Hamilton Lane(US:HLNE)2025-02-04 21:19Financial Performance - Total revenues increased by $42.2 million for the three months ended December 31, 2024, compared to the same period in 2023, driven by increases in management and advisory fees and incentive fees [137]. - Management and advisory fees rose by $12.6 million for the three months ended December 31, 2024, compared to the same period in 2023 [137]. - Incentive fees surged by $29.6 million for the three months ended December 31, 2024, primarily due to proceeds from the sale of underlying investments in specialized funds [140]. - Total revenues for the nine months ended December 31, 2024, increased by $137.0 million compared to the same period in 2023, attributed to both management and advisory fees and incentive fees [141]. - Specialized funds revenue increased by $50.9 million for the nine months ended December 31, 2024, mainly due to a $37.7 million increase from evergreen funds [142]. - Net income attributable to Hamilton Lane Incorporated for the three months ended December 31, 2024, was $52.972 million, compared to $19.506 million for the same period in 2023 [135]. - Fee Related Earnings (FRE) for the nine months ended December 31, 2024, reached $165.8 million, up from $137.3 million in the same period of 2023, representing a 20.8% increase [183]. - Adjusted EBITDA for the nine months ended December 31, 2024, was $264.4 million, compared to $181.4 million for the same period in 2023, reflecting a 46% increase [183]. - Non-GAAP EPS for the nine months ended December 31, 2024, was $3.82, up from $2.54 in the same period of 2023, indicating a 50.8% increase [185]. - The company reported net income attributable to Hamilton Lane Incorporated of $166.9 million for the nine months ended December 31, 2024, compared to $92.5 million in 2023, a 80.5% increase [183]. Assets and Management - As of December 31, 2024, the company had $96.4 billion in assets under management (AUM) from customized separate accounts and $38.3 billion from specialized funds [101]. - The company reported $821.2 billion in assets under advisement (AUA) as of December 31, 2024, indicating a strong advisory service presence [101]. - Fee-earning AUM is a key metric, comprising assets from which management fees are derived, with a focus on commitments and net invested capital [130]. - Fee-earning AUM increased by $1.3 billion during the three months ended December 31, 2024, primarily due to contributions from customized separate accounts and specialized funds [172]. - Customized separate accounts fee-earning AUM increased by $0.4 billion, with contributions of $1.4 billion and distributions of $1.1 billion for the three months ended December 31, 2024 [173]. - Specialized funds fee-earning AUM increased by $0.8 billion, with contributions of $1.5 billion and distributions of $0.7 billion for the three months ended December 31, 2024 [174]. - Fee-earning AUM increased by $5.2 billion for the nine months ended December 31, 2024, driven by contributions from customized separate accounts and specialized funds [175]. - Customized separate accounts contributed $4.7 billion, with an increase in fee-earning AUM of $2.2 billion during the same period [176]. - Specialized funds saw contributions of $5.5 billion, resulting in a fee-earning AUM increase of $3.0 billion for the nine months ended December 31, 2024 [177]. Expenses - Total expenses increased by $18.6 million for the three months ended December 31, 2024, compared to the same period in 2023, due to higher compensation and benefits and general administrative expenses [146]. - Compensation and benefits expenses rose by $12.2 million for the three months ended December 31, 2024, driven by increases in incentive fee compensation and equity-based compensation [147]. - Total expenses for the nine months ended December 31, 2024, increased by $67.6 million compared to the same period in 2023, due to higher compensation and benefits and general administrative expenses [149]. - General, administrative and other expenses increased by $12.0 million for the nine months ended December 31, 2024, primarily due to higher third-party commissions and fund reimbursement expenses [152]. Debt and Capital Structure - The company issued $100 million in senior notes with a 5.28% interest rate due on October 15, 2029, to enhance its capital structure [105]. - The company amended its credit facilities on October 7, 2024, allowing for additional indebtedness and updating maturity dates [104]. - The Term Loan Agreement had an outstanding balance of $95 million as of December 31, 2024, with a maturity date of July 1, 2029 [206]. - The company has access to a Revolving Loan Agreement with a cap of $50 million, with no outstanding balance as of December 31, 2024 [207]. - The principal amount of debt outstanding was $295.0 million as of December 31, 2024, compared to $196.9 million as of March 31, 2024 [209]. - The annual interest rate on the Term Loan Agreement was 6.25% as of December 31, 2024, with $195 million in borrowings outstanding [237]. - A 100 basis point increase in interest rates is estimated to result in increased interest expense of approximately $1.0 million over the next 12 months [238]. - The aggregate principal amount of loans under all Loan Agreements is subject to a cap of $325 million [204]. - The company had $125.0 million in availability under the Loan Agreements as of December 31, 2024 [209]. Investment Performance - The company reported a gross IRR of 47.6% for Secondary Fund VI, with a net IRR of 57.7% [195]. - The total capital invested in Secondary Fund V was $3.9 billion, achieving a gross multiple of 1.5 and a net IRR of 16.1% [196]. - The gross multiple for PEF IX was reported at 1.9, with a net IRR of 15.5% [196]. - The gross IRR for Co-Investment Fund IV was 24.0%, with a net IRR of 22.4% [195]. Strategic Initiatives - The company plans to create new funds with different asset mixes and investment strategies, which may yield different returns compared to historical funds [191]. - The company expects to evaluate opportunities for strategic investments in technology-driven private markets data and wealth management solutions [212]. - The company intends to continue paying cash dividends on a quarterly basis, subject to funds being legally available [217]. - The Stock Repurchase Program allows for the repurchase of up to 6% of outstanding shares, not to exceed $50 million, with full purchase authority remaining available as no shares have been repurchased [213]. Regulatory and Compliance - As of December 31, 2024, the company was required to maintain approximately $5.9 million in liquid net assets for regulatory purposes [216].