Hamilton Lane Q2 Earnings Call Highlights

Key Points

• Strong financial growth: First-half management and advisory fees rose 18% to $325 million, fee-related revenue increased 29% to $414 million, and fee-related earnings climbed 34% to $215 million. The fee-related earnings margin improved to 52%.
• Assets and fundraising expanded: Fee-earning assets under management reached $86 billion, up 12% year over year, led by a 25% increase in specialized-fund assets. The Evergreen Platform grew 42% to nearly $21 billion, while the firm secured major commitments for secondary and venture funds.
• Strategic changes and new partnerships: Hamilton Lane announced leadership changes ahead of Mario Giannini’s retirement and named Hartley Rogers co-CEO. It also partnered with FactSet to provide private-markets analytics, creating a new recurring-revenue opportunity.

Hamilton Lane NASDAQ: HLNE reported fiscal second-quarter 2027 results marked by growth in fee-earning assets, management and advisory fees, and fee-related earnings, while outlining leadership changes, fundraising activity and new technology partnerships.

For the first half of fiscal 2027, total management and advisory fees rose 18% from a year earlier to $325 million, while total fee-related revenue increased 29% to $414 million. Fee-related earnings rose 34% to $215 million. The firm reported year-to-date GAAP net income of $158 million, or $3.80 per share, and adjusted net income of $211 million, or $3.91 per share.

Hamilton Lane also declared a quarterly dividend of $0.60 per share. Head of Shareholder Relations John Oh said the payment keeps the firm on pace to deliver its targeted fiscal 2027 dividend of $2.40 per share, representing an 11% increase from the prior fiscal year.

Assets and fundraising activity

At quarter-end, Hamilton Lane’s total asset footprint was approximately $1.1 trillion, up 7% year over year. Assets under management were $151 billion, up $5 billion, or 4%, while assets under advisement reached $929 billion, up $69 billion, or 8%. The increase in assets under advisement was primarily driven by market value growth and additions of technology solutions and back-office mandates.

Total fee-earning AUM reached $86 billion, an increase of $10 billion, or 12%, from a year earlier and $2 billion from the preceding quarter. Executive Co-Chairman Erik Hirsch said the growth mix continued to favor specialized funds, which carry higher fee rates. Hamilton Lane’s blended fee rate rose to 69 basis points, representing compounded annual growth of 5% over the past five years.

Specialized-fund fee-earning AUM totaled more than $44 billion, up nearly $9 billion, or 25%, over the trailing 12 months. Hamilton Lane generated more than $2 billion in gross contributions during the quarter, driven by subscriptions to its Evergreen Platform, the first close of its seventh secondary fund and drawdown activity from certain funds.

The Evergreen Platform ended the quarter with nearly $21 billion in AUM, representing 42% annual growth. Net inflows were nearly $800 million for the quarter, up from approximately $640 million in the prior quarter. September alone generated nearly $400 million of net inflows. Hirsch said the firm had not imposed gates on any Evergreen products and said performance since inception remained strong across the platform.

The firm held a first close in July for its seventh secondary fund, with nearly $1.3 billion of investor commitments. It also previously held a first close for its latest venture fund with more than $370 million of commitments. Hamilton Lane has launched an inaugural GP-led secondary fund and described a newer credit strategy intended to invest in diversified lending and specialty finance opportunities.

Customized separate-account fee-earning AUM stood at $41 billion, up $663 million from a year earlier and $362 million sequentially. The company also secured $1.7 billion of new contracted mandate value, primarily through expansions and re-ups from existing clients.

Leadership transition and strategic priorities

Chairman Hartley Rogers said Mario Giannini will retire from the firm effective March 31. Rogers has been named co-chief executive officer alongside Juan, while Hirsch moved into the executive co-chairman role and will lead strategic initiatives intended to support long-term growth.

Rogers said his priorities as co-CEO include maintaining a client-first approach, accelerating growth and investing in employee development. He said Hamilton Lane will continue investing in wealth distribution through a centrally managed sales effort serving national accounts and smaller registered investment adviser channels in the U.S. and internationally.

Hirsch said wealth-market fundraising improved during the quarter across a broad range of the firm’s products. He attributed some of the improvement to investors becoming more informed about private markets over time, while noting that the wealth channel remains early in its development.

FactSet partnership and financial outlook

Hamilton Lane announced a strategic partnership with FactSet to provide an integrated private-markets analytics solution for institutional investors. Through the arrangement, Hamilton Lane’s data covering more than 70,000 funds and 240,000 private companies, along with its benchmarks, will be accessible through FactSet’s portfolio analytics platform.

The company said the partnership includes multi-year annual recurring revenue with an agreed-upon floor and potential to scale. Revenue will be reported in Hamilton Lane’s reporting, monitoring and data analytics segment within management and advisory fees. Hirsch declined to disclose the revenue amount but said the floor was meaningful.

Chief Financial Officer Jeff Armbrister said specialized-fund management fees increased $46 million, or 27%, in the first half, driven by growth in the Evergreen Platform, the latest direct equity fund and the first close of the secondary fund. Revenue from reporting, monitoring, data and analytics offerings increased nearly $3 million, or 15%.

Incentive fees totaled $154 million for the period. Hamilton Lane’s unrealized carry balance stood at approximately $1.6 billion, up 11% from a year earlier despite recognizing $107 million of incentive fees, excluding fee-related performance revenues, over the preceding 12 months.

Fee-related earnings for the first half totaled $250 million, up 34% year over year, while the fee-related earnings margin increased to 52% from 50%. Armbrister said the company expects to operate at a low-50% fee-related earnings margin on an annual basis, though quarterly performance-revenue levels may vary.

The company also cited gains from strategic investments. A Securitize business combination produced a $15.6 million non-operating gain during the reporting period. Bloomberg’s acquisition of Canoe, which closed in October, is expected to generate a $17 million gain in Hamilton Lane’s fiscal third quarter. An announced acquisition of Russell Investments is expected to produce an approximately $18 million gain if it closes as anticipated.

About Hamilton Lane (NASDAQ:HLNE)

Hamilton Lane Incorporated NASDAQ: HLNE is a global investment management firm specializing in private markets. The company provides investment solutions and advisory services focused on alternative assets, including private equity, private credit, venture capital, growth equity, infrastructure and real assets.

Hamilton Lane serves institutional investors, family offices, financial advisors and high-net-worth individuals. Its offerings include separately managed accounts, customized portfolios, commingled funds, evergreen vehicles and secondary-market strategies.

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