On this episode of After Earnings, Hamilton Lane, a giant in the world of private markets investing. I'm delighted to be joined by Eric Hirs, Hamilton Lane's co-CEO, to discuss opening up private capital to retail investors, why fund manager experience matters more than thematics right now, and how he navigates the longer investing timelines of the private world when Hamilton Lane is itself publicly traded. Well, Eric, thank you very much for joining.I thought just to set the stage a little bit to frame a c ...

Core Insights - Morgan Stanley's global head of client coverage, Elizabeth Dennis, highlights a strong demand for evergreen funds among investors seeking returns in private markets [1] Group 1 - Clients are primarily focused on gaining access to private companies [1] - Evergreen funds are increasingly popular among investors [1] - The comments were made ahead of the Women, Money & Power event in London [1]

Core Insights - Hamilton Lane reported mixed results for Q1 FY2026, with Non-GAAP EPS at $1.31, below the consensus estimate of $1.34, and GAAP revenue at $175.958 million, missing the projected $186.65 million [1][5] - The company experienced a 13% year-over-year decline in Non-GAAP EPS and a 14% drop in GAAP EPS, attributed to unpredictable incentive fee flows and lower revenue [1][5] - Despite the revenue shortfall, management highlighted growth in key asset metrics and strong Fee Related Earnings, which increased by 31% year-over-year to $83.7 million [1][6] Financial Performance - Non-GAAP EPS for Q1 FY2026 was $1.31, down 13% from $1.51 in Q1 FY2025 [2] - GAAP revenue fell to $175.958 million, a 5% decrease from $197 million in the previous year [2] - Fee Related Earnings margin improved to 51%, up from 45% a year ago, despite a 26% decrease in incentive fees [6] Asset Management - Assets under management (AUM) reached $140.9 billion, a 9% increase from the previous year, while assets under advisement (AUA) grew to $845.3 billion, a 4% increase [8] - Fee-earning assets under management increased by 10% to $74.4 billion, with specialized funds growing by 16% [8] Business Strategy - Hamilton Lane focuses on building long-term, fee-earning relationships, with management and advisory fees constituting the majority of recurring revenue [4] - The company has launched new products, including Evergreen funds and expanded its proprietary analytics platform, Cobalt LP [4][9] Segment Performance - Specialized funds saw a decline in fees year-over-year, while customized separate accounts posted modest fee growth of 3% [7] - Reporting, monitoring, data, and analytics fees increased by 20%, indicating a growing demand for technology-driven services [7] Future Outlook - Management emphasized a healthy fundraising pipeline and plans for growth in assets, although they did not provide explicit revenue or earnings guidance [12] - Key items for investors to monitor include trends in incentive and retroactive fee realization, which can impact quarterly performance [13]