UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December 31, 2021~~June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________ to ___________________________

Commission file number 001-38021

HAMILTON LANE INCORPORATED

(Exact name of Registrant as specified in its charter)

Delaware

26-2482738

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

110 Washington Street,

Suite 1300

Conshohocken,

19428

(Address of principal executive offices)

(Zip Code)

(610) 934-2222

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.001 par value per share

HLNE

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of ~~January 28,~~July 29, 2022, there were ~~37,194,344~~37,295,472 shares of the registrant’s Class A common stock, par value $0.001, and ~~16,033,359~~15,953,682 shares of the registrant’s Class B common stock, par value $0.001, outstanding.

Table of Contents


			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			3
Condensed Consolidated Balance Sheets as of ~~December 31, 2021~~June 30, 2 022 and March 31, 20212			3
Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~December 31, 2021~~June 3 0 , 202 2 and 202021			4
~~Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2021 and 20~~20			5
Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30 , 202 2 and 202021			65
Condensed Consolidated Statements of Cash Flows for the ~~nine~~ three months ended ~~December 31, 2021~~June 30, 2022 and 202021			86
Notes to Condensed Consolidated Financial Statements			108
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2621
Item 3. Quantitative and Qualitative Disclosures about Market Risk			4739
Item 4. Controls and Procedures			4940
PART II - OTHER INFORMATION
Item 1. Legal Proceedings			5042
Item 1A. Risk Factors			5042
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5042
Item 6. Exhibits			5143
Signatures			5244

This Quarterly Report on Form 10-Q (“Form 10-Q”) includes certain information regarding the historical performance of our specialized funds and customized separate accounts. An investment in shares of our Class A common stock is not an investment in our specialized funds or customized separate accounts. In considering the performance information relating to our specialized funds and customized separate accounts contained herein, current and prospective Class A common stockholders should bear in mind that the performance of our specialized funds and customized separate accounts is not indicative of the possible performance of shares of our Class A common stock and is also not necessarily indicative of the future results of our specialized funds or customized separate accounts, even if fund investments were in fact liquidated on the dates indicated, and there can be no assurance that our specialized funds or customized separate accounts will continue to achieve, or that future specialized funds and customized separate accounts will achieve, comparable results.

We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are owned by us or licensed by us. We also own or have the rights to copyrights that protect the content of our solutions. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Form 10-Q are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, trade names and copyrights.

This Form 10-Q may include trademarks, service marks or trade names of other companies. Our use or display of other parties’ trademarks, service marks, trade names or products is not intended to, and does not imply a relationship with, or endorsement or sponsorship of us by, the trademark, service mark or trade name owners.

Unless otherwise indicated, information contained in this Form 10-Q concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and

management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets that we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have not independently verified any third-party information.

Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” the “Company,” “Hamilton Lane” and similar terms refer to Hamilton Lane Incorporated and its consolidated subsidiaries. As used in this Form 10-Q, (i) the term “HLA” refers to Hamilton Lane Advisors, L.L.C. and (ii) the terms “Hamilton Lane Incorporated” and “HLI” refer solely to Hamilton Lane Incorporated, a Delaware corporation, and not to any of its subsidiaries.

Cautionary Note Regarding Forward-Looking Information

Some of the statements in this Form 10-Q may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Words such as ~~“will,” “expect,” “believe,” “estimate,” “continue,” “anticipate,” “intend,”~~“will”, “expect”, “believe”, “estimate”, “continue”, “anticipate”, “intend”, “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements discuss management’s current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. All forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different, including risks relating to: our ability to manage growth, fund performance, competition in our industry, changes in our regulatory environment and tax status; market conditions generally; our ability to access suitable investment opportunities for our clients; our ability to maintain our fee structure; our ability to attract and retain key employees; our ability to manage our obligations under our debt agreements; defaults by clients and third-party investors on their obligations to fund commitments; our ability to comply with investment guidelines set by our clients; our ability to successfully integrate acquired businesses with ours; our ability to manage risks associated with pursuing new lines of business or entering into strategic partnerships; our ability to anticipate, identify and manage risks we face; our ability to manage the effects of events outside of our control; and our ability to receive distributions from HLA to fund our payment of dividends, taxes and other expenses.

The foregoing list of factors is not exhaustive. For more information regarding these risks and uncertainties as well as additional risks that we face, you should refer to the “Risk Factors” detailed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021, as amended~~2022 (our ~~“2021~~“2022 Form 10-K”), and in our subsequent reports filed from time to time with the Securities and Exchange Commission (the “SEC”). The forward-looking statements included in this Form 10-Q are made only as of the date we filed this report. We undertake no obligation to update or revise any forward-looking statement as a result of new information or future events, except as otherwise required by law.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Hamilton Lane Incorporated

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share amounts)


		December 31,		March 31,			June 30,		March 31,
		2021		2021			2022		2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	78,838	$	87,025	Cash and cash equivalents	$	83,052	$	72,138
Restricted cash	Restricted cash	3,315		3,041		Restricted cash	3,996		4,023
Fees receivable	Fees receivable	47,085		29,202		Fees receivable	44,982		51,869
Prepaid expenses	Prepaid expenses	5,912		6,143		Prepaid expenses	6,575		6,858
Due from related parties	Due from related parties	2,016		2,495		Due from related parties	3,780		1,872
Furniture, fixtures and equipment, net	Furniture, fixtures and equipment, net	29,229		23,308		Furniture, fixtures and equipment, net	29,410		28,842
Lease right-of-use assets, net	Lease right-of-use assets, net	67,023		64,384		Lease right-of-use assets, net	64,270		65,636
Investments	Investments	483,320		368,836		Investments	533,263		503,789
Deferred income taxes	Deferred income taxes	249,004		251,949		Deferred income taxes	246,089		245,046
Other assets	Other assets	28,553		17,821		Other assets	26,409		28,162
Assets of consolidated variable interest entities:	Assets of consolidated variable interest entities:					Assets of consolidated variable interest entities:
Cash and cash equivalents	Cash and cash equivalents	187		311		Cash and cash equivalents	144		36
Investments held in trust	Investments held in trust	276,009		276,003		Investments held in trust	276,083		276,016
Investments	Investments	8,294		4,787		Investments	33,776		10,036
Other assets	Other assets	668		1,214		Other assets	475		623
Total assets	Total assets	$	1,279,453	$	1,136,519	Total assets	$	1,352,304	$	1,294,946
Liabilities, redeemable non-controlling interests and equity	Liabilities, redeemable non-controlling interests and equity					Liabilities, redeemable non-controlling interests and equity
Accounts payable	Accounts payable	$	2,190	$	2,173	Accounts payable	$	3,570	$	2,827
Accrued compensation and benefits	Accrued compensation and benefits	48,282		29,415		Accrued compensation and benefits	36,924		20,117
Accrued members’ distributions	Accrued members’ distributions	11,769		16,877		Accrued members’ distributions	10,754		27,119
Accrued dividend	Accrued dividend	12,916		11,201		Accrued dividend	14,800		12,947
Debt	Debt	146,767		163,175		Debt	220,885		171,326
Payable to related parties pursuant to tax receivable agreement	Payable to related parties pursuant to tax receivable agreement	187,252		194,764		Payable to related parties pursuant to tax receivable agreement	180,536		180,536
Lease liabilities	Lease liabilities	83,720		75,281		Lease liabilities	80,433		82,244
Other liabilities (includes $16,477 and $17,381 at fair value)		31,560		36,122
Other liabilities (includes $12,931 and $13,818 at fair value)						Other liabilities (includes $12,931 and $13,818 at fair value)	26,786		47,669
Liabilities of consolidated variable interest entities:	Liabilities of consolidated variable interest entities:					Liabilities of consolidated variable interest entities:
Other liabilities	Other liabilities	16,122		17,310		Other liabilities	10,642		12,675
Total liabilities	Total liabilities	540,578		546,318		Total liabilities	585,330		557,460

Commitments and contingencies (Note 16)	Commitments and contingencies (Note 16)	0		0		Commitments and contingencies (Note 16)	0		0

Redeemable non-controlling interests	Redeemable non-controlling interests	276,000		276,000		Redeemable non-controlling interests	276,000		276,000

Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	—		—		Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	—		—
Class A common stock, $0.001 par value, 300,000,000 authorized; 37,194,344 and 36,290,183 issued and outstanding as of December 31, 2021 and March 31, 2021, respectively		37		36
Class B common stock, $0.001 par value, 50,000,000 authorized; 16,033,359 and 16,739,846 issued and outstanding as of December 31, 2021 and March 31, 2021, respectively		16		17
Class A common stock, $0.001 par value, 300,000,000 authorized; 37,295,472 and 37,280,697 issued and outstanding as of June 30, 2022 and March 31, 2022, respectively						Class A common stock, $0.001 par value, 300,000,000 authorized; 37,295,472 and 37,280,697 issued and outstanding as of June 30, 2022 and March 31, 2022, respectively	37		37
Class B common stock, $0.001 par value, 50,000,000 authorized; 15,953,682 and 16,033,359 issued and outstanding as of June 30, 2022 and March 31, 2022, respectively						Class B common stock, $0.001 par value, 50,000,000 authorized; 15,953,682 and 16,033,359 issued and outstanding as of June 30, 2022 and March 31, 2022, respectively	16		16
Additional paid-in-capital	Additional paid-in-capital	162,067		150,564		Additional paid-in-capital	163,129		161,676
Retained earnings	Retained earnings	181,637		87,512		Retained earnings	205,325		185,149
Total Hamilton Lane Incorporated stockholders’ equity	Total Hamilton Lane Incorporated stockholders’ equity	343,757		238,129		Total Hamilton Lane Incorporated stockholders’ equity	368,507		346,878
Non-controlling interests in general partnerships	Non-controlling interests in general partnerships	2,941		2,211		Non-controlling interests in general partnerships	3,632		3,423
Non-controlling interests in Hamilton Lane Advisors, L.L.C.	Non-controlling interests in Hamilton Lane Advisors, L.L.C.	116,177		73,861		Non-controlling interests in Hamilton Lane Advisors, L.L.C.	118,835		111,185
Total equity	Total equity	462,875		314,201		Total equity	490,974		461,486
Total liabilities, redeemable non-controlling interests and equity	Total liabilities, redeemable non-controlling interests and equity	$	1,279,453	$	1,136,519	Total liabilities, redeemable non-controlling interests and equity	$	1,352,304	$	1,294,946

See accompanying notes to the condensed consolidated financial statements.

Hamilton Lane Incorporated

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended
December 31, Nine Months Ended December 31,
2021 2020 2021 2020
Revenues
Management and advisory fees $ 79,836 $ 75,279 $ 229,653 $ 208,913
Incentive fees 10,490 8,680 34,217 12,512
Consolidated variable interest entities related:
Incentive fees 1,378 624 3,149 17,333
Total revenues 91,704 84,583 267,019 238,758
Expenses
Compensation and benefits 34,004 28,536 94,028 93,914
General, administrative and other 16,332 13,328 48,742 34,978
Consolidated variable interest entities related:
General, administrative and other 322 — 952 —
Total expenses 50,658 41,864 143,722 128,892
Other income (expense)
Equity in income of investees 12,924 12,138 60,181 10,938
Interest expense (1,157) (468) (3,488) (1,448)
Interest income 26 658 488 775
Non-operating income 37,043 6,229 65,500 6,830
Consolidated variable interest entities related:
Equity in (loss) income of investees (298) (215) 170 (2,239)
Unrealized income 2,135 — 1,067 —
Interest expense (4) — (4) —
Total other income (expense) 50,669 18,342 123,914 14,856
Income before income taxes 91,715 61,061 247,211 124,722
Income tax expense 11,519 6,429 37,515 20,522
Net income 80,196 54,632 209,696 104,200
Less: (Loss) income attributable to non-controlling interests in general partnerships (119) (68) 167 (346)
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. 26,181 21,497 76,849 46,283
Less: Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc. 2,285 — 519 —
Net income attributable to Hamilton Lane Incorporated $ 51,849 $ 33,203 $ 132,161 $ 58,263
Basic earnings per share of Class A common stock $ 1.44 $ 0.96 $ 3.64 $ 1.79
Diluted earnings per share of Class A common stock $ 1.40 $ 0.96 $ 3.59 $ 1.78
Dividends declared per share of Class A common stock $ 0.35 $ 0.313 $ 1.05 $ 0.938


	Three Months Ended June 30,
	2022		2021
Revenues
Management and advisory fees	$	85,946	$	73,884
Incentive fees	49,524		2,364
Consolidated variable interest entities related:
Incentive fees	39		2,747
Total revenues	135,509		78,995
Expenses
Compensation and benefits	52,194		26,732
General, administrative and other	20,513		16,154
Consolidated variable interest entities related:
General, administrative and other	277		359
Total expenses	72,984		43,245
Other income (expense)
Equity in (loss) income of investees	(625)		20,049
Interest expense	(1,495)		(1,165)
Interest income	168		423
Non-operating income	4,343		3,603
Consolidated variable interest entities related:
Equity in income of investees	732		229
Unrealized income (loss)	1,966		(2,244)

Total other income (expense)	5,089		20,895
Income before income taxes	67,614		56,645
Income tax expense	11,488		11,964
Net income	56,126		44,681
Less: Income attributable to non-controlling interests in general partnerships	308		213
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	20,168		19,296
Less: Income (loss) attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	2,166		(2,996)
Net income attributable to Hamilton Lane Incorporated	$	33,484	$	28,168

Basic earnings per share of Class A common stock	$	0.92	$	0.78
Diluted earnings per share of Class A common stock	$	0.91	$	0.78
Dividends declared per share of Class A common stock	$	0.40	$	0.35

See accompanying notes to the condensed consolidated financial statements.

Hamilton Lane Incorporated

Condensed Consolidated Statements of ~~Comprehensive Income~~

~~(Unaudited)~~

~~(In thousands)~~

Three Months Ended
December 31, Nine Months Ended December 31,
2021 2020 2021 2020
Net income $ 80,196 $ 54,632 $ 209,696 $ 104,200
Other comprehensive income, net of tax
Foreign currency translation — — — 130
Total other comprehensive income, net of tax — — — 130
Comprehensive income 80,196 54,632 209,696 104,330
Less:
Comprehensive (loss) income attributable to non-controlling interests in general partnerships (119) (68) 167 (346)
Comprehensive income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. 26,181 21,497 76,849 46,335
Comprehensive income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc. 2,285 — 519 —
Total comprehensive income attributable to Hamilton Lane Incorporated $ 51,849 $ 33,203 $ 132,161 $ 58,341

~~See accompanying notes to the condensed consolidated financial statements.~~


			5

~~Hamilton Lane Incorporated~~

~~Condensed Consolidated Statements of~~ Stockholders’ Equity

(Unaudited)

(In thousands)


		Class A Common Stock				Class B Common Stock		Additional Paid in Capital				Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.				Total Equity				Class A Common Stock				Class B Common Stock				Additional Paid in Capital				Retained Earnings		Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.		Total Equity

Balance at March 31, 2021				$	36					$	17					$	150,564					$	87,512			$	—			$	2,211			$	73,861			$	314,201
Balance at March 31, 2022																										Balance at March 31, 2022		$	37			$	16			$	161,676			$	185,149	$	3,423	$	111,185	$	461,486
Net income	Net income	—				—		—				132,161		—				167		76,849				209,177		Net income		—				—				—				33,484		308		20,168		53,960

Equity-based compensation	Equity-based compensation	—				—		3,870				—		—				—		1,836				5,706		Equity-based compensation		—				—				1,307				—		—		590		1,897

Repurchase of Class A shares for employee tax withholding		—				—		(220)				—		—				—		(385)				(605)
Deferred tax adjustment		—				—		2,722				—		—				—		—				2,722

Dividends declared	Dividends declared	—				—		—				(38,429)		—				—		—				(38,429)		Dividends declared		—				—				—				(14,800)		—		—		(14,800)
Capital contributions from non-controlling interests, net		—				—		—				—		—				563		—				563
Capital distributions to non-controlling interests, net																										Capital distributions to non-controlling interests, net		—				—				—				—		(99)		—		(99)
Member distributions	Member distributions	—				—		—				—		—				—		(32,361)				(32,361)		Member distributions		—				—				—				—		—		(14,121)		(14,121)
Secondary Offerings		1				(1)		4,097				—		—				—		(4,098)				(1)

Employee Share Purchase Plan share issuance	Employee Share Purchase Plan share issuance	—				—		936				—		—				—		446				1,382		Employee Share Purchase Plan share issuance		—				—				334				—		—		151		485
Adjustment of redeemable non-controlling interest to redemption value	Adjustment of redeemable non-controlling interest to redemption value	—				—		—				393		—				—		127				520		Adjustment of redeemable non-controlling interest to redemption value		—				—				—				1,492		—		674		2,166
Equity reallocation between controlling and non-controlling interests	Equity reallocation between controlling and non-controlling interests	—				—		98				—		—				—		(98)				—		Equity reallocation between controlling and non-controlling interests		—				—				(188)				—		—		188		—
Balance at December 31, 2021		$	37			$	16	$	162,067			$	181,637	$	—			$	2,941	$	116,177			$	462,875
Balance at June 30, 2022																										Balance at June 30, 2022		$	37			$	16			$	163,129			$	205,325	$	3,632	$	118,835	$	490,974

Class A Common Stock Class B Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling
Interests in General Partnerships Non-Controlling
Interests in Hamilton Lane Advisors, L.L.C. Total Equity
Balance at March 31, 2020 $ 30 $ 22 $ 107,727 $ 47,090 $ (78) $ 4,853 $ 77,757 $ 237,401
Net income (loss) — — — 58,263 — (346) 46,283 104,200
Other comprehensive income — — — — 78 — 52 130
Equity-based compensation — — 3,251 — — — 2,079 5,330
Repurchase of Class A shares for employee tax withholding — — (22) — — — (14) (36)
Deferred tax adjustment — — 14,424 — — — — 14,424
Dividends declared — — — (31,650) — — — (31,650)
Capital distributions to non-controlling interests, net — — — — — (2,421) — (2,421)
Member distributions — — — — — — (28,599) (28,599)
Secondary offerings 5 (4) 15,933 — — — (15,938) (4)
Employee Share Purchase Plan share issuance — — 658 — — — 419 1,077
Equity reallocation between controlling and non-controlling interests — — 593 — — — (593) —
Balance at December 31, 2020 $ 35 $ 18 $ 142,564 $ 73,703 $ — $ 2,086 $ 81,446 $ 299,852


			6

~~Hamilton Lane Incorporated~~

~~Condensed Consolidated Statements of Stockholders’ Equity~~

~~(Unaudited)~~

~~(In thousands)~~

Class A Common Stock Class B Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-Controlling
Interests in General Partnerships Non-Controlling
Interests in Hamilton Lane Advisors, L.L.C. Total Equity
Balance at September 30, 2021 $ 37 $ 16 $ 161,000 $ 141,130 $ — $ 2,904 $ 99,165 $ 404,252
Net income — — — 51,849 — (119) 26,181 77,911
Other comprehensive income — — — — — — — —
Equity-based compensation — — 1,179 — — — 532 1,711
Deferred tax adjustment — — 2 — — — 2
Dividends declared — — — (12,916) — — — (12,916)
Capital contributions from non-controlling interests, net — — — — — 156 — 156
Member distributions — — — — — — (11,024) (11,024)
Employee Share Purchase Plan share issuance — — 340 — — — 158 498
Adjustment of redeemable non-controlling interest to redemption value — — — 1,574 — — 711 2,285
Equity reallocation between controlling and non-controlling interests — — (454) — — — 454 —
Balance at December 31, 2021 $ 37 $ 16 $ 162,067 $ 181,637 $ — $ 2,941 $ 116,177 $ 462,875


		Class A Common Stock				Class B Common Stock		Additional Paid in Capital				Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.				Total Equity				Class A Common Stock				Class B Common Stock				Additional Paid in Capital				Retained Earnings		Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.		Total Equity

Balance at September 30, 2020				$	35					$	18					$	141,010					$	51,275			$	—			$	3,506			$	67,351			$	263,195
Net income		—				—		—				33,203		—				(68)		21,497				54,632
Balance at March 31, 2021																										Balance at March 31, 2021		$	36			$	17			$	150,564			$	87,512	$	2,211	$	73,861	$	314,201

Net income (loss)																										Net income (loss)		—				—				—				28,168		213		19,296		47,677

Equity-based compensation	Equity-based compensation	—				—		1,136				—		—				—		623				1,759		Equity-based compensation		—				—				1,573				—		—		768		2,341
Repurchase of Class A shares for employee tax withholding																										Repurchase of Class A shares for employee tax withholding		—				—				(46)				—		—		(22)		(68)

Repurchase of Class A shares for employee tax withholding		—				—		(4)				—		—				—		—				(4)
Deferred tax adjustment		—				—		—				—		—				—		—				—
Dividends declared	Dividends declared	—				—		—				(10,775)		—				—		—				(10,775)		Dividends declared		—				—				—				(12,600)		—		—		(12,600)
Capital distributions to non-controlling interests, net		—				—		—				—		—				(1,352)		—				(1,352)
Capital contributions from non-controlling interests, net																										Capital contributions from non-controlling interests, net		—				—				—				—		137		—		137
Member distributions	Member distributions	—				—		—				—		—				—		(7,973)				(7,973)		Member distributions		—				—				—				—		—		(9,665)		(9,665)

Employee Share Purchase Plan share issuance	Employee Share Purchase Plan share issuance	—				—		239				—		—				—		131				370		Employee Share Purchase Plan share issuance		—				—				267				—		—		130		397
Equity reallocation between controlling and non-controlling interests	Equity reallocation between controlling and non-controlling interests	—				—		183				—		—				—		(183)				—		Equity reallocation between controlling and non-controlling interests		—				—				(2,013)				—		—		(983)		(2,996)
Balance at December 31, 2020		$	35			$	18	$	142,564			$	73,703	$	—			$	2,086	$	81,446			$	299,852
Balance at June 30, 2021																										Balance at June 30, 2021		$	36			$	17			$	150,345			$	103,080	$	2,561	$	83,385	$	339,424

See accompanying notes to the condensed consolidated financial statements.


			7

Hamilton Lane Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


		Nine Months Ended December 31,					Three Months Ended June 30,
		2021		2020			2022		2021
Operating activities:	Operating activities:					Operating activities:
Net income	Net income	$	209,696	$	104,200	Net income	$	56,126	$	44,681
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	3,744		2,982		Depreciation and amortization	1,764		1,378
Change in deferred income taxes	Change in deferred income taxes	19,941		13,382		Change in deferred income taxes	(1,043)		7,960
Change in payable to related parties pursuant to tax receivable agreement	Change in payable to related parties pursuant to tax receivable agreement	(6,202)		(73)		Change in payable to related parties pursuant to tax receivable agreement	—		(539)
Equity-based compensation	Equity-based compensation	5,706		5,310		Equity-based compensation	1,897		2,341
Equity in income of investees		(60,181)		(10,938)
Gain on sale of investment		(11,936)		(6,229)
Equity in loss (income) of investees						Equity in loss (income) of investees	625		(20,049)

Fair value adjustment of other investments	Fair value adjustment of other investments	(47,774)		—		Fair value adjustment of other investments	(4,344)		(3,455)
Proceeds received from investments	Proceeds received from investments	38,945		704		Proceeds received from investments	3,343		3,381
Non-cash lease expense	Non-cash lease expense	7,210		4,352		Non-cash lease expense	1,374		3,522
Other	Other	43		(105)		Other	14		(849)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Fees receivable	Fees receivable	(17,883)		3,760		Fees receivable	6,887		155
Prepaid expenses	Prepaid expenses	263		2,068		Prepaid expenses	283		177
Due from related parties	Due from related parties	479		(1,382)		Due from related parties	(1,908)		136
Other assets	Other assets	256		(1,291)		Other assets	1,128		(1,613)
Accounts payable	Accounts payable	17		101		Accounts payable	743		976
Accrued compensation and benefits	Accrued compensation and benefits	18,867		29,982		Accrued compensation and benefits	16,807		2,189
Lease liability	Lease liability	(1,410)		(1,466)		Lease liability	(1,819)		771
Other liabilities	Other liabilities	(6,457)		195		Other liabilities	(18,241)		(10,917)
Consolidated variable interest entities related:	Consolidated variable interest entities related:					Consolidated variable interest entities related:
Change in warrant liability measured at fair value	Change in warrant liability measured at fair value	(1,067)		—		Change in warrant liability measured at fair value	(1,966)		2,244

Equity in (income) loss of investees		(170)		2,239
Equity in income of investees						Equity in income of investees	(732)		(229)
Other assets and liabilities	Other assets and liabilities	425		—		Other assets and liabilities	14		129
Net cash provided by operating activities	Net cash provided by operating activities	152,512		147,791		Net cash provided by operating activities	60,952		32,389
Investing activities:	Investing activities:					Investing activities:
Purchase of furniture, fixtures and equipment	Purchase of furniture, fixtures and equipment	(7,788)		(8,558)		Purchase of furniture, fixtures and equipment	(1,707)		(4,535)
Purchase of other investments	Purchase of other investments	(18,798)		(500)		Purchase of other investments	(20,236)		(298)
Cash paid for acquisition of business	Cash paid for acquisition of business	(10,096)		—		Cash paid for acquisition of business	(1,500)		(10,096)
Cash paid for purchase of intangible assets		—		(1,000)
Proceeds from sale of investment valued under the measurement alternative		12,623		—

Distribution from investment valued under the measurement alternative	Distribution from investment valued under the measurement alternative	12,739		—		Distribution from investment valued under the measurement alternative	—		12,739

Distributions received from investments	Distributions received from investments	12,088		19,764		Distributions received from investments	2,227		13,281
Contributions to investments	Contributions to investments	(56,432)		(57,119)		Contributions to investments	(35,237)		(15,522)

Net cash used in investing activities	Net cash used in investing activities	(55,664)		(47,413)		Net cash used in investing activities	(56,453)		(4,431)
Financing activities:						Financing activities:

Borrowings of debt						Borrowings of debt	25,000		—
Repayments of debt						Repayments of debt	(457)		(469)
Draw-down on revolver						Draw-down on revolver	25,000		—
Repayment of revolver						Repayment of revolver	—		(15,000)

Repurchase of Class A shares for employee tax withholding						Repurchase of Class A shares for employee tax withholding	—		(68)
Proceeds received from issuance of shares under Employee Share Purchase Plan						Proceeds received from issuance of shares under Employee Share Purchase Plan	485		397

Dividends paid						Dividends paid	(12,947)		(11,201)
Members’ distributions paid						Members’ distributions paid	(30,485)		(15,809)
Other						Other	—		(74)
Consolidated variable interest entities related:						Consolidated variable interest entities related:
Contributions from non-controlling interest in general partnerships						Contributions from non-controlling interest in general partnerships	133		232
Distributions to non-controlling interest in general partnerships						Distributions to non-controlling interest in general partnerships	(233)		(95)

Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	6,496		(42,087)

Increase (decrease) in cash, cash equivalents, and restricted cash						Increase (decrease) in cash, cash equivalents, and restricted cash	10,995		(14,129)
Cash, cash equivalents, and restricted cash at beginning of the period						Cash, cash equivalents, and restricted cash at beginning of the period	76,197		90,377
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period						Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period	$	87,192	$	76,248

See accompanying notes to the condensed consolidated financial statements.


			8

Hamilton Lane Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Nine Months Ended December 31,
2021 2020
Financing activities:
Proceeds from offerings 73,833 354,629
Purchase of membership interests (73,833) (354,629)
Repayments of debt (1,382) (937)
Repayment of revolver (15,000) —
Repurchase of Class B common stock (1) (4)
Repurchase of Class A shares for employee tax withholding (605) (36)
Proceeds received from issuance of shares under Employee Share Purchase Plan 1,382 1,077
Payments to related parties, pursuant to tax receivable agreement (15,584) (36)
Dividends paid (36,714) (28,902)
Members’ distributions paid (37,469) (26,522)
Other (75) —
Consolidated variable interest entities related:
Contributions from non-controlling interest in general partnerships 1,053 70
Distributions to non-controlling interest in general partnerships (490) (2,491)
Net cash used in financing activities (104,885) (57,781)
Effect of exchange rate changes on cash and cash equivalents — 130
(Decrease) increase in cash, cash equivalents, and restricted cash (8,037) 42,727
Cash, cash equivalents, and restricted cash at beginning of the period 90,377 53,210
Cash, cash equivalents, and restricted cash at end of the period $ 82,340 $ 95,937


Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Consolidated Statements of Financial Condition:
Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:						Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:
		As of December 31,					As of June 30,
		2021		2020			2022		2021
Cash and cash equivalents	Cash and cash equivalents	$	78,838	$	92,895	Cash and cash equivalents	$	83,052	$	73,124
Restricted cash	Restricted cash	3,315		3,042		Restricted cash	3,996		3,048
Cash and cash equivalents held at consolidated variable interest entities	Cash and cash equivalents held at consolidated variable interest entities	187		—		Cash and cash equivalents held at consolidated variable interest entities	144		76
Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	$	82,340	$	95,937	Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	$	87,192	$	76,248

See accompanying notes to the condensed consolidated financial statements.


			9

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

1.Organization

Hamilton Lane Incorporated (“HLI”) is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payable to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, HLI held approximately 68.9% and ~~67.2%~~68.9%, respectively, of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement in place with HLA’s members, the economic interest in HLA held by HLI will increase.

HLA is a registered investment advisor with the United States Securities and Exchange Commission (“SEC”), providing asset management and advisory services, primarily to institutional investors, to design, build and manage private markets portfolios. HLA generates revenues primarily from management fees, by managing assets on behalf of customized separate accounts, specialized fund products and distribution management accounts, and advisory fees, by providing asset supervisory and reporting services. HLA sponsors the formation, ~~and/or~~and serves as the general partner or managing member, of various limited ~~partnerships or limited~~ liability ~~companies~~partnerships consisting of specialized funds and certain single client separate account entities (“Partnerships”) that acquire interests in third-party managed investment funds that make private equity and equity-related investments. The Partnerships may also make direct ~~co-investments,~~investments, including investments in debt, equity, and other equity-based instruments. ~~HLA,~~The Company, which includes certain subsidiaries that serve as the general partner or managing member ~~of substantially all~~ of the Partnerships, may invest its own capital in the Partnerships and generally makes all investment and operating decisions for the Partnerships. HLA operates several wholly-owned entities through which it conducts its foreign operations.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. Results of operations for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending March 31, ~~2022.~~2023. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, ~~2021.~~2022.

~~COVID-19~~

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) a global pandemic, which has resulted in significant disruption and uncertainty in the global economic markets. Given the continued uncertainty regarding the scope and duration of the COVID-19 pandemic, it is currently not possible to predict the precise impact it will have on the


			10

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Company’s financial statements. In addition, certain impacts may not be reported in the current quarter due to the Company’s investments in partnerships and unrealized carried interest amounts, which are reported on a three-month lag, as discussed below in “Accounting for Differing Fiscal Periods”.

Accounting for Differing Fiscal Periods

The Partnerships primarily have a fiscal year end as of December 31, and the Company accounts for its investments in the Partnerships using a three-month lag due to the timing of financial information received from the investments held by the Partnerships. The Partnerships primarily invest in private equity funds, which generally require at least 90 days following the calendar year end to present audited financial statements. The Company records its share of capital contributions to and distributions from the Partnerships in investments in the Condensed Consolidated Balance Sheets during the three-month lag period.

Fair Value of Financial Instruments

The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below:

•Level 1: Values are determined using quoted market prices for identical financial instruments in an active market.

•Level 2: Values are determined using quoted prices for similar financial instruments and valuation models whose inputs are observable.

•Level 3: Values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The carrying amount of cash and cash equivalents, fees receivable, and accounts payable approximate fair value due to the immediate or short-term maturity of these financial instruments.

Recent Accounting Pronouncements

In June 2022, the FASB issued Accounting Standard Updated ("ASU") 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this update clarify the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual sale restrictions and introduce new disclosure requirements related to such equity securities. The amendments are effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

3. Revenue

The following table presents revenues disaggregated by product offering, which aligns with the identified performance obligations and the basis for calculating each amount:

Three Months Ended
December 31, Nine Months Ended December 31,
Management and advisory fees 2021 2020 2021 2020
Specialized funds $ 38,233 $ 38,155 $ 107,935 $ 102,103
Customized separate accounts 25,982 23,285 75,416 70,600
Advisory 6,119 6,618 18,781 19,928
Reporting and other 5,992 2,673 16,983 8,093
Distribution management 3,170 2,827 9,313 5,291
Fund reimbursement revenue 340 1,721 1,225 2,898
Total management and advisory fees $ 79,836 $ 75,279 $ 229,653 $ 208,913

Three Months Ended
December 31, Nine Months Ended December 31,
Incentive fees 2021 2020 2021 2020
Specialized funds $ 6,765 6,178 $ 23,903 $ 9,407
Customized separate accounts 3,725 2,502 10,314 3,105
Consolidated variable interest related:
Specialized funds 1,378 624 3,149 17,333
Total incentive fees $ 11,868 $ 9,304 $ 37,366 $ 29,845

~~Cost to obtain contracts~~

The Company incurs incremental costs related to sales commissions paid to certain employees directly related to customized separate account contracts. These incremental costs are capitalized and amortized over the expected contract length proportionately to the management fee revenue expected to be recognized in each year as a percentage of the total expected revenue for the contract. The contract asset related to the cost to obtain contracts was $1,022 and $964 as of December 31, 2021 and March 31, 2021, respectively, and is included in other assets in the Condensed Consolidated Balance Sheets. Amortization expense related to this contract asset was $121 and $373 for the three and nine months ended December 31, 2021, respectively, and $135 and $389 for the three and nine months ended December 31, 2020, respectively, and is included in compensation and benefits in the Condensed Consolidated Statements of Income.


			12

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended June 30,
Management and advisory fees		2022		2021
Specialized funds		$	43,649	$	33,388
Customized separate accounts		28,375		24,500
Advisory		6,248		6,366
Reporting and other		6,318		5,282
Distribution management		496		4,121
Fund reimbursement revenue		860		227
Total management and advisory fees		$	85,946	$	73,884


	Three Months Ended June 30,
Incentive fees		2022		2021
Specialized funds		$	42,209	$	1,659
Customized separate accounts		7,315		705
Consolidated variable interest related:
Specialized funds		39		2,747
Total incentive fees		$	49,563	$	5,111

4. Investments

Investments consist of the following:


		December 31,		March 31,			June 30,		March 31,
		2021		2021			2022		2022
Equity method investments in Partnerships	Equity method investments in Partnerships	$	303,149	$	240,337	Equity method investments in Partnerships	$	331,988	$	326,296
Other equity method investments	Other equity method investments	1,502		1,297		Other equity method investments	1,661		1,573
Other investments	Other investments	22,767		17,381		Other investments	16,591		19,820
Investments valued under the measurement alternative	Investments valued under the measurement alternative	155,902		109,821		Investments valued under the measurement alternative	183,023		156,100
Total Investments	Total Investments	$	483,320	$	368,836	Total Investments	$	533,263	$	503,789

Equity method investments

The Company’s equity method investments in Partnerships represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments within the Partnerships vary by fund. The Company has a 1% interest in substantially all of the Partnerships. The Company’s other equity method investment represents its ownership in a joint venture that automates the collection of fund and underlying portfolio company data from general partners. The Company recognized an equity method income related to its investments in Partnerships and other equity method investments of $12,924 and $60,181 for the three and nine months ended December 31, 2021, respectively, and $12,138 and $10,938 for the three and nine months ended December 31, 2020, respectively.

Other investments

The Company’s other investments represent a publicly traded security and investments in private equity funds and direct credit and equity ~~co-investments~~investments that are held as collateral on the Company’s secured financing. The private equity fund investments can only be redeemed through distributions received from the liquidation of underlying investments of the fund, and the timing of distributions is currently indeterminable. The direct credit ~~co-investments~~investments are debt securities classified as trading securities. ~~The direct equity co-investments~~Other


			10

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and ~~private equity funds~~per share amounts)

investments are measured at fair value with unrealized holding gains and losses ~~included~~recorded in ~~earnings.~~non-operating income in the Condensed Consolidated Statement of Income.

The Company accounts for its secured financing at fair value under the fair value option. The primary reason for electing the fair value option is to mitigate volatility in earnings from using different measurement attributes. The significant input to the fair value of the secured financing is the fair value of the other investments delivered as collateral which are estimated using Level 3 inputs with the significant inputs as shown in Note 5 below.

The Company recognized a ~~gain~~loss on other investments held as collateral of ~~$2,288 and $3,239~~$723 during the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022 and ~~$1,276 and $5,999~~a gain of $814 during the three ~~and nine~~ months ended ~~December 31, 2020, respectively,~~June 30, 2021, that are recorded in non-operating income. The Company recognized a ~~loss~~gain on the secured financing liability of ~~$2,288 and $3,239~~$723 during the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022 and ~~$1,276 and $5,999~~a loss of $814 during the three ~~and nine~~ months ended ~~December 31, 2020, respectively, that are recorded in non-operating income in the Condensed Consolidated Statement of Income.~~


			13

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

~~Investments valued under the measurement alternative~~

~~During the nine months ended December 31,~~June 30, 2021, an investment held by the Company launched an initial public offering (“IPO”) and began trading on a public exchange. As part of the IPO, the Company agreed to a lockup restriction on selling or transferring the security for a period of 180 days. As the investment has a readily determinable fair value at the end of each reporting period, it no longer qualifies to be recorded under the measurement alternative. The investment is recorded at fair value with changes in value recorded to net income. As the lockup restriction expired during the quarter ended December 31, 2021, the Company transferred the investment from Level 3 to Level 1 at December 31, 2021.

During the nine months ended December 31, 2021, there were observable price changes in 2 investments held by the Company. As a result of the transactions, the Company marked the investments to fair value based upon the transaction prices, which resulted in total unrealized gains of $19,768 and $44,484 during the three and nine months ended December 31, 2021, respectively, that are recorded in non-operating income in the Condensed Consolidated Statement of Income.

Investments valued under the measurement alternative

During the quarter ended ~~December 31, 2021,~~June 30, 2022, the Company made investments in 2 private companies. The Company invested ~~$13,500~~$3,000 in a ~~company maintaining~~technology driven platform that provides a ~~platform~~digitized token for investors that improves the efficiency of ~~solutions designed to aid individual investors and various wealth management platforms with their wealth management needs.~~capital raises. Additionally, the Company invested ~~$4,500~~$12,000 in ~~a company that provides environmental, social and governance (“ESG”) reporting metrics and analysis to private market firms and private companies.~~an online financial services platform. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company will value the investments under the measurement alternative.

During the quarter ended ~~December 31, 2021, an entity in which~~June 30, 2022, the Company ~~held~~made an additional investment of $5,236 in a company that maintains a platform of solutions designed to aid individual investors and various wealth management platforms with their wealth management needs. As a result of the transaction, the Company marked its original investment to fair value based upon the transaction price, which resulted in total ~~carrying amount of $687 was sold to a third party. The Company received cash proceeds of $12,623 and recorded a~~unrealized gain of ~~$11,936 in connection with the transaction~~$6,687 during the three months ended ~~December 31, 2021~~June 30, 2022, that is recorded in non-operating income in the Condensed Consolidated Statement of Income. Due to the lack of readily determinable fair value for this investment, over which the Company does not have significant influence, the Company will continue to value the investment under the measurement alternative.

5. Fair Value Measurement

The following tables summarize the Company’s financial assets and financial liabilities recorded at fair value by fair value hierarchy level:


		As of December 31, 2021											As of June 30, 2022
		Level 1		Level 2		Level 3		Total		Amortized Cost			Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:	Financial assets:											Financial assets:
Other investments	Other investments	$	6,290	$	—	$	16,477	$	22,767	$	11,369	Other investments	$	3,660	$	—	$	12,931	$	16,591	$	11,361
Investments held in trust	Investments held in trust	276,009		—		—		276,009		276,000		Investments held in trust	276,083		—		—		276,083		276,000
Total financial assets	Total financial assets	$	282,299	$	—	$	16,477	$	298,776	$	287,369	Total financial assets	$	279,743	$	—	$	12,931	$	292,674	$	287,361
Financial liabilities:	Financial liabilities:											Financial liabilities:
Warrant liability(1)	Warrant liability(1)	$	5,429	$	873	$	—	$	6,302			Warrant liability(1)	$	790	$	127	$	—	$	917
Secured financing(2)	Secured financing(2)	—		—		16,477		16,477				Secured financing(2)	—		—		12,931		12,931
Total financial liabilities	Total financial liabilities	$	5,429	$	873	$	16,477	$	22,779			Total financial liabilities	$	790	$	127	$	12,931	$	13,848


			1411

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)


		As of March 31, 2021											As of March 31, 2022
		Level 1		Level 2		Level 3		Total		Amortized Cost			Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:	Financial assets:											Financial assets:
Other investments	Other investments	$	—	$	4,083	$	13,298	$	17,381	$	9,902	Other investments	$	6,002	$	—	$	13,818	$	19,820	$	10,853
Investments held in trust	Investments held in trust	276,003		—		—		276,003		276,000		Investments held in trust	276,016		—		—		276,016		276,000
Total financial assets	Total financial assets	$	276,003	$	4,083	$	13,298	$	293,384	$	285,902	Total financial assets	$	282,018	$	—	$	13,818	$	295,836	$	286,853
Financial liabilities:	Financial liabilities:											Financial liabilities:
Warrant liability(1)	Warrant liability(1)	$	6,348	$	1,020	$	—	$	7,368			Warrant liability(1)	$	2,484	$	399	$	—	$	2,883
Secured financing(2)	Secured financing(2)	—		4,083		13,298		17,381				Secured financing(2)	—		—		13,818		13,818
Total financial liabilities	Total financial liabilities	$	6,348	$	5,103	$	13,298	$	24,749			Total financial liabilities	$	2,484	$	399	$	13,818	$	16,701

(1) Warrant liability is recorded within other liabilities of consolidated variable interests in the Condensed Consolidated Balance Sheet.

(2) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheet.

The following is a reconciliation of other investments for which significant unobservable inputs (Level 3) were used in determining fair value:

Private equity funds Direct credit co-investments Direct equity co-investments Publicly traded equity security Total other investments
Balance as of September 30, 2021 $ 7,159 $ 783 $ 6,068 $ 6,122 $ 20,132
Contributions 204 — — — 204
Distributions (25) — — — (25)
Net gain (loss) 1,464 (1) 825 168 2,456
Transfer out — — — (6,290) (6,290)
Balance as of December 31, 2021 $ 8,802 $ 782 $ 6,893 $ — $ 16,477
Balance as of March 31, 2021 $ 6,254 $ 985 $ 6,059 $ — $ 13,298
Contributions 293 — 28 — 321
Distributions (179) (202) — — (381)
Net gain (loss) 2,434 (1) 806 (165) 3,074
Transfer in — — — 6,455 6,455
Transfer out — — — $ (6,290) (6,290)
Balance as of December 31, 2021 $ 8,802 $ 782 $ 6,893 $ — $ 16,477


	Private equity funds		Direct credit investments		Direct equity investments		Total other investments







Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	—		—		—		—
Distributions	(164)		—		—		(164)
Net loss	(456)		(1)		(266)		(723)


Balance as of June 30, 2022	$	6,404	$	773	$	5,754	$	12,931


	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments







Balance as of March 31, 2021	$	6,254	$	985	$	6,059	$	—	$	13,298
Contributions	30		—		28		—		58
Distributions	(95)		(202)		—		—		(297)
Net gain	577		12		225		—		814
Transfer in	—		—		—		6,455		6,455
Balance as of June 30, 2021	$	6,766	$	795	$	6,312	$	6,455	$	20,328


			1512

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Private equity funds Direct credit co-investments Direct equity co-investments Total other investments
Balance as of September 30, 2020 $ 6,208 $ 1,889 $ 9,606 $ 17,703
Contributions 218 — — 218
Distributions (896) — (139) (1,035)
Net gain (loss) 252 6 1,018 1,276
Transfer out — — (4,271) (4,271)
Balance as of December 31, 2020 $ 5,782 $ 1,895 $ 6,214 $ 13,891
Balance as of March 31, 2020 $ 5,786 $ 1,756 $ 5,852 $ 13,394
Contributions 246 — — 246
Distributions (1,264) (74) (139) (1,477)
Net gain 1,014 213 4,772 5,999
Transfer out — — (4,271) (4,271)
Balance as of December 31, 2020 $ 5,782 $ 1,895 $ 6,214 $ 13,891

The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of financial assets were as follows, as of ~~December 31, 2021:~~June 30, 2022:

Significant

Fair

Valuation

Unobservable

Weighted

Fair

Valuation

Unobservable

Weighted

Value

Methodology

Inputs

Range

Average

Value

Methodology

Inputs

Range

Average

Other investments:

Private equity funds

8,802

Adjusted net asset value

Selected market return

4.7%

6.1%

5.9%

Private equity funds

6,404

Adjusted net asset value

Selected market return

(6.3)%

(9.2)%

(8.6)%

Direct credit co-investments

782

Discounted cash flow

Market yield

10.0%

Direct equity co-investments

6,893

Market approach

EBITDA multiple

8.00x

15.25x

11.40x

Direct credit investments

773

Discounted cash flow

Market yield

12.5%

Direct equity investments

5,754

Market approach

EBITDA multiple

8.00x

13.50x

10.59x

Market approach

Equity multiple

1.62x

Market approach

Equity multiple

1.58x

For the significant unobservable inputs listed in the table above: (1) a significant increase or decrease in the selected market return would result in a significantly higher or lower fair value measurement, respectively; (2) a significant increase or decrease in the market yield would result in a significantly lower or higher fair value measurement, respectively; and (3) a significant increase or decrease in the selected multiple would result in a significantly higher or lower fair value measurement, respectively.

6. Acquisitions

On April 1, 2021, the Company acquired substantially all the assets of 361 Capital, LLC for a total aggregate cash amount of $13,096, of which $10,096 was paid on the closing date of the acquisition. The remaining $3,000 will be paid in 2 equal installments on the first and second anniversaries of the closing. On April 1, 2022, the Company paid the first of the two equal installments. The purchase price based upon the fair value of consideration transferred at the date of acquisition is $12,946. The Company recorded $7,145 of definite lived intangible assets related primarily to the acquired investment management contracts, which will be amortized over seven years, and $5,623


			16

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

of goodwill, which are both recorded in other assets in the Condensed Consolidated Balance Sheets. The remaining assets acquired and liabilities assumed are not material to the condensed consolidated financial statements. Revenue and net income attributable to the acquisition of 361 Capital, LLC were not material for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ and therefore, pro forma information related to this acquisition is not presented.

7. Variable Interest Entities

The Company consolidates certain ~~VIEs~~variable interest entities ("VIEs") in which it is determined that the Company is the primary beneficiary.

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships and a Partnership in which it is currently the primary beneficiary, which are not wholly-owned by the Company. The total assets of ~~the~~these consolidated ~~general partner entities~~VIEs are ~~$8,294~~$33,776 and ~~$4,787~~$10,036 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively, and are recorded in investments of consolidated variable interest entities in the Condensed Consolidated Balance Sheets. The consolidated ~~general partner entities~~VIEs had no liabilities as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021.~~2022. The


			13

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

assets of the consolidated ~~general partner entities~~VIEs represent equity method-investments in ~~direct/co-investment~~direct investment funds and customized separate accounts and may only be used to settle obligations of the consolidated ~~general partner entities,~~VIEs, if any. In addition, there is no recourse to the Company for the consolidated ~~general partner entities’~~VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest.

The Company sponsors and consolidates Hamilton Lane Alliance Holdings I, Inc. (“HLAH”) through HL Alliance Holdings Sponsor LLC, an indirect wholly-owned subsidiary of the Company. On January 15, 2021, HLAH completed an IPO raising total gross proceeds of $276,000 which were placed in a trust and can only be utilized for funding a business combination or the redemption of Class A shares of HLAH. In a private placement concurrent with the IPO, HLAH sold warrants to HL Alliance Holdings Sponsor LLC for gross proceeds of $7,520 which were used by HLAH to pay the offering costs and also to provide working capital. The total assets of HLAH were ~~$276,864~~$276,700 and ~~$277,528~~$276,675 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively. The total liabilities of HLAH were ~~$16,122~~$10,642 and ~~$17,310~~$12,675 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively. The assets of HLAH held outside of the trust can only be used to settle obligations of HLAH, and there is no recourse to the Company for HLAH’s liabilities. All warrants and Class B common stock of HLAH held by the Company are eliminated in consolidation.


			17

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary based upon the Company’s equity interest percentage in each of the VIEs. Certain Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by simple majority vote (i.e. do not have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of ~~December 31, 2021,~~June 30, 2022, the total ~~commitments and~~ remaining unfunded commitments from the ~~limited partners and~~Company’s general ~~partners~~partner entities to the unconsolidated VIEs ~~are $25,965,752 and $8,954,083, respectively. These~~was $116,530. Investor commitments are the primary source of financing for the unconsolidated VIEs.

The maximum exposure to loss represents the potential loss of assets recognized by the Company relating to these unconsolidated entities. The Company believes that its maximum exposure to loss is limited because it establishes separate limited partnerships or limited liability companies to serve as the general partner or managing member of the Partnerships.


			14

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

The carrying ~~amount~~value of assets and liabilities recognized in the Condensed Consolidated Balance Sheet related to the Company’s interests in these non-consolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows:


		December 31,		March 31,			June 30,		March 31,
		2021		2021			2022		2022
Investments	Investments	$	174,367	$	138,092	Investments	$	194,872	$	191,378
Fees receivable	Fees receivable	12,677		4,133		Fees receivable	21,116		9,754
Due from related parties	Due from related parties	512		837		Due from related parties	1,115		778
Total VIE Assets	Total VIE Assets	187,556		143,062		Total VIE Assets	217,103		201,910
Less: Non-controlling interests	Less: Non-controlling interests	(1,831)		(2,211)		Less: Non-controlling interests	(1,940)		(1,873)
Maximum exposure to loss	Maximum exposure to loss	$	185,725	$	140,851	Maximum exposure to loss	$	215,163	$	200,037

8. Debt

The Company’s debt consisted of the following:

December 31, 2021 March 31, 2021
Principal Outstanding Carrying Value Interest Rate Principal Outstanding Carrying Value Interest Rate
Term Loan $ 72,211 $ 72,022 2.25 % $ 73,594 $ 73,378 2.25 %
Multi-Draw Facility 75,000 74,745 3.50 % 75,000 74,797 3.50 %
Revolver — — 2.25 % 15,000 15,000 2.25 %
Total Debt $ 147,211 $ 146,767 $ 163,594 $ 163,175


			18

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

On April 22, 2021, the Company amended its Term Loan and Security Agreement with First Republic Bank to provide an additional $25,000 of committed borrowing capacity and amended its Multi-Draw Term Loan and Security Agreement with First Republic Bank to increase the maximum commitment amount from $75,000 to $100,000 and extend the period to request an advance under the facility until March 31, 2022.


	As of June 30, 2022						As of March 31, 2022
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	96,297	$	96,125	3.25	%	$	71,754	$	71,574	2.25	%
Multi-Draw Facility	100,000		99,760		3.50	%	100,000		99,752		3.50	%
Revolver	25,000		25,000		3.25	%	—		—		2.25	%
Total Debt	$	221,297	$	220,885			$	171,754	$	171,326

The carrying ~~amount~~value of the Company’s outstanding debt as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021~~2022 approximated fair value except for the multi-draw facility which had an estimated fair value of $90,270 as of June 30, 2022. The estimated fair value of debt is based on then-current market rates for similar debt instruments and is classified as Level 2 within the fair value hierarchy.

9. Equity

The following table shows a rollforward of the Company’s common stock outstanding since March 31, ~~2021:~~2022:


		Class A Common Stock	Class B Common Stock		Class A Common Stock	Class B Common Stock
March 31, 2021		36,290,183	16,739,846
Shares issued (repurchased) in connection with offerings		877,400	(695,505)
March 31, 2022				March 31, 2022	37,280,697	16,033,359

Forfeitures	Forfeitures	(7,420)	(10,982)	Forfeitures	(931)	(79,677)
Shares repurchased for employee tax withholdings	Shares repurchased for employee tax withholdings	(5,891)	—	Shares repurchased for employee tax withholdings	(27)	—
Restricted stock granted	Restricted stock granted	22,411	—	Restricted stock granted	7,248	—
Shares issued pursuant to Employee Share Purchase Plan	Shares issued pursuant to Employee Share Purchase Plan	17,661	—	Shares issued pursuant to Employee Share Purchase Plan	8,485	—
December 31, 2021		37,194,344	16,033,359
June 30, 2022				June 30, 2022	37,295,472	15,953,682

~~September 2021 Offering~~

In September 2021, the Company and certain selling stockholders completed a registered offering of an aggregate of 950,751 shares of Class A common stock at a price to the underwriter of $84.15 per share (the “September 2021 Offering”). The shares sold consisted of 73,351 shares held by the selling stockholders and 877,400 shares newly issued by the Company. The Company received $73,833 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges by certain members of HLA of a total of 695,505 Class B units and 181,895 Class C units. In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock. The Company did not receive any proceeds from the sale of shares by the selling stockholders.

~~September 2020 Offering~~

In September 2020, the Company and a certain selling stockholder completed a registered offering of an aggregate of 2,207,380 shares of Class A common stock at a price to the underwriter of $70.18 per share (the “September 2020 Offering”). The shares sold consisted of 75,000 shares held by the selling stockholder and 2,132,380 shares newly issued by the Company. The Company received $149,650 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges by certain members of HLA of a total of 1,936,880 Class B units and 195,500 Class C units. In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of


			1915

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

~~shares of Class B common stock. The Company did not receive any proceeds from the sale of shares by the selling stockholder.~~

~~June 2020 Offering~~

In June 2020, the Company and certain selling stockholders completed a registered offering of an aggregate of 2,995,757 shares of Class A common stock at a price to the underwriters of $70.09 per share (the “June 2020 Offering”). The shares sold consisted of 71,242 shares held by the selling stockholders and 2,924,515 shares newly issued by the Company. The Company received $204,979 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges by certain members of HLA of a total of 2,271,636 Class B units and 652,879 Class C units. In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock. The Company did not receive any proceeds from the sale of shares by the selling stockholders.

10. Equity-Based Compensation

A summary of restricted stock activity for the ~~nine~~three months ended ~~December 31, 2021~~June 30, 2022 is presented below:


		Total Unvested	Weighted- Average Grant-Date Fair Value of Award			Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2021		288,857	$	55.58
March 31, 2022					March 31, 2022	281,307	$	67.50
Granted	Granted	22,411	$	82.06	Granted	7,248	$	69.12
Vested	Vested	(19,093)	$	51.13	Vested	(289)	$	82.72
Forfeited	Forfeited	(7,420)	$	63.38	Forfeited	(931)	$	82.22
December 31, 2021		284,755	$	57.76
June 30, 2022					June 30, 2022	287,335	$	67.48

As of ~~December 31, 2021,~~June 30, 2022, total unrecognized compensation expense related to restricted stock was ~~$11,624.~~$16,952.

11. Compensation and Benefits

The Company has recorded the following amounts related to compensation and benefits:


		Three Months Ended December 31,				Nine Months Ended December 31,					Three Months Ended June 30,
		2021		2020		2021		2020				2022		2021
Base compensation and benefits	Base compensation and benefits	$	29,340	$	24,448	$	79,014	$	81,317	Base compensation and benefits		$	37,907	$	23,137
Incentive fee compensation	Incentive fee compensation	2,953		2,329		9,308		7,287		Incentive fee compensation		12,390		1,254
Equity-based compensation	Equity-based compensation	1,711		1,759		5,706		5,310		Equity-based compensation		1,897		2,341
Total compensation and benefits	Total compensation and benefits	$	34,004	$	28,536	$	94,028	$	93,914	Total compensation and benefits		$	52,194	$	26,732

12. Income Taxes

The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim period in which


			20

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax; therefore, the effective tax rate can vary from period to period. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more likely than not that all or a portion of the deferred tax asset may not be realized.

The Company’s effective tax rate was ~~12.6%~~17.0% and ~~15.2%~~21.1% for the three ~~and nine~~ months ended ~~December 31,~~June 30, 2022 and 2021, ~~respectively, and 10.5% and 16.5% for the three and nine months ended December 31, 2020,~~ respectively. The effective tax rates were different from the statutory tax rates due to the portion of income allocated to non-controlling interests, valuation allowance recorded against deferred tax assets and ~~state income~~discrete tax ~~expense~~adjustments recorded in the periods.

In connection with the September 2021 Offering and unit exchanges, the Company recorded a deferred tax asset in the amount of $16,996, which is net of a valuation allowance of $2,786 related to the portion of tax benefits that more likely than not will not be realized. Additionally, in connection with the September 2021 Offering and unit exchange and recording of the deferred tax asset, the Company recorded a payable to related parties pursuant to the tax receivable agreement of $14,277.

During the quarter ended December 31, 2021, the Company exercised its contractual right to terminate early the rights of certain parties to receive ongoing payments under the tax receivable agreement by making early termination payments of $15,584. As a result of the early termination payments, the Company recognized a gain of $4,319 during the three months ended December 31, 2021 that is recorded in non-operating income in the Condensed Consolidated Statement of Income.

As of ~~December 31, 2021,~~June 30, 2022, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months.


			16

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

13. Earnings per Share

Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to HLI, and, therefore, are not participating securities. As a result, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included. Shares of the Company’s Class B common stock are, however, considered potentially dilutive to the Class A common stock because the Class B units to which the Class B common stock corresponds are exchangeable for shares of Class A common stock on a 1-for-one basis, at which time the share of Class B common stock is surrendered in exchange for a payment of its par value.


			21

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:


		Three Months Ended December 31, 2021								Three Months Ended December 31, 2020										Three Months Ended June 30, 2022
																	Three Months Ended June 30, 2022
				Net income attributable to Class A Stockholders		Weighted-Average Shares			Per share amount			Net income attributable to Class A Stockholders		Weighted-Average Shares					Per share amount					Net income attributable to Class A Stockholders		Weighted-Average Shares			Per share amount

Net income attributable to HLI	Net income attributable to HLI	$	51,849							$	33,203							Net income attributable to HLI					$	33,484
Impact of changes in carrying amount of redeemable NCI	Impact of changes in carrying amount of redeemable NCI	1,308								—							Impact of changes in carrying amount of redeemable NCI				380
Basic EPS of Class A common stock	Basic EPS of Class A common stock	$	53,157		36,902,741		$	1.44		$	33,203		34,478,437		$	0.96	Basic EPS of Class A common stock				33,864				36,999,561		$	0.92
Adjustment to net income:	Adjustment to net income:																Adjustment to net income:
Assumed vesting of employee awards	Assumed vesting of employee awards	66								94							Assumed vesting of employee awards				9
Assumed conversion of Class B and Class C Units	Assumed conversion of Class B and Class C Units	21,946								—							Assumed conversion of Class B and Class C Units				15,179
Effect of dilutive securities:	Effect of dilutive securities:																Effect of dilutive securities:
Assumed vesting of employee awards	Assumed vesting of employee awards				165,569								272,955				Assumed vesting of employee awards								31,546
Assumed conversion of Class B and Class C Units	Assumed conversion of Class B and Class C Units				16,675,834								—				Assumed conversion of Class B and Class C Units								16,675,834
Diluted EPS of Class A common stock	Diluted EPS of Class A common stock	$	75,169		53,744,144		$	1.40		$	33,297		34,751,392		$	0.96	Diluted EPS of Class A common stock				$	49,052			53,706,941		$	0.91

		Nine Months Ended December 31, 2021								Nine Months Ended December 31, 2020										Three Months Ended June 30, 2021
																	Three Months Ended June 30, 2021
				Net income attributable to Class A Stockholders		Weighted-Average Shares			Per share amount			Net income attributable to Class A Stockholders		Weighted-Average Shares					Per share amount					Net income attributable to Class A Stockholders		Weighted-Average Shares			Per share amount
Net income attributable to HLI	Net income attributable to HLI	$	132,161							$	58,263							Net income attributable to HLI					$	28,168
Impact of changes in carrying amount of redeemable NCI	Impact of changes in carrying amount of redeemable NCI	358								—							Impact of changes in carrying amount of redeemable NCI				—
Basic EPS of Class A common stock	Basic EPS of Class A common stock	$	132,519		36,375,797		$	3.64		$	58,263		32,567,754		$	1.79	Basic EPS of Class A common stock				28,168				36,003,089		$	0.78
Adjustment to net income:	Adjustment to net income:																Adjustment to net income:
Assumed vesting of employee awards	Assumed vesting of employee awards	156								156							Assumed vesting of employee awards				34
Assumed conversion of Class B and Class C Units		60,083								—

Effect of dilutive securities:	Effect of dilutive securities:																Effect of dilutive securities:
Assumed vesting of employee awards	Assumed vesting of employee awards				138,902								240,194				Assumed vesting of employee awards								125,905
Assumed conversion of Class B and Class C Units					17,192,702								—

Diluted EPS of Class A common stock	Diluted EPS of Class A common stock	$	192,758		53,707,401		$	3.59		$	58,419		32,807,948		$	1.78	Diluted EPS of Class A common stock				$	28,202			36,128,994		$	0.78

The adjustments to net income for dilutive securities is based upon the additional income that would be allocated to HLI for the change in its ownership percentage due to the dilutive securities and adjusted for the incremental income tax expense related to the additional allocated income.


			2217

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

The ~~calculations~~calculation of diluted earnings per share exclude ~~18,912,099~~17,553,234 outstanding Class B and Class C units of HLA for the three ~~and nine~~ months ended ~~December 31, 2020,~~June 30, 2021, which are exchangeable into Class A common stock under the “if-converted” method, because the inclusion of such shares would be antidilutive. Net income (loss) recorded by HLI on a standalone basis will determine if the Class B and Class C units are dilutive or antidilutive in each respective period.

14. Related-Party Transactions

The Company considers its employees, directors, and equity method investments to be related parties.

Revenue and Receivables

The Company has investment management agreements with various specialized funds and customized separate accounts that it manages. The Company earned management and advisory fees from Partnerships of ~~$53,701 and $150,955~~$60,711 for the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022 and ~~$52,080 and $140,883~~$46,422 for the three ~~and nine~~ months ended ~~December 31, 2020, respectively.~~June 30, 2021. The Company earned incentive fees from Partnerships of ~~$10,335 and $34,669~~$49,178 for the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022, and ~~$8,153 and $28,332~~$4,575 for the three ~~and nine~~ months ended ~~December 31, 2020, respectively.~~June 30, 2021.

Fees receivable from the Partnerships were ~~$31,407~~$31,866 and ~~$14,814~~$27,728 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets.

Expenses and Payables

The Company maintains a service agreement with its joint venture pursuant to which it had expenses of ~~$1,098 and $3,201~~$1,104 for the three ~~and nine~~ months ended ~~December 31, 2021, respectively,~~June 30, 2022 and ~~$1,047 and $3,001~~$1,020 for the three ~~and nine~~ months ended ~~December 31, 2020, respectively,~~June 30, 2021, that are included in general, administrative and other expenses in the Condensed Consolidated Statements of Income. The Company also ~~has~~had a payable to the joint venture of ~~$370~~$373 and ~~$325~~$752 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively, which is included in other liabilities in the Condensed Consolidated Balance Sheets.

15. Supplemental Cash Flow Information


		Nine Months Ended December 31,					Three Months Ended June 30,
		2021		2020			2022		2021
Establishment of lease liability in exchange for right of use asset		$	7,950	$	61,597

Non-cash financing activities:	Non-cash financing activities:					Non-cash financing activities:
Dividends declared but not paid	Dividends declared but not paid	$	12,916	$	10,775	Dividends declared but not paid	$	14,800	$	12,600
Member distributions declared but not paid	Member distributions declared but not paid	$	11,769	$	7,906	Member distributions declared but not paid	$	10,754	$	3,028
Establishment of net deferred tax assets related to offerings		$	19,783	$	91,580


			23

~~Hamilton Lane Incorporated~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~(In thousands, except share and per share amounts)~~

16. Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may be subject to various legal, regulatory, and/or administrative proceedings from time to time. Although there can be no assurance of the outcome of such proceedings, in the opinion of management, the Company does not believe it is probable that any pending or, to its knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect its condensed consolidated financial statements.


			18

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Incentive Fees

The Partnerships have allocated carried interest still subject to contingencies and did not meet the Company’s criteria for revenue recognition in the amounts of ~~$1,064,430~~$1,102,214 and ~~$648,772,~~$1,191,066, net of amounts attributable to non-controlling interests, at ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively.

If the Company ultimately receives the unrecognized carried interest, a total of ~~$266,107~~$275,554 and ~~$162,193~~$297,766 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable.

Commitments

The Company serves as the investment manager of the Partnerships. The general partner or managing member of each Partnership is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Partnerships was ~~$183,843~~$192,952 and ~~$201,442~~$186,164 as of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, respectively.

The Company has unrealized gains on its investments valued under the measurement alternative of ~~$54,003~~$58,060 as of ~~December 31, 2021,~~June 30, 2022, of which up to 15% may be accrued as a discretionary bonus as those gains are realized.

Leases

The Company’s leases consist primarily of operating leases for office space and office equipment in various locations around the ~~world, which have remaining lease terms of one year to 17 years.~~world. Some leases have the option to extend for an additional term or terminate early. Short-term lease costs are not material.

The Company entered into a 17-year lease agreement for its new headquarters in a newly constructed building. The Company was granted access to the space in October 2020 to begin building various leasehold improvements and moved into the property in June 2021.

~~The~~ following table shows lease costs and other supplemental information related to the Company’s operating leases:


			Three Months Ended June 30,
						2022		2021
Operating lease costs						$	2,059	$	3,382
Variable lease costs						$	237	$	205
Cash paid for amounts included in the measurement of operating lease liabilities						$	1,939	$	1,500

Weighted average remaining lease term (in years)	14.4			15.6
Weighted average discount rate	3.2	%		3.4	%


			2419

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Three Months Ended December 31, Nine Months Ended December 31,
2021 2020 2021 2020
Operating lease costs $ 2,011 $ 2,471 $ 7,610 $ 4,908
Variable lease costs $ 416 $ 387 $ 980 $ 688
Cash paid for amounts included in the measurement of operating lease liabilities $ 1,657 $ 1,338 $ 4,794 $ 3,889
Weighted average remaining lease term (in years) 14.7 15.4
Weighted average discount rate 3.2 % 3.2 %

As of ~~December 31, 2021,~~June 30, 2022, the maturities of operating lease liabilities were as follows:


Remainder of FY2022	$	~~1,927~~5,910
FY2023	~~7,984~~7,411
FY2024	~~7,411~~7,002
FY2025	~~6,977~~6,483
FY2026	~~6,382~~6,628
Thereafter	~~76,180~~70,239
Total lease payments	~~106,861~~103,673
Less: imputed interest	~~(23,141)~~(23,240)
Total operating lease liabilities	$	~~83,720~~80,433

17. Subsequent Events

On ~~February 1,~~August 2, 2022, the Company declared a quarterly dividend of ~~$0.35~~$0.40 per share of Class A common stock to record holders at the close of business on ~~March~~September 15, 2022. The payment date will be ~~April~~October 6, 2022.


			2520

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Form 10-Q, and our audited financial statements, notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our ~~2021~~2022 Form 10-K for a more complete understanding of our financial position and results of operations.

The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Investors should review the “Cautionary Note Regarding Forward-Looking Information” above and the “Risk Factors” detailed in Part I, Item 1A of our ~~2021~~2022 Form 10-K for a discussion of those risks and uncertainties that have the potential to cause actual results to be materially different. Our results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. Unless otherwise indicated, references in this Form 10-Q to fiscal ~~2021~~2022 and fiscal ~~2020~~2021 are to our fiscal years ended March 31, ~~2021,~~2022, and ~~2020,~~2021, respectively.

Business Overview

We are a global private markets investment solutions ~~provider.~~provider and operate our business in a single segment. We offer a variety of investment solutions to address our clients’ needs across a range of private markets, including private equity, private credit, real estate, infrastructure, natural resources, growth equity, venture capital and ~~venture capital.~~impact. These solutions are constructed from a range of investment types, including primary investments in funds managed by third-party managers, ~~direct/co-investments~~direct investments alongside such funds and acquisitions of secondary stakes in such funds, with a number of our clients utilizing multiple investment types. These solutions are offered in a variety of formats covering some or all phases of private markets investment programs:

•Customized Separate Accounts: We design and build customized portfolios of private markets funds and direct investments to meet our clients’ specific portfolio objectives with regard to return, risk tolerance, diversification and liquidity. We generally have discretionary investment authority over our customized separate accounts, which comprised approximately ~~$76~~$83 billion of our assets under management (“AUM”) as of ~~December 31, 2021.~~June 30, 2022.

•Specialized Funds: We organize, invest and manage specialized primary, secondary ~~direct/co-investment funds, strategic opportunity funds~~ and ~~evergreen~~direct investment funds. Our specialized funds invest across a variety of private markets and include equity, equity-linked and credit funds offered on standard terms as well as shorter duration, opportunistically oriented funds. We launched our first specialized fund in ~~1997, and~~1997. Since then, our product offerings have grown steadily ~~comprising~~and now include evergreen offerings that invest primarily in secondaries and direct investments in equity and credit and are available to certain high-net-worth individuals. Specialized funds comprised approximately ~~$22~~$26 billion of our AUM as of ~~December 31, 2021.~~June 30, 2022.

•Advisory Services: We offer investment advisory services to assist clients in developing and implementing their private markets investment programs. Our investment advisory services include asset allocation, strategic plan creation, development of investment policies and guidelines, the screening and recommending of investments, legal negotiations, the monitoring of and reporting on investments and investment manager review and due diligence. Our advisory clients include some of the largest and most sophisticated private markets investors in the world. We had approximately ~~$753~~$724 billion of assets under advisement (“AUA”) as of ~~December 31, 2021.~~June 30, 2022.

2621

•Distribution Management: We offer distribution management services to our clients through active portfolio management to enhance the realized value of publicly traded stock they receive as distributions in-kind from private equity funds.

•Reporting, Monitoring, Data and Analytics: We provide our clients with comprehensive reporting and investment monitoring services, usually bundled into our broader investment solutions offerings, but ~~occasionally~~also on a stand-alone, fee-for-service basis. Private markets investments are unusually difficult to monitor, report on and administer, and our clients are able to benefit from our sophisticated infrastructure, which provides real time access to reliable and transparent investment data, and our high-touch service approach, which allows for timely and informed responses to the multiplicity of issues that can arise. We also provide comprehensive research and analytical services as part of our investment solutions, leveraging our large, global, proprietary and high-quality database ~~of private markets investment performance~~for transparency and powerful analytics. Our data, as well as our ~~suite of~~benchmarking and forecasting models, are accessible through our proprietary ~~analytical investment tools. In particular, the data and analytics provided by our~~technology solution, Cobalt LP, platform provides clients with more visibility into the private markets, enabling them to more accurately conduct market research, investment diligence, portfolio analysis and plan commitments. It allows us to provideon a ~~service for limited partners with whom we have not yet had any relationship and differentiates us from our competitors in the industry.~~stand-alone, subscription basis.

Our client and investor base is broadly diversified by type, size and geography. Our client base primarily comprises institutional investors that range from those seeking to make an initial investment in alternative assets to some of the world’s largest and most sophisticated private markets investors. As we offer a highly customized, flexible ~~outsourcing partner,~~service, we are equipped to provide investment services to institutional clients of all sizes and with different needs, internal resources and investment objectives. Our clients include prominent institutional investors in the United States, Canada, Europe, the Middle East, Asia, Australia and Latin America. We provide private markets solutions and services to some of the largest global pension, sovereign wealth and U.S. state pension funds. In addition, we believe we are a leading provider of private markets solutions for U.S. labor union pension plans, and we serve numerous smaller public and corporate pension plans, sovereign wealth funds, financial institutions and insurance companies, endowments and foundations, as well as family offices and selected high-net-worth individuals.

~~Trends Affecting Our Business~~

~~Impact of Covid-19~~

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) a global pandemic, which has resulted in significant disruption and uncertainty in the global economic markets. We are closely monitoring developments related to the COVID-19 pandemic and assessing any negative impacts to our business. While we have re-opened many of our offices, including our corporate headquarters, to employees for onsite work in 2022 as conditions permit, we believe COVID-19’s adverse impact on our business, financial condition and results of operations will be significantly driven by a number of factors that we are unable to predict or control, including, for example: the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies; the timing, scope and effectiveness of additional governmental responses to the pandemic; the timing and path of economic recovery; and the negative impact on our portfolio investments, clients, counterparties, vendors and other business partners that may indirectly adversely affect us.

As of December 31, 2021, we have adequate liquidity with $78.8 million in available cash and $100 million in availability under our Loan Agreements (defined below). For more information on our Loan Agreements, see “Liquidity and Capital Resources—Loan Agreements”.

~~Operating Segments~~

~~We operate our business in a single segment, which is how our chief operating decision maker (who is our chief executive officer) reviews financial performance and allocates resources.~~

Key Financial and Operating Measures

Our key financial measures are discussed below.

Revenues

We generate revenues primarily from management and advisory fees, and to a lesser extent, incentive fees.

Management and advisory fees comprise specialized fund and customized separate account management fees, advisory and reporting fees and distribution management fees.

Revenues from customized separate accounts are generally based on a contractual rate applied to committed capital or net invested capital under management. These fees often decrease over the life of the contract due to built-in declines in contractual rates and/or as a result of lower net invested capital balances as capital is returned to clients. In certain cases, we also provide advisory and/or reporting services, and, therefore, we also receive fees for services such as monitoring and reporting on a client’s existing private markets investments. In addition, we may provide for investments in our specialized funds as part of our customized separate accounts. In these cases, we generally reduce the management and/or incentive fees on customized separate accounts to the extent that assets in the accounts are invested in our specialized funds so that our clients do not pay duplicate fees.

Revenues from specialized funds are based on a percentage of limited partners’ capital commitments to, net invested capital or net asset value in, our specialized funds. The management fee during the commitment period is often charged on capital commitments and after the commitment period (or a defined anniversary of the fund’s initial closing) is typically reduced by a percentage of the management fee for the preceding year or charged on net invested capital. In the case of certain funds, we charge

management fees on capital commitments, with the management fee increasing during the early years of the fund’s term and declining in the later years. Management fees for certain funds are discounted based on the amount of the limited partners’ commitments, whether the limited partners commit early in the offering period or if the limited partners are investors in our other funds.

Revenues from advisory and reporting services are generally annual fixed fees, which vary depending on the services we provide. In limited cases, advisory service clients are charged basis point fees annually based on the amounts they have committed to invest pursuant to their agreements with us. In other cases where our services are limited to monitoring and reporting on investment portfolios, clients are charged a fee based on the number of investments in their portfolio.

Distribution management fees are generally earned by applying a percentage to AUM or proceeds received. Certain active management clients may elect a fee structure under which they are charged an asset-based fee plus a fee based on net realized and unrealized gains and income net of realized and unrealized losses.

Incentive fees comprise carried interest earned from our specialized funds and certain customized separate accounts structured as single-client funds in which we have a general partner commitment, and performance fees earned on certain other customized separate accounts.

For each of our secondary funds, ~~direct/co-investment~~direct investment funds, strategic opportunity funds and evergreen funds, we generally earn carried interest equal to a fixed percentage of net profits, usually 10.0% to 12.5%, subject to a compounded annual preferred return that is generally 6.0% to 8.0%. To the extent that our primary funds also directly make secondary investments and ~~direct/co-investments,~~direct investments, they generally earn carried interest on a similar basis. Furthermore, certain of our primary funds earn carried interest on their investments in other private markets funds on a primary basis that is generally 5.0% of net profits, subject to the fund’s compounded annual preferred return.

We recognize carried interest when it is probable that a significant reversal will not occur. In the event that a payment is made before it can be recognized as revenue, this amount would be included as deferred incentive fee revenue on our consolidated balance sheet and recognized as income in accordance with our revenue recognition policy. The primary contingency regarding incentive fees is the “clawback,” or the obligation to return distributions in excess of the amount prescribed by the applicable fund or separate account documents. Incentive fees are typically only required to be returned on a net of tax basis due to a clawback. As such, the tax-related portion of incentive fees is typically not subject to clawback and is therefore recognized as revenue immediately upon receipt. In the event that a payment is made before it can be recognized as revenue, this amount would be included as deferred incentive fee revenue on our Consolidated Balance Sheet and recognized as income in accordance with our revenue recognition policy.

Performance fees, which are a component of incentive fees, are based on the aggregate amount of realized gains earned by the applicable customized separate account, subject to the achievement of defined minimum returns to the clients. Performance fees range from 5.0% to 12.5% of net profits, subject to a compounded annual preferred return that varies by account but is generally 6.0% to 8.0%. Performance fees are recognized when the risk of clawback or reversal is not probable.

Expenses

Compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses and benefits paid and payable to employees, (b) equity-based compensation associated with the grants of restricted stock awards and (c) incentive fee compensation, which consists of carried interest and performance fee allocations. We expect to continue to experience a general rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand geographically and create new products and services.

Our compensation arrangements with our employees contain a significant bonus component driven by the results of our operations. Therefore, as our revenues, profitability and the amount of incentive fees earned by our customized separate accounts and specialized funds increase, our compensation costs rise.

Certain current and former employees participate in a carried interest program whereby approximately 25% of incentive fees from certain of our specialized funds and customized separate accounts are awarded to plan participants. We record compensation expense payable to plan participants as the incentive fees become estimable and collection is probable.

General, administrative and other includes travel, accounting, legal and other professional fees, commissions, placement fees, office expenses, depreciation and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.

Other Income (Expense)

Equity in income (loss) of investees primarily represents our share of earnings from our investments in our specialized funds and certain customized separate accounts in which we have a general partner commitment. Equity income primarily comprises our share of the net realized and unrealized gains (losses) and investment income partially offset by the expenses from these investments.

We have general partner commitments in our specialized funds and certain customized separate accounts that invest solely in primary funds, secondary funds and ~~direct/co-investments,~~direct investments, as well as those that invest across investment types. Equity in income (loss) of investees will increase or decrease as the change in underlying fund investment valuations increases or decreases. Since our ~~direct/co-investment~~direct investment funds invest in underlying portfolio companies, their quarterly and annual valuation changes are more affected by individual company movements than our primary and secondary funds that have exposures across multiple portfolio companies in underlying private markets funds. Our specialized funds and customized separate accounts invest across industries, strategies and geographies, and therefore our general partner investments do not include any significant concentrations in a specific sector or area outside the United States.

Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs, amortization of original issue discount and the write-off of deferred financing costs due to the repayment of previously outstanding debt.

Interest income is income earned on cash and cash equivalents.

Non-operating income (loss) consists primarily of gains and losses on certain investments, changes in liability under the tax receivable agreement and other non-recurring or non-cash items.

Other income (expense) of consolidated Variable Interest Entities (“VIEs”) consists primarily of the share of earnings of investments of consolidated general partner entities, which are not wholly-owned by us, in our specialized funds and certain customized separate accounts in which ~~it has~~they have a general partner commitment and changes in fair value of liabilities of our sponsored special purpose acquisition company (“SPAC”).

Income Tax Expense

We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by HLA. Prior to our IPO, we operated as a partnership for U.S. federal income tax purposes and therefore were not subject to U.S. federal and state income taxes. HLA is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by HLA flows through to its limited partners, including us, and is generally not subject to U.S. federal or state income tax at the partnership level. Our non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to non-U.S. income taxes. Additionally, certain of our subsidiaries are subject to local jurisdiction income taxes at the entity level. Accordingly, the tax liability with respect to income attributable to non-controlling interests in HLA is borne by the holders of such non-controlling interests.

Non-controlling interests

Non-controlling interests reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us. Non-controlling interests are presented as separate components in our consolidated statements of income to clearly distinguish between our interests and the economic interests of third parties and employees in those entities.

Fee-Earning AUM

Fee-earning AUM is a metric we use to measure the assets from which we earn management fees. Our fee-earning AUM comprise assets in our customized separate accounts and specialized funds from which we derive management ~~fees.~~fees that are generally derived from applying a certain percentage to the appropriate fee base. We classify customized separate account revenue as management fees if the client is charged an asset-based fee, which includes the majority of our discretionary AUM accounts but also includes certain non-discretionary AUA accounts. Our fee-earning AUM is equal to the amount of capital commitments, net invested capital and net asset value (“NAV”) of our customized separate accounts and specialized funds depending on the fee terms. Substantially all of our customized separate accounts and specialized funds earn fees based on commitments or net invested capital, which are not affected by market appreciation or depreciation. Therefore, revenues and fee-earning AUM are not significantly affected by changes in market value.

Our calculations of fee-earning AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers. Our definition of fee-earning AUM is not based on any definition that is set forth in the agreements governing the customized separate accounts or specialized funds that we manage.

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Consolidated Results of Operations

The following is a discussion of our consolidated results of operations for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020.~~2021. This information is derived from our accompanying condensed consolidated financial statements prepared in accordance with GAAP.


		Three Months Ended December 31,				Nine Months Ended December 31,					Three Months Ended June 30,
($ in thousands)	($ in thousands)	2021		2020		2021		2020		($ in thousands)	2022		2021
Revenues	Revenues									Revenues
Management and advisory fees	Management and advisory fees	$	79,836	$	75,279	$	229,653	$	208,913	Management and advisory fees	$	85,946	$	73,884
Incentive fees	Incentive fees	10,490		8,680		34,217		12,512		Incentive fees	49,524		2,364
Consolidated variable interest entities related:	Consolidated variable interest entities related:									Consolidated variable interest entities related:
Incentive fees	Incentive fees	1,378		624		3,149		17,333		Incentive fees	39		2,747
Total revenues	Total revenues	91,704		84,583		267,019		238,758		Total revenues	135,509		78,995
Expenses	Expenses									Expenses
Compensation and benefits	Compensation and benefits	34,004		28,536		94,028		93,914		Compensation and benefits	52,194		26,732
General, administrative and other	General, administrative and other	16,332		13,328		48,742		34,978		General, administrative and other	20,513		16,154
Consolidated variable interest entities related:	Consolidated variable interest entities related:									Consolidated variable interest entities related:
General, administrative and other	General, administrative and other	322		—		952		—		General, administrative and other	277		359
Total expenses	Total expenses	50,658		41,864		143,722		128,892		Total expenses	72,984		43,245
Other income (expense)	Other income (expense)									Other income (expense)
Equity in income of investees		12,924		12,138		60,181		10,938
Equity in (loss) income of investees										Equity in (loss) income of investees	(625)		20,049
Interest expense	Interest expense	(1,157)		(468)		(3,488)		(1,448)		Interest expense	(1,495)		(1,165)
Interest income	Interest income	26		658		488		775		Interest income	168		423
Non-operating income	Non-operating income	37,043		6,229		65,500		6,830		Non-operating income	4,343		3,603
Consolidated variable interest entities related:	Consolidated variable interest entities related:									Consolidated variable interest entities related:
Equity in (loss) income of investees		(298)		(215)		170		(2,239)
Unrealized income		2,135		—		1,067		—
Interest expense		(4)		—		(4)		—
Equity in income of investees										Equity in income of investees	732		229
Unrealized income (loss)										Unrealized income (loss)	1,966		(2,244)

Total other income (expense)	Total other income (expense)	50,669		18,342		123,914		14,856		Total other income (expense)	5,089		20,895
Income before income taxes	Income before income taxes	91,715		61,061		247,211		124,722		Income before income taxes	67,614		56,645
Income tax expense	Income tax expense	11,519		6,429		37,515		20,522		Income tax expense	11,488		11,964
Net income	Net income	80,196		54,632		209,696		104,200		Net income	56,126		44,681
Less: (Loss) income attributable to non-controlling interests in general partnerships		(119)		(68)		167		(346)
Less: Income attributable to non-controlling interests in general partnerships										Less: Income attributable to non-controlling interests in general partnerships	308		213
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	26,181		21,497		76,849		46,283		Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	20,168		19,296
Less: Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.		2,285		—		519		—
Less: Income (loss) attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.										Less: Income (loss) attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	2,166		(2,996)
Net income attributable to Hamilton Lane Incorporated	Net income attributable to Hamilton Lane Incorporated	$	51,849	$	33,203	$	132,161	$	58,263	Net income attributable to Hamilton Lane Incorporated	$	33,484	$	28,168

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Revenues


		Three Months Ended December 31,			Nine Months Ended December 31,							Three Months Ended June 30,
($ in thousands)	($ in thousands)		2021		2020		2021		2020		($ in thousands)		2022		2021
Management and advisory fees	Management and advisory fees										Management and advisory fees
Specialized funds	Specialized funds		$	38,233	$	38,155	$	107,935	$	102,103	Specialized funds		$	43,649	$	33,388
Customized separate accounts	Customized separate accounts		25,982		23,285		75,416		70,600		Customized separate accounts		28,375		24,500
Advisory	Advisory		6,119		6,618		18,781		19,928		Advisory		6,248		6,366
Reporting and other	Reporting and other		5,992		2,673		16,983		8,093		Reporting and other		6,318		5,282
Distribution management	Distribution management		3,170		2,827		9,313		5,291		Distribution management		496		4,121
Fund reimbursement revenue	Fund reimbursement revenue		340		1,721		1,225		2,898		Fund reimbursement revenue		860		227
Total management and advisory fees	Total management and advisory fees		79,836		75,279		229,653		208,913		Total management and advisory fees		85,946		73,884
Incentive fees	Incentive fees		11,868		9,304		37,366		29,845		Incentive fees		49,563		5,111
Total revenues	Total revenues		$	91,704	$	84,583	$	267,019	$	238,758	Total revenues		$	135,509	$	78,995

Three months ended ~~December 31, 2021~~June 30, 2022 compared to three months ended ~~December 31, 2020~~June 30, 2021

Total revenues increased ~~$7.1~~$56.5 million, or 8%72%, to ~~$91.7~~$135.5 million, for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020,~~June 30, 2021, due to increases in both management and advisory fees and incentive fees.

Management and advisory fees increased ~~$4.6~~$12.1 million, or 6%16%, to ~~$79.8~~$85.9 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020.~~June 30, 2021. Specialized funds revenue increased ~~$0.1~~$10.3 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020,~~June 30, 2021, due primarily to a ~~$4.8~~$5.8 million increase in revenue from our evergreen funds, ~~and~~ a ~~$1.9~~$2.4 million increase in revenue from our latest direct equity fund, ~~which added $1.3 billion~~ and ~~$0.7 billion, respectively, in fee-earning AUM between periods. These increases were partially offset by~~ a ~~$5.5~~$1.0 million ~~decrease~~increase in revenue from our latest secondary fund which added $1.5 billion, $0.8 billion, and $0.5 billion, respectively, in fee-earning AUM between periods. Revenue from our latest direct equity fund included ~~$7.2~~$0.6 million in retroactive fees infor the ~~prior year period.~~three months ended June 30, 2022. Retroactive fees are management fees earned in the current period from investors that commit to a specialized fund towards the end of the fundraising period and are required to pay a catch-up management fee as if they had committed to the fund at the first closing in a prior period. Customized separate accounts revenue increased ~~$2.7~~$3.9 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020~~June 30, 2021 due to the addition of several new accounts and additional allocations from existing accounts. ~~Reporting and other fees increased $3.3~~Distribution management revenue decreased $3.6 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020~~June 30, 2021 due to ~~$2.2~~decreased distribution activity.

Incentive fees increased $44.5 million ~~in revenue added from the acquisition of 361 Capital, LLC. Distribution management revenue increased $0.3~~to $49.6 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020 due to increased distribution activity. Fund reimbursement revenue decreased $1.4 million for the three months ended December 31,~~June 30, 2021, ~~compared to the three months ended December 31, 2020, due to the recognition of fund reimbursements from our latest direct equity fund in the prior year period.~~

~~Incentive fees increased $2.6 million to $11.9 million for the three months ended December 31, 2021 compared to the three months ended December 31, 2020,~~ due to increases in incentive fees from both customized separate accounts and specialized funds.

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~~Nine months ended December 31, 2021 compared to nine months ended December 31, 2020~~

Total revenues increased $28.3 million, or 12%, to $267.0 million, for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due to increases in both management and advisory fees and incentive fees.

Management and advisory fees increased $20.7 million, or 10%, to $229.7 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020. Specialized funds revenue increased $5.8 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due primarily to a $11.6 million increase in revenue from our evergreen funds and a $4.3 million increase in revenue from our latest direct equity fund, which added $1.3 billion and $0.7 billion, respectively, in fee-earning AUM between periods. These increases were partially offset by a $5.0 million decrease in revenue from our latest secondary fund which included $10.8 million in retroactive fees in the prior year period. Customized separate accounts revenue increased $4.8 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020 due to the addition of several new accounts and additional allocations from existing accounts. Reporting and other fees increased $8.9 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020 due to $6.6 million in revenue added from the acquisition of 361 Capital, LLC in the current year period. Distribution management revenue increased $4.0 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020 due to increased distribution activity. Fund reimbursement revenue decreased $1.7 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due to the recognition of fund reimbursements from our latest direct equity fund in the prior year period.

Incentive fees increased $7.5 million to $37.4 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due to an increase in incentive fees from customized separate accounts.

Expenses

Three months ended ~~December 31, 2021~~June 30, 2022 compared to three months ended ~~December 31, 2020~~June 30, 2021

Total expenses increased ~~$8.8~~$29.7 million, or ~~21%~~69%, to ~~$50.7~~$73.0 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020~~June 30, 2021 due to increases in both compensation and benefits expenses and general, administrative and other expenses.

Compensation and benefits expenses increased ~~$5.5~~$25.5 million, or ~~19%~~95%, to ~~$34.0~~$52.2 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020,~~June 30, 2021, due to increases in base compensation and benefits and incentive fee compensation. Base compensation and benefits increased $14.8 million, or 64%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, due primarily to an increase in ~~base~~our bonus plan accrual related to the increase in incentive fee revenue. Incentive fee compensation ~~and benefits. Base compensation and benefits~~ increased ~~$4.9~~$11.1 million ~~or 20%,~~ for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended December 31, 2020, due primarily to increased salary expense from additional headcount in the current year period compared to the prior year period. Incentive fee compensation increased $0.6 million for the three months ended December 31,June 30, 2021, ~~compared to the three months ended December 31, 2020,~~ due to the increase in incentive fee revenue.

General, administrative and other expenses increased ~~$3.3~~$4.3 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020.~~June 30, 2021. This change consisted primarily of a ~~$1.7 million increase in consulting and professional fees.~~

~~Nine months ended December 31, 2021 compared to nine months ended December 31, 2020~~

Total expenses increased $14.8 million, or 12%, to $143.7 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due primarily to an increase in general, administrative and other expenses.

Compensation and benefits expenses increased $0.1 million to $94.0 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020. Base compensation and benefits decreased $2.3 million, or 3%, for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due primarily to a decrease in our bonus plan accrual. Incentive fee compensation increased $2.0 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due to the increase in incentive fee revenue.

General, administrative and other expenses increased $14.7 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020. This change consisted primarily of a $5.8$1.3 million increase in consulting and professional fees, a ~~$3.4~~$0.9 million increase in ~~rent~~travel expense, ~~which included expenses for our new headquarters in the current year period,~~ and a ~~$1.2~~$0.6 million increase in third-party commissions.

Other Income (Expense)

The following table shows the equity in income of investees included in other income (expense):


		Three Months Ended December 31,			Nine Months Ended December 31,							Three Months Ended June 30,
($ in thousands)	($ in thousands)		2021		2020		2021		2020		($ in thousands)		2022		2021
Equity in income (loss) of investees	Equity in income (loss) of investees										Equity in income (loss) of investees
Primary funds	Primary funds		$	1,129	$	1,365	$	7,124	$	69	Primary funds		$	1,265	$	1,828
Direct/co-investment funds			867		3,513		15,375		2,928
Direct investment funds											Direct investment funds		(1,559)		7,654
Secondary funds	Secondary funds		4,074		2,413		11,824		2,126		Secondary funds		84		2,483
Customized separate accounts	Customized separate accounts		5,042		4,006		20,201		2,761		Customized separate accounts		(176)		7,293
Other equity method investments	Other equity method investments		1,514		626		5,827		815		Other equity method investments		493		1,020
Total equity in income (loss) of investees	Total equity in income (loss) of investees		$	12,626	$	11,923	$	60,351	$	8,699	Total equity in income (loss) of investees		$	107	$	20,278

Three months ended ~~December 31, 2021~~June 30, 2022 compared to three months ended ~~December 31, 2020~~June 30, 2021

Other income ~~increased $32.3~~decreased $15.8 million to ~~$50.7~~$5.1 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020,~~June 30, 2021, due primarily to ~~an increase~~a decrease in ~~other non-operating income.~~equity in income of investees.

Equity in income of investees ~~increased $0.7~~decreased $20.2 million to ~~$12.6~~$0.1 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020.~~June 30, 2021. This was due primarily to the prior year gains from increases in public ~~and private~~ market valuations during the quarter ended ~~September 30,~~March 31, 2021.

Non-operating income increased ~~$32.9~~$5.0 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020,~~June 30, 2021, due primarily to ~~$31.7~~a $6.7 million ~~in gains~~gain on ~~two~~a technology ~~investments and a $5.2 million decrease to the tax receivable agreement liability primarily due to early termination payments in the current year period.~~

investment.

Other income of consolidated VIEs increased ~~$2.0~~$4.7 million for the three months ended ~~December 31, 2021~~June 30, 2022 compared to the three months ended ~~December 31, 2020,~~June 30, 2021, due primarily to the change in fair value of the warrants of our sponsored SPAC.

~~Nine months ended December 31, 2021 compared to nine months ended December 31, 2020~~

Other income increased $109.1 million to an income of $123.9 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due primarily to increases in equity in income of investees and other non-operating income.28

Equity in income of investees increased $51.7 million to income of $60.4 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020. This was due primarily to the increases in public and private market valuations during the nine months ended September 30, 2021.

Non-operating income increased $59.7 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due primarily to $54.9 million in gains on two technology investments and a $6.2 million decrease to the tax receivable agreement liability primarily due to early termination payments in the current year period.

Other income of consolidated VIEs increased $3.5 million for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020, due to increases in equity in income (loss) of investees discussed above and a change in fair value of the warrants of our sponsored SPAC.

Income Tax Expense

Our effective tax rate was ~~12.6%~~17.0% and ~~10.5%~~21.1% for the three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020, respectively, and 15.2% and 16.5% for the nine months ended December 31, 2021 and 2020,~~ respectively. These rates were different than the statutory tax rates due to the portion of income allocated to non-controlling interests, valuation allowance recorded against deferred tax assets and ~~state income~~discrete tax ~~expense~~adjustments recorded in the periods. The effective tax rate for the three months ended ~~December 31,~~June 30, 2022 was less than the effective tax rate for the three months ended June 30, 2021 primarily due to a valuation allowance for deferred tax assets not expected to be realized, which was ~~higher~~lower in the three months ended June 30, 2022 than the three months ended December 31, 2020 due primarily to discrete tax adjustments, which were higher in the three months ended December 31, 2021 than the comparable prior year period. The effective tax rate for the nine months ended December 31, 2021 was less than the nine months ended December 31, 2020 due primarily to a tax adjustment related to equity in income of investees which was less in the nine months ended December 31, 2021 than the comparable prior year period.

June 30, 2021.

Fee-Earning AUM

The following table provides the period to period rollforward of our fee-earning AUM.


		Three Months Ended December 31,						Nine Months Ended December 31,							Three Months Ended June 30,						Three Months Ended June 30,
($ in millions)	($ in millions)	2021						2021						($ in millions)	2022						2021
		Customized Separate Accounts		Specialized Funds		Total		Customized Separate Accounts		Specialized Funds		Total			Customized Separate Accounts		Specialized Funds		Total		Customized Separate Accounts		Specialized Funds		Total
Balance, beginning of period	Balance, beginning of period	$	27,390	$	17,243	$	44,633	$	25,664	$	16,341	$	42,005	Balance, beginning of period	$	30,938	$	18,193	$	49,131	$	25,664	$	16,341	$	42,005
Contributions (1)	Contributions (1)	1,540		770		2,310		4,999		2,776		7,775		Contributions (1)	1,902		1,435		3,337		1,573		936		2,509
Distributions (2)	Distributions (2)	(719)		(384)		(1,103)		(2,753)		(1,595)		(4,348)		Distributions (2)	(1,142)		(179)		(1,321)		(1,007)		(941)		(1,948)
Foreign exchange, market value and other (3)	Foreign exchange, market value and other (3)	153		76		229		454		183		637		Foreign exchange, market value and other (3)	51		(77)		(26)		147		48		195
Balance, end of period	Balance, end of period	$	28,364	$	17,705	$	46,069	$	28,364	$	17,705	$	46,069	Balance, end of period	$	31,749	$	19,372	$	51,121	$	26,377	$	16,384	$	42,761

(1)Contributions represent (i) new commitments from customized separate accounts and specialized funds that earn fees on a committed capital fee base and (ii) capital contributions to underlying investments from customized separate accounts and specialized funds that earn fees on a net invested capital or NAV fee base.

(2)Distributions represent (i) returns of capital in customized separate accounts and specialized funds that earn fees on a net invested capital or NAV fee base, (ii) reductions in fee-earning AUM from separate accounts and specialized funds that moved from a committed capital to net invested capital fee base and (iii) reductions in fee-earning AUM from customized separate accounts and specialized funds that are no longer earning fees.

(3)Foreign exchange, market value and other consists primarily of (i) the impact of foreign exchange rate fluctuations for customized separate accounts and specialized funds that earn fees on non-U.S. dollar denominated commitments and (ii) market value appreciation (depreciation) from customized separate accounts and specialized funds that earn fees on a NAV fee base.

Three months ended ~~December 31, 2021~~June 30, 2022

Fee-earning AUM increased ~~$1.4~~$2.0 billion to ~~$46.1~~$51.1 billion during the three months ended ~~December 31, 2021,~~June 30, 2022, due to contributions from customized separate accounts and specialized funds.

Customized separate accounts fee-earning AUM increased ~~$1.0~~$0.8 billion, or 4%3%, to ~~$28.4~~$31.7 billion for the three months ended ~~December 31, 2021.~~June 30, 2022. Customized separate accounts contributions were ~~$1.5~~$1.9 billion for the three months ended ~~December 31, 2021,~~June 30, 2022, due to new allocations from existing clients and the addition of new clients. Distributions were ~~$0.7~~$1.1 billion for the three months ended ~~December 31, 2021~~June 30, 2022 due to ~~$0.4~~$0.5 billion from accounts moving from a committed to net invested capital fee base, $0.3 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, ~~$0.2 billion from accounts moving from a committed to net invested capital fee base,~~ and ~~$0.1~~$0.3 billion from accounts reaching the end of their fund term.

Specialized funds fee-earning AUM increased ~~$0.5~~$1.2 billion, or 3%6%, to ~~$17.7~~$19.4 billion for the three months ended ~~December 31, 2021.~~June 30, 2022. Specialized fund contributions were ~~$0.8~~$1.4 billion for the three months ended ~~December 31, 2021,~~June 30, 2022, due primarily to ~~$0.3 billion from our evergreen funds and $0.2~~$0.5 billion from our latest ~~direct equity fund.~~secondary fund and $0.4 billion from our

evergreen funds. Distributions were ~~$0.4~~$0.2 billion for the three months ended ~~December 31, 2021,~~June 30, 2022, due to ~~$0.3~~$0.1 billion from returns of capital in funds earning fees on a net invested capital or NAV fee base and $0.1 billion from accounts reaching the end of their fund term.

~~Nine months ended December 31, 2021~~

~~Fee-earning AUM increased $4.1 billion to $46.1 billion during the nine months ended December 31, 2021, due to contributions from customized separate accounts and specialized funds.~~

Customized separate accounts fee-earning AUM increased $2.7 billion, or 11%, to $28.4 billion for the nine months ended December 31, 2021. Customized separate accounts contributions were $5.0 billion for the nine months ended December 31, 2021, due to new allocations from existing clients and the addition of new clients. Distributions were $2.8 billion for the nine months ended December 31, 2021 due to $1.2 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, $1.0 billion from accounts reaching the end of their fund term, and $0.6 billion from accounts moving from a committed to net invested capital fee base.

Specialized funds fee-earning AUM increased $1.4 billion, or 8%, to $17.7 billion for the nine months ended December 31, 2021. Specialized fund contributions were $2.8 billion for the nine months ended December 31, 2021, due primarily to $0.9 billion from our evergreen funds, $0.7 billion from our latest direct equity fund, and $0.7 billion from our direct credit funds. Distributions were $1.6 billion for the nine months ended December 31, 2021, due to $0.9 billion from returns of capital in funds earning fees on a net invested capital or NAV fee base, $0.4 billion from our prior direct equity fund moving from a committed to net invested capital fee base, and $0.3 billion from accounts reaching the end of their fund term.

Non-GAAP Financial Measures

Below is a description of our unaudited non-GAAP financial measures. These are not measures of financial performance under GAAP and should not be considered a substitute for the most directly comparable GAAP measures, which are reconciled below. These measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these measures in isolation or as a substitute for GAAP measures. Other companies may calculate these measures differently than we do, limiting their usefulness as a comparative measure.

Fee Related Earnings

Fee Related Earnings (“FRE”) is used to highlight our earnings from recurring management fees. FRE represents net income excluding (a) incentive fees and related compensation, (b) interest income and expense, (c) income tax expense, (d) equity in income of investees, (e) other non-operating income and (f) certain other significant items that we believe are not indicative of our core performance. We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business. FRE is presented before income taxes.

Adjusted EBITDA

Adjusted EBITDA is an internal measure of profitability. We believe Adjusted EBITDA is useful to investors because it enables them to better evaluate the performance of our core business across reporting periods. Adjusted EBITDA represents net income excluding (a) interest expense on our outstanding debt, (b) income tax expense, (c) depreciation and amortization expense, (d) equity-based compensation expense, (e) other non-operating income and (f) certain other significant items that we believe are not indicative of our core performance.

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The following table shows a reconciliation of net income attributable to Hamilton Lane Incorporated to Fee Related Earnings and Adjusted EBITDA for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020:~~2021:


		Three Months Ended December 31,			Nine Months Ended December 31,							Three Months Ended June 30,
($ in thousands)	($ in thousands)		2021		2020		2021		2020		($ in thousands)		2022		2021
Net income attributable to Hamilton Lane Incorporated	Net income attributable to Hamilton Lane Incorporated		$	51,849	$	33,203	$	132,161	$	58,263	Net income attributable to Hamilton Lane Incorporated		$	33,484	$	28,168
(Loss) Income attributable to non-controlling interests in general partnerships			(119)		(68)		167		(346)
Income attributable to non-controlling interests in general partnerships											Income attributable to non-controlling interests in general partnerships		308		213
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.		26,181		21,497		76,849		46,283		Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.		20,168		19,296
Income attributable to non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.			2,285		—		519		—
Income (loss) attributable to non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.											Income (loss) attributable to non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.		2,166		(2,996)
Incentive fees	Incentive fees		(11,868)		(9,304)		(37,366)		(29,845)		Incentive fees		(49,563)		(5,111)
Incentive fee related compensation (1)	Incentive fee related compensation (1)		5,609		4,408		17,685		13,828		Incentive fee related compensation (1)		23,541		2,383
SPAC related general, administrative and other expenses	SPAC related general, administrative and other expenses		309		—		868		—		SPAC related general, administrative and other expenses		276		359
Non-operating income related compensation			1,790		—		1,790		—
Interest income	Interest income		(26)		(658)		(488)		(775)		Interest income		(168)		(423)
Interest expense	Interest expense		1,161		468		3,492		1,448		Interest expense		1,495		1,165
Income tax expense	Income tax expense		11,519		6,429		37,515		20,522		Income tax expense		11,488		11,964
Equity in income of investees	Equity in income of investees		(12,626)		(11,923)		(60,351)		(8,699)		Equity in income of investees		(107)		(20,278)
Non-operating income	Non-operating income		(39,178)		(6,229)		(66,567)		(6,830)		Non-operating income		(6,309)		(1,359)
Fee Related Earnings	Fee Related Earnings		$	36,886	$	37,823	$	106,274	$	93,849	Fee Related Earnings		$	36,779	$	33,381
Depreciation and amortization	Depreciation and amortization		1,292		1,005		3,744		2,982		Depreciation and amortization		1,764		1,378
Equity-based compensation	Equity-based compensation		1,711		1,759		5,706		5,310		Equity-based compensation		1,897		2,341
Incentive fees	Incentive fees		11,868		9,304		37,366		29,845		Incentive fees		49,563		5,111
Incentive fees attributable to non-controlling interests	Incentive fees attributable to non-controlling interests		(59)		(25)		(134)		(735)		Incentive fees attributable to non-controlling interests		(3)		(95)
Incentive fee related compensation (1)	Incentive fee related compensation (1)		(5,609)		(4,408)		(17,685)		(13,828)		Incentive fee related compensation (1)		(23,541)		(2,383)
Non-operating income related compensation			(1,790)		—		(1,790)		—
Interest income	Interest income		26		658		488		775		Interest income		168		423
Adjusted EBITDA	Adjusted EBITDA		$	44,325	$	46,116	$	133,969	$	118,198	Adjusted EBITDA		$	66,627	$	40,156

(1) Incentive fee related compensation includes incentive fee compensation expense and bonus related to carried interest that is classified as base compensation.

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Non-GAAP Earnings Per Share

Non-GAAP earnings per share measures our per-share earnings excluding certain significant items that we believe are not indicative of our core performance and assuming all Class B and Class C units in HLA were exchanged for Class A common stock in HLI. Non-GAAP earnings per share is calculated as adjusted net income divided by adjusted shares outstanding. Adjusted net income is income before taxes fully taxed at our estimated statutory tax rate and excludes any impact of changes in carrying amount of our redeemable non-controlling interest. We believe adjusted net income and non-GAAP earnings per share are useful to investors because they enable them to better evaluate total and per-share operating performance across reporting periods.

The following table shows a reconciliation of adjusted net income to net income attributable to Hamilton Lane Incorporated and adjusted shares outstanding to weighted-average shares of Class A common stock outstanding for the three ~~and nine~~ months ended ~~December 31, 2021~~June 30, 2022 and ~~2020:~~2021:


		Three Months Ended December 31,	Nine Months Ended December 31,									Three Months Ended June 30,
(in thousands, except share and per-share amounts)	(in thousands, except share and per-share amounts)		2021		2020		2021		2020		(in thousands, except share and per-share amounts)		2022		2021
Net income attributable to Hamilton Lane Incorporated	Net income attributable to Hamilton Lane Incorporated		$	51,849	$	33,203	$	132,161	$	58,263	Net income attributable to Hamilton Lane Incorporated		$	33,484	$	28,168
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.		26,181		21,497		76,849		46,283		Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.		20,168		19,296
Income tax expense	Income tax expense		11,519		6,429		37,515		20,522		Income tax expense		11,488		11,964
Adjusted pre-tax net income	Adjusted pre-tax net income		89,549		61,129		246,525		125,068		Adjusted pre-tax net income		65,140		59,428
Adjusted income taxes (1)	Adjusted income taxes (1)		(21,312)		(14,488)		(58,673)		(29,641)		Adjusted income taxes (1)		(15,568)		(14,144)
Adjusted net income	Adjusted net income		$	68,237	$	46,641	$	187,852	$	95,427	Adjusted net income		$	49,572	$	45,284

Weighted-average shares of Class A common stock outstanding - diluted	Weighted-average shares of Class A common stock outstanding - diluted		53,744,144		34,751,392		53,707,401		32,807,948		Weighted-average shares of Class A common stock outstanding - diluted		53,706,941		36,128,994
Exchange of Class B and Class C units in HLA (2)	Exchange of Class B and Class C units in HLA (2)		—		18,912,099		—		20,812,989		Exchange of Class B and Class C units in HLA (2)		—		17,553,234
Adjusted shares outstanding	Adjusted shares outstanding		53,744,144		53,663,491		53,707,401		53,620,937		Adjusted shares outstanding		53,706,941		53,682,228

Non-GAAP earnings per share	Non-GAAP earnings per share		$	1.27	$	0.87	$	3.50	$	1.78	Non-GAAP earnings per share		$	0.92	$	0.84

(1) Represents corporate income taxes at our estimated statutory tax rate of ~~23.8%~~23.9% and ~~23.7%~~23.8% for the three ~~and nine~~ month periods ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ respectively, applied to adjusted pre-tax net income. The 23.9% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.9%. The 23.8% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.8%~~. The 23.7% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.7%~~.

(2) Assumes the full exchange of Class B and Class C units in HLA for Class A common stock of HLI pursuant to the exchange agreement. For the three months ended June 30, 2022, the full exchange of Class B and Class C units is already included within the GAAP Weighted-average shares of Class A common stock outstanding - diluted.

3932

Investment Performance

The following tables present information relating to the historical performance of our ~~discretionary investment accounts.~~specialized funds with fund families having at least two distinct vintages and most recent fund sizes of greater than $500 million per fund. The data ~~for these investments is~~are presented from the date indicated through ~~September 30, 2021~~March 31, 2022 and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.

When considering the data presented below, ~~you should~~ note that the historical results of our ~~discretionary investments~~specialized funds are not indicative of the future results you should expect from such investments, from any future investment funds we may raise or from an investment in our Class A common stock, in part because:

•market conditions and investment opportunities during previous periods may have been significantly more favorable for generating positive performance than those we may experience in the future;

•the performance of our funds is generally calculated on the basis of the NAV of the funds’ investments, including unrealized gains, which may never be realized;

•our historical returns derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed;

•our newly established funds may generate lower returns during the period that they initially deploy their capital;

•in recent years, there has been increased competition for investment opportunities resulting from the increased amount of capital invested in private markets alternatives and high liquidity in debt markets, and the increased competition for investments may reduce our returns in the future; and

•the performance of particular funds also will be affected by risks of the industries and businesses in which they invest.

The historical and potential future returns of the investment funds we manage are not directly linked to returns on our Class A common stock. Therefore, you should not conclude that continued positive performance of the investment funds we manage will necessarily result in positive returns on an investment in our Class A common stock. As used in this discussion, internal rate of return (“IRR”) is calculated on a pooled basis using daily cash flows. See “Performance Methodology” below for more information on how our returns are calculated.

Specialized Fund Performance

We organize, invest and manage specialized primary, secondary ~~direct/co-investment funds, strategic opportunity funds~~ and ~~evergreen~~direct investment funds. Our specialized funds invest across a variety of private markets and include equity, equity-linked and credit funds offered on standard terms, as well as shorter duration, opportunistically oriented funds. Below is performance information across our various specialized funds. Substantially all of these funds are globally focused, and they are grouped by the investment strategy utilized.

4033

~~Gross Returns — Realized~~
Fund Vintage
year Fund size ($M) Realized
Capital
invested ($M) Realized
Gross
multiple Realized
Gross
IRR (%) Realized Gross
Spread vs.
S&P 500 PME Realized Gross
Spread vs.
MSCI World PME
Primaries (Diversified)
PEF I 1998 122 117 1.3 5.4% 378 bps 322 bps
PEF IV 2000 250 238 1.7 16.2% 1,302 bps 1,170 bps
PEF V 2003 135 133 1.7 14.2% 841 bps 950 bps
PEF VI 2007 494 499 1.7 12.2% 112 bps 446 bps
PEF VII 2010 262 245 1.7 15.5% 102 bps 500 bps
PEF VIII 2012 427 129 1.4 12.3% (160) bps 190 bps
PEF IX 2015 517 121 2.4 31.9% 1,588 bps 1,904 bps
PEF X 2018 278 N/A N/A N/A N/A N/A
Secondaries
Pre-Fund - - 362 1.5 17.1% 1,330 bps 1,172 bps
Secondary Fund I 2005 360 353 1.2 5.2% 113 bps 341 bps
Secondary Fund II 2008 591 596 1.5 19.9% 459 bps 876 bps
Secondary Fund III 2012 909 697 1.6 18.8% 509 bps 896 bps
Secondary Fund IV 2016 1,916 251 2.2 39.6% 2,375 bps 2,685 bps
Secondary Fund V 2019 3,929 20 2.1 141.3% 11,334 bps 11,527 bps
Co-investments
Pre-Fund - - 244 1.9 21.3% 1,655 bps 1,600 bps
Co-Investment Fund 2005 604 561 1.0 0.2% (554) bps (304) bps
Co-Investment Fund II 2008 1,195 874 2.4 21.1% 878 bps 1,257 bps
Co-Investment Fund III 2014 1,243 446 2.7 37.3% 2,264 bps 2,596 bps
Co-Investment Fund IV 2018 1,698 163 4.5 86.9% 6,781 bps 7,105 bps
Equity Opportunities V 2021 1,086 N/A N/A N/A N/A N/A
Fund Vintage
year Fund size ($M) Realized
Capital
invested ($M) Realized
Gross
multiple Realized
Gross
IRR (%) Realized Gross
Spread vs.
CS HY II PME Realized Gross
Spread vs.
CS LL PME
Strategic Opportunities (Tail-end secondaries and credit)
Strat Opps 2015 2015 71 58 1.3 14.9% 581 bps 916 bps
Strat Opps 2016 2016 214 155 1.3 17.7% 1,084 bps 1,279 bps
Strat Opps 2017 2017 435 322 1.3 15.6% 1,102 bps 1,165 bps
Strat Opps 2018 2018 889 434 1.2 13.8% 940 bps 1,179 bps
Strat Opps 2019 2019 762 201 1.3 25.7% 1,925 bps 2,102 bps
Strat Opps 2020 2021 898 20 1.0 11.6% 276 bps 716 bps

~~Gross Returns — Realized and Unrealized~~


Fund	Fund	Vintage year	Fund size ($M)	Capital invested ($M)	Gross multiple	Net Multiple	Gross IRR (%)	Net IRR (%)	Gross Spread vs. S&P 500 PME	Net Spread vs. S&P 500 PME	Gross Spread vs. MSCI World PME	Net Spread vs. MSCI World PME	Fund	Vintage year	Fund size ($M)	Capital invested ($M)	Gross multiple	Net Multiple	Gross IRR (%)	Net IRR (%)	Gross Spread vs. S&P 500 PME	Net Spread vs. S&P 500 PME	Gross Spread vs. MSCI World PME	Net Spread vs. MSCI World PME
Primaries (Diversified)	Primaries (Diversified)												Primaries (Diversified)
PEF I	PEF I	1998	122	117	1.3	1.2	5.4%	2.5%	378 bps	76 bps	322 bps	16 bps	PEF I	1998	122	117	1.3	1.2	5.4%	2.5%	378 bps	76 bps	322 bps	16 bps
PEF IV	PEF IV	2000	250	238	1.7	1.5	16.2%	11.2%	1,302 bps	828 bps	1,170 bps	708 bps	PEF IV	2000	250	238	1.7	1.5	16.2%	11.2%	1,302 bps	828 bps	1,170 bps	708 bps
PEF V	PEF V	2003	135	133	1.7	1.6	14.2%	9.6%	841 bps	360 bps	950 bps	463 bps	PEF V	2003	135	133	1.7	1.6	14.2%	9.6%	841 bps	363 bps	950 bps	466 bps
PEF VI	PEF VI	2007	494	514	1.7	1.6	11.8%	9.0%	66 bps	(178) bps	399 bps	150 bps	PEF VI	2007	494	514	1.7	1.6	11.8%	9.0%	68 bps	(175) bps	403 bps	155 bps
PEF VII	PEF VII	2010	262	287	1.6		13.4%	9.6%	(98) bps	(471) bps	296 bps	(84) bps	PEF VII	2010	262	288	1.6	1.7	13.4%	9.5%	(103) bps	(481) bps	297 bps	(85) bps
PEF VIII	PEF VIII	2012	427	417	1.4	1.5	10.9%	8.4%	(363) bps	(632) bps	(33) bps	(300) bps	PEF VIII	2012	427	419	1.5	1.6	11.4%	8.8%	(315) bps	(578) bps	41 bps	(221) bps
PEF IX	PEF IX	2015	517	477	1.9	1.8	22.8%	21.1%	629 bps	430 bps	944 bps	739 bps	PEF IX	2015	517	497	2.0	1.9	22.9%	21.2%	662 bps	469 bps	1,016 bps	824 bps
PEF X	PEF X	2018	278	174	1.5	1.4	30.2%	25.4%	903 bps	266 bps	1,207 bps	556 bps	PEF X	2018	278	200	1.5	1.4	25.4%	21.1%	646 bps	95 bps	1,067 bps	510 bps
Secondaries	Secondaries												Secondaries
Pre-Fund	Pre-Fund	-		362	1.5	N/A	17.1%	N/A	1,330 bps	N/A	1,172 bps	N/A	Pre-Fund	-		362	1.5	N/A	17.1%	N/A	1,330 bps	N/A	1,172 bps	N/A
Secondary Fund I	Secondary Fund I	2005	360	353	1.2		5.2%	3.8%	113 bps	(63) bps	341 bps	157 bps	Secondary Fund I	2005	360	353	1.2		5.2%	3.8%	113 bps	(63) bps	341 bps	157 bps
Secondary Fund II	Secondary Fund II	2008	591	596	1.5	1.4	19.9%	13.6%	459 bps	(185) bps	876 bps	219 bps	Secondary Fund II	2008	591	596	1.5	1.4	19.9%	13.5%	458 bps	(191) bps	875 bps	214 bps
Secondary Fund III	Secondary Fund III	2012	909	836	1.4		14.1%	11.9%	29 bps	(217) bps	411 bps	170 bps	Secondary Fund III	2012	909	837	1.5	1.4	14.3%	12.1%	43 bps	(201) bps	433 bps	193 bps
Secondary Fund IV	Secondary Fund IV	2016	1,916	2,022	1.7		24.1%	25.5%	613 bps	743 bps	939 bps	1,067 bps	Secondary Fund IV	2016	1,916	2,036	1.7	1.6	21.7%	22.5%	426 bps	484 bps	801 bps	857 bps
Secondary Fund V	Secondary Fund V	2019	3,929	2,299	1.5		65.0%	85.5%	4,423 bps	6,274 bps	4,721 bps	6,540 bps	Secondary Fund V	2019	3,929	3,090	1.5		49.3%	56.5%	3,280 bps	3,890 bps	3,784 bps	4,422 bps
Co-investments
Direct/Co-investments													Direct/Co-investments
Pre-Fund	Pre-Fund	-		244	1.9	N/A	21.3%	N/A	1,655 bps	N/A	1,600 bps	N/A	Pre-Fund	-		244	1.9	N/A	21.3%	N/A	1,655 bps	N/A	1,600 bps	N/A
Co-Investment Fund	Co-Investment Fund	2005	604	577	1.0	0.9	0.2%	(1.3)%	(569) bps	(746) bps	(319) bps	(501) bps	Co-Investment Fund	2005	604	577	1.0	0.9	0.2%	(1.3)%	(570) bps	(746) bps	(319) bps	(502) bps
Co-Investment Fund II	Co-Investment Fund II	2008	1,195	1,157	2.0	1.7	17.8%	14.1%	536 bps	148 bps	916 bps	523 bps	Co-Investment Fund II	2008	1,195	1,157	2.1	1.8	17.9%	14.2%	545 bps	159 bps	926 bps	536 bps
Co-Investment Fund III	Co-Investment Fund III	2014	1,243	1,262	2.1	1.8	20.7%	17.4%	548 bps	228 bps	878 bps	552 bps	Co-Investment Fund III	2014	1,243	1,275	2.0	1.8	19.1%	15.9%	390 bps	83 bps	741 bps	430 bps
Co-Investment Fund IV	Co-Investment Fund IV	2018	1,698	1,453	2.0	1.8	37.3%	36.9%	1,668 bps	1,516 bps	1,962 bps	1,797 bps	Co-Investment Fund IV	2018	1,698	1,468	2.1	1.9	33.7%	32.5%	1,409 bps	1,222 bps	1,789 bps	1,603 bps
Equity Opportunities Fund V	Equity Opportunities Fund V	2021	1,086	432	1.0		N/A						Equity Opportunities Fund V	2021	1,539	836	1.1		20.3%	23.5%	1,431 bps	2,274 bps	1,993 bps	2,773 bps

Fund	Fund	Vintage year	Fund size ($M)	Capital invested ($M)	Gross multiple	Net Multiple	Gross IRR (%)	Net IRR (%)	Gross Spread vs. CS HY II PME	Net Spread vs. CS HY II PME	Gross Spread vs. CS LL PME	Net Spread vs. CS LL PME	Fund	Vintage year	Fund size ($M)	Capital invested ($M)	Gross multiple	Net Multiple	Gross IRR (%)	Net IRR (%)	Gross Spread vs. CS HY II PME	Net Spread vs. CS HY II PME	Gross Spread vs. CS LL PME	Net Spread vs. CS LL PME
Strategic Opportunities (Tail-end secondaries and credit)	Strategic Opportunities (Tail-end secondaries and credit)												Strategic Opportunities (Tail-end secondaries and credit)
Strat Opps 2015	Strat Opps 2015	2015	71	68	1.3	1.2	14.1%	10.7%	540 bps	214 bps	853 bps	523 bps	Strat Opps 2015	2015	71	68	1.3	1.2	14.1%	10.7%	551 bps	219 bps	857 bps	521 bps
Strat Opps 2016	Strat Opps 2016	2016	214	216	1.3	1.2	12.0%	9.6%	532 bps	290 bps	719 bps	477 bps	Strat Opps 2016	2016	214	216	1.3	1.2	11.4%	9.0%	508 bps	271 bps	663 bps	427 bps
Strat Opps 2017	Strat Opps 2017	2017	435	447	1.3	1.2	13.0%	10.3%	779 bps	501 bps	888 bps	625 bps	Strat Opps 2017	2017	435	448	1.3	1.2	12.6%	10.1%	806 bps	538 bps	866 bps	614 bps
Strat Opps 2018	Strat Opps 2018	2018	889	844	1.2		11.8%	9.7%	611 bps	355 bps	841 bps	586 bps	Strat Opps 2018	2018	889	851	1.2		10.3%	8.3%	582 bps	343 bps	714 bps	472 bps
Stat Opps 2019	Stat Opps 2019	2019	762	678	1.2	1.1	18.1%	14.8%	1,032 bps	521 bps	1,210 bps	689 bps	Stat Opps 2019	2019	762	696	1.2	1.1	13.7%	10.7%	951 bps	521 bps	884 bps	440 bps
Stat Opps 2020	Stat Opps 2020	2021	898	437	1.0		6.0%	6.1%	(39) bps	16 bps	77 bps	101 bps	Stat Opps 2020	2021	898	746	1.0		5.8%	5.4%	870 bps	813 bps	318 bps	301 bps

Performance Methodology

The indices presented for comparison are the S&P 500, MSCI World, Credit Suisse High Yield II (“CS HY II”) and Credit Suisse Leverage Loan (“CS LL”), calculated on a public market equivalent (“PME”) basis. We believe these indices are commonly used by private markets and credit investors to evaluate performance. The PME calculation methodology allows private markets investment performance to be evaluated against a public index and assumes that capital is being invested in, or withdrawn from, the index on the days the capital was called and distributed from the underlying fund managers. The S&P 500 Index is a total return capitalization-weighted index that measures the performance of 500 U.S. large cap stocks. The MSCI World Index is a free float-adjusted market capitalization-weighted index of over 1,600 world stocks that is designed to measure the equity market performance of developed markets. The CS HY II Index, formerly known as the DLJ High Yield Index, is designed to mirror the investable universe of the U.S. dollar denominated high yield debt market. Prices for the CS HY II Index are

available on a weekly basis. The CS LL Index is an index designed to mirror the investable universe of

the U.S. dollar denominated leveraged loan market. Loans must be rated 5B or lower and the index frequency is monthly.

Our IRR represents the pooled IRR for all discretionary investments for the period from inception to ~~September 30, 2021.~~March 31, 2022. Gross IRR is presented net of management fees, carried interest and expenses charged by the general partners of the underlying investments, but does not include our management fees, carried interest or expenses. Our gross IRR would decrease with the inclusion of our management fees, carried interest and expenses. Net IRR is net of all management fees, carried interest and expenses charged by the general partners of the underlying investments, as well as by us. Net IRR figures for our funds do not include cash flows attributable to the general partner. Note that secondary portfolio IRRs can be initially impacted by purchase discounts (or premiums) paid at the closing of a transaction, the impact of which will diminish over time.

The “Realized IRR” represents the pooled IRR for those discretionary investments that we consider realized for purposes of our track record, which are investments where the underlying investment fund has been fully liquidated, has generated a distributions to paid-in capital ratio (“DPI”) greater than or equal to 1.0 or is older than six years and has a residual value to paid-in capital ratio (“RVPI”) less than or equal to 0.2. Hamilton Lane Secondary Realized includes investments that have been fully liquidated, have a DPI greater than or equal to 1.0 or a RVPI less than or equal to 0.2. Hamilton Lane Realized Co-Investment and Hamilton Lane Realized Strategic Opportunities include investments that have been fully liquidated or have a DPI greater than or equal to 1.0. “Unrealized” includes all investments that do not meet the aforementioned criteria. DPI represents total distributions divided by total invested capital. RVPI represents the remaining market value divided by total invested capital. “Capital“Capital Invested” refers to the total amount of all investments made by a fund, including commitment-reducing and non-commitment-reducing capital calls. “Multiple” represents total distributions from underlying investments to the fund plus the fund’s market value divided by total contributed capital. “Gross Multiple” is presented net of management fees, carried interest and expenses charged by the fund managers of the underlying investments.

Specialized fund and pre-fund performance does not include ten funds-of-funds that have investor-specific investment guidelines.

~~Certain~~Many of our specialized funds utilize revolving credit facilities, which provide capital that is available to fund investments or pay partnership expenses and management fees. Borrowings may be paid down from time to time with investor capital contributions or distributions from investments. The use of a credit facility affects the fund’s return and magnifies the performance on the upside or on the downside.

Liquidity and Capital Resources

Historical Liquidity and Capital Resources

We have managed our historical liquidity and capital requirements primarily through the receipt of management and advisory fee revenues. Our primary cash flow activities involve: (1) generating cash flow from operations, which largely includes management and advisory fees; (2) realizations generated from our investment activities; (3) funding capital commitments that we have made to certain of our specialized funds and customized separate accounts; (4) making dividend payments to our stockholders and distributions to holders of HLA units; and (5) borrowings, interest payments and repayments under our outstanding debt. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, our cash and cash equivalents ~~including investments in money market funds,~~ were ~~$78.8~~$83.1 million and ~~$87.0~~$72.1 million, respectively.

Our material sources of cash from our operations include: (1) management and advisory fees, which are collected monthly or quarterly; (2) incentive fees, which are volatile and largely unpredictable as to amount and timing; and (3) fund distributions related to investments in our specialized funds and certain customized separate accounts that we manage. We use cash flow from operations primarily to pay compensation and related expenses, general, administrative and other expenses, debt service, capital expenditures and distributions to our owners and to fund commitments to certain of our specialized funds and customized separate accounts. If cash flow from operations were insufficient to fund distributions to our owners, we expect that we would suspend paying such distributions.

We have also accessed the capital markets and used proceeds from sales of our Class A common stock to settle in cash exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement.

Finally, we have used available cash and borrowings from our Loan Agreements (defined below) to make strategic investments in companies that seek to offer technology-driven private markets data and wealth management solutions.

Loan Agreements

We maintain a Term Loan and Security Agreement, as amended (the “Term Loan Agreement”), a Revolving Loan and Security Agreement, as amended (the “Revolving Loan Agreement”), and a Multi-Draw Term Loan and Security Agreement, as amended (the “Multi-Draw Term Loan Agreement” and, together with the Term Loan Agreement and the Revolving Loan Agreement, the “Loan Agreements”), with First Republic Bank (“First Republic”). The Term Loan Agreement has a maturity date of July 1, 2027 and the interest rate is a floating per annum rate equal to the prime rate minus 1.50% subject to a floor of 2.25%. As of ~~December 31, 2021,~~June 30, 2022, we had an outstanding balance of ~~$72.2~~$96.3 million under the Term Loan Agreement. We are entitled to request additional uncommitted ~~term advances not to exceed $25 million in the aggregate, as well as additional committed~~ term advances not to exceed $25 million in the aggregate through March 24, 2023.

The Revolving Loan Agreement provides that the aggregate outstanding balance will not exceed $25 million and has a maturity date of March 24, 2023. The interest rate is a floating per annum rate equal to the prime rate minus 1.50% subject to a floor of 2.25%. As of ~~December 31, 2021,~~June 30, 2022, we ~~did not have any~~had an outstanding balance of $25.0 million under the Revolving Loan Agreement.

The Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $100 million with a maturity date of July 1, 2030. Advances ~~may~~could be drawn through March 31, 2022 and the interest rate is a fixed per annum rate of 3.50%. As of ~~December 31, 2021,~~June 30, 2022, we had an outstanding balance of ~~$75.0~~$100.0 million under the Multi-Draw Term Loan Agreement.

The Loan Agreements contain covenants that, among other things, limit HLA’s ability to incur indebtedness, transfer or dispose of assets, merge with other companies, create, incur or allow liens, make investments, make distributions, engage in transactions with affiliates and take certain actions with respect to management fees. The Loan Agreements also require HLA to maintain, among other requirements, (i) a specified amount of management fees, (ii) a specified amount of adjusted EBITDA, as defined in the Loan Agreements, and (iii) a specified minimum tangible net worth, during the term of each of the Loan Agreements. The obligations under the Loan Agreements are secured by substantially all the assets of HLA. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, the principal amount of debt outstanding equaled ~~$147.2~~$221.3 million and ~~$163.6~~$171.8 million, respectively.

During the quarter ended June 30, 2022, we borrowed an additional $25.0 million under our term loan and drew down $25.0 million under our Revolving Loan Agreement to fund contributions to our funds as well as other non-fund investments.

Future Sources and Uses of Liquidity

We generate significant cash flows from operating activities. We believe that we will be able to continue to meet our ~~current~~short-term and long-term liquidity and capital requirements through our cash flows from operating activities, existing cash and cash equivalents and our ability to obtain future external financing.

We believe we will also continue to evaluate opportunities, based on market conditions, to access the capital markets and use proceeds from sales of our Class A common stock to settle in cash exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement. The timing or size of any potential transactions will depend on a number of factors, including market opportunities and our views regarding our capital and liquidity positions and potential future needs. There can be no assurance that any such transactions will be completed on favorable terms, or at all.

We will also continue to evaluate opportunities to make strategic investments in companies that seek to offer technology-driven private markets data and wealth management solutions.

We currently sponsor a SPAC and ~~intend to~~may sponsor additional SPACs in the future, depending on market and other conditions, which will require an initial investment of capital from us that we may be unable to recover if a suitable target company for the SPAC is not identified within the prescribed timeframe.

In November 2018, we authorized a program to repurchase up to 6% of the outstanding shares of our Class A common stock, not to exceed $50 million (the “Stock Repurchase Program”). The Stock Repurchase Program does not include specific price targets or timetables and may be suspended or terminated by us at any time. We intend to finance the purchases using available working capital and/or external financing. The Stock Repurchase Program expires 12 months after the date of the first acquisition under the authorization. We have not repurchased any of our Class A common stock under the Stock Repurchase Program, and therefore the full purchase authority remains available. Our board of directors periodically reviews the Stock Repurchase Program and ~~on December 16, 2021,~~most recently re-approved it ~~on the same terms as those approved~~ in ~~2018.~~December 2021.

We expect that our primary ~~current~~short-term and long-term liquidity needs will comprise cash to: (1) provide capital to facilitate the growth of our business; (2) fund commitments to our investments; (3) pay operating expenses, including cash compensation to our employees; (4) make payments and/or exercise early termination buyout rights under the tax receivable agreement; (5) fund capital ~~expenditures;~~expenditures and make strategic investments; (6) pay interest and principal due on our outstanding debt; (7) pay income taxes; (8) make dividend payments to our stockholders and distributions to holders of HLA units in accordance with our distribution policy; (9) settle exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement from time to time; (10) fund SPACs sponsored by us; and (11) fund purchases of our Class A common stock pursuant to the Stock Repurchase Program.

We are required to maintain minimum net capital balances for regulatory purposes for certain of our ~~Hong Kong, United Kingdom~~foreign subsidiaries and our broker-dealer ~~subsidiaries.~~subsidiary. These net capital requirements are met by retaining cash. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of ~~December 31, 2021~~June 30, 2022 and March 31, ~~2021,~~2022, we were required to maintain approximately ~~$3.3~~$4.0 million ~~and $3.0 million, respectively,~~ in liquid net assets within these subsidiaries to meet regulatory net capital and capital adequacy requirements. We are in compliance with these regulatory requirements.

Dividend Policy

The declaration and payment by us of any future dividends to holders of our Class A common stock is at the sole discretion of our board of directors. We intend to continue to pay a cash dividend on a quarterly basis. Subject to funds being legally available, we will cause HLA to make pro rata distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under the tax receivable agreement, and to pay our corporate and other overhead expenses.

Tax Receivable Agreement

We expect that periodic exchanges of membership units of HLA by members of HLA will result in increases in the tax basis in our share of the assets of HLA that otherwise would not have been available. These increases in tax basis are expected to increase our depreciation and amortization deductions and create other tax benefits and therefore may reduce the amount of tax that we would otherwise be required to pay in the future. The tax receivable agreement will require us to pay 85% of the amount of these and certain other tax benefits, if any, that we realize (or are deemed to realize in the case of an early termination payment, a change in control or a material breach by us of our obligations under the tax receivable agreement) to the ~~existing direct and indirect~~pre-IPO members of HLA.

Cash Flows

~~Nine~~Three Months Ended ~~December 31,~~June 30, 2022 and 2021 ~~and 2020~~


		Nine Months Ended December 31,					Three Months Ended June 30,
($ in thousands)	($ in thousands)	2021		2020		($ in thousands)	2022		2021
Net cash provided by operating activities	Net cash provided by operating activities	$	152,512	$	147,791	Net cash provided by operating activities	$	60,952	$	32,389
Net cash used in investing activities	Net cash used in investing activities	(55,664)		(47,413)		Net cash used in investing activities	$	(56,453)	$	(4,431)
Net cash used in financing activities		(104,885)		(57,781)
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	$	6,496	$	(42,087)

Operating Activities

Our operating activities generally reflect our earnings in the respective periods after adjusting for significant non-cash activity, including equity in income (loss) of investees, equity-based compensation, lease expense and depreciation and amortization, all of which are included in earnings. For the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ our net cash provided by operating activities was driven primarily by receipts of management fees and incentive fees offset by payment of operating expenses, which includes compensation and benefits and general, administrative and other expenses.

Investing Activities

Our investing activities generally reflect cash used for acquisitions, fixed asset purchases and contributions to and distributions from our investments. For the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ our net cash used in investing activities was driven primarily by purchases of furniture, fixtures and equipment and net contributions to our funds. Additionally, during the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, we ~~received a distribution from one of our investments valued under the measurement~~

~~alternative and proceeds from the sale of one of our investments valued under the measurement alternative, which was partially offset by the cash paid to acquire 361 Capital, LLC.~~made other non-fund investments.

Financing Activities

Our financing activities generally reflect cash received from debt and equity financings, payments to owners in the form of dividends, distributions and repurchases of shares and scheduled repayments of our outstanding debt. For the ~~nine~~three months ended ~~December 31,~~June 30, 2022 and 2021, ~~and 2020,~~ our net cash used in financing activities was driven primarily by dividends paid to shareholders ~~payments under the tax receivable agreement~~ and distributions to HLA members. Additionally, during the ~~nine~~three months ended ~~December 31, 2021,~~June 30, 2022, we ~~repaid the outstanding balance on~~borrowed additional amounts under our ~~Revolving Loan Agreement.~~existing term loan and revolving credit facility in order to fund contributions to our funds and other non-fund investments.

Off-Balance Sheet Arrangements

There have been no material changes in our off-balance sheet arrangements discussed in our ~~2021~~2022 Form 10-K.

Contractual Obligations, Commitments and Contingencies

There have been no material changes outside of the ordinary course of business in our contractual obligations, commitments and contingencies from those specified in our ~~2021~~2022 Form 10-K.

Critical Accounting Policies

The preparation of our condensed consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent liabilities. We base our judgments on our historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

For a more complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our condensed consolidated financial statements, please refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our ~~2021~~2022 Form 10-K.

Recent Accounting Pronouncements

Information regarding recent accounting developments and their impact on our results can be found in Note 2, “Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including price risk, interest-rate risk, access to and cost of financing risk, liquidity risk, counterparty risk and foreign exchange-rate risk. Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit or financial market dislocations.

Our predominant exposure to market risk is related to our role as general partner or investment manager for our specialized funds and customized separate accounts and the sensitivities to movements in the fair value of their investments, which may adversely affect our equity in income of investees. Since our management fees are generally based on commitments or net invested capital, our management fee and advisory fee revenue is not significantly impacted by changes in investment values.

Fair value of the financial assets and liabilities of our specialized funds and customized separate accounts may fluctuate in response to changes in the value of securities, foreign currency exchange rates, commodity prices and interest rates. The impact of investment risk is as follows:

•Equity in income of investees changes along with the realized and unrealized gains of the underlying investments in our specialized funds and certain customized separate accounts in which we have a general partner commitment. Our general partner investments include thousands of unique underlying portfolio investments with no significant concentration in any industry or country outside of the United States.

•Management fees from our specialized funds and customized separate accounts are not significantly affected by changes in fair value as the management fees are not generally based on

the value of the specialized funds or customized separate accounts, but rather on the amount of capital committed or invested in the specialized funds or customized separate accounts, as applicable.

•Incentive fees from our specialized funds and customized separate accounts are not materially affected by changes in the fair value of unrealized investments because they are based on realized gains and subject to achievement of performance criteria rather than on the fair value of the specialized fund’s or customized separate account’s assets prior to realization. Minor decreases in underlying fair value would not affect the amount of deferred incentive fee revenue subject to clawback.

Exchange Rate Risk

Several of our specialized funds and customized separate accounts hold investments denominated in non-U.S. dollar currencies that may be affected by movements in the rate of exchange between the U.S. dollar and foreign currency, which could impact investment performance. The currency exposure related to investments in foreign currency assets is limited to our general partner interest, which is typically one percent of total capital commitments. We do not possess significant assets in foreign countries in which we operate or engage in material transactions in currencies other than the U.S. dollar. Therefore, changes in exchange rates are not expected to materially impact our financial statements.

Interest Rate Risk

As of ~~December 31, 2021,~~June 30, 2022, we had ~~$147.2~~$221.3 million in borrowings outstanding under our Loan Agreements. The annual interest rate on the Term Loan Agreement, which is at the prime rate minus 1.50%, subject to a floor of 2.25%, was ~~2.25%~~3.25% as of ~~December 31, 2021.~~June 30, 2022. The annual interest rate on the Revolving Loan Agreement, which is at the prime rate minus 1.50%, subject to a floor of 2.25%, was ~~2.25%~~3.25% as of ~~December 31, 2021.~~June 30, 2022.

Based on the floating rate component of our Loan Agreements payable as of ~~December 31, 2021,~~June 30, 2022, we estimate that a 100 basis point increase in interest rates would result in increased interest expense of ~~$0.4~~$1.2 million over the next 12 months.

Credit Risk

We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~December 31, 2021.~~June 30, 2022. Our disclosure controls and procedures are intended to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods

specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at ~~December 31, 2021.~~June 30, 2022.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting during the quarter ended ~~December 31, 2021~~June 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


			41

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, we may be subject to various legal, regulatory and/or administrative proceedings from time to time. Although there can be no assurance of the outcome of such proceedings, in the opinion of management, we do not believe it is probable that any pending or, to our knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect our condensed consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our ~~2021~~2022 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table provides information about our repurchase activity with respect to shares of our Class A common stock for the quarter ended ~~December 31, 2021:~~June 30, 2022:

~~Period~~

Total
Number of
Shares
Purchased

Average Price
Paid per
Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs

~~Maximum Approximate~~

~~Dollar Value of~~

~~Shares~~

~~that May Yet Be~~

~~Purchased Under the~~

~~Plans or Programs(1)~~

~~October 1-31, 2021~~

—

~~50,000,000~~

~~November 1-30, 2021~~

—

~~50,000,000~~

~~December 1-31, 2021~~

—

~~50,000,000~~

~~Total~~

—

~~50,000,000~~


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)
April 1-30, 2022	—	$	—	—	$	50,000,000
May 1-31, 2022	—	$	—	—	$	50,000,000
June 1-30, 2022	27	$	68.79	—	$	50,000,000
Total	27	$	68.79	—	$	50,000,000

(1) Represents shares of Class A common stock tendered by an employee as payment of taxes withheld on the vesting of restricted stock granted under HLI’s 2017 Equity Incentive Plan.

(2) On November 6, 2018, we announced that our board of directors authorized a program to repurchase, in the aggregate, up to 6% of the outstanding shares of our Class A common stock as of the date of the authorization, not to exceed $50 million (the “Stock Repurchase Program”). The authorization provides us the flexibility to repurchase shares in the open market or in privately negotiated transactions from time to time, based on market conditions and other factors. We have not repurchased any of our Class A common stock under the Stock Repurchase Program, so the full purchase authority remains available under this program, which expires 12 months after the date of the first acquisition under the authorization. ~~On December 16, 2021, our~~Our board of directors most recently re-approved the Stock Repurchase Program ~~on the same terms as those approved~~ in ~~2018.~~December 2021.

5042

Item 6. Exhibits

Incorporated By Reference

Filed Herewith

Incorporated By Reference

Filed Herewith

Exhibit No.

Description of Exhibit

Form

Exhibit

Filing Date

File No.

Exhibit No.

Description of Exhibit

Form

Exhibit

Filing Date

File No.

3.1

Amended and Restated Certificate of Incorporation of Hamilton Lane Incorporated

8-K

3.1

3/10/17

001-38021

3.1

Amended and Restated Certificate of Incorporation of Hamilton Lane Incorporated

8-K

3.1

3/10/17

001-38021

3.2

Amended and Restated Bylaws of Hamilton Lane Incorporated

10-K

3.2

6/27/17

001-38021

3.2

Amended and Restated Bylaws of Hamilton Lane Incorporated

10-K

3.2

6/27/17

001-38021

31.1

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.1

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32‡

Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32‡

Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following financial information from our Quarterly Report on Form 10-Q for the quarter ended December 31, 2021 formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Stockholders’ Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements.

101

The following financial information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Stockholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

‡ Furnished herewith.


			5143

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 12stnd day of ~~February~~August 2022.


HAMILTON LANE INCORPORATED


By:			/s/ Atul Varma
			Name: Atul Varma
			Title: Chief Financial Officer and Treasurer

By:			/s/ Michael Donohue
			Name: Michael Donohue
			Title: Managing Director and Controller