Hamilton Lane(HLNE)2024-05-23 18:28Financial Data and Key Metrics - Total fee-earning AUM stood at $65.7 billion, growing $8.4 billion or 15% YoY [4] - Management and advisory fee revenue grew by 22% YoY, with fee-related earnings (FRE) also up 22% [53] - GAAP EPS for fiscal 2024 was $3.69, while non-GAAP EPS was $3.92 [53] - Unrealized carry balance increased by 19% YoY to over $1.2 billion [27] - Total AUM grew by 11% YoY to $124 billion, with AUA up 7% YoY to $51 billion [73] Business Line Performance - Customized separate accounts fee-earning AUM grew 8% YoY to $37.6 billion [22] - Specialized funds fee-earning AUM grew 24% YoY to $28.2 billion, driven by $5.5 billion in net inflows [55] - Evergreen platform AUM reached nearly $6.5 billion, with average monthly net inflows of $255 million in Q1 2024 [76] - Revenue from customized separate accounts increased by $11.1 million or 9% YoY [9] - Specialized funds revenue increased by $64.7 million or 33% YoY [47] Market and Geographic Performance - Wirehouse channel flows reached close to $900 million by the end of Q1 2024 [7] - Non-wirehouse flows also scaled nicely, complementing the wirehouse success [7] - The secondary fund raised over $5 billion, marking the largest institutional fundraise in the company's history [75] - Credit platform invested over $1.3 billion in credit transactions in 2023, a 45% increase YoY [24] Strategic Direction and Industry Competition - The company continues to expand its customized separate accounts and specialized funds, focusing on higher fee-rate products [54] - The Evergreen platform is a key growth driver, with steady monthly inflows and new distribution relationships [76] - The company is investing in technology partnerships, including tokenization and digital assets, to enhance accessibility and efficiency in private markets [57][25] - The venture capital market is becoming more rational, presenting a better entry point for the company's new specialized fund [89] Management Commentary on Operating Environment and Future Outlook - Management emphasized the importance of maintaining strong double-digit growth and leveraging scale for future margin improvements [32] - The company is focused on expanding its sales resources and deepening client relationships to drive growth [12] - Management remains optimistic about the wirehouse channel and expects continued strong fundraising [33] - The company is committed to investing in technology and innovation to stay ahead in the private markets [25][57] Other Important Information - The company announced a 10% increase in its annual dividend to $1.96 per share, marking the seventh consecutive year of double-digit dividend growth [53] - The company participated in strategic investments, including Securitize and Nevada, to support innovation in the private markets [25][77] - The company highlighted its long-term relationships with clients, with some separate account relationships exceeding 20 years [74] Q&A Session Summary Question: Retail Channel Growth and Product Launches - The company is seeing strong momentum in the retail channel, with plans to expand existing funds and launch new products in the future [62][63] Question: Expense Growth and Margin Expectations - Management expects expense growth to continue, driven by headcount growth and distribution costs, but remains focused on maintaining strong margins [64][65] Question: Fundraising Pipeline and Market Opportunities - The company has a robust pipeline for specialized funds, with high single-digit growth in SMA business and strong interest from clients across various strategies [34][86] Question: Distribution Fees and Revenue Share Arrangements - The majority of distribution fees are upfront, with ongoing revenue share arrangements being less common [88] Question: Venture Capital Fund Launch and Market Sentiment - The company launched a new venture capital fund, citing a more rational market environment and strong client demand as key factors [89]