Hamilton Lane Incorporated (HLNE) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Total Asset Footprint At quarter end, the total asset footprint stood at just over $1 trillion, representing a 6% increase year-over-year. This growth was attributed to the first-time crossing of the $1 trillion mark, despite quarter-to-quarter swings due to AUA.
Assets Under Management (AUM) AUM stood at $145 billion, growing $14 billion or 11% compared to the prior year period. The growth was driven by specialized funds and customized separate accounts.
Assets Under Advisement (AUA) AUA came in at $860 billion, growing $44 billion or 5% year-over-year. This growth was primarily due to market value growth and the addition of technology solutions and back-office mandates.
Total Management and Advisory Fees Total management and advisory fees for the year-to-date period were up 6% year-over-year. This includes the impact of $20.7 million of retro fees in the prior year period versus $800,000 in the current year period.
Total Fee-Related Revenue Total fee-related revenue for the period was $321.6 million, representing 23% growth year-over-year. This growth was largely driven by fee-related performance revenue.
Fee-Related Earnings (FRE) Fee-related earnings were $160.7 million year-to-date, representing 34% growth year-over-year. The FRE margin for the quarter was 50%, up from 46% in the prior year period, benefiting from strong fee-related performance revenues.
GAAP EPS GAAP EPS was $2.98, based on $124.6 million of GAAP net income.
Non-GAAP EPS Non-GAAP EPS was $2.86, based on $155.7 million of adjusted net income.
Dividend A dividend of $0.54 per share was declared this quarter, maintaining a 10% increase over the last fiscal year, equating to a targeted $2.16 per share for fiscal year 2026.
Fee-Earning AUM Total fee-earning AUM stood at $76.4 billion, growing $6.7 billion or 10% year-over-year. Growth was largely driven by specialized fund platforms, particularly semi-liquid Evergreen products.
Customized Separate Account Fee-Earning AUM Customized separate account fee-earning AUM was $40.8 billion, growing $1.4 billion or 4% year-over-year. Growth stemmed from new client wins, re-ups from existing clients, and contributions for investment activity.
Specialized Funds Fee-Earning AUM Specialized funds fee-earning AUM ended fiscal Q2 at $35.6 billion, growing $5.3 billion or 17% year-over-year. Growth was driven by Evergreen platform inflows, net asset value growth, and closed-end fund activity.
Evergreen AUM Evergreen AUM reached $14.3 billion, nearly doubling over 18 months. Growth was driven by expanded product offerings, robust fundraising, and strong performance.
Unrealized Carry Balance The unrealized carry balance was up 14% year-over-year, now standing at approximately $1.4 billion, even after recognizing $102 million of incentive fees in the last 12 months.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Evergreen Products: Expanded product offerings, including the launch of additional Evergreen products. Total Evergreen AUM reached $14.3 billion, nearly doubling in 18 months. New products like Global Secondaries, Global Venture, and Asia funds contributed to $1.6 billion in net inflows this quarter.
Specialized Funds: Fee-earning AUM grew by 17% to $35.6 billion, driven by Evergreen platform and closed-end fundraises. New funds like the second infrastructure fund and flagship secondaries fund are scaling effectively.
Technology Solutions: Partnership with Bloomberg to provide private market indices and benchmarks via Bloomberg Terminal. Securitize partnership deepened with expected 2x return on investment. Novata acquisition of Atlas Metrics expands sustainability data solutions.
Strategic Partnership with Guardian Life: Hamilton Lane will manage Guardian's $5 billion private equity portfolio and an additional $500 million annual commitment for 10 years. This partnership includes equity warrants and financial incentives for Hamilton Lane.
Insurance Solutions Platform: Scaled to over $119 billion, with a dedicated team formed in 2024 to serve insurers. Guardian partnership is a key milestone in this strategy.
Fee-earning AUM: Total fee-earning AUM grew by 10% year-over-year to $76.4 billion, driven by specialized funds and Evergreen products. Blended fee rate increased to 65 basis points.
Revenue Growth: Total fee-related revenue grew by 23% year-over-year to $321.6 million. Fee-related earnings increased by 34% to $160.7 million.
Expense Management: G&A expenses increased due to revenue-related costs, but cost savings in other areas maintained financial discipline.
Focus on Long-term Growth: Decisions are aimed at sustainable growth, including scaling new products and expanding partnerships.
Private Credit Market Insights: Data shows strong credit fundamentals with low default rates (~1%) and prudent leverage levels. Private credit continues to outperform public indices.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Conditions: Concerns about a broader credit crisis in the industry were addressed, but the company stated that they see no data to support this notion. However, the narrative of a potential credit crisis could create uncertainty in the market.
Regulatory Hurdles: No explicit mention of regulatory challenges, but the company operates in a highly regulated financial environment, which inherently carries compliance risks.
Economic Uncertainties: The company highlighted strong credit fundamentals and low default rates, but broader economic uncertainties could still pose risks to their operations and investments.
Strategic Execution Risks: The company is expanding its product offerings and entering new partnerships, such as with Guardian Life Insurance. While these initiatives are growth-oriented, they carry execution risks, including integration challenges and achieving expected financial outcomes.
Supply Chain Disruptions: Not applicable to the company's operations as it is a financial services firm.
Competitive Pressures: The company is facing competitive pressures in the private equity and asset management space, as evidenced by their focus on expanding product offerings and partnerships to maintain market position.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Guardian Life Partnership: Hamilton Lane will manage Guardian's private equity portfolio of nearly $5 billion and receive approximately $500 million per year for the next 10 years. This includes $250 million in seed capital for expanding the Evergreen platform. The partnership also involves equity warrants and financial incentives for Guardian.
Fee-Earning AUM Growth: Fee-earning AUM grew 10% year-over-year to $76.4 billion, with strong momentum in semi-liquid Evergreen products. The blended fee rate increased to 65 basis points, up 14% since 2017.
Evergreen Platform Expansion: Evergreen AUM reached $14.3 billion, with $1.6 billion in net inflows during the quarter. Over $1 billion of Evergreen AUM is not yet earning management fees but is expected to transition in the next 12-18 months.
Specialized Funds and Secondaries: The company is raising its next flagship secondaries fund, with a first close expected in the first half of 2026. The current vintage secondaries fund has a net IRR of 44.1%.
Infrastructure Fundraising: The second infrastructure fund has raised over $1.1 billion, nearly doubling the size of the first fund. Fundraising is expected to conclude in the coming months, with a new fund launch anticipated in late 2026 or early 2027.
Bloomberg Partnership: Hamilton Lane's private market indices and benchmarks are now available on Bloomberg Terminal, enhancing brand visibility and access to a broader audience.
Securitize Public Listing: Securitize, a partner in tokenizing financial assets, is expected to go public in the first half of 2026. Hamilton Lane anticipates a 2x return on its initial investment.
Novata Acquisition: Novata acquired Atlas Metrics to expand sustainability data solutions. Hamilton Lane invested additional capital to support this acquisition and future growth.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Dividend per share: $0.54 per share declared this quarter
Annual dividend target: $2.16 per share for fiscal year 2026, representing a 10% increase over last fiscal year
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What are the fees likely to hit P&L from the Guardian announcement?
A:The vast majority of revenue will come from the $5 billion being allocated over the next 10 years. The existing $5 billion is a monitoring assignment. The $250 million will go into Evergreen, and the SMA portion will be a mix of primary funds and specialized funds at prevailing fee rates.
Q:What is the scope for monetizing data sets and indices through the Bloomberg partnership?
A:The Bloomberg arrangement is a revenue share model that will grow as the installed base and usage grow. The focus is on data as an education tool, brand enhancer, and for better investment decisions. Investable indices are not a focus due to lack of traction and challenges in replicating private market portfolios.
Q:How is the pipeline for the SMA business developing, and what is the sales force allocation?
A:The pipeline is robust, with billions of dollars in the contracting phase. The sales team is organized by geographic territories rather than SMAs. Specialized funds are meeting customer needs better, leading to strong growth and superior fee models.
Q:Are the Guardian warrants front-end loaded, and are they tied to the revenue share?
A:The warrants are front-end loaded with additional warrants provided over time. The revenue share is not tied to the warrants; they are separate.
Q:What factors impacted the core fee rate on specialized funds, and how will it evolve?
A:The fee rate increased due to a heavier mix of specialized funds, particularly Evergreen, which has a higher fee rate. Strong flows in specialized funds will continue to lift the overall fee rate over time.
Q:How are sales incentives or fee holidays being considered for evergreen funds?
A:Sales incentives are used for new products with short performance histories to attract initial adopters, typically for 6-12 months. There is no need to extend these incentives for established funds or longer periods.
Q:What is the potential expense impact from Guardian team members joining Hamilton Lane, and how will the deal scale over time?
A:The expense impact is minimal as the Guardian team members will fill existing open positions. The deal's economics will scale over time, with initial higher impact due to capital going into Evergreen products and continued stacking of the $500 million per year.
Q:Review of Unclear Management Responses
A:No questions were identified where management avoided giving a direct answer or lacked clarity in their responses.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Global
Guardian equity
Novata
Private Market
SP
ability product
access
acquisition
arrangement
bankruptcy
benchmark
capital basis
combination
corporates
credit crisis
default rate
effort
entity
equity market
equity portfolio
fee date
fee holiday
focus
fund capital
fund month
goal
index
industry
insurance solution
insurer
launch fund
level
loss
scale
set
suite
sustainability
track
transparency
update
vision
HLNE Transcript
Hamilton Lane Incorporated (HLNE) Q4 2026 Earnings Call Transcript
Neutral5-21
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%.
HLNE Slides
HLNE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
