• Management and Advisory Fee Revenue Growth: 21% year-to-date increase.

• Fee-Related Earnings Growth: 21% year-to-date increase.

• GAAP EPS: $2.85 based on $114 million of GAAP net income.

• Non-GAAP EPS: $2.58 based on $140 million of adjusted net income.

• Dividend: $0.49 per share, targeting $1.96 per share for fiscal year 2025.

• Total Asset Footprint: $947 billion, 11% year-over-year increase.

• Assets Under Management (AUM): $131 billion, 10% year-over-year increase.

• Fee-Earning AUM: $70 billion, 14% year-over-year increase.

• Specialized Funds Revenue Increase: $40 million or 33% year-over-year.

• Incentive Fees: $87 million year-to-date, up 133% year-over-year.

• Unrealized Carry Balance: Approximately $1.3 billion, up 9% year-over-year.

• Total Expenses Increase: $48.6 million year-to-date.

• Fee-Related Earnings Margin: 43% for the quarter and year-to-date.

• Warning! GuruFocus has detected 5 Warning Signs with HLNE.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Hamilton Lane Inc (NASDAQ:HLNE) reported a 21% growth in management and advisory fee revenue year-to-date through the second quarter of fiscal 2025.

• The company achieved a significant milestone by being added to the S&P MidCap 400 Index.

• Total assets under management (AUM) increased by 10% year-over-year, reaching $131 billion.

• The specialized funds platform saw strong growth, with fee-earning AUM increasing by 14% compared to the prior year.

• Hamilton Lane Inc (NASDAQ:HLNE) successfully launched new products, including a venture-focused fund with nearly $500 million in commitments and an infrastructure Evergreen product.

Negative Points

• The company faces potential challenges with retro fees impacting year-over-year specialized funds revenue growth comparisons.

• Total expenses increased by $48.6 million year-to-date, driven by higher compensation and general administrative costs.

• The fee rate, excluding retro fees, showed a decline quarter-over-quarter, indicating potential volatility in fee structures.

• Hamilton Lane Inc (NASDAQ:HLNE) is navigating a competitive landscape with increasing competition in the private markets sector.

• The company acknowledges regulatory hurdles in expanding private market access to 401(k) retirement accounts, which could limit growth opportunities in that segment.

Q & A Highlights

Q: Can you talk about the opportunities ahead for Hamilton Lane in new distribution channels, particularly with brokers offering alternative products for the first time? A: Erik Hirsch, Chief Investment Officer, explained that the majority of mass affluent individuals currently lack exposure to private markets. He sees a long-term shift where individual investors' portfolios will mirror those of institutional investors. This shift could move a significant portion of global wealth into private markets, transforming the industry and Hamilton Lane's business over time.