Hamilton Lane Q1 Earnings Call Highlights

Key Points

• Strong financial performance: Hamilton Lane’s management and advisory fees rose 21% year over year to $161 million, while fee-related earnings increased 49% to $124 million. Adjusted earnings were $1.94 per share, and the company raised its fiscal 2027 dividend pace by 11% to $2.40 per share.
• Assets and fundraising continued to grow: The firm’s total asset footprint surpassed $1 trillion, including $146 billion in assets under management and $914 billion under advisement. Evergreen products generated nearly $640 million in quarterly net inflows, while major fundraising included a $3.8 billion direct equity effort and initial closes for secondary and venture funds.
• Strategic investments may add gains: Hamilton Lane expects roughly $50 million from Russell Investments’ proposed acquisition and about $30 million from Bloomberg’s purchase of Canoe, with estimated gains of approximately $18 million and more than $15 million, respectively, subject to closing conditions.

Hamilton Lane NASDAQ: HLNE reported higher first-quarter fiscal 2027 management fees, fee-related earnings and earnings per share, while highlighting continued growth in its evergreen products, closed-end fundraising activity and technology-related investments.

The private-markets investment firm said its total asset footprint exceeded $1 trillion at quarter-end, up 8% from a year earlier. Assets under management were $146 billion, up $5 billion, or 4%, while assets under advisement rose 8% to $914 billion, driven primarily by market-value gains and additions of technology solutions and back-office mandates.

Management and advisory fees increased 21% year over year to $161 million. Total fee-related revenue rose 44% to $236 million, and fee-related earnings increased 49% to $124 million. Hamilton Lane reported GAAP net income of $80 million, or $1.93 per share, and adjusted net income of $105 million, or $1.94 per share.

The company also declared a quarterly dividend of $0.60 per share, keeping it on pace to pay $2.40 per share for fiscal 2027, representing an 11% increase from the prior fiscal year.

Specialized Funds and Evergreen Flows

Fee-earning AUM reached $83.7 billion, increasing $9.3 billion, or 12%, from the prior-year period and $2 billion sequentially. The company’s blended fee rate rose to 69 basis points as its fee-earning AUM mix shifted toward specialized funds.

Specialized-fund fee-earning AUM totaled $42.6 billion, up 25% year over year. Gross contributions were $2.4 billion during the quarter, primarily from evergreen product subscriptions as well as drawdown products including Hamilton Lane’s sixth equity opportunities fund, second venture fund and second infrastructure fund.

Hamilton Lane’s evergreen platform generated nearly $640 million in net inflows for the quarter ended in June and finished the period with more than $19 billion in AUM. Co-Chief Executive Officer Erik Hirsch said the company did not impose gates on any funds and recorded positive net flows in 10 of its 12 evergreen funds.

Its non-U.S. multi-strategy equity fund posted net outflows amid elevated redemptions, while the non-U.S. credit offering was roughly flat. Hirsch said redemptions in the multi-strategy fund largely reflected investors harvesting gains and rebalancing after strong performance, as well as clients moving capital from the evergreen vehicle into separately managed accounts.

“While it is a redemption, it’s just moving from one pocket of Hamilton Lane capital to another pocket,” Hirsch said in response to an analyst question, referring to clients funding separate accounts.

Hirsch also said the company had seen slower flows in certain products and investor hesitancy amid negative headlines surrounding private markets, but said management views that pressure as temporary and had begun to see sentiment improve in July.

Fundraising Activity Builds

Hamilton Lane said its direct equity platform completed a $3.8 billion fundraising effort, including $3.3 billion in the fund and $500 million in separate accounts investing alongside it. The fund portion represented more than 57% growth from its predecessor fund. Nearly 30% of its capital had been committed across small- and mid-market businesses, according to Hirsch.

The company’s seventh secondary fund held an initial close of nearly $1.3 billion in investor commitments during the quarter, with another close expected later in calendar 2026. Its second venture fund also held a first close exceeding $370 million, more than 60% of the $615 million raised by the first venture fund.

Hamilton Lane expects to be in market with five key strategies through the balance of fiscal 2027 and early fiscal 2028: core secondaries, an inaugural GP-led secondary strategy, venture, credit and infrastructure.

Customized separate-account fee-earning AUM stood at $41.1 billion, up 2% year over year. The company closed more than $2.3 billion of mandate value from existing clients, largely through re-ups, and more than $1.3 billion from new clients. Hirsch noted that awarded mandates may take time to become fee-earning AUM, particularly when portfolios are focused on primary investments that are deployed over several years.

Expenses, Incentive Fees and Capital Returns

CFO Jeff Armbrister said incentive fees totaled $114 million in the quarter, including fee-related performance revenue primarily tied to the quarterly crystallization of performance fees from the U.S. Private Assets Evergreen Fund. Hamilton Lane’s unrealized carry balance was approximately $1.5 billion, up 11% year over year despite recognition of $113 million of incentive fees, excluding fee-related performance revenue, over the last 12 months.

Total expenses increased $50 million, or 50%, from the prior-year period. Compensation and benefits rose $38 million, largely due to operating performance and higher headcount. General and administrative expenses increased $12 million, reflecting revenue-related costs, including third-party commissions for U.S. evergreen funds, platform fees, placement-agent fees and fund reimbursement expenses.

Fee-related earnings margin was 53%, compared with 51% a year earlier. Armbrister said the result benefited from fee-related performance revenue, while Hirsch said future margin performance could also benefit from asset-mix shifts, revenue growth and expense discipline.

During the quarter, Hamilton Lane repurchased about 559,000 shares at a weighted-average price of $89.51, spending roughly $50 million. Total repurchases under the program have reached $70 million.

Strategic Investment Updates

Management also discussed several developments involving strategic investments. Russell Investments announced an agreement to be acquired by a consortium led by B Capital and CalPERS. Hamilton Lane expects to realize just under $50 million based on its share of the proposed transaction value and anticipates recognizing a gain of about $18 million if the transaction closes, which Russell has indicated is expected in the first quarter of calendar 2027, subject to approvals and customary conditions.

Hamilton Lane also said Securitize has become publicly traded on the New York Stock Exchange under the ticker SECZ. Armbrister said Hamilton Lane holds approximately 1.5 million shares that will begin being marked to the public share price in the next quarter, subject to a 180-day lock-up period.

Separately, Bloomberg agreed to acquire alternative-investment data platform Canoe. Hamilton Lane expects proceeds of approximately $30 million from the transaction and an estimated gain of more than $15 million over Canoe’s current carrying value when the deal closes.

About Hamilton Lane (NASDAQ:HLNE)

Hamilton Lane is a global private markets investment management firm specializing in the full spectrum of private equity and credit strategies. The company partners with institutional investors and wealth managers to design, implement and manage customized portfolios in primary fund investing, secondary market transactions and direct co-investment opportunities. By combining investment selection, portfolio construction and ongoing monitoring, Hamilton Lane seeks to optimize risk-adjusted returns across diverse private markets exposures.

Founded in 1991, Hamilton Lane has developed a track record of investment and advisory services in private markets.

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