Hamilton Lane Incorporated (HLNE) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presented strong financial performance, with significant growth in Fee-Earning AUM and a 10% dividend increase. The Guardian Life partnership and Bloomberg collaboration enhance future prospects. While 2026 will focus on scaling existing products, the Evergreen platform's evolution and positive secondary market sentiment are promising. The Q&A revealed no major risks or concerns, and AI risks are not significant. Given the company's market cap, these factors suggest a positive stock price movement over the next two weeks.
Key Financial Performance
Total Asset Footprint Over $1 trillion, representing a 6% increase year-over-year. The growth was attributed to market value growth of the portfolio and the addition of technology solutions and back-office mandates.
Assets Under Management (AUM) $146 billion, an increase of $11 billion or 8% year-over-year. Growth was driven by specialized funds and customized separate accounts.
Assets Under Advisement (AUA) $871 billion, an increase of $50 billion or 6% year-over-year. This was primarily due to market value growth and the addition of technology solutions and back-office mandates.
Total Management and Advisory Fees Up 11% year-over-year. Growth was driven by increased fee-related performance revenues and management fees.
Total Fee-Related Revenue $507 million, representing a 31% growth year-over-year. This was driven by fee-related performance revenues and management fees.
Fee-Related Earnings (FRE) $254.6 million year-to-date, representing a 37% growth year-over-year. FRE margin increased to 50% from 48% in the prior year period, benefiting from strong fee-related performance revenues.
GAAP EPS $4.35 based on $183 million of GAAP net income.
Non-GAAP EPS $4.41 based on $240.1 million of adjusted net income.
Dividend Declared at $0.54 per share this quarter, a 10% increase over the last fiscal year, equating to a targeted $2.16 per share for fiscal year 2026.
Fee-Earning AUM $79.1 billion, an increase of $8.1 billion or 11% year-over-year. Growth was driven by specialized fund platforms, particularly semi-liquid evergreen products.
Specialized Funds Fee-Earning AUM $38.1 billion, an increase of $6.9 billion or 22% year-over-year. Growth was driven by the Evergreen platform and net asset value appreciation.
Customized Separate Accounts Fee-Earning AUM $41.1 billion, an increase of $1.3 billion or 3% year-over-year. Growth was supported by new client wins, re-ups, and investment activity.
Evergreen Platform AUM Over $16 billion, representing over 70% year-over-year growth. Growth was driven by expanded product offerings, robust fundraising, and solid investment performance.
International Credit Evergreen Fund AUM Surpassed $2 billion, with a since inception net annualized return of over 9.5%. Positive monthly performance was recorded throughout calendar year 2025.
Unrealized Carry Balance Approximately $1.5 billion, up 15% year-over-year, even after recognizing $77 million of incentive fees in the last 12 months.
Total Expenses Increased by $40 million or 14% year-over-year. Compensation and benefits increased by $29 million or 15%, driven by operating performance, headcount, and equity-based compensation.
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Operating Highlights
New Product Lines: Expanded and deeper client relationships with new product lines gaining traction and growing. Recent launches include the seventh secondary product, second venture access product, and new Evergreen offerings in infrastructure and secondaries.
Innovative Technology Investment: Investment in Pluto Financial Technologies to enhance liquidity tools for private market investors using AI-driven technology.
Global Reach and Diversification: Larger, more global reach with expanded client relationships and diversified platform.
Strategic Partnership with Guardian: Partnership closed, overseeing $5 billion of Guardian's private equity portfolio with additional annual commitments of $500 million for 10 years. Includes $250 million investment into Evergreen platform.
Fee-earning AUM Growth: Total fee-earning AUM grew 11% year-over-year to $79.1 billion, driven by specialized fund platform and Evergreen products.
Revenue Growth: Total fee-related revenue increased 31% year-over-year to $507 million. Fee-related earnings grew 37% to $254.6 million.
Evergreen Platform Expansion: Evergreen AUM reached over $16 billion, representing 70% year-over-year growth, driven by expanded offerings and strong performance.
Shift in Fee-Earning AUM Mix: Blended fee rate increased to 67 basis points, driven by a shift towards higher fee rate specialized funds, particularly Evergreen products.
Reshaping Credit Strategy: Transitioning from Strategic Opportunities fund to segmented closed-end credit funds to align with market trends and client preferences.
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Risk or Challenges
Market Conditions: The company acknowledges changing markets and industry evolution as challenges that require navigation to maintain growth and momentum.
Regulatory Hurdles: Forward-looking statements are subject to risks and uncertainties, including regulatory risks, as highlighted in the cautionary statements and risk factors in the fiscal 2025 10-K.
Strategic Execution Risks: The company faces timing variability in customized separate accounts, which can introduce delays in asset and revenue realization. Additionally, the reshaping of the credit franchise to align with market segmentation introduces execution risks.
Economic Uncertainties: Volatility in the private credit market is noted, which could impact the company's credit Evergreen fund and related strategies.
Competitive Pressures: The company acknowledges that it is not the largest player in secondary and venture spaces, indicating room for growth but also competitive challenges.
Supply Chain Disruptions: No explicit mention of supply chain disruptions in the transcript.
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Guidance & Outlook
Guardian Partnership: The partnership with Guardian has officially closed. Hamilton Lane will oversee nearly $5 billion of Guardian's existing private equity portfolio, with additional annual commitments of approximately $500 million for at least 10 years. This includes $250 million of capital invested into Hamilton Lane's Evergreen platform. Initial economic impacts will be recognized in fiscal Q4 2026.
Fee-Earning AUM Growth: Total fee-earning AUM grew 11% year-over-year to $79.1 billion, driven by specialized fund platforms and Evergreen products. The blended fee rate stands at 67 basis points, benefiting from a shift towards higher fee rate specialized funds.
Specialized Funds: Fee-earning AUM for specialized funds grew 22% year-over-year to $38.1 billion. Growth was driven by Evergreen platform net new flows and net asset value appreciation. First closes for the new secondary fund and second Venture Access fund are expected in Q2 2026.
Infrastructure Fund: The second infrastructure fund closed with nearly $2 billion in capital, tripling the size of the inaugural fund. Over 40% of the fund is already committed as of December 31, 2025.
Evergreen Platform: Evergreen platform AUM reached over $16 billion, representing 70% year-over-year growth. The U.S. registered counterpart for the international credit Evergreen fund is expected to launch in the coming months. Newer Evergreen offerings, including infrastructure and secondaries, are approaching $1 billion AUM each.
Customized Separate Accounts: Fee-earning AUM for customized separate accounts grew 3% year-over-year to $41.1 billion. The pipeline of live opportunities remains sizable and in the multibillion-dollar range.
Credit Strategy: The company is reshaping its credit strategy to align with market segmentation. New closed-end credit funds will be launched, sitting alongside credit Evergreen funds, with fees charged on a net invested basis.
Pluto Financial Technologies Investment: Hamilton Lane invested in Pluto Financial Technologies to enhance liquidity solutions for private market investors. This aligns with the firm's strategy to broaden access to private markets and improve the investor experience.
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Shareholder Return Plan
Dividend per share: $0.54 per share for this quarter
Annual dividend target: $2.16 per share for fiscal year 2026
Dividend growth: 10% increase over last fiscal year
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Key Q&A
Q:Can you talk about the product road map for wealth in calendar 2026 and expectations for new product launches?
A:Erik Hirsch stated that while 2025 saw a significant number of new product launches, 2026 will not see nearly the same volume. The focus will be on scaling existing products rather than introducing a large number of new ones.
Q:What is Hamilton Lane's software exposure and how does it compare to peers given potential AI risks?
A:Erik Hirsch explained that Hamilton Lane's portfolios are highly diversified across sectors, geographies, and sizes, with no significant concentration in software. As a result, AI risks are not a concern for the company or its customers.
Q:How are exit pathways evolving across the platform and the broader industry? What could accelerate distributions?
A:Erik Hirsch noted that distribution activity is picking up due to buyers and sellers reaching equilibrium on pricing. He expects 2026 to be a stronger exit environment than 2025, driven by asset maturity and readiness for profit realization.
Q:What opportunities are opening up as the Evergreen platform evolves into a multi-asset, multi-strategy platform?
A:Erik Hirsch described the evolution in three waves: introduction of products, education on their benefits, and structuring/partnerships for broader use. The company is now entering the third wave, exploring opportunities like model portfolios and partnerships.
Q:What is the dispersion in redemption requests between institutional and retail clients within the Evergreen Suite?
A:Erik Hirsch clarified that institutional clients are not using the liquidity provision as a primary feature. Instead, they value ease of use, tactical portfolio management, and reentry into private markets. Redemption rates are not higher for institutional clients.
Q:What trends are being observed in the wealth channel, particularly regarding private credit and model portfolios?
A:Erik Hirsch stated that Hamilton Lane is not seeing hesitation in the wealth channel. While model portfolios are a topic of discussion, there is no significant shift yet. The company is prepared to meet diverse customer preferences, whether for model portfolios or tailored solutions.
Q:What are the expectations for Fund VII in the secondary market, and how is investor sentiment?
A:Erik Hirsch highlighted that the secondary market is undercapitalized with significant growth potential. While Hamilton Lane is not among the largest players, it aims to grow and move upmarket. Investor sentiment and feedback are encouraging.
Q:How could AI disruption impact the software landscape, and which areas might be more insulated?
A:Erik Hirsch emphasized the need for granular analysis rather than broad assumptions. While some software companies may struggle due to AI, others continue to grow. He also suggested potential M&A activity between traditional and AI-driven tech companies.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the size of Fund VII in the secondary market, instead focusing on general growth aspirations and market dynamics.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUM month
AUM period
Evergreen offering
Guardian
Pluto
Venture Access
ability
access
allocation
arrangement
asset value
basis carry
calendar inflow
client relationship
combination
commitment close
context
credit market
credit product
detail
end Evergreen
end credit
equity fund
evergreen fund
experience
fee capital
fund Evergreen
inception
individual
industry
investor commitment
liquidity
mix account
need
opportunity franchise
pace
point mix
program
reminder fund
size
strategy
suite
sum
track
trajectory
update
venture
HLNE Transcript
Hamilton Lane Incorporated (HLNE) Q3 2026 Earnings Call Transcript
Positive2-3
The earnings call presented strong financial performance, with significant growth in Fee-Earning AUM and a 10% dividend increase. The Guardian Life partnership and Bloomberg collaboration enhance future prospects. While 2026 will focus on scaling existing products, the Evergreen platform's evolution and positive secondary market sentiment are promising. The Q&A revealed no major risks or concerns, and AI risks are not significant. Given the company's market cap, these factors suggest a positive stock price movement over the next two weeks.
Hamilton Lane Incorporated (HLNE) Q2 2026 Earnings Call Transcript
Positive11-4
The company reported strong financial performance with 23% growth in fee-related revenue and a 34% increase in fee-related earnings. The Evergreen AUM nearly doubled, and the dividend was increased by 10%. The Q&A section did not reveal significant concerns, and the Guardian and Bloomberg partnerships are expected to contribute positively. Given the market cap of approximately $4.9 billion, these factors suggest a positive stock price movement of 2% to 8% over the next two weeks.
Hamilton Lane Incorporated (HLNE) Q1 2026 Earnings Call Transcript
Unknown9-22
The earnings call presents a mixed picture: strong AUM growth, a dividend increase, and a stable FRE margin outlook are positive, but declining management fees and specialized funds revenue raise concerns. The Q&A section lacks clarity, adding uncertainty. Overall, the positive and negative factors balance out, leading to a neutral sentiment. Given the market cap of approximately $4.9 billion, the stock is likely to experience minimal movement, falling in the neutral range of -2% to 2%.
Hamilton Lane Incorporated (HLNE) Q2 2025 Earnings Call Transcript
Positive8-5
The earnings call highlights strong growth in fee-related earnings, AUM, and dividend increases, which are positive indicators. Despite some revenue declines due to retro fees, the company shows robust performance in specialized funds and evergreen platforms. The Q&A reveals confidence in strategic partnerships and potential growth in incentive fees with a favorable macro environment. The market cap suggests moderate sensitivity to these factors, leading to a positive stock price prediction.
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