Hamilton Lane(US:HLNE)2019-11-07 22:06Assets Under Management and Advisement - As of September 30, 2019, the company had approximately $52 billion in assets under management (AUM) from customized separate accounts and $14 billion from specialized funds[95]. - The company reported approximately $416 billion in assets under advisement (AUA) as of September 30, 2019, serving a diverse client base including institutional investors globally[95]. - Fee-earning AUM increased by $1.2 billion to $36.0 billion during the three months ended September 30, 2019, due to contributions from customized separate accounts and specialized funds[154]. - Customized separate accounts fee-earning AUM increased by $0.4 billion, or 2%, to $22.9 billion for the three months ended September 30, 2019[155]. - Specialized funds fee-earning AUM increased by $0.8 billion, or 7%, to $13.1 billion for the three months ended September 30, 2019[156]. - Fee-earning AUM increased by $2.4 billion to $36.0 billion during the six months ended September 30, 2019[157]. - Customized separate accounts contributions were $1.5 billion for the six months ended September 30, 2019, primarily due to new allocations from existing and new clients[158]. - Specialized funds fee-earning AUM increased by $1.7 billion, or 15%, to $13.1 billion for the six months ended September 30, 2019[159]. Revenue Sources - Management and advisory fees are the primary revenue sources, with revenues from customized separate accounts based on a contractual rate applied to committed capital or net invested capital[103][104]. - Management and advisory fees rose by $5.9 million, or 11%, to $59.2 million for the three months ended September 30, 2019, driven by increases in specialized funds and customized separate accounts[129]. - Total revenues increased by $8.5 million, or 15%, to $64.3 million for the three months ended September 30, 2019 compared to the same period in 2018[128]. - Total revenues for the six months ended September 30, 2019 increased by $9.8 million, or 8%, to $129.0 million compared to the same period in 2018[131]. - Management and advisory fees for the six months ended September 30, 2019 increased by $15.5 million, or 15%, to $119.7 million, with significant contributions from specialized funds[132]. - Incentive fees increased by $2.5 million to $5.1 million for the three months ended September 30, 2019, primarily due to a $3.0 million increase from specialized funds[130]. Expenses and Income - Total expenses increased by $2.9 million, or 8%, to $37.4 million for the three months ended September 30, 2019, attributed to higher general, administrative, and compensation expenses[135]. - Compensation and benefits expenses increased by $0.6 million, or 3%, to $23.4 million for the three months ended September 30, 2019, due to higher base compensation and benefits[136]. - Net income attributable to Hamilton Lane Incorporated was $15.3 million for the three months ended September 30, 2019, compared to $11.2 million for the same period in 2018[125]. - Net income attributable to Hamilton Lane Incorporated for the three months ended September 30, 2019, was $15.3 million, an increase of 36.5% from $11.2 million in 2018[169]. - Adjusted net income for the six months ended September 30, 2019, was $50.4 million, compared to $49.3 million in 2018, reflecting a 2.2% increase[169]. Tax and Income Tax Expense - The effective tax rate was 7.7% for the three months ended September 30, 2019, down from 14.6% in 2018, and 10.5% for the six months ended September 30, 2019, compared to 11.4% in 2018[148]. - Income tax expense for the three months ended September 30, 2019, was $2.7 million, a decrease of 52.1% from $5.6 million in 2018[169]. - The effective corporate income tax rate for the six-month period ended September 30, 2019, was estimated at 23.8%[169]. Cash Flow and Financing Activities - The net cash provided by operating activities for the six months ended September 30, 2019, was $66.2 million, compared to $73.1 million for the same period in 2018[201]. - The net cash used in investing activities was $(10.8) million for the six months ended September 30, 2019, compared to $8.6 million in 2018[202]. - The net cash used in financing activities was $31.9 million for the six months ended September 30, 2019, down from $53.7 million in 2018[202]. - The company paid dividends of $13.0 million during the six months ended September 30, 2019, compared to $8.6 million in 2018[208]. Debt and Liquidity - As of September 30, 2019, the principal amount of debt outstanding was $69.4 million, a decrease from $71.3 million as of March 31, 2019[194]. - The Term Loan Agreement provides for a term loan facility of $75.0 million, with an accordion feature allowing an increase of up to $25.0 million[192]. - The company expects to continue meeting its liquidity needs through cash flows from operations and existing cash equivalents[195]. - As of September 30, 2019, the company had $69.4 million in borrowings outstanding under Loan Agreements, with an annual interest rate of 3.75%[218]. Market and Financial Risks - The company is exposed to various market risks, including price risk, interest-rate risk, liquidity risk, and foreign exchange-rate risk[213]. - The company limits its credit risk by engaging with reputable financial institutions for financial transactions[220]. - The fair value of financial assets and liabilities may fluctuate due to changes in securities, foreign currency exchange rates, commodity prices, and interest rates[215]. - The company does not possess significant assets in foreign countries, limiting the impact of exchange rate changes on financial statements[217]. - A 100 basis point increase in interest rates is estimated to result in an increased interest expense of $0.7 million over the next 12 months[219]. Investment Performance - The company’s investment performance includes various funds with internal rates of return (IRR) ranging from 5.4% to 60.8% across different vintage years and strategies[176]. - The company’s equity in income (loss) of investees reflects its share of earnings from investments in specialized funds and customized separate accounts, influenced by underlying fund investment valuations[116]. - Equity in income of investees decreased by $1.6 million to $3.7 million for the three months ended September 30, 2019, mainly due to a decline in gains from direct/co-investment funds[143]. - Equity in income of investees increased by $4.7 million to $9.9 million for the six months ended September 30, 2019, compared to the same period in 2018[146]. - Other income decreased by $8.8 million to $8.0 million for the three months ended September 30, 2019, primarily due to a decrease in non-operating income[142]. - Non-operating income decreased by $8.0 million for the six months ended September 30, 2019, primarily due to a $6.2 million decrease in gains from the sale of technology investments[147]. Shareholder Information - The company has authorized a Stock Repurchase Program to repurchase up to 6% of its outstanding shares, not to exceed $50 million[197]. - Weighted-average shares of Class A common stock outstanding - diluted increased to 27,632,890 for the three months ended September 30, 2019, from 23,257,419 in 2018[169]. - The company reported a total income attributable to non-controlling interests of $16.9 million for the three months ended September 30, 2019, down from $20.8 million in 2018[169]. - The company’s adjusted shares outstanding for the three months ended September 30, 2019, was 53,547,201, slightly up from 53,438,643 in 2018[169].