Hamilton Lane(US:HLNE)2020-11-05 02:58Financial Data and Key Metrics Changes - Year-to-date management and advisory fee revenue grew by nearly 12% while fee-related earnings increased by over 14% compared to the prior year period [5] - GAAP EPS for the year-to-date period was $0.79 based on $25.1 million of GAAP net income, while non-GAAP EPS was $0.91 based on $48.8 million of adjusted net income [5] - Total asset footprint reached approximately $547 billion, representing a 14% year-over-year increase [14] - Fee-related earnings were up 14% versus the prior year period due to revenue growth [33] Business Line Data and Key Metrics Changes - Total fee-earning AUM grew by $3.2 billion or nearly 9% year-over-year, driven by positive fund flows from both specialized funds and customized separate accounts [17] - Fee-earning AUM from customized separate accounts stood at $24.6 billion, growing approximately 7% over the past 12 months [18] - Specialized funds achieved positive inflows of nearly $1.5 billion, resulting in an 11% increase in fee-earning AUM [19] Market Data and Key Metrics Changes - The rebound in private markets has not been uniform, with growth and technology sectors performing well while energy and some regional markets struggled [13] - Total AUA increased by over $68 billion, approximately 14% year-over-year [15] Company Strategy and Development Direction - The company is focused on expanding its Asian presence with a new office in Singapore and a new headquarters in Philadelphia [9][10] - The firm aims to enhance diversity and inclusion within its workforce, with women and minorities representing 50% of the global workforce [12] - The company is adapting its fee structures to meet investor preferences, offering choices between traditional and invested capital fee models [24] Management's Comments on Operating Environment and Future Outlook - Management noted that investors have maintained or increased their allocations, with a small shift favoring growth-oriented investments [13] - The firm expects continued growth in fee-earning AUM driven by reups from existing clients and the addition of new clients [17] - Management expressed optimism about the market's strength and the potential for increased realization activity due to favorable conditions [65] Other Important Information - The company declared a dividend of $31.25 per share, marking a 13.6% increase over the previous fiscal year [5] - The firm recognized $6.1 million in retro fees from the secondary fund, compared to $2.8 million from the prior year [30] Q&A Session Summary Question: Outlook for distributions and drivers - Management indicated that distributions are influenced by the aging of assets and timing mismatches between reups and expirations, with growth expected to remain strong despite timing noise [40][41] Question: New fee structure impact - The new fee structure was designed to provide investors with choices based on their preferences for upfront versus back-end fees, with early indications of strong demand [43] Question: Operating leverage and expense growth - Management acknowledged positive operating leverage but noted that G&A expenses are expected to rise as travel and other activities normalize [46][47] Question: Credit fund strategy - The credit fund is opportunistic, allowing for tactical adjustments based on market conditions, focusing on performing credit currently [74] Question: Opening of Singapore office - The Singapore office aims to enhance the firm's presence in Asia, aligning with client investment activities in the region [75]