HLNE - Earnings call transcript Q2 2025 | Hamilton Lane Incorporated

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Operator

Good morning, ladies and gentlemen, and welcome to the Hamilton Lane Fiscal Second Quarter Earnings Conference Call. [Operator Instructions] This call is being recorded on Wednesday, November 6, 2024.

I would now like to turn the conference over to Mr. John Oh, Head of Shareholders. Please go ahead.

John Oh

Nicole. you, Thank welcome Earnings and Hamilton QX Lane Good to XXXX Call. Fiscal morning, the will Erik morning, Today, Officer; joined website. presentation, be I by on available Armbrister, press and our Financial which a are and Hirsch, Chief Officer. Earlier issued this we release slide Jeff Executive Co-Chief

Before statements. remind that we results, will we to the want quarter's be discuss we you making forward-looking

forward-looking results performance expectations risks discuss projections cause relating are These position, our and differ financial to future objectives, current and and actual from do our future of statements and guarantee plans, those Forward-looking our operations, performance may not events projected. statements business. to materially results uncertainties or that to subject

included in Hamilton XXXX discussion to reports file and and update or only fiscal of we undertake the subsequent any risks, required, XX-K them. today, of obligation a made the except statements the are these as forward-looking factors we of SEC. cautionary as These with review Lane For risk please statements revise and no

measures presentation the our the can also important performance Lane the We will those assessing in available made the to of of as view that Reconciliation in earnings found measures referring to we be non-GAAP Shareholders of GAAP section materials on business. be Hamilton non-GAAP website.

will interest an products. purchase to to offer sell Our of our XX-Q solicitation available call represents an nothing any results made offer detailed is financial that Hamilton when or be this filed. Please on note in of Lane's a

while earnings grew of the period. adjusted EPS $X.XX quarter EPS advisory based $XXX into of revenue our This and of versus with income non-GAAP Let's fee fee-related prior $XXX of net the of Year-to-date also XX%, fiscal by translated and the million start GAAP on XXXX, XX% income. on based year GAAP second million net highlights. through $X.XX by grew management our

XXXX. over us XX% track have dividend this for quarter, the also keeps share increase turn of per last now equating Erik. share to targeted that, to over a per the fiscal fiscal which I'll on $X.XX We With year declared call year, the $X.XX for

Erik Hirsch

Thank good you, John, everyone. morning, and

being detail quarter. Lane our Before XX, to that of September for MidCap want I officially XXX HLNE milestone the S&P to a business. Hamilton strategy during extremely employees. our serve but occurred dedication simple, shareholders marks had the and recognizing doing in to and to that well our the serve was on helping results, and focus Hamilton work Lane for firm. all benefit day Index. our go I I results On every professional singular for well acknowledge XXX our will history, brings and the XX-year the This another S&P of and effective proud and great quarter's clients into us included grow also each Juan grateful Throughout our to achievement clients, are delivering continues that we've to Both that a added

growth XX% accounts. I'll billion at increase let's the mandates. result footprint results growth year of asset end solution to primarily our AUM quarter, total Now technology an and market year-over-year, and on stood up and billion from and start funds $XX The at footprint. at and prior addition XX% or with AUA or billion came to customized the stood and XX% the back-office billion the compared specialized both to $XX separate move from of period. value was the This quarter grew $XXX represents $XXX our our year-over-year.

product expanding fund are lines to here now The largely adding platform, we existing by fee be driven same. growth, the to new AUM. Turning and Strong continues specialized earning story total our where ones.

the approximately AUM at prior XX% $X.X to billion relative and fee-earning grew or $XX billion total stood year Our period.

AUM fee-earning from net over $X.X came our Now funds. same from customized $X.X of separate our specialized came the billion and accounts, taken period, separately, billion

across the been higher evergreen fee products rate As where remains our fee-earning went it in Day, blended our from of platform basis the we AUM XX continuing Shareholder XX has rate blended in When public mix fee shift fees. funds our notably excluding points. our the steadily most growth fee impact we our stems specialized impressive. increasing retro Today, in towards detailed at rate over from stands year-over-year. was the points, XXXX, basis This

earning our here X% on grew at Fee stood Moving billion customized separate now year-over-year. to and $XX.X AUM additional detail accounts.

and continue We size growth the location. across mandate type, geographic to see clients coming from

we market transactions, call, credit our account direct allocations we secondaries equity and separate mandates see last investments. include As meaningful on including continue to increasingly private noted to and

allocations For funds, our being funds types. accounts, and our category. account with specific on transaction those fulfilled in possible, in separate the are results focused not those specialized AUM fees This captured those to when commitments separate within the management specific

separate separate those optically, capturing higher dollars modest account rate are AUM, funds. more While simply fee-earning results fee we in this dollar account specialized in growth in

Let's to funds quarter our momentum stood fee AUM billion. strong. be earning end, to at At where move here now $XX.X specialized continues

Over expansion an in platform. increase of activity the XX% billion, for closes period. past to and $X.X Evergreen robust XX months, of additional continued growth of representing relative from market, we year our achieved funds positive net stem This the inflows prior investment

begin is here to which fundraising Fund, I'll and direct Strategic annual with targeting quarter, our Opportunities our on LP. during institutional the Moving credit activity the fund

we short totaled raise is deploy total brought always charge and which closes series the market As capital. and the on nearly as of invested million, funds million. net fees additional effectively for a management the raise the to capital in refresher, $XX with $XXX the series investment that periods we quarter, held After

private accounts platform. platform opportunities Our component our includes discretionary credit key Evergreen a fund remains of overall strategic our separate that our and

we to this If for back you total going X have raised $X funds, nearly prior program our XXXX. billion

to product. venture our now Moving

to record our and access strong separate managers shop new to businesses. As a combines our XXXX, with to investing we the with investors provide since track This in space our account reminder, advisory top-performing in a one-stop product actively to have successful I'm and order that $XXX first through finalize most been venture primarily X, fund, of long-standing first secondary pleased in fundraising this the venture-focused to closing quarter co-investment the of and venture million nearly the space, for November announce including raised look we'll LP on we've calendar commitments primary, transactions. through and XXXX. recent

from proud and are of We the successful appreciate support the fundraise investors.

Let's move [ now Impax to product. ] our

alongside directly environmental invest companies strategy the measurable goal generating a Our social in of impact. and/or returns [indiscernible] seeks to with

our with XX, of all LP funds for the $XX of specialized with million tactical strategy strategies, scale Impact each goal growth and product manner, held latest $XXX commitments. are far the fund with pleased nearly in is and On million, thus product this Our a this and our nearly methodical the updates forward fundraise. close of our we the look X million prior Like respectively. to in to vintage in you October strategy and we grow providing first raised and $XXX third

funds. on Now evergreen to our

September of strong $XXX X total platform third at XX% stood with across remained calendar AUM offerings months. XXXX. over for billion last net we the nearly our existing the inflows of having As Monthly XX as $X.X XX, averaged nearly over million the quarter grown

creation On commitment June, of to announced both related is products, in the Evergreen day October newest infrastructure remain newly bring which highlight in we launch highlighted markets launched growth market. ability X, of of on continued us of complements and new the our we to to credit our and we front existing new shareholder product our infrastructure the vision, and products our we products now in our active to offerings. offerings. private execute During strategic opportunity believe offerings Evergreen diversified Evergreen These our our additional

and access markets and Evergreen a sheet to capital. our a market these to Evergreen have work products benefits $XXX investors overall diversifying evergreen to in Recently, new our funding asset with senior offering. our access. resulted sources this the in both received the We've us balance our products in offering our Lastly, capital high-quality launch continue key successfully was infrastructure ensure to funds with to we ability closed put goal simple: component of the launches million notes is remains ability already to well and The some seed class. to to the expanding this on deliver of capital market

clients clients management markets this and with services with to Trust now investors. and to data, around turn technology management, partnership strategic to a financials, and the discuss want Trust, moment to before and its our access component I Northern regarding access of asset institutional call our private I offer quick Trust's take tools is Jeff newest the providing of Northern announcement key partnership Northern with a banking asset over a wealth to highlight Now provider Cobalt. centering who will individual institutional to a recent analytics leading both servicing,

office Our suite analytics their a front combination proprietary Northern Cobalt clients. and private for market data system. solution solutions result The software and powerful and Trust in of comprehensive front-to-back of

This yet deliver unique strategic These market arrangement. institutions private leading example the accomplish financial our institutional the access our and noninstitutional an increased and our of of of world's help represents brand agreement increasingly partnerships mutually and beneficial to expertise, our ability both goal and population private of integration partner markets unique of investors. suite another technology a capabilities through data and growing awareness to advanced with solutions

the call to excited financials. And pass will with who that, with Northern to I'll this Trust. are the journey embark We cover now on Jeff,

Jeffrey Armbrister

we've XXXX, and strong Thank prior morning, in period. good management achieved with fees our Year-to-date fiscal year growth XX% for advisory you, Erik, up business versus the and everyone.

our for from stemming the $X.X final by specialized from AUM period. compared the same $X.X closes year fund fee-earning primarily period. over fees primarily in driven our secondary fund prior million most that $XX months. Retro latest that increase raised versus revenue a the increased million, our This were recent last Evergreen million held prior the by year secondary in close fiscal was billion platform $X.X $XX.X Our and the to of year to XX funds billion in XX% or fund

first closes investors dating a fund's As later during back a fees reminder, come pay to the into fundraise that close. retroactive

fees equity be of secondary finished fundraising. quarterly fund fiscal year market current For primary has our that funded the our XXXX, the remainder of driver will direct retro now

and impact revenue year-over-year fund fiscal expected our Our fees represented largest XXXX. largest thus This of some growth year latest amount quarter is XXXX funds fundraise of history forward. going retro the specialized institutional first the have and generated our the on comparison the to during fiscal secondary in

to the on accounts. to million existing by from and period. to from year addition customized accounts, analytics year reporting, $X.X the period continued new and offerings Moving re-ups due prior Revenue compared clients of the monitoring, increased prior or data increased compared activity. Revenue X% million separate investment $X.X our to

is the up XXX% component period. are $XX and Year-to-date final the to fees. of incentive revenue relative million year Lastly, our totaled fees incentive prior

prior the from The now to unrealized period, stands recognized Let's our the incentive year balance during carry $X.X balance The months. billion. turn is X% fees balance. of XX at last now million while approximately carry having up $XXX.X unrealized

period being at the Evergreen fee increased period. related fee-related compensation to earnings, to million prior FRE result to growth to we've at primarily in came increased wire of head period. Moving AUM earning the on $XX.X with incentive by margin expenses, prior primarily FRE and count including for compensation in Fee-related year year-to-date our with prior and driven Total year-to-date that benefits XXXX $XX.X compared prior fee offered $X.X management XX%. associated earlier. quarter were calls. as expenses also and million, up by revenue-related product year increased Fiscal FRE, expenses. XX% compensation or on year discussed margin million, by came the G&A commissions relative XX%. the increased discussed higher relative U.S. the houses Total driven third-party the a

overall healthy expenses growth growth to with We in also firm management and continue fee and while managed our maintaining investing profitability. line supporting aim initiatives

stock. X-year tranche We The align divided thresholds target on, share. is includes our date $XXX required to Before team for details are vesting moment thresholds price like alignment equity the granted awards into performance some to $XXX, a and to awards. to for each X strongly $XXX per incentives. believe service conditions, related Each our moving following have provide our and grant in leadership a I'd take performance And period and X award tranches. performance

thus, of all dilution, The be our performance will the approximately of current been first vest potential tranches would X% outstanding price tranche met shares. at the service The and target fully threshold the first awards the diluted if period. vest of end has

our on I'll wrap up now commentary some with balance sheet.

largest our to separate be in continues our clients funds. Our and our accounts customized asset investments specialized alongside

clients. that invest October growth, long we continue to liabilities, be mentioned the With balance earlier, our of scheduled alongside of regard XXXX. on recently term, as million important is Over mature X.XX% notes interest we notes investments the sheet as at to rates paid and $XXX The fixed capital view these will to an XX, on Erik our are our semiannually. senior component and we'll continued our issued

now utilized leverage Throughout we have balance a this that, The Today, our business. our up and into sheet our sheet on of supporting now questions. alongside our new and secured With maintaining of firm's important work represents aim are open strategic for investments our clients is sheet something to these our seed extremely growth We proud history, will key we launched balance we've and to asset will balance support and vision. continue commitments to a call and we continued our firm's the strategically capital of. conservative the component for allow ability continue the initiatives strength while initiatives, profile. in capital invest through recently the products, largest of growth GP that support

Operator

Our be Instructions] from Ken Worthington will [Operator JPMorgan. question coming first from

Kenneth Worthington

you the There's about brokers brought a channels? new number you of the last their And you for that opportunities you over are time. the months you what in Can alternative or the talk say, so? XX relative sort distribution products can to see clients these to to size on, offer looking for distribution first ahead of

Erik Hirsch

Ken, I'll take the thanks question. Erik. for It's that.

step we so I'll you macro asking if a response. question, macro think you're I give and pretty a back,

where widest the markets. of private majority exposure see a the affluent aperture don't mass the individuals vast you have I is any the think world what lens, at to of

take have so think change you'll a institutional is likely is where that see here to I period portfolios we're is be mirror to see time. And long a what to to more to That over that beginning investors. investors really a change going begin begin individual of place going

continue this here. sprint to the we're analogy use so And running a of I a not is marathon,

of at the wealth think held individuals many, I trillions in in so look that's hands dollars. when the talking And globally, we're you amount many of something many,

what a institutional long think so of as that akin as or our And eventually massive XX% that of markets, take [indiscernible] of that business if more into that capital the our place a to or we X% again, will about we X% amount XX% that and will period. well see private the of world, or just transform moving industry in over time

going think we starting to a a exciting for So great point long at be and what very is we're journey.

Kenneth Worthington

being say, being follow-up, as Maybe online new as platforms a is these Or the asked the essentially Hamilton future more the versus, come asked servicing, of past? do on what you are of come you in done the what RIAs versus have from being the in Lane client wirehouses same? more asked is already? or the that is they online you've to client management Like

Erik Hirsch

So, Erik. no. is answer it's The

transparency and that around they want looking are want good They easily People through. product what education. for they're asset has is the accessible performance. people think an of regardless I coming platforms want that consistent class,

think for. a from RIA, customer what an through And I or they're that's individual customer coming that's a coming wire looking so a whether

sort and one at why service And piece technology. of been good of understands successful firm we're apart. an because think strong we've I customers, client is to our reasons I service data so has of is, think helping a us the to really this DNA incredibly that that's how and education and the And stand

Operator

Goldman will from Blostein Our Alex be next question coming from Sachs.

Alexander Blostein

the with to with anything funds obviously over next couple outside quarter, vehicles, had last up? of of the help kind have but us it, in at success the as look the in retail-oriented coming secondary maybe the terms funds the of last over on specialized of what's guys months Evergreen of on call the business you lots XX quarters lineup XX of you kind specialist comp of coming strongly

Erik Hirsch

Alex, Erik. Sure, it's

market, what think, I and as so about this products in mentioned, that's doing variety going I is putting So right now. be are of to we a

I So we market when did Again, where is of direct nicely. was sort and be what's it answer have our of that that. the and business start why success sort scale, questions start, was sub-$XXX and to of impact in to to bother? we and of and have we're there first have some were million, think look, equity one, the goal largest we our And was, what growing a poised then currently doing of is

And so that is growing.

think market think of really a appeal. that has market get a we we're in product I happy to lot finally venture

of out good. with that as million sort fund the of And $XXX-plus so feels coming an gate initial that of

that of coming a have closings sure ahead a of all So lot kind us of of we lot work I these board, of do have think a up the products successfully. are just make we in we lot market, across and to

Alexander Blostein

I us And equity total clarification your just guess, like is equity-based question. I comments got you. from on of beyond then going you quick trajectory the the Can stock-based I this awards. a here around and look Great. to refresh heard just year? compensation, comp fiscal number what

Jeffrey Armbrister

at Yes. $XX the at year, -- structured a Jeff. as We're We're and are looking million looking this per X-year award. awards is

So that's the we're about. time thinking horizon that

Operator

from Stanley. Cyprys Morgan from is Next Michael

Michael Cyprys

and administration given in in the election Maybe here. just the D.C. change here then

be you Hamilton if here? hurdles just overcome And space? Maybe private access remind retirement the the see? us that how potentially access with potentially unlock to to positioning do curious in what see How accounts. helping markets you Lane is change impacting might Just administration those retirement

Erik Hirsch

Erik. It's Mike. Thanks,

morning we're earnings and think doing it I day. digesting this like amidst So the sort everyone, of

So timing, perhaps a suboptimal. little

capital. It's be, retirement, a this Evergreen thinking vehicle. we're in just we're lot XXX(k) about pulling in that capital not the now housed retirement reaction macro would my if think obviously, of a I for is to

like your as is that for changes There we you alter priority this opening need of and idea the can a reality, market of in becomes extent What to we whether private what the no alter say in date Evergreen about multitude think products exactly think is knowledge. we're question, know, our of what I the up. what good the to administration I talking I target will that going trusted are, allocation we're that's sort is brand, see be XXX(k) regs a to to really in for market is sit to here So a access, good happen. environment, looking order a as as whether I with today, inclusion not. have that or funds market regulatory Evergreen already product performance, good current that same which is good or experiencing

that if very, so And participate to well there meaningful way. market we very like we're alters, feel in positioned a

Michael Cyprys

you facilitate Maybe changes need just from occur practically, that. just in -- follow up, could if to be to to not what oftentimes of specific anything being system, just think help record I we hear curious about color sort would accommodate. And to maybe order able keeper

you move how and to that see that time? able be you might ball over how curious forward Just help

Erik Hirsch

Yes.

any think operate today, one, not how change. a one, think, XXX(k)s that about be freely But the sure will if I'm tradable. I driver you they're of of

And have of to need to how are address of component liquid in kind that illiquid valuation sort of a assets potentially part now, then there to is, going for be do rules included. the or less of with vehicles so assets the much minimum, right can at fund place you're a variety second And this.

by all of practical mark-to-market second an of to changes, legal having is an aspects all environment into where putting not think that asset second are sort liquid, and both valuations. marked just lot what there's but a market-driven So I people of there's all accustomed today

the see real, answer remain about decades, the will or are XXX(k)s it's I still the So and talking today, been hurdles no. has have markets why and last couple to whether private in continued of for we we not think

Operator

Mike from Next in Wells coming line from be will Fargo Securities. Brown

Michael Brown

dive into little how actually monetize maybe Northern Cobalt. And to clients the expand on Wanted How just examples you institutions? -- you there? provide of Northern you there. then to with an kind opportunity at will do Northern partnership? that And And How well? Can more an is into just the are that, there other financial there side partnership Trust. -- Can a some expand Erik? utilize to with then as a there wealth follow-on Trust expand is maybe to opportunity continue

Erik Hirsch

proportion of about their is thanks customer to their is for think of we data that forecasting, gets think and Mike, the about what is holdings And look is if you software the their benchmarking, in forecasting, Erik, what institutional portion and of, it and all desire have what market bigger, and Cobalt comp customer it or your analyze and benchmarked about that to in sort individual cash bases allows et institutional And cetera. that institutional Cobalt, assets very equivalent Think portfolio a they see people a becomes question. market the then don't sort public of again, necessary there's Yes, doing. system think risk markets. of do and that across calculations, dealing have upload growing factors flow of market is with, that private It's Northern's of flow at about private I analytics customer sort import, anything private and desirable. assets that if we is is cash unique comparisons, think

current as I of is of customer so system to essentially that Northern for front-to-back SaaS give, into sort base. our said, And system solution their kind plugging their

do we also you excited. best across investors, there institutional individual process a brand incredibly in are excited, in choice very not Northern proud as, as I us. can enhancement systems this choices Obviously, And with blue-chip usage some have ultimately organization in were job that we're We're be investors. the they have Northern, market rigorous at very certainly, made the well think, because We're our excited out and looking that generation. we obviously, make sure into there. revenue standpoint is We're about And but goal an that ran of a made. to So only to largely possible private from that that. selecting expand what

to we across yes, recognizing see this built because and market other Cobalt, that the think we believe private I system, partnerships second have the point, market that. as we chance the your analytics in to market market-leading have software a And is

Michael Brown

Great. Okay.

on fund As the growth there. side. been specialized very a question Obviously, has impressive follow-up

quarter, there? quarter-over-quarter. mainly retro fee looks as the institutional go think And that off right fees, we rate, on Looks point about the This Anything out forward, declined is excluding side. the like point? this to like the there it quarter jumping

Erik Hirsch

it's stick So that. again. I'll Erik with

I is and The simply what are specialized to the rates so not see on on noise think that happening this just numbers. in just fee depending funds going again, altering, is you're and our bounce just retro quarter-to-quarter. there, closing timings

encouraging, and and and We be that Quarter-to-quarter, to you do year-over-year, if pattern to will I look is. at going up we trend think actual to an see right. has here the some at line, year-over-year at volatility. see And continued out will But the what that you're it the this have year-over-year to are so look as noted, sort I noise. people the look take of because you

Operator

KBW. Our will from Instructions] question be [Operator last Alan from coming Hall

Unknown Analyst

on appetite different products days But competition change managers. if you asset great diversified across a just in with any more of platform. part Maybe clients the would class are seeing in kind lot that uptake potential But be is and just of seeing it if value of that, of to diversity wondering are products was early across in multiple still I products? you're Maybe could the more maybe talk seeing know multi-asset as I offering asset it I products growth. classes. the channel adds follow-up hear you part class you're products. versus different Evergreen the -- investing single a the know a you relates to it's to you're with

Erik Hirsch

It's question. the for Thanks Erik.

somewhat appeal to down to sort Lane What going sort visibility. anchor wouldn't that whether have We manager. whether We're doing necessarily know you can flagship of a are that across So to and I wouldn't say know our multiple and we service but a anecdotally another cases, we a provider. product great kind in of size again, lot Lane what necessarily whether, of to Hamilton They're limited. across we our we people business, just going product some they a is through, put is visibility interactions exposure diversified our across give products, to the which -- in can are, of are be instant clients getting funds that. is industry, of of product of kind of Hamilton

anchor that so tool. has a been And nice

And they allows decide of want infrastructure customer or whether any financial might the overweight something then be put particular whether or adviser an the that and it additional to like. to area, credit in

sort think And increased to that sure I'm sort a Yes, speak positioned Yes, growing well I is that's there today. competition. of but marketplace, how and positioned, going so we're see and be there's we the the that. competition, numbers attractive that's we're reality of really of to

John Oh

Nicole, are there any more questions?

Operator

Hirsch, CEO, like to over call Erik closing comments. There for to are no I'd final turn further questions time. Mr. now the at this

Erik Hirsch

like time. the I time a television. spending a up much appreciate suspect of after of last little us lot much night watching Again, tired too a you are lot

great the day. appreciate appreciate the So We time. we Have a support.

Operator

and please disconnect call Ladies your that today. you and gentlemen, this for concludes you thank lines. We participating for ask your conference

Hamilton Lane (HLNE) 6 Nov 242025 Q2 Earnings call transcript