559) | |||||
Ending balance at Dec. 31, 2019 | 216,350 | 30 | 22 | 109,050 | 34,469 | 2 | 5,441 | 67,336 |
Beginning balance at Sep. 30, 2019 | 204,631 | 30 | 22 | 107,718 | 28,998 | (7) | 5,592 | 62,278 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 28,437 | 13,497 | 44 | 14,896 | ||||
Other comprehensive loss | 16 | 9 | 7 | |||||
Equity-based compensation | 1,781 | 981 | 800 | |||||
Deferred tax adjustment | 20 | 20 | ||||||
Dividends declared | (8,026) | (8,026) | ||||||
Capital contributions from (distributions to) non-controlling interests, net | (195) | (195) | ||||||
Member distributions | (10,607) | (10,607) | ||||||
Secondary offering | 0 | 0 | 0 | |||||
Employee Share Purchase Plan share issuance | 293 | 161 | 132 | |||||
Equity reallocation between controlling and non-controlling interests | 0 | 170 | (170) | |||||
Ending balance at Dec. 31, 2019 | 216,350 | $ 30 | $ 22 | $ 109,050 | $ 34,469 | $ 2 | $ 5,441 | $ 67,336 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative-effect adjustment from adoption of accounting guidance | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | ||
Net income | $ 88,163 | $ 78,590 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,379 | 1,759 |
Change in deferred income taxes | 7,197 | 18,945 |
Change in payable to related parties pursuant to tax receivable agreement | 150 | (9,134) |
Equity-based compensation | 5,244 | 4,777 |
Equity in income of investees | (14,331) | (10,096) |
Gain on sale of investments valued under the measurement alternative | (4,973) | (11,133) |
Proceeds received from investments | 8,475 | 11,652 |
Other | 598 | (482) |
Changes in operating assets and liabilities: | ||
Fees receivable | 856 | (2,029) |
Prepaid expenses | 126 | (66) |
Due from related parties | (39) | 728 |
Other assets | 329 | (262) |
Accounts payable | (108) | 744 |
Accrued compensation and benefits | 14,510 | 25,130 |
Deferred incentive fees | 0 | (2,541) |
Other liabilities | (521) | 327 |
Net cash provided by operating activities | 108,055 | 106,909 |
Investing activities: | ||
Purchase of furniture, fixtures and equipment | (1,207) | (4,758) |
Purchase of other investments | (3,967) | 0 |
Proceeds from sales of investments valued under the measurement alternative | 6,419 | 22,531 |
Loan to investee | (157) | (944) |
Distributions received from investments | 6,878 | 8,166 |
Contributions to investments | (37,196) | (30,642) |
Net cash used in investing activities | (29,230) | (5,647) |
Financing activities: | ||
Proceeds from offering | 147,122 | 129,626 |
Purchase of membership interests | (147,122) | (129,626) |
Repayments of debt | (3,750) | (1,875) |
Draw-down on revolver | 15,000 | 0 |
Repayment of revolver | (15,000) | (10,450) |
Secured financing | 15,750 | 0 |
Contributions from non-controlling interest in general partnerships | 30 | 30 |
Distributions to non-controlling interest in general partnerships | (898) | (1,817) |
Repurchase of Class B common stock | (2) | (2) |
Repurchase of Class A shares for employee tax withholding | (45) | (174) |
Proceeds received from issuance of shares under Employee Share Purchase Plan | 885 | 0 |
Dividends paid | (21,041) | (13,351) |
Members’ distributions paid | (36,613) | (41,878) |
Net cash used in financing activities | (45,684) | (69,517) |
Effect of exchange rate changes on cash and cash equivalents | (37) | 13 |
Increase in cash, cash equivalents, and restricted cash | 33,104 | 31,758 |
Cash, cash equivalents, and restricted cash at beginning of the period | 51,590 | 49,383 |
Cash, cash equivalents, and restricted cash at end of the period | $ 84,694 | $ 81,141 |
Organization
Organization | 9 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Hamilton Lane Incorporated (“HLI”) was incorporated in the State of Delaware on December 31, 2007. As of March 6, 2017, following its initial public offering (“IPO”) and related transactions, HLI became a publicly-traded entity, and is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain deferred tax assets and liabilities, payable to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of December 31, 2019 and March 31, 2019, HLI held approximately 54.9% and 50.3%, respectively, of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement in place with HLA’s members, the economic interest in HLA held by HLI will increase. HLA is a registered investment advisor with the United States Securities and Exchange Commission (“SEC”), providing asset management and advisory services, primarily to institutional investors, to design, build and manage private markets portfolios. HLA sponsors the formation, and serves as the general partner or managing member, of various limited partnerships or limited liability companies consisting of specialized funds and certain single client separate account entities (“Partnerships”) that acquire interests in third-party managed investment funds that make private equity and equity-related investments. The Partnerships may also make direct co-investments, including investments in debt, equity, and other equity-based instruments. HLA, which includes certain subsidiaries that serve as the general partner or managing member of the Partnerships, may invest its own capital in the Partnerships and generally makes all investment and operating decisions for the Partnerships. HLA operates several wholly-owned entities through which it conducts its foreign operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. Results of operations for the nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the year ending March 31, 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019. Fair Value of Financial Instruments The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below: • Level 1: Values are determined using quoted market prices for identical financial instruments in an active market. • Level 2: Values are determined using quoted prices for similar financial instruments and valuation models whose inputs are observable. • Level 3: V alues are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The carrying amount of cash and cash equivalents, fees receivable, and accounts payable approximate fair value due to the immediate or short-term maturity of these financial instruments. The carrying amount of the term loan of $67,245 as of December 31, 2019 approximated fair value based on then-current market rates for similar debt instruments and is classified as Level 2 within the fair value hierarchy. Leases On April 1, 2019, the Company adopted ASU 2016-02, “ Leases”, (ASC 842) on a prospective basis and as a result, prior period amounts were not adjusted to reflect the impacts of the new standard. In addition, as permitted under the transition guidance within the new standard, prior scoping, classification, and accounting for initial direct costs were carried forward for leases existing as of the adoption date. The new standard establishes a right of use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the Condensed Consolidated Balance Sheets for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Condensed Consolidated Statements of Income. The adoption did not have an impact on the Condensed Consolidated Statements of Income as all of the Company’s leases are operating leases, and will continue to be recognized as expense on a straight-line basis. The adoption, however, resulted in a gross-up in total assets and total liabilities on the Condensed Consolidated Balance Sheets. The Company determines whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines whether it should be classified as an operating or finance lease. The Company accounts for lease components and non-lease components as a single lease component. Lease ROU assets and lease liabilities are recognized at the commencement date of the lease and measured based on the present value of lease payments over the lease term. Lease ROU assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. Generally, the Company’s leases do not provide an implicit rate and as a result, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company does not recognize a lease ROU asset or lease liability for short-term leases, which have lease terms of 12 months or less. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ”. ASU 2018-13 changes the fair value measurement disclosure requirements. The amendments remove or modify certain disclosures, while others were added. Early adoption of any removed or modified disclosure requirements is permitted upon issuance of ASU 2018-13 and adoption of the additional disclosure requirements may be delayed until the effective date. The Company elected to early adopt the removed or modified disclosure requirements of the standard on October 1, 2018 and expects to adopt the additional disclosure requirements on April 1, 2020. The adoption of the removed or modified disclosure requirements did not have a material impact on the Company’s disclosures in its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “ Accounting for Financial Instruments - Credit Losses (Topic 326) ”. ASU 2016-13 replaces the incurred loss methodology in current GAAP with a methodology that reflects expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for the Company on April 1, 2020 and early adoption is permitted. The Company has identified all of its material financial assets and does not expect that implementing the guidance will have a material impact on the Company's consolidated financial statements. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Revenue
Revenue | 9 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The following table presents revenues disaggregated by product offering, which aligns with the identified performance obligations and the basis for calculating each amount: Three Months Ended Nine Months Ended December 31, Management and advisory fees 2019 2018 2019 2018 Specialized funds $ 27,789 $ 23,413 $ 81,733 $ 67,164 Customized separate accounts 22,618 21,594 67,047 63,087 Advisory 5,878 5,926 18,091 18,287 Reporting and other 2,237 2,260 6,492 6,373 Distribution management 1,108 1,975 3,169 3,773 Fund reimbursement revenue 207 449 3,052 1,160 Total management and advisory fees $ 59,837 $ 55,617 $ 179,584 $ 159,844 Three Months Ended Nine Months Ended December 31, Incentive fees 2019 2018 2019 2018 Specialized funds $ 3,638 $ 10,227 $ 11,257 $ 18,036 Customized separate accounts 4,663 152 6,275 7,311 Total incentive fees $ 8,301 $ 10,379 $ 17,532 $ 25,347 The Company recognized $2,541 of incentive fees during the nine months ended December 31, 2018 that were previously received and deferred. Cost to obtain contracts The Company incurs incremental costs related to sales commissions paid to certain employees directly related to customized separate account contracts. These incremental costs are capitalized and amortized over the expected contract length proportionately to the management fee revenue expected to be recognized in each year as a percentage of the total expected revenue for the contract. The contract asset related to the cost to obtain contracts was $973 and $968 as of December 31, 2019 and March 31, 2019, respectively, and is included in other assets in the Condensed Consolidated Balance Sheets. Amortization expense related to this contract asset was $120 and $363 for the three and nine months ended December 31, 2019, respectively, and $111 and $347 for the three and nine months ended December 31, 2018, respectively, and is included in general, administrative and other in the Condensed Consolidated Statements of Income. |
Investments
Investments | 9 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments Investments consist of the following: December 31, March 31, 2019 2019 Equity method investments in Partnerships $ 159,984 $ 122,505 Equity method investments in Partnerships held by consolidated VIEs 11,183 11,648 Other equity method investments 1,069 1,086 Other investments 16,395 12,488 Investments valued under the measurement alternative 4,537 6,764 Total Investments $ 193,168 $ 154,491 Equity method investments The Company’s equity method investments in Partnerships represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments within the Partnerships vary by fund. The Company has a 1% interest in substantially all of the Partnerships. The Company’s other equity method investments represent its ownership in a technology company that provides benchmarking and analytics of private equity data and its ownership in a joint venture that automates the collection of fund and underlying portfolio company data from general partners. The Company recognized equity method income related to its investments in Partnerships and other equity method investments of $4,454 and $14,331 for the three and nine months ended December 31, 2019, respectively, and $4,934 and $10,096 for the three and nine months ended December 31, 2018, respectively. Other investments The Company’s other investments represent investments in private equity funds and direct credit and equity co-investments. The private equity fund investments can only be redeemed through distributions received from the liquidation of underlying investments of the fund, and the timing of distributions is currently indeterminable. The direct credit co-investments are debt securities classified as trading securities. The direct equity co-investments and private equity funds are measured at fair value with unrealized holding gains and losses included in earnings. The Company’s other investments are recorded at estimated fair value utilizing significant unobservable inputs and are therefore classified in Level 3 of the fair value hierarchy. The following is a reconciliation of other investments for which significant unobservable inputs (Level 3) were used in determining value: Private equity funds Direct credit co-investments Direct equity co-investments Total other investments Balance as of September 30, 2019 $ 5,836 $ 3,093 $ 6,984 $ 15,913 Contributions 392 — — 392 Distributions (748) — — (748) Net gain 457 36 345 838 Balance as of December 31, 2019 $ 5,937 $ 3,129 $ 7,329 $ 16,395 Private equity funds Direct credit co-investments Direct equity co-investments Total other investments Balance as of March 31, 2019 $ 3,734 $ 3,940 $ 4,814 $ 12,488 Contributions 2,484 — 1,875 4,359 Distributions (748) (973) — (1,721) Net gain 467 162 640 1,269 Balance as of December 31, 2019 $ 5,937 $ 3,129 $ 7,329 $ 16,395 The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of assets were as follows, as of December 31, 2019: Significant Fair Valuation Unobservable Weighted Value Methodology Inputs Range Average Private equity funds $ 5,937 Adjusted net asset value Selected market return 4.7% - 4.7% 4.7% Direct credit co-investments $ 3,129 Recent precedent transactions Discounted cash flow Market yield 9.7% - 10.1% 9.86% Direct equity co-investments $ 7,329 Market approach EBITDA multiple 8.0x - 13.25x 10.87x Market approach Equity multiple 1.25x 1.25x For the significant unobservable inputs listed in the table above, (1) a significant increase or decrease in the selected market return would result in a significantly higher or lower fair value measurement, respectively; (2) a significant increase or decrease in the market yield would result in a significantly lower or higher fair value measurement, respectively; and (3) a significant increase or decrease in the selected multiple would result in a significantly higher or lower fair value measurement, respectively. During the nine months ended December 31, 2019, the Company transferred these investments for an agreed amount of cash of $15,750 to a Partnership that is a Variable Interest Entity (“VIE”) of which the Company is the general partner but does not consolidate as the Company is not the primary beneficiary. Due to continuing involvement with these assets at the Partnership, the Company accounted for this transfer as a secured financing as it has not met the criteria in ASC 860, “ Transfers and Servicing ”, to qualify as a sale and therefore has recorded a financial liability for the secured financing which is included in other liabilities in the Condensed Consolidated Balance Sheets. The cash received was recorded as secured financing in financing activities in the Condensed Consolidated Statements of Cash Flows. As of December 31, 2019, all other investments were pledged as collateral on the Company’s secured financing. The Company accounts for this financial liability at fair value under the fair value option. The primary reason for electing the fair value option is to mitigate volatility in earnings from using different measurement attributes. The significant input to the fair value of the secured financing is the fair value of the other investments delivered as collateral. As of December 31, 2019, the secured financing had a fair value of $16,395 and an amortized cost of $14,186. The fair value of the secured financing is estimated using Level 3 inputs with the significant input being the fair value of the other investments utilized as collateral as shown above. The Company recognized a gain of $838 and $1,269 on other investments during the three and nine months ended December 31, 2019, respectively, and a loss of $838 and $1,973 on the secured financing liability during the three and nine months ended December 31, 2019, respectively, that are recorded in other non-operating loss. Investments valued under the measurement alternative On July 1, 2019, the previously announced sale of an entity in which the Company held an investment closed. The Company received gross proceeds of $6,419 and recorded a gain of approximately $4,973 in connection with the transaction during the nine months ended December 31, 2019. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities The Company consolidates certain VIEs in which it is determined that the Company is the primary beneficiary. The consolidated VIEs are general partner entities of the Partnerships, which are not wholly owned by the Company. The total assets of the consolidated VIEs are $11,183 and $11,648 as of December 31, 2019 and March 31, 2019, respectively, and are recorded in investments in the Condensed Consolidated Balance Sheets. The consolidated VIEs had no liabilities as of December 31, 2019 and March 31, 2019 other than deferred incentive fee revenue of $3,704 as of both December 31, 2019 and March 31, 2019. The assets of the consolidated VIEs may only be used to settle obligations of the consolidated VIEs, if any. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest. The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary based upon the Company’s equity interest percentage in each of the VIEs. Certain Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by simple majority vote (i.e. do not have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of December 31, 2019, the total commitments and remaining unfunded commitments from the limited partners and general partners to the unconsolidated VIEs are $18,320,381 and $6,623,566, respectively. These commitments are the primary source of financing for the unconsolidated VIEs. The maximum exposure to loss represents the potential loss of assets recognized by the Company relating to these unconsolidated entities. The Company believes that its maximum exposure to loss is limited because it establishes separate limited partnerships or limited liability companies to serve as the general partner or managing member of the Partnerships. The carrying amount of assets and liabilities recognized in the Condensed Consolidated Balance Sheets related to the Company’s interests in these non-consolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows: December 31, March 31, 2019 2019 Investments $ 116,636 $ 87,001 Fees receivable 1,535 5,896 Due from related parties 1,001 1,332 Total VIE Assets 119,172 94,229 Deferred incentive fee revenue 3,704 3,704 Non-controlling interests (5,441) (5,716) Maximum exposure to loss $ 117,435 $ 92,217 |
Equity
Equity | 9 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | Equity The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2019: Class A Common Stock Class B Common Stock March 31, 2019 27,367,477 23,516,439 Shares issued (repurchased) in connection with registered offering 2,451,633 (1,466,712) Shares issued in connection with contingent compensation payment 7,692 — Forfeitures (14,649) — Shares repurchased for employee tax withholdings (509) — Restricted stock granted 6,070 — Shares issued pursuant to Employee Share Purchase Plan 17,999 — December 31, 2019 29,835,713 22,049,727 September 2019 Offering In September 2019, the Company and certain selling stockholders completed a registered offering of an aggregate of 2,680,089 shares of Class A common stock at a price of $60.01 per share (the “September 2019 Offering”). The shares sold consisted of (i) 228,456 shares held by the selling stockholders and (ii) 2,451,633 shares newly issued by the Company. The Company received approximately $147,122 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges by certain members of HLA of a total of 1,466,712 Class B units and 984,921 Class C units. In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock. The Company did not receive any proceeds from the sale of shares by the selling stockholders. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation A summary of restricted stock activity for the nine months ended December 31, 2019 is presented below: Total Weighted- March 31, 2019 662,076 $ 26.58 Granted 6,070 $ 53.47 Vested (8,556) $ 29.70 Forfeited (14,649) $ 27.24 December 31, 2019 644,941 $ 26.78 |
Compensation and Benefits
Compensation and Benefits | 9 Months Ended |
Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | |
Compensation and Benefits | Compensation and Benefits The Company has recorded the following amounts related to compensation and benefits: Three Months Ended December 31, Nine Months Ended December 31, 2019 2018 2019 2018 Base compensation and benefits $ 19,562 $ 19,749 $ 60,810 $ 57,819 Incentive fee compensation 2,046 2,498 4,314 5,539 Equity-based compensation 1,761 1,596 5,244 4,778 Contingent compensation related to acquisition — — — 5,100 Total compensation and benefits $ 23,369 $ 23,843 $ 70,368 $ 73,236 |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim period in which those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax; therefore, the effective tax rate can vary from period to period. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more likely than not that all or a portion of the deferred tax asset may not be realized. The Company’s effective tax rate was 13.8% and 44.6% for the three months ended December 31, 2019 and 2018, respectively, and 11.6% and 24.6% for the nine months ended December 31, 2019 and 2018, respectively. The effective tax rates were different from the statutory tax rate due to the portion of income allocated to non-controlling interests and discrete tax adjustments recorded in the periods. The effective tax rates for the three and nine months ended December 31, 2018 included provision to return adjustments related to the state income tax apportionment impact on estimated deferred tax assets as of December 31, 2018. In connection with the September 2019 Offering, the Company recorded a deferred tax asset in the amount of $41,130. It is more likely than not that a portion of these tax benefits will not be realized, so a valuation allowance of $3,736 was established as of September 30, 2019. Additionally, in connection with the September 2019 Offering and recording of the deferred tax asset, the Company recorded a payable to related parties pursuant to the tax receivable agreement of $31,481. As of December 31, 2019, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to HLI, and, therefore, are not participating securities. As a result, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included. Shares of the Company’s Class B common stock are, however, considered potentially dilutive to the Class A common stock because the Class B units to which the Class B common stock corresponds are exchangeable for shares of Class A common stock on a one-for-one basis, at which time the share of Class B common stock is surrendered in exchange for a payment of its par value. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock: Three Months Ended Three Months Ended Net income attributable to HLI Weighted-Average Shares Per share amount Net income attributable to HLI Weighted-Average Shares Per share amount Basic EPS of Class A common stock $ 13,497 29,185,039 $ 0.46 $ 5,458 25,051,094 $ 0.22 Adjustment to net income: Assumed vesting of employee awards 88 59 Effect of dilutive securities: Assumed vesting of employee awards 423,167 523,724 Diluted EPS of Class A common stock $ 13,585 29,608,206 $ 0.46 $ 5,517 25,574,818 $ 0.22 Nine Months Ended Nine Months Ended Net income attributable to HLI Weighted-Average Shares Per share amount Net income attributable to HLI Weighted-Average Shares Per share amount Basic EPS of Class A common stock $ 40,177 27,710,607 $ 1.45 $ 25,525 23,329,134 $ 1.09 Adjustment to net income: Assumed vesting of employee awards 267 327 Effect of dilutive securities: Assumed vesting of employee awards 386,988 541,483 Diluted EPS of Class A common stock $ 40,444 28,097,595 $ 1.44 $ 25,852 23,870,617 $ 1.08 The calculations of diluted earnings per share exclude 23,968,994 outstanding Class B and Class C units of HLA for the three and nine months ended December 31, 2019 and 27,819,930 outstanding Class B and Class C units of HLA for the three and nine months ended December 31, 2018, which are exchangeable into Class A common stock under the “if-converted” method, because the inclusion of such shares would be antidilutive. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions The Company has investment management agreements with various specialized funds and customized separate accounts that it manages. The Company earned management and advisory fees from Partnerships of $39,141 and $117,941 for the three and nine months ended December 31, 2019, respectively, and $33,724 and $97,168 for the three and nine months ended December 31, 2018, respectively. The Company earned incentive fees from Partnerships of $5,731 and $14,850 for the three and nine months ended December 31, 2019, respectively, and $10,267 and $24,857 for the three and nine months ended December 31, 2018, respectively. The Company entered into a service agreement on June 1, 2017 with its joint venture pursuant to which it had expenses of $1,261 and $4,006 for the three and nine months ended December 31, 2019, respectively, and $1,277 and $3,725 for the three and nine months ended December 31, 2018, respectively, that are included in general, administrative and other expenses in the Condensed Consolidated Statements of Income. The Company also has a payable to the joint venture of $423 and $450 as of December 31, 2019 and March 31, 2019, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets. The Company holds a convertible promissory note (the “Note”) issued by one of the Company’s equity method investees. The Note contains an option for the outstanding principal and any accrued interest to be converted to shares of the issuer under certain conditions. The carrying value of the Note was $877 and $678 as of December 31, 2019 and March 31, 2019, respectively, and is recorded in other assets in the Condensed Consolidated Balance Sheets. Due from related parties in the Condensed Consolidated Balance Sheets consists primarily of advances made on behalf of the Partnerships for the payment of certain operating costs and expenses, for which the Company is subsequently reimbursed, and refundable tax distributions made to members. Fees receivable from the Partnerships were $3,668 and $8,927 as of December 31, 2019 and March 31, 2019, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets. In connection with HLA’s acquisition of Real Asset Portfolio Management LLC (“RAPM”) in 2017, the Company paid the remaining 50% of contingent compensation due to the former principals of RAPM, who are employees of the Company, during the nine months ended December 31, 2019. Such compensation was paid $3,824 in cash and $425 by issuing Class A common stock. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Nine Months Ended December 31, 2019 2018 Cumulative-effect adjustment from adoption of accounting guidance $ — $ 997 Shares issued for contingent compensation payment $ 425 $ 425 Non-cash financing activities: Dividends declared but not paid $ 8,026 $ 5,325 Member distributions declared but not paid $ 10,505 $ 8,206 Establishment of net deferred tax assets related to offerings $ 37,394 $ 37,924 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the ordinary course of business, the Company may be subject to various legal, regulatory, and/or administrative proceedings from time to time. Although there can be no assurance of the outcome of such proceedings, in the opinion of management, the Company does not believe it is probable that any pending or, to its knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect its condensed consolidated financial statements. Incentive Fees The Partnerships have allocated carried interest still subject to contingencies and that did not meet the Company’s criteria for recognition in the amounts of $408,928 and $326,466, net of amounts attributable to non-controlling interests, at December 31, 2019 and March 31, 2019, respectively, and $3,704 at both December 31, 2019 and March 31, 2019 that has been received and deferred by the Company. If the Company ultimately receives the unrecognized carried interest, a total of $102,232 and $81,616 as of December 31, 2019 and March 31, 2019, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable. Commitments The Company serves as the investment manager of the Partnerships. The general partner or managing member of each Partnership is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Partnerships was $132,899 and $123,637 as of December 31, 2019 and March 31, 2019, respectively. Leases The Company’s leases consist primarily of operating leases for office space and office equipment in various locations around the world. These leases have remaining lease terms of one year to six years, some of which have the option to extend for an additional five years or have the option to terminate within one year. In October 2019, the Company executed an agreement to lease office space for its new headquarters in suburban Philadelphia. The lessor is currently building the office space. The Company expects to gain access to the space to build various leasehold improvements in late fiscal 2021. At that time, the Company will then establish an ROU asset and a lease liability for the new lease. Total operating lease costs were $1,239 and $3,649 for the three and nine months ended December 31, 2019, respectively. Total variable lease costs were $134 and $395 for the three and nine months ended December 31, 2019, respectively. Short-term lease costs were not material for the three and nine months ended December 31, 2019. The following table shows other supplemental information related to the Company’s operating leases: Three Months Ended December 31, 2019 Nine Months Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 1,323 $ 3,898 Weighted average remaining lease term (in years) 2.5 Weighted average discount rate 5.5 % As of December 31, 2019, the maturities of operating lease liabilities were as follows: Remainder of FY2020 $ 1,290 FY2021 4,531 FY2022 2,868 FY2023 752 FY2024 389 Thereafter 244 Total lease payments 10,074 Less: imputed interest (677) Total operating lease liabilities $ 9,397 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 31, 2020, the Company entered into an asset purchase agreement for certain software from one of its equity method investees for cash of $5,000 and retirement of an agreed upon number of shares of that investee. On February 4, 2020, the Company declared a quarterly dividend of $0.275 per share of Class A common stock to record holders at the close of business on March 16, 2020. The payment date will be April 6, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. Results of operations for the nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the year ending March 31, 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2019. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below: • Level 1: Values are determined using quoted market prices for identical financial instruments in an active market. • Level 2: Values are determined using quoted prices for similar financial instruments and valuation models whose inputs are observable. • Level 3: V alues are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
Leases | Leases On April 1, 2019, the Company adopted ASU 2016-02, “ Leases”, (ASC 842) on a prospective basis and as a result, prior period amounts were not adjusted to reflect the impacts of the new standard. In addition, as permitted under the transition guidance within the new standard, prior scoping, classification, and accounting for initial direct costs were carried forward for leases existing as of the adoption date. The new standard establishes a right of use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the Condensed Consolidated Balance Sheets for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Condensed Consolidated Statements of Income. The adoption did not have an impact on the Condensed Consolidated Statements of Income as all of the Company’s leases are operating leases, and will continue to be recognized as expense on a straight-line basis. The adoption, however, resulted in a gross-up in total assets and total liabilities on the Condensed Consolidated Balance Sheets. The Company determines whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified asset for a period of time in exchange for consideration. For identified leases, the Company determines whether it should be classified as an operating or finance lease. The Company accounts for lease components and non-lease components as a single lease component. Lease ROU assets and lease liabilities are recognized at the commencement date of the lease and measured based on the present value of lease payments over the lease term. Lease ROU assets include initial direct costs incurred by the Company and are presented net of deferred rent and lease incentives. Generally, the Company’s leases do not provide an implicit rate and as a result, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company does not recognize a lease ROU asset or lease liability for short-term leases, which have lease |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ”. ASU 2018-13 changes the fair value measurement disclosure requirements. The amendments remove or modify certain disclosures, while others were added. Early adoption of any removed or modified disclosure requirements is permitted upon issuance of ASU 2018-13 and adoption of the additional disclosure requirements may be delayed until the effective date. The Company elected to early adopt the removed or modified disclosure requirements of the standard on October 1, 2018 and expects to adopt the additional disclosure requirements on April 1, 2020. The adoption of the removed or modified disclosure requirements did not have a material impact on the Company’s disclosures in its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, “ Accounting for Financial Instruments - Credit Losses (Topic 326) ”. ASU 2016-13 replaces the incurred loss methodology in current GAAP with a methodology that reflects expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance is effective for the Company on April 1, 2020 and early adoption is permitted. The Company has identified all of its material financial assets and does not expect that implementing the guidance will have a material impact on the Company's consolidated financial statements. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents revenues disaggregated by product offering, which aligns with the identified performance obligations and the basis for calculating each amount: Three Months Ended Nine Months Ended December 31, Management and advisory fees 2019 2018 2019 2018 Specialized funds $ 27,789 $ 23,413 $ 81,733 $ 67,164 Customized separate accounts 22,618 21,594 67,047 63,087 Advisory 5,878 5,926 18,091 18,287 Reporting and other 2,237 2,260 6,492 6,373 Distribution management 1,108 1,975 3,169 3,773 Fund reimbursement revenue 207 449 3,052 1,160 Total management and advisory fees $ 59,837 $ 55,617 $ 179,584 $ 159,844 Three Months Ended Nine Months Ended December 31, Incentive fees 2019 2018 2019 2018 Specialized funds $ 3,638 $ 10,227 $ 11,257 $ 18,036 Customized separate accounts 4,663 152 6,275 7,311 Total incentive fees $ 8,301 $ 10,379 $ 17,532 $ 25,347 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments | Investments consist of the following: December 31, March 31, 2019 2019 Equity method investments in Partnerships $ 159,984 $ 122,505 Equity method investments in Partnerships held by consolidated VIEs 11,183 11,648 Other equity method investments 1,069 1,086 Other investments 16,395 12,488 Investments valued under the measurement alternative 4,537 6,764 Total Investments $ 193,168 $ 154,491 |
Reconciliation of Other Investments | The following is a reconciliation of other investments for which significant unobservable inputs (Level 3) were used in determining value: Private equity funds Direct credit co-investments Direct equity co-investments Total other investments Balance as of September 30, 2019 $ 5,836 $ 3,093 $ 6,984 $ 15,913 Contributions 392 — — 392 Distributions (748) — — (748) Net gain 457 36 345 838 Balance as of December 31, 2019 $ 5,937 $ 3,129 $ 7,329 $ 16,395 Private equity funds Direct credit co-investments Direct equity co-investments Total other investments Balance as of March 31, 2019 $ 3,734 $ 3,940 $ 4,814 $ 12,488 Contributions 2,484 — 1,875 4,359 Distributions (748) (973) — (1,721) Net gain 467 162 640 1,269 Balance as of December 31, 2019 $ 5,937 $ 3,129 $ 7,329 $ 16,395 |
Schedule of Assumptions Used | The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of assets were as follows, as of December 31, 2019: Significant Fair Valuation Unobservable Weighted Value Methodology Inputs Range Average Private equity funds $ 5,937 Adjusted net asset value Selected market return 4.7% - 4.7% 4.7% Direct credit co-investments $ 3,129 Recent precedent transactions Discounted cash flow Market yield 9.7% - 10.1% 9.86% Direct equity co-investments $ 7,329 Market approach EBITDA multiple 8.0x - 13.25x 10.87x Market approach Equity multiple 1.25x 1.25x |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The carrying amount of assets and liabilities recognized in the Condensed Consolidated Balance Sheets related to the Company’s interests in these non-consolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows: December 31, March 31, 2019 2019 Investments $ 116,636 $ 87,001 Fees receivable 1,535 5,896 Due from related parties 1,001 1,332 Total VIE Assets 119,172 94,229 Deferred incentive fee revenue 3,704 3,704 Non-controlling interests (5,441) (5,716) Maximum exposure to loss $ 117,435 $ 92,217 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Rollforward of Common Stock | The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2019: Class A Common Stock Class B Common Stock March 31, 2019 27,367,477 23,516,439 Shares issued (repurchased) in connection with registered offering 2,451,633 (1,466,712) Shares issued in connection with contingent compensation payment 7,692 — Forfeitures (14,649) — Shares repurchased for employee tax withholdings (509) — Restricted stock granted 6,070 — Shares issued pursuant to Employee Share Purchase Plan 17,999 — December 31, 2019 29,835,713 22,049,727 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Stock Activity | A summary of restricted stock activity for the nine months ended December 31, 2019 is presented below: Total Weighted- March 31, 2019 662,076 $ 26.58 Granted 6,070 $ 53.47 Vested (8,556) $ 29.70 Forfeited (14,649) $ 27.24 December 31, 2019 644,941 $ 26.78 |
Compensation and Benefits (Tabl
Compensation and Benefits (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Compensation Related Costs [Abstract] | |
Schedule of Compensation and Benefits | The Company has recorded the following amounts related to compensation and benefits: Three Months Ended December 31, Nine Months Ended December 31, 2019 2018 2019 2018 Base compensation and benefits $ 19,562 $ 19,749 $ 60,810 $ 57,819 Incentive fee compensation 2,046 2,498 4,314 5,539 Equity-based compensation 1,761 1,596 5,244 4,778 Contingent compensation related to acquisition — — — 5,100 Total compensation and benefits $ 23,369 $ 23,843 $ 70,368 $ 73,236 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock: Three Months Ended Three Months Ended Net income attributable to HLI Weighted-Average Shares Per share amount Net income attributable to HLI Weighted-Average Shares Per share amount Basic EPS of Class A common stock $ 13,497 29,185,039 $ 0.46 $ 5,458 25,051,094 $ 0.22 Adjustment to net income: Assumed vesting of employee awards 88 59 Effect of dilutive securities: Assumed vesting of employee awards 423,167 523,724 Diluted EPS of Class A common stock $ 13,585 29,608,206 $ 0.46 $ 5,517 25,574,818 $ 0.22 Nine Months Ended Nine Months Ended Net income attributable to HLI Weighted-Average Shares Per share amount Net income attributable to HLI Weighted-Average Shares Per share amount Basic EPS of Class A common stock $ 40,177 27,710,607 $ 1.45 $ 25,525 23,329,134 $ 1.09 Adjustment to net income: Assumed vesting of employee awards 267 327 Effect of dilutive securities: Assumed vesting of employee awards 386,988 541,483 Diluted EPS of Class A common stock $ 40,444 28,097,595 $ 1.44 $ 25,852 23,870,617 $ 1.08 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Disclosures | Nine Months Ended December 31, 2019 2018 Cumulative-effect adjustment from adoption of accounting guidance $ — $ 997 Shares issued for contingent compensation payment $ 425 $ 425 Non-cash financing activities: Dividends declared but not paid $ 8,026 $ 5,325 Member distributions declared but not paid $ 10,505 $ 8,206 Establishment of net deferred tax assets related to offerings $ 37,394 $ 37,924 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost, Cash Flows, and Other Supplemental Cash Flow Information Regarding Leases | The following table shows other supplemental information related to the Company’s operating leases: Three Months Ended December 31, 2019 Nine Months Ended December 31, 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 1,323 $ 3,898 Weighted average remaining lease term (in years) 2.5 Weighted average discount rate 5.5 % |
Maturity of Operating Lease Liabilities | As of December 31, 2019, the maturities of operating lease liabilities were as follows: Remainder of FY2020 $ 1,290 FY2021 4,531 FY2022 2,868 FY2023 752 FY2024 389 Thereafter 244 Total lease payments 10,074 Less: imputed interest (677) Total operating lease liabilities $ 9,397 |
Organization - Narrative (Detai
Organization - Narrative (Details) | Dec. 31, 2019 | Mar. 31, 2019 |
HLA | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Percent of economic interest held | 54.90% | 50.30% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt | $ 67,245 | $ 70,954 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Debt | $ 67,245 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 68,138 | $ 65,996 | $ 197,116 | $ 185,191 |
Management and advisory fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 59,837 | 55,617 | 179,584 | 159,844 |
Specialized funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 27,789 | 23,413 | 81,733 | 67,164 |
Customized separate accounts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 22,618 | 21,594 | 67,047 | 63,087 |
Advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,878 | 5,926 | 18,091 | 18,287 |
Reporting and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,237 | 2,260 | 6,492 | 6,373 |
Distribution management | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,108 | 1,975 | 3,169 | 3,773 |
Fund reimbursement revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 207 | 449 | 3,052 | 1,160 |
Incentive fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8,301 | 10,379 | 17,532 | 25,347 |
Specialized funds | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3,638 | 10,227 | 11,257 | 18,036 |
Customized separate accounts | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 4,663 | $ 152 | $ 6,275 | $ 7,311 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Previously deferred incentive fees recognized during the period | $ 2,541 | ||||
Contract asset related to the cost to obtain contracts | $ 973 | $ 973 | $ 968 | ||
Contract asset amortization expense | $ 120 | $ 111 | $ 363 | $ 347 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 |
Investment [Line Items] | |||
Other investments | $ 16,395 | $ 15,913 | $ 12,488 |
Investments valued under the measurement alternative | 4,537 | 6,764 | |
Total Investments | 193,168 | 154,491 | |
Equity method investments in Partnerships | |||
Investment [Line Items] | |||
Equity method investments | 159,984 | 122,505 | |
Equity method investments in Partnerships held by consolidated VIEs | |||
Investment [Line Items] | |||
Equity method investments | 11,183 | 11,648 | |
Other equity method investments | |||
Investment [Line Items] | |||
Equity method investments | $ 1,069 | $ 1,086 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Equity in income of investees | $ 4,454 | $ 4,934 | $ 14,331 | $ 10,096 | |
Cash received on transfer of other investments | 15,750 | 0 | |||
Secured financing | 16,395 | 16,395 | $ 0 | ||
Amortized cost | 14,186 | 14,186 | |||
Net gain | 838 | 1,269 | |||
Unrealized loss on secured borrowings, fair value adjustment | $ 838 | 1,973 | |||
Proceeds from sales of investments valued under the measurement alternative | 6,419 | 22,531 | |||
Gain on sale of investment | $ 4,973 | $ 11,133 | |||
Equity method investments in Partnerships | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percent interest in partnerships | 1.00% | 1.00% |
Investments - Reconciliation of
Investments - Reconciliation of Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | $ 15,913 | $ 12,488 |
Contributions | 392 | 4,359 |
Distributions | (748) | (1,721) |
Net gain | 838 | 1,269 |
Other investments, ending balance | 16,395 | 16,395 |
Private equity funds | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 5,836 | 3,734 |
Contributions | 392 | 2,484 |
Distributions | (748) | (748) |
Net gain | 457 | 467 |
Other investments, ending balance | 5,937 | 5,937 |
Direct credit co-investments | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 3,093 | 3,940 |
Contributions | 0 | 0 |
Distributions | 0 | (973) |
Net gain | 36 | 162 |
Other investments, ending balance | 3,129 | 3,129 |
Direct equity co-investments | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 6,984 | 4,814 |
Contributions | 0 | 1,875 |
Distributions | 0 | 0 |
Net gain | 345 | 640 |
Other investments, ending balance | $ 7,329 | $ 7,329 |
Investments - Valuation Methodo
Investments - Valuation Methodologies (Details) $ in Thousands | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) |
Investment [Line Items] | |||
Other investments | $ 16,395 | $ 15,913 | $ 12,488 |
Private equity funds | |||
Investment [Line Items] | |||
Other investments | 5,937 | 5,836 | 3,734 |
Direct credit co-investments | |||
Investment [Line Items] | |||
Other investments | 3,129 | 3,093 | 3,940 |
Direct equity co-investments | |||
Investment [Line Items] | |||
Other investments | $ 7,329 | $ 6,984 | $ 4,814 |
Adjusted net asset value | Minimum | Private equity funds | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 0.047 | ||
Adjusted net asset value | Maximum | Private equity funds | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 0.047 | ||
Selected market return | Adjusted net asset value | Weighted Average | Private equity funds | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 0.047 | ||
Market yield | Discounted cash flow | Minimum | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 0.097 | ||
Market yield | Discounted cash flow | Maximum | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 0.101 | ||
Market yield | Discounted cash flow | Weighted Average | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 0.0986 | ||
EBITDA multiple | Market approach | Minimum | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 8 | ||
EBITDA multiple | Market approach | Maximum | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 13.25 | ||
EBITDA multiple | Market approach | Weighted Average | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 10.87 | ||
Equity multiple | Market approach | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 1.25 | ||
Equity multiple | Market approach | Weighted Average | Direct credit co-investments | |||
Investment [Line Items] | |||
Range of and weighted-average inputs | 1.25 |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated VIEs (Details) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | $ 469,379,000 | $ 360,591,000 |
Total liabilities of consolidated VIEs | 253,029,000 | 190,869,000 |
Deferred incentive fee revenue | 3,704,000 | 3,704,000 |
Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Total assets of consolidated VIEs | 11,183,000 | 11,648,000 |
Total liabilities of consolidated VIEs | 0 | 0 |
Deferred incentive fee revenue | $ 3,704,000 | $ 3,704,000 |
Variable Interest Entities - Un
Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Total commitments from the limited partners and general partners to the unconsolidated VIE | $ 18,320,381 | |
Remaining unfunded commitments from the limited partners and general partners to the unconsolidated VIE | 6,623,566 | |
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
Deferred incentive fee revenue | 3,704 | $ 3,704 |
Not Primary Beneficiary | ||
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
Investments | 116,636 | 87,001 |
Fees receivable | 1,535 | 5,896 |
Due from related parties | 1,001 | 1,332 |
Total VIE Assets | 119,172 | 94,229 |
Deferred incentive fee revenue | 3,704 | 3,704 |
Non-controlling interests | (5,441) | (5,716) |
Maximum exposure to loss | $ 117,435 | $ 92,217 |
Equity - Shares of Common Stock
Equity - Shares of Common Stock Outstanding (Details) | 9 Months Ended |
Dec. 31, 2019shares | |
Common Class A | |
Common Stock, Shares Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | 27,367,477 |
Shares issued in connection with registered offering (in shares) | 2,451,633 |
Shares issued in connection with contingent compensation payment (in shares) | 7,692 |
Forfeitures (in shares) | (14,649) |
Shares repurchased for employee tax withholdings (in shares) | (509) |
Restricted stock granted (in shares) | 6,070 |
Shares issued in connection with ESPP (in shares) | 17,999 |
Outstanding, end of period (in shares) | 29,835,713 |
Common Class B | |
Common Stock, Shares Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | 23,516,439 |
Stock repurchased in connection with registered offering (in shares) | (1,466,712) |
Shares issued in connection with contingent compensation payment (in shares) | 0 |
Forfeitures (in shares) | 0 |
Shares repurchased for employee tax withholdings (in shares) | 0 |
Restricted stock granted (in shares) | 0 |
Outstanding, end of period (in shares) | 22,049,727 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | |||
Proceeds from offering | $ 147,122 | $ 129,626 | |
Common Class A | |||
Class of Stock [Line Items] | |||
Stock sold in connection with secondary public offering (in shares) | 2,451,633 | ||
September 2019 Offering | Common Class A | |||
Class of Stock [Line Items] | |||
Stock sold in connection with secondary public offering (in shares) | 2,680,089 | ||
Shares sold in connection with secondary offering (in dollars per share) | $ 60.01 | ||
Proceeds from offering | $ 147,122 | ||
September 2019 Offering, Current Stockholder Issuance | Common Class A | |||
Class of Stock [Line Items] | |||
Stock sold in connection with secondary public offering (in shares) | 228,456 | ||
September 2019 Offering, New Issuance | Common Class A | |||
Class of Stock [Line Items] | |||
Stock sold in connection with secondary public offering (in shares) | 2,451,633 | ||
Members’ Equity (Deficit) | Common Class B | |||
Class of Stock [Line Items] | |||
Purchase of interest by parent (in shares) | 1,466,712 | ||
Members’ Equity (Deficit) | Common Class C | |||
Class of Stock [Line Items] | |||
Purchase of interest by parent (in shares) | 984,921 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Restricted Stock (Details) - 2017 Equity Incentive Plan - Restricted Stock $ / shares in Units, $ in Thousands | 9 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Total Unvested | |
Unvested at beginning of period (in shares) | shares | 662,076 |
Granted (in shares) | shares | 6,070 |
Vested (in shares) | shares | (8,556) |
Forfeited (in shares) | shares | (14,649) |
Unvested at end of period (in shares) | shares | 644,941 |
Weighted- Average Grant-Date Fair Value of Award | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 26.58 |
Granted (in dollars per share) | $ / shares | 53.47 |
Vested (in dollars per share) | $ / shares | 29.70 |
Forfeited (in dollars per share) | $ / shares | 27.24 |
Unvested at end of period (in dollars per share) | $ / shares | $ 26.78 |
Total unrecognized compensation expense relating to restricted stock | $ | $ 11,974 |
Compensation and Benefits - Sch
Compensation and Benefits - Schedule of Compensation and Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | ||||
Base compensation and benefits | $ 19,562 | $ 19,749 | $ 60,810 | $ 57,819 |
Incentive fee compensation | 2,046 | 2,498 | 4,314 | 5,539 |
Equity-based compensation | 1,761 | 1,596 | 5,244 | 4,778 |
Contingent compensation related to acquisition | 0 | 0 | 0 | 5,100 |
Total compensation and benefits | $ 23,369 | $ 23,843 | $ 70,368 | $ 73,236 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Effective tax rate | 13.80% | 44.60% | 11.60% | 24.60% | |
Payable to related parties pursuant to tax receivable agreement | $ 101,404,000 | $ 101,404,000 | $ 69,636,000 | ||
Unrecognized tax positions | 0 | 0 | |||
Tax Receivable Agreement | |||||
Related Party Transaction [Line Items] | |||||
Payable to related parties pursuant to tax receivable agreement | 31,481,000 | 31,481,000 | |||
September 2019 Offering | |||||
Related Party Transaction [Line Items] | |||||
Deferred tax asset | 41,130,000 | 41,130,000 | |||
Valuation allowance | $ 3,736,000 | $ 3,736,000 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share - Basic and Diluted (Details) - Common Class A - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net income attributable to HLI | ||||
Basic EPS of Class A common stock | $ 13,497 | $ 5,458 | $ 25,525 | |
Assumed vesting of employee awards | 88 | 59 | $ 267 | 327 |
Diluted EPS of Class A common stock | $ 13,585 | $ 5,517 | $ 40,444 | $ 25,852 |
Weighted-Average Shares | ||||
Weighted-average basic EPS of Class A common stock (in shares) | 29,185,039 | 25,051,094 | 27,710,607 | 23,329,134 |
Weighted-average assumed vesting of employee awards (in shares) | 423,167 | 523,724 | 386,988 | 541,483 |
Weighted-average diluted EPS of Class A common stock (in shares) | 29,608,206 | 25,574,818 | 28,097,595 | 23,870,617 |
Per share amount | ||||
Basic EPS of Class A common stock (in dollars per share) | $ 0.46 | $ 0.22 | $ 1.45 | $ 1.09 |
Diluted EPS of Class A common stock (in dollars per share) | $ 0.46 | $ 0.22 | $ 1.44 | $ 1.08 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Class B and Class C Units of Hamilton Lane Advisors, L.L.C. | ||||
Class of Stock [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 23,968,994 | 27,819,930 | 23,968,994 | 27,819,930 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Revenues | $ 68,138 | $ 65,996 | $ 197,116 | $ 185,191 | |
Payable to related parties pursuant to tax receivable agreement | 101,404 | 101,404 | $ 69,636 | ||
Long-term Debt | 877 | 877 | 678 | ||
Fees receivable | 19,456 | 19,456 | 20,320 | ||
General Partnerships | |||||
Related Party Transaction [Line Items] | |||||
Fees receivable | 3,668 | 3,668 | 8,927 | ||
Joint Venture | |||||
Related Party Transaction [Line Items] | |||||
Payable to related parties pursuant to tax receivable agreement | 423 | 423 | $ 450 | ||
Service Agreement Fees Paid | Joint Venture | |||||
Related Party Transaction [Line Items] | |||||
Fees paid to joint venture | 1,261 | 1,277 | 4,006 | 3,725 | |
Management and advisory fees | |||||
Related Party Transaction [Line Items] | |||||
Revenues | 59,837 | 55,617 | 179,584 | 159,844 | |
Management and advisory fees | General Partnerships | |||||
Related Party Transaction [Line Items] | |||||
Revenues | 39,141 | 33,724 | 117,941 | 97,168 | |
Incentive fees | |||||
Related Party Transaction [Line Items] | |||||
Revenues | 8,301 | 10,379 | 17,532 | 25,347 | |
Incentive fees | General Partnerships | |||||
Related Party Transaction [Line Items] | |||||
Revenues | $ 5,731 | $ 10,267 | $ 14,850 | $ 24,857 | |
RAPM | |||||
Related Party Transaction [Line Items] | |||||
Percent of total payment to principals of RAPM | 50.00% | 50.00% | |||
RAPM | Former principals of RAPM, current employees of Company | |||||
Related Party Transaction [Line Items] | |||||
Portion of asset acquisition paid in cash | $ 3,824 | ||||
Common Class A | RAPM | Former principals of RAPM, current employees of Company | |||||
Related Party Transaction [Line Items] | |||||
Portion of acquisition paid by issuing common stock | $ 425 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Apr. 01, 2018 | |
Supplemental Cash Flow Information [Abstract] | |||||
Cumulative-effect adjustment from adoption of accounting guidance | $ 997 | $ 0 | $ 997 | $ 997 | |
Shares issued for contingent compensation payment | 425 | 425 | 425 | ||
Non-cash financing activities: | |||||
Dividends declared but not paid | 5,325 | 8,026 | 5,325 | $ 5,673 | |
Member distributions declared but not paid | $ 8,206 | 10,505 | 8,206 | $ 17,081 | |
Establishment of net deferred tax assets related to offerings | $ 37,394 | $ 37,924 |
Commitments and Contingencies -
Commitments and Contingencies - Incentive Fees (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Carried Interest still subject to contingencies | $ 408,928 | $ 326,466 |
Deferred incentive fee revenue | 3,704 | 3,704 |
Incentive fees, unrecorded estimate | $ 102,232 | $ 81,616 |
Commitments and Contingencies_2
Commitments and Contingencies - Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Other commitment | $ 132,899 | $ 123,637 |
Commitments and Contingencies_3
Commitments and Contingencies - Lease Cost (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Operating lease cost | $ 1,239 | $ 3,649 |
Variable lease cost | 134 | 395 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,323 | $ 3,898 |
Weighted average remaining lease term (in years) | 2 years 6 months | 2 years 6 months |
Weighted average discount rate | 5.50% | 5.50% |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 6 years |
Commitments and Contingencies_4
Commitments and Contingencies - Operating Lease Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of FY2020 | $ 1,290 |
FY2021 | 4,531 |
FY2022 | 2,868 |
FY2023 | 752 |
FY2024 | 389 |
Thereafter | 244 |
Total lease payments | 10,074 |
Less: imputed interest | (677) |
Total operating lease liabilities | $ 9,397 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 04, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Payment to acquire assets in purchase agreement | $ 5 | |||||
Common Class A | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.275 | $ 0.2125 | $ 0.825 | $ 0.6375 | ||
Common Class A | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.275 |
Uncategorized Items - hlne-2019
Label | Element | Value |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 411,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 20,000 |
Subsidiaries [Member] | Noncontrolling Interest [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 566,000 |