Hamilton Lane Incorporated

Music Music Music Music Thank you. Thank you. Thank you. Good morning, ladies and gentlemen, and welcome to the Hamilton Lane First Quarter Fiscal Year 2027 Earnings Call. At this time, our lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Tuesday, August 4th, 2026. I would now like to turn the conference over to John Oh, Head of Shareholder Relations. Please go ahead.

Thank you, Joanna. Good morning and welcome to the Hamilton Lane Q1 fiscal year 2027 earnings call. Today, I will be joined by Erik Hirsch, Co-Chief Executive Officer, and Jeff Armbrister, Chief Financial Officer. Earlier this morning, we issued a press release and a slide presentation which are available on our website. Before we discuss the quarter's results, we want to remind you that we will be making forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position Results of operations, plans, objectives, future performance, and business. These forward-looking statements do not guarantee future events or performance and are subject to risks and uncertainty that may cause our actual results to differ materially from those projected. For discussion of these risks, please review the cautionary statements and risk factors included in the Hamilton Lane Fiscal 2026 10-K and subsequent reports we file with the SEC. These forward-looking statements are made only as of today and, except as required, we undertake no obligation to update or revise any of them. We will also be referring to non-GAAP measures that we view as important in assessing the performance of our business. Reconciliation of those non-GAAP measures to GAAP can be found in the earnings presentation materials made available on the shareholders section of the Hamilton Lane website. Our detailed financial results will be made available when our 10-Q is filed. Please note that nothing on this call represents an offer to sell or a solicitation of an offer to purchase interest in any of Hamilton Lane's products. Let's begin with the highlights and I'll start with our total asset footprint. At quarter end, our total asset footprint stood at over $1 trillion and represents an 8% increase to our footprint year over year. AUM stood at $146 billion and grew $5 billion or 4% compared to the prior year period. AUA came in at $914 billion and grew $69 billion or 8% relative to the prior year period. This stemmed primarily from market value growth and the addition of a variety of technology solutions and back office mandates. For this first quarter of fiscal year 2027, total management and advisory fees were $161 million and were up 21% year over year. Total fee-related revenue was $236 million and represents 44% growth year-over-year. Fee-related earnings were $124 million and represents 49% growth year-over-year. We generated gap EPS. We generated quarterly gap EPS of $1.93 based on $80 million of gap net income and non-gap EPS of $1.94 based on $105 million of adjusted net income. We have also declared a dividend of $0.60 per share this quarter, which keeps us on track for the 11% increase over last fiscal year, equating to the targeted $2.40 per share for fiscal year 2027. With that, I'll now turn the call over to Erik.

Thank you, John, and good morning, everyone. In May, we celebrated Hamilton Lane's 35th anniversary. A simple AI query will tell you that few companies founded ever reached this milestone. To me, while the longevity is noteworthy, the more important point is what that milestone represents. It represents evolution, a desire to never stand still. As the world and markets have changed around us, Hamilton Lane has built and adapted and innovated, all with a focus on best serving our clients. And while I'm proud of the growth and how many new investors continue to entrust us with capital, I am exceptionally proud that clients who have been with us from the beginning of this journey continue to entrust us with capital today. But at the end of the day, what makes Hamilton Lane are our people. We are looking forward to continuing to evolve, continuing to grow, and continuing to successfully serve our clients. Let me turn now to fee-earning AUM. At quarter end, total fee-earning AUM stood at $83.7 billion and grew $9.3 billion, or 12%, year-over-year. Net quarter-over-quarter growth was $2.1 billion, or 3%. Our blended fee rate continues to benefit as our fee-earning AUM mix shifts towards the specialized funds part of our business. Our blended fee rate now stands at 69 basis points. Total fee-earning AUM growth continues to be driven largely by our specialized fund platform. Overall, specialized fund fee-earning AUM ended this quarter at $42.6 billion, having grown $8.5 billion over the last 12 months. This represents an increase of 25%. Quarter-over-quarter growth was $2 billion, or 5%. We produced $2.4 billion of gross contributions in the quarter, That stemmed primarily from new subscriptions to our Evergreen products, along with healthy contributions from our drawdown products, namely our sixth equity opportunities fund, our second venture fund, and our second infrastructure fund. This was offset with redemptions coming primarily from two of our largest non-U.S. Evergreen products, along with exit activity and drawdown funds. Our Evergreen platform continues to demonstrate resilience. For the quarter that ended in June, we generated nearly $640 million of net inflows across all strategies and ended the period with over $19 billion of AUM. Importantly, we did not enact gates on any of our funds, and we saw positive net inflow across 10 out of 12 funds, with our non-U.S. credit offering essentially being flat for the quarter and our non-U.S. multi-strategy equity funds showing elevated redemptions and finishing in net outflow for the quarter. The redemptions in this fund came largely from two categories of investors. The first being longstanding investors who have seen their exposure grow due to strong performance. Had you invested a dollar in the institutional USD share class of our non-US multi-strat equity platform at inception, as of June 30th of this year, that dollar would be worth $2.32. Not surprisingly, We see clients harvesting some gains and rebalancing, with some of those funds flowing back into other Hamilton Lane products. The second category is a bit more unique. Clients housing capital in the Evergreen Fund while awaiting deployment in a separately managed account. They are redeeming to then fund the SMA. In prior times, we saw clients often just leave future private dollars in passive public equity accounts. But with the advent of evergreens, we are seeing more institutional clients avail themselves of this alternative to temporarily house capital for future use in drawdown funds. While this inevitably results in redemptions, it still means the capital is retained by Hamilton Lane. As evergreen market dynamics continue to evolve and mature, we expect over time that redemptions will be driven by different motivators and will need to be examined in context. All that said, we have seen a slowdown on flows on certain products and a general hesitancy with investors given the constant negative headlines. We strongly believe this is temporary and have already begun to see the swing back. For us, we continue to operate with a long-term mindset. Our evergreen platform has been purposely built to reach investors around the world and to offer a wide variety of strategies. Today, We are one of only a small number of Evergreen managers with both a scaled U.S. platform and a scaled non-U.S. platform. Outside the U.S., we offer seven vehicles with our multi-strategy equity, credit, and infrastructure funds, each having more than $1 billion of AUM, and our secondaries and venture offerings are fast approaching the $1 billion AUM mark. Performance across the vehicles remains strong. That same breadth is evident in the U.S. as well. We now offer five vehicles across multi-strategy equity, infrastructure, venture, secondaries, and most recently credit, which we discussed on our last call. Today, the multi-strategy equity fund represents the majority of our U.S. Evergreen AUM, driven by strong performance since inception and continued traction in the wire house channels. The fund has just been added to another wire house, bringing distribution for that strategy to now three wire houses. We have achieved all of this while at the same time leveling up and expanding our U.S. distribution team. This may beg a logical question. If things are going well, why would we do this? It's simple, and it's where I started earlier. A constant desire to evolve and to be better. Sales professionals are realizing that not all platforms are built the same, and with an increasing amount of data available on brands, product lineups, DealFlow, and Performance, professionals are choosing who they believe will be the winning franchises for the next many years. Over the last 12 months, we have added six highly experienced evergreen sales professionals to our senior ranks. They have joined from outstanding firms, JP Morgan, Fidelity, Morgan Stanley, BlackRock, PIMCO, and Monroe Capital. So while we are pleased with the success we've had so far, we are far more excited with what lies ahead as this team comes together. Let me turn to performance. We are now entering the phase of the evergreen journey where track records are getting longer and are getting more scrutiny. Investors are realizing that investment approach and risk-taking are not the same across platforms. For Hamilton Lane, we are not trying to build an index, nor are we building concentrated portfolios. We are building portfolios with purposeful diversification across managers, strategies, geographies, and underlying assets, and are doing so with the benefit of deep sourcing, discipline pacing, active task management, and rigorous portfolio construction. That matters because in private markets, manager selection and asset selection still drive outcomes in a very meaningful way and the dispersion between top and bottom performers remains wide. And when you combine that discipline with the advantages of a multi-manager platform, Differentiated deal flow, access to high-quality middle market opportunities, flexibility across market environments, and the ability to lean into specialized expertise, you give yourself a far stronger foundation for consistency over time. That is what we believe is showing up in our results, which continue to be strong. As of June 2026, when looking at institutional USD share class, and excluding the most recently launched U.S. private credit fund given its nascency, each of our funds has generated positive double-digit performance both year-to-date and since inception, with the exception being our non-U.S. private credit platform, which targets a high single-digit return and has delivered just that. In addition, for every single one of those funds, We have also produced positive performance in every single calendar year since inception. I will also note that our three largest and most seasoned individual products, those being our US and non-US multi-strategy equity product and non-US credit product, have generated over $3.6 billion of total cash realizations from their underlying portfolios. So when we step back and look at the platform in its entirety, What we see is a business that remains healthy, diversified, and well-positioned for long-term growth. We have strong performance, growing global reach, expanding distribution, and a client base that continues to engage with the platform in different ways across products and structures. There will be periods where flows move around, and there will certainly be noise around the category, but none of that changes our conviction. We believe the evergreen platform we have built is differentiated, durable, and still very early in its growth trajectory. Let me turn now to our closed-end franchise. We continue to execute well across our fundraising activities and are seeing strong momentum build across several strategies approaching their initial closes. Through the balance of fiscal 2027 and into early fiscal 2028, we expect to be in market with five key strategies. Core secondaries, our inaugural GP-led secondary strategy, venture, credit, and infrastructure. But let me begin with our most recently closed fund. I'm pleased to announce that our direct equity platform finished its raise, collecting $3.8 billion in and alongside the fund. That broke down to $3.3 billion in the fund and $500 million in separate accounts investing alongside. The fund portion alone represents an over 57% growth versus the prior fund. We believe our team, our differentiated deal flow, and our near 30-year track record in this space resonated with investors across the globe. We attracted public and private pension funds, sovereign wealth funds, Taft-Hartley plans, endowments and foundations, and individuals. And we are deeply grateful for their trust in us. That fund is off to a strong start with nearly 30% of the capital committed across a variety of small and mid-market businesses, and while early, performance is strong. This fundraise is yet another prime example of how we are continuing to scale both our closed-end franchise and our business overall. We are proud of what we've been able to accomplish with this fundraise, and we look forward to continuing to build on this momentum. Turning to our seventh secondary fund, fundraising is off to a good start. as we held the first close just last week on nearly $1.3 billion of investor commitments. This will be followed by another close in this calendar year on which we already have good visibility. Like before, we have 18 months from the time of the initial close to complete the fundraise. We remain encouraged by the level of support we have already received and we are looking forward to continuing to grow and expand this franchise. Turning now to venture. I'm pleased to share that during the quarter we successfully held the first close for our second venture fund, securing more than $370 million of investor commitments. For context, our first venture fund raised a total of $615 million, which means this initial close already represents more than 60% of the size of the first fund. We believe that is a strong early proof point for the strategy. and a clear reflection of the confidence our investors have in the team, the platform and the opportunity set we see in this market. Wrapping up here with customized separate accounts. At quarter end, customized separate account fee earning AUM stood at $41.1 billion and grew $818 million or 2% over the last 12 months and was up slightly quarter over quarter. We continue to see gross contributions coming from a mix of new client wins, plus re-up activity from existing clients, plus contributions for investment activity, and then being offset by fee basis step downs, which is largely a timing related impact, as well as capital distribution stemming from exit activity. During the quarter, we continue to execute well across our separate account business, converting both our back book and active pipeline into closed mandates from existing clients and new relationships alike. From our existing client base, we closed on more than $2.3 billion of total mandate value driven primarily by re-ups while also expanding one relationship into a new service line. We also closed on more than $1.3 billion of total mandate value from clients that are new to Hamilton Lane. These wins came from both domestic and international institutions Further reinforcing the global relevance for our platform and the continued demand we are seeing across the market for private market solutions delivered at scale. Lastly, our team continues to make very good progress replenishing the pipeline of re-up opportunities, which today totals multiple As we have said before, these mandates do not always convert immediately into fee-earning AUM, particularly where the underlying portfolio construction is more heavily oriented towards primary investing, or where there are commitments being made to our transaction products, either Drawdown or Evergreen. There is often a natural pacing element to deployment for the primary element, and that timing should be expected. But what matters most to us is that the capital has been awarded, the client relationships have been established, and the foundation for future fee earning growth is in place. Turning now to our balance sheet updates, and let me highlight some recent exciting events regarding several investments in our strategic investment portfolio, and then Jeff will provide more details in his section. I'll start with Russell Investments. On July 9th, Russell announced that a consortium led by B Capital and CalPERS agreed to acquire the firm. As a reminder, in March of 2021, we entered into a strategic partnership with Russell, because we saw a compelling opportunity to combine Russell's global outsource solutions franchise and client reach with Hamilton Lane's private market platform, research portfolio construction capabilities, and technology. Over the past five years, that partnership has created differentiated access points and tailored solutions for Russell's global clients, and it stands as a strong example of how we can use our platform to help sophisticated partners expand private market access in a way that is strategic, scalable, and aligned with client demand. During our period of ownership, the investment delivered both strategic and financial benefits. And while this transaction marks the end of our economic ownership in Russell, it does not mark the end of the relationship. We remain excited to continue advancing the partnership and our shared goal for delivering best in class private market solutions. Next, back in fall of 2025, Securitize announced that it had entered into a definitive business combination agreement with Cantor Equity Partners II, a special purpose acquisition company, and they would transition to a publicly traded company. That transaction has now been completed, and Securitize is now a publicly listed company on the New York Stock Exchange. We originally invested $5 million from our balance sheet and now hold approximately 1.1 million shares of Securitize, which, as of yesterday's closing price, traded at $6.94 per share. Our relationship with Securitize began in 2022 when we partnered with them to tokenize several Hamilton Lane offerings and expand access to private markets through digital-first token-based technology. In May 2024, Hamilton Lane built on our commercial relationship and participated in Securitize's strategic funding round led by BlackRock. We made that investment because we believe Securitize was building important infrastructure for the next evolution of capital markets. Trusted, regulated technology that can bring traditional financial assets on-chain and make private markets more accessible to a broader set of investors. Securitize's move towards becoming a public company is an important validation of that thesis. It reflects the increasing institutional adoption of tokenization and highlights the role that regulated infrastructure can play in modernizing how financial assets are issued, managed, traded, and serviced. Next up is Canoo. Canoo is an AI-driven platform that automates the collection, extraction, and validation of alternative investment data. Taking the large volume of fund documents, capital account statements, and cash flow that underpin the private markets and turning them into clean, actionable information. Our relationship began in 2019 with pilots on Hamilton Lane's own documents, which was then followed by our initial investment in Canoe's Series A in 2020, and then continuing to support the business through subsequent rounds. We invested because Canoe was addressing a need we experienced ourselves and saw across the broader market. That being reducing operational friction and enhancing data quality across the asset class. Bloomberg's agreement to acquire Canoe is a strong validation of that thesis. For Hamilton Lane, it is another example of us using our balance sheet in a targeted way to support technology partners that we believe are helping shape the future of the private markets. And with that, I'll now pass the call to Jeff, who will cover both our financials and the impact stemming from these transactions.