Cover Page
Cover Page - shares | 3 Months Ended | |
Jun. 30, 2023 | Jul. 28, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38021 | |
Entity Registrant Name | HAMILTON LANE INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-2482738 | |
Entity Address, Address Line One | 110 Washington Street, | |
Entity Address, Address Line Two | Suite 1300 | |
Entity Address, City or Town | Conshohocken, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19428 | |
City Area Code | 610 | |
Local Phone Number | 934-2222 | |
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | |
Trading Symbol | HLNE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001433642 | |
Current Fiscal Year End Date | --03-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 38,588,557 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 15,409,507 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Assets | ||
Fees receivable | $ 65,864 | $ 47,140 |
Prepaid expenses | 8,007 | 9,817 |
Due from related parties | 7,963 | 7,186 |
Furniture, fixtures and equipment, net | 30,360 | 28,425 |
Lease right-of-use assets, net | 64,396 | 62,327 |
Investments | 546,080 | 530,921 |
Deferred income taxes | 229,259 | 233,912 |
Assets of consolidated variable interest entities: | ||
Investments | 546,080 | 530,921 |
Total assets | 1,200,094 | 1,140,543 |
Liabilities and equity | ||
Accounts payable | 5,574 | 4,559 |
Accrued compensation and benefits | 32,525 | 24,190 |
Accrued members’ distributions | 11,464 | 15,723 |
Accrued dividend | 16,780 | 15,049 |
Debt | 197,939 | 213,533 |
Payable to related parties pursuant to tax receivable agreement | 173,818 | 174,702 |
Lease liabilities | 80,994 | 78,817 |
Liabilities of consolidated variable interest entities: | ||
Total liabilities | 558,394 | 566,351 |
Commitments and contingencies (Note 15) | ||
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued | 0 | 0 |
Additional paid-in-capital | 176,673 | 171,567 |
Total Hamilton Lane Incorporated stockholders’ equity | 434,768 | 415,444 |
Total equity | 641,700 | 574,192 |
Total liabilities and equity | 1,200,094 | 1,140,543 |
Class A Common Stock | ||
Liabilities of consolidated variable interest entities: | ||
Common stock | 39 | 39 |
Class B Common Stock | ||
Liabilities of consolidated variable interest entities: | ||
Common stock | 15 | 15 |
Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
Assets | ||
Cash and cash equivalents | 100,255 | 99,686 |
Restricted cash | 4,805 | 4,804 |
Investments | 546,080 | 530,921 |
Other assets | 28,092 | 46,784 |
Assets of consolidated variable interest entities: | ||
Cash and cash equivalents | 100,255 | 99,686 |
Investments | 546,080 | 530,921 |
Other assets | 28,092 | 46,784 |
Liabilities and equity | ||
Other liabilities (includes $14,149 and $14,228 at fair value) | 33,376 | 32,856 |
Liabilities of consolidated variable interest entities: | ||
Other liabilities | 33,376 | 32,856 |
Consolidated VIEs | ||
Assets | ||
Cash and cash equivalents | 24,909 | 12,062 |
Investments | 88,260 | 57,044 |
Other assets | 1,844 | 435 |
Assets of consolidated variable interest entities: | ||
Cash and cash equivalents | 24,909 | 12,062 |
Investments | 88,260 | 57,044 |
Other assets | 1,844 | 435 |
Liabilities and equity | ||
Other liabilities (includes $14,149 and $14,228 at fair value) | 5,924 | 6,922 |
Liabilities of consolidated variable interest entities: | ||
Other liabilities | 5,924 | 6,922 |
General Partnerships | ||
Liabilities of consolidated variable interest entities: | ||
Stockholders' equity attributable to noncontrolling interest | 4,004 | 3,877 |
Subsidiaries | ||
Liabilities of consolidated variable interest entities: | ||
Retained earnings | 258,041 | 243,823 |
Hamilton Lane Advisors, L.L.C. | ||
Liabilities of consolidated variable interest entities: | ||
Stockholders' equity attributable to noncontrolling interest | 138,853 | 135,702 |
Consolidated Funds | ||
Liabilities of consolidated variable interest entities: | ||
Stockholders' equity attributable to noncontrolling interest | $ 64,075 | $ 19,169 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Class of Stock [Line Items] | ||
Other liabilities, fair value | $ 14,149 | $ 14,228 |
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 38,589,298 | 38,611,919 |
Common stock, shares outstanding (in shares) | 38,589,298 | 38,611,919 |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 15,409,507 | 15,409,507 |
Common stock, shares outstanding (in shares) | 15,409,507 | 15,409,507 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues | ||
Total revenues | $ 125,037 | $ 135,509 |
Consolidated variable interest entities related: | ||
Total revenues | 125,037 | 135,509 |
Expenses | ||
Compensation and benefits | 44,103 | 52,194 |
Consolidated variable interest entities related: | ||
Total expenses | 70,098 | 72,984 |
Other income (expense) | ||
Equity in income (loss) of investees | 11,866 | (625) |
Interest income | 937 | 168 |
Non-operating income | 232 | 4,343 |
Consolidated variable interest entities related: | ||
Unrealized income | 757 | 4,344 |
Total other income (expense) | 12,805 | 5,089 |
Income before income taxes | 67,744 | 67,614 |
Income tax expense | 16,400 | 11,488 |
Net income | 51,344 | 56,126 |
Net income attributable to Hamilton Lane Incorporated | 30,998 | 33,484 |
Class A Common Stock | ||
Consolidated variable interest entities related: | ||
Net income attributable to Hamilton Lane Incorporated | $ 30,998 | $ 33,484 |
Basic earnings per share of Class A common stock (in dollars per share) | $ 0.82 | $ 0.92 |
Diluted earnings per share of Class A common stock (in dollars per share) | 0.81 | 0.91 |
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.45 | $ 0.40 |
Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
Expenses | ||
General, administrative and other | $ 25,761 | $ 20,513 |
Consolidated variable interest entities related: | ||
General, administrative and other | 25,761 | 20,513 |
Other income (expense) | ||
Interest expense | (2,890) | (1,495) |
Consolidated VIEs | ||
Expenses | ||
General, administrative and other | 234 | 277 |
Consolidated variable interest entities related: | ||
General, administrative and other | 234 | 277 |
Other income (expense) | ||
Interest expense | (6) | 0 |
Interest income | 1,740 | 0 |
Consolidated variable interest entities related: | ||
Equity in income of investees | 132 | 732 |
Unrealized income | 794 | 1,966 |
General Partnerships | ||
Consolidated variable interest entities related: | ||
Less: Income attributable to non-controlling interests | 1 | 308 |
Hamilton Lane Advisors, L.L.C. | ||
Consolidated variable interest entities related: | ||
Less: Income attributable to non-controlling interests | 19,133 | 20,168 |
Hamilton Lane Alliance Holdings I, Inc. | ||
Consolidated variable interest entities related: | ||
Less: Income attributable to non-controlling interests | 0 | 2,166 |
Consolidated Funds | ||
Consolidated variable interest entities related: | ||
Less: Income attributable to non-controlling interests | 1,212 | 0 |
Management and advisory fees | ||
Revenues | ||
Total revenues | 105,407 | 85,946 |
Consolidated variable interest entities related: | ||
Total revenues | 105,407 | 85,946 |
Incentive fees | ||
Revenues | ||
Total revenues | 19,630 | 49,563 |
Consolidated variable interest entities related: | ||
Total revenues | 19,630 | 49,563 |
Incentive fees | Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
Revenues | ||
Total revenues | 19,630 | 49,524 |
Consolidated variable interest entities related: | ||
Total revenues | 19,630 | 49,524 |
Incentive fees | Consolidated VIEs | ||
Revenues | ||
Total revenues | 0 | 39 |
Consolidated variable interest entities related: | ||
Total revenues | $ 0 | $ 39 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid in Capital | Retained Earnings | Consolidated Funds Noncontrolling Interests | General Partnerships Noncontrolling Interests | Hamilton Lane Advisors, L.L.C. Noncontrolling Interests |
Beginning balance at Mar. 31, 2022 | $ 461,486 | $ 37 | $ 16 | $ 161,676 | $ 185,149 | $ 0 | $ 3,423 | $ 111,185 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 53,960 | 33,484 | 308 | 20,168 | ||||
Equity-based compensation | 1,897 | 1,307 | 590 | |||||
Dividends declared | (14,800) | (14,800) | ||||||
Capital distribution to non-controlling interests, net | (99) | (99) | ||||||
Member distributions | (14,121) | (14,121) | ||||||
Employee Share Purchase Plan share issuance | 485 | 334 | 151 | |||||
Adjustment of redeemable non-controlling interest to redemption value | 2,166 | 1,492 | 674 | |||||
Equity reallocation between controlling and non-controlling interests | 0 | (188) | 188 | |||||
Ending balance at Jun. 30, 2022 | 490,974 | 37 | 16 | 163,129 | 205,325 | 0 | 3,632 | 118,835 |
Beginning balance at Mar. 31, 2023 | 574,192 | 39 | 15 | 171,567 | 243,823 | 19,169 | 3,877 | 135,702 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 51,344 | 30,998 | 1,212 | 1 | 19,133 | |||
Equity-based compensation | 2,846 | 1,995 | 851 | |||||
Repurchase of Class A shares for employee tax withholding | (108) | (76) | (32) | |||||
Dividends declared | (16,780) | (16,780) | ||||||
Capital contributions from non-controlling interests, net | 43,820 | 43,694 | 126 | |||||
Member distributions | (14,165) | (14,165) | ||||||
Employee Share Purchase Plan share issuance | 551 | 386 | 165 | |||||
Equity reallocation between controlling and non-controlling interests | 0 | 2,801 | (2,801) | |||||
Ending balance at Jun. 30, 2023 | $ 641,700 | $ 39 | $ 15 | $ 176,673 | $ 258,041 | $ 64,075 | $ 4,004 | $ 138,853 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating activities: | ||
Net income | $ 51,344 | $ 56,126 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,873 | 1,764 |
Change in deferred income taxes | 4,654 | (1,043) |
Change in payable to related parties pursuant to tax receivable agreement | (883) | 0 |
Equity-based compensation | 2,846 | 1,897 |
Equity in (income) loss of investees | (11,866) | 625 |
Net realized loss on sale of investments | 288 | 0 |
Fair value adjustment of investments | (757) | (4,344) |
Proceeds received from partnerships | 6,060 | 3,343 |
Non-cash lease expense | 2,062 | 1,374 |
Other | 36 | 14 |
Changes in operating assets and liabilities: | ||
Fees receivable | (18,725) | 6,887 |
Prepaid expenses | 1,809 | 283 |
Due from related parties | (777) | (1,908) |
Other assets | 17,389 | 1,128 |
Accounts payable | 1,015 | 743 |
Accrued compensation and benefits | 8,336 | 16,807 |
Lease liability | (1,954) | (1,819) |
Other liabilities | (1,402) | (18,241) |
Consolidated variable interest entities related: | ||
Net cash provided by operating activities | 57,973 | 60,952 |
Investing activities: | ||
Purchase of furniture, fixtures and equipment | (3,385) | (1,707) |
Cash paid for acquisition of business | 0 | (1,500) |
Purchase of investments | (1,177) | (20,236) |
Proceeds from sale of investments | 1,343 | 0 |
Proceeds from sale of intangible assets | 876 | 0 |
Distributions received from Partnerships | 1,676 | 2,227 |
Contributions to Partnerships | (22,686) | (35,237) |
Net cash used in investing activities | (39,722) | (56,453) |
Financing activities: | ||
Borrowings of debt | 0 | 25,000 |
Repayments of debt | (625) | (457) |
Draw-down on revolver | 10,000 | 25,000 |
Repayment of revolver | (25,000) | 0 |
Repurchase of Class A shares for employee tax withholding | (108) | 0 |
Proceeds received from issuance of shares under Employee Share Purchase Plan | 551 | 485 |
Dividends paid | (15,049) | (12,947) |
Members’ distributions paid | (18,423) | (30,485) |
Consolidated variable interest entities related: | ||
Net cash (used in) provided by financing activities | (4,834) | 6,496 |
Increase in cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities | 13,417 | 10,995 |
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at beginning of the period | 116,552 | 76,197 |
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period | 129,969 | 87,192 |
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: | ||
Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities | 129,969 | 87,192 |
Consolidated VIEs | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Fair value adjustment of investments | (794) | (1,966) |
Consolidated variable interest entities related: | ||
Change in warrant liability measured at fair value | 0 | (1,966) |
Equity in income of investees | (132) | (732) |
Other assets and liabilities | (3,243) | 14 |
Investing activities: | ||
Purchase of investments | (16,369) | 0 |
Consolidated variable interest entities related: | ||
Contributions from non-controlling interest in general partnerships | 148 | 133 |
Distributions to non-controlling interest in general partnerships | (22) | (233) |
Contributions from non-controlling interest in consolidated funds | 43,694 | 0 |
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: | ||
Cash and cash equivalents | 24,909 | 144 |
Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
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: | ||
Cash and cash equivalents | 100,255 | 83,052 |
Restricted cash | $ 4,805 | $ 3,996 |
Organization
Organization | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Hamilton Lane Incorporated (“HLI”) was incorporated in the State of Delaware on December 31, 2007 and, following its 2017 initial public offering, 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, payables 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 June 30, 2023 and March 31, 2023, HLI held approximately 70.1% 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 and by providing asset supervisory and reporting services. HLA sponsors the formation, and serves as the general partner or managing member, of various limited liability 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 investments, including investments in debt, equity, and other equity-based instruments. The Company, which includes certain subsidiaries that serve as the general partner or managing member 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending March 31, 2024. 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, 2023. 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: V alues 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. |
Revenue
Revenue | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 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 June 30, Management and advisory fees 2023 2022 Specialized funds $ 57,716 $ 43,649 Customized separate accounts 31,719 28,375 Advisory 6,293 6,248 Reporting and other 5,557 6,318 Distribution management 1,213 496 Fund reimbursement revenue 2,909 860 Total management and advisory fees $ 105,407 $ 85,946 Three Months Ended June 30, Incentive fees 2023 2022 Specialized funds $ 18,386 $ 42,209 Customized separate accounts 1,244 7,315 Consolidated variable interest entities related: Specialized funds — 39 Total incentive fees $ 19,630 $ 49,563 |
Investments
Investments | 3 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | 4. Investments Investments consist of the following: June 30, March 31, 2023 2023 Equity method investments in Partnerships $ 353,540 $ 340,603 Other equity method investments 2,000 — Fair value investments 20,154 21,586 Investments valued under the measurement alternative 170,386 168,732 Total Investments $ 546,080 $ 530,921 Investments of consolidated variable interest entities (“VIEs”) consist of the following: June 30, March 31, 2023 2023 Equity method investments in Partnerships $ 12,984 $ 12,292 Fair value investments 75,276 44,752 Total Investments of Consolidated VIEs $ 88,260 $ 57,044 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, representing a general partner interest. The Company’s other equity method investments represent its ownership in a technology company to develop an AI-powered investment assistant for private markets. Fair value investments The Company’s fair value investments represent a publicly traded security and investments in private equity funds and direct credit and equity 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 amortized cost of the assets held as collateral was $7,388 and $7,429 as of June 30, 2023 and March 31, 2023, respectively. The direct credit investments are debt securities classified as trading securities. Fair value investments are measured at fair value with unrealized holding gains and losses recorded in non-operating (expense) income in the Condensed Consolidated Statements 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 fair value 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 loss on fair value investments held as collateral of $29 during the three months ended June 30, 2023 and a loss of $723 during the three months ended June 30, 2022, that are recorded in non-operating (expense) income. The Company recognized a gain on the secured financing liability of $29 during the three months ended June 30, 2023, and a gain of $723 during the three months ended June 30, 2022, that are recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. Investments valued under the measurement alternative Three Months Ended June 30, 2023 2022 Carrying amount beginning of the year $ 168,732 $ 156,100 Adjustments related to equity investments Purchases 1,177 20,236 Sales / return of capital (178) — Net unrealized gain 1 1,177 6,687 Net realized (loss) gain (522) — Carrying amount, end of year $ 170,386 $ 183,023 (1) Net unrealized gain consists of fair value adjustments for observable price changes of identical or similar investments. The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses related to the Company’s investments under the measurement alternative: June 30, March 31, 2023 2023 Cumulative gross unrealized gains $ 70,235 $ 69,058 Cumulative gross unrealized losses $ (43,289) $ (43,289) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements The following tables summarize the Company’s financial assets and financial liabilities recorded at fair value by fair value hierarchy level: As of June 30, 2023 Level 1 Level 2 Level 3 NAV (2) Total Financial assets: Fair value investments $ 6,005 $ — $ 14,149 $ — $ 20,154 Consolidated VIEs Fair value investments — — 54,625 20,651 75,276 Total financial assets $ 6,005 $ — $ 68,774 $ 20,651 $ 95,430 Financial liabilities: Secured financing (1) $ — $ — $ 14,149 $ — $ 14,149 Total financial liabilities $ — $ — $ 14,149 $ — $ 14,149 As of March 31, 2023 Level 1 Level 2 Level 3 NAV (2) Total Financial assets: Fair value investments $ 7,358 $ — $ 14,228 $ — $ 21,586 Consolidated VIEs Fair value investments — — 21,163 23,589 $ 44,752 Total financial assets $ 7,358 $ — $ 35,391 $ 23,589 $ 66,338 Financial liabilities: Secured financing (1) $ — $ — $ 14,228 $ — $ 14,228 Total financial liabilities $ — $ — $ 14,228 $ — $ 14,228 (1) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheets. (2) Investments are recorded at estimated fair value based upon the net asset value of the fund utilizing the practical expedient under Accounting Standards Codification ASC 820, “Fair Value Measurement.” The fair value amounts presented in this column are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Note 4. 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 investments Direct equity investments Total other investments Balance as of March 31, 2023 $ 6,664 $ 790 $ 6,774 $ 14,228 Contributions — — — — Distributions (50) — — (50) Net (loss) gain (184) (5) 160 (29) Balance as of June 30, 2023 $ 6,430 $ 785 $ 6,934 $ 14,149 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 The following is a reconciliation of investments held by our consolidated VIEs for which significant unobservable inputs (Level 3) were used in determining value: Direct credit investments Balance as of March 31, 2023 $ 21,163 Contributions 14,056 Distributions (40) Net loss 82 Transfer in 19,364 Balance as of June 30, 2023 $ 54,625 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 June 30, 2023: Significant Fair Valuation Unobservable Weighted Value Methodology Inputs Range Average Other investments: Private equity funds $ 6,430 Adjusted net asset value Selected market return 4.8% - 7.9% 7.3% Direct credit investments $ 785 Discounted cash flow Market yield 13.2% - 13.2% 13.2% Direct equity investments $ 6,934 Market approach EBITDA multiple 8.25x - 14.75x 12.62x Market approach Equity multiple 1.65x 1.65x Investments of consolidated VIE: Direct credit investments $ 16,853 Discounted cash flow Market yield 8.6% - 10.2% 9.7% Direct credit investments $ 37,772 Recent precedent For the significant unobservable inputs listed in the tables above: (1) a significant increase or decrease in the selected market return would result in a significantly higher or lower fair value measurement, |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | 6. Variable Interest Entities The Company consolidates certain 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 fund in which it is currently the primary beneficiary, which are not wholly-owned by the Company. The assets of the consolidated general partner VIEs represent equity method-investments in direct investment funds and customized separate accounts and the assets of the consolidated fund represent cash and direct credit investments. The assets may only be used to settle obligations of the respective consolidated VIEs, if any. In addition, there is no recourse to the Company for the consolidated VIEs’ liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest. 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 June 30, 2023, the total remaining unfunded commitments from the Company’s general partner entities to the nonconsolidated VIEs was $142,665. Investor commitments are the primary source of financing for the nonconsolidated VIEs. The maximum exposure to loss represents the potential loss of assets recognized by the Company relating to these nonconsolidated 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. The carrying value of assets and liabilities recognized in the Condensed Consolidated Balance Sheets related to the Company’s interests in these nonconsolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows: June 30, March 31, 2023 2023 Investments $ 204,504 $ 199,858 Fees receivable 23,986 15,829 Due from related parties 3,344 1,960 Total VIE Assets 231,834 217,647 Less: Non-controlling interests (1,570) (1,665) Maximum exposure to loss $ 230,264 $ 215,982 |
Debt
Debt | 3 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt The Company’s debt consisted of the following: As of June 30, 2023 As of March 31, 2023 Principal Outstanding Carrying Value Interest Rate Principal Outstanding Carrying Value Interest Rate Term Loan $ 98,750 $ 98,359 7.00 % $ 99,375 $ 98,969 6.75 % 2020 Multi-Draw Facility 100,000 99,580 3.50 % 100,000 99,564 3.50 % Revolver — — 15,000 15,000 6.50 % Total Debt $ 198,750 $ 197,939 $ 214,375 $ 213,533 |
Equity
Equity | 3 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Equity | 8. Equity The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2023: Class A Common Stock Class B Common Stock March 31, 2023 38,611,919 15,409,507 Forfeitures (30,697) — Shares repurchased for employee tax withholdings (25) — Shares issued pursuant to Employee Share Purchase Plan 8,101 — June 30, 2023 38,589,298 15,409,507 |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | 9. Equity Based Compensation Restricted Stock Awards A summary of restricted stock activity for the three months ended June 30, 2023 is presented below: Total Weighted- March 31, 2023 377,668 $ 65.70 Granted — $ — Vested (2,101) $ 74.68 Forfeited (11,131) $ 66.63 June 30, 2023 364,436 $ 65.62 As of June 30, 2023, total unrecognized compensation expense related to restricted stock was $20,894. Performance Awards A summary of performance award activity for the three months ended June 30, 2023 is presented below: Total Weighted- March 31, 2023 528,282 $ 29.79 Granted — $ — Vested — $ — Forfeited (19,566) $ 29.79 June 30, 2023 508,716 $ 29.79 As of June 30, 2023, total estimated unrecognized expense related to the unvested performance awards was $12,764, and none of the performance awards have met their market price based vesting condition. |
Compensation and Benefits
Compensation and Benefits | 3 Months Ended |
Jun. 30, 2023 | |
Compensation Related Costs [Abstract] | |
Compensation and Benefits | 10. Compensation and Benefits The Company has recorded the following amounts related to compensation and benefits: Three Months Ended June 30, 2023 2022 Base compensation and benefits $ 36,350 $ 37,907 Incentive fee compensation 4,907 12,390 Equity-based compensation 2,846 1,897 Total compensation and benefits $ 44,103 $ 52,194 |
Income Tax
Income Tax | 3 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 11. Income Tax 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 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 24.2% for the three months ended June 30, 2023, and 17.0% for the three months ended June 30, 2022. 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 discrete tax adjustments recorded in the periods. As of June 30, 2023, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 12. 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 one-for-one basis, at which time the share of Class B common stock is surrendered in exchange for a payment of its par value. 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 Three Months Ended 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 $ 30,998 $ 33,484 Impact of changes in carrying amount of redeemable NCI — 380 Basic EPS of Class A common stock $ 30,998 37,707,809 $ 0.82 $ 33,864 36,999,561 $ 0.92 Adjustment to net income: Assumed vesting of employee awards 14 9 Assumed conversion of Class B and Class C Units 12,602 15,179 Effect of dilutive securities: Assumed vesting of employee awards 58,845 31,546 Assumed conversion of Class B and Class C Units 16,089,097 16,675,834 Diluted EPS of Class A common stock $ 43,614 53,855,751 $ 0.81 $ 49,052 53,706,941 $ 0.91 The adjustments to net income for dilutive securities are 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. 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. The calculation of diluted earnings per share excludes 508,716 performance awards for the three months ended June 30, 2023 as the market condition was not achieved as of June 30, 2023. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 13. 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 $80,303 and $60,711 for the three months ended June 30, 2023 and 2022, respectively. The Company earned incentive fees from Partnerships of $18,625 and $49,178 for the three months ended June 30, 2023 and 2022, respectively. Fees receivable from the Partnerships were $46,916 and $31,684 as of June 30, 2023 and March 31, 2023, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets. |
Supplemental Cash Flow
Supplemental Cash Flow | 3 Months Ended |
Jun. 30, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow | 14. Supplemental Cash Flow Three Months Ended June 30, 2023 2022 Establishment of lease liability in exchange for right of use asset $ 3,116 $ — Non-cash investing activities: Other equity method investment $ 2,000 $ — Non-cash financing activities: Dividends declared but not paid $ 16,780 $ 14,800 Member distributions declared but not paid $ 11,464 $ 10,754 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. 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. 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 $1,100,591 and $1,022,250, net of amounts attributable to non-controlling interests, at June 30, 2023 and March 31, 2023, respectively. If the Company ultimately receives the unrecognized carried interest, a total of $275,148 and $255,562 as of June 30, 2023 and March 31, 2023, 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 $218,356 and $211,556 as of June 30, 2023 and March 31, 2023, respectively. The Company has an unrealized net gain on its investments valued under the measurement alternative and a fair value investment of $31,231 as of June 30, 2023, of which up to 15% may be paid as a discretionary bonus as those gains are realized. The Company offers an Employee Investment Program (“EIP”) through which certain employees are able to invest directly into certain Company managed funds as individual limited partners (“LP”). The employees also have an option to enter into a loan agreement with a third-party lender to fund committed capital. The loan is collateralized by the underlying LP interest in the fund and return of capital distributions are utilized to pay the outstanding loan balance. The Company entered into a separate agreement with the third-party lender to backstop the employee’s performance under the loan with a commitment to purchase the LP interest from the lender at the greater of fair value or the outstanding balance of the loan in the event of a default by the employee. As of June 30, 2023, the total amount of outstanding loans under the EIP was $647, and the Company believes the risk of default by an employee to be remote. Leases The Company’s leases consist primarily of operating leases for office space and office equipment in various locations around the world. Some leases have the option to extend for an additional term or terminate early. Short-term lease costs are not material . The following table shows lease costs and other supplemental information related to the Company’s operating leases: Three Months Ended June 30, 2023 2022 Operating lease costs $ 2,200 $ 2,059 Variable lease costs $ 399 $ 237 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,088 $ 194 Weighted average remaining lease term (in years) 13.4 14.4 Weighted average discount rate 3.4 % 3.2 % As of June 30, 2023, the maturities of operating lease liabilities were as follows: Remainder of FY2024 $ 6,223 FY2025 8,204 FY2026 7,650 FY2027 7,397 FY2028 6,929 Thereafter 65,141 Total lease payments 101,544 Less: imputed interest (20,550) Total operating lease liabilities $ 80,994 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On August 1, 2023, the Company declared a quarterly dividend of $0.445 per share of Class A common stock to record holders at the close of business on September 15, 2023. The payment date will be October 5, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||
Net income attributable to HLI | $ 30,998 | $ 33,484 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe 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 months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending March 31, 2024. 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, 2023. |
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 | 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: V alues 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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of 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 June 30, Management and advisory fees 2023 2022 Specialized funds $ 57,716 $ 43,649 Customized separate accounts 31,719 28,375 Advisory 6,293 6,248 Reporting and other 5,557 6,318 Distribution management 1,213 496 Fund reimbursement revenue 2,909 860 Total management and advisory fees $ 105,407 $ 85,946 Three Months Ended June 30, Incentive fees 2023 2022 Specialized funds $ 18,386 $ 42,209 Customized separate accounts 1,244 7,315 Consolidated variable interest entities related: Specialized funds — 39 Total incentive fees $ 19,630 $ 49,563 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investment | Investments consist of the following: June 30, March 31, 2023 2023 Equity method investments in Partnerships $ 353,540 $ 340,603 Other equity method investments 2,000 — Fair value investments 20,154 21,586 Investments valued under the measurement alternative 170,386 168,732 Total Investments $ 546,080 $ 530,921 |
Schedule of Variable Interest Entities | Investments of consolidated variable interest entities (“VIEs”) consist of the following: June 30, March 31, 2023 2023 Equity method investments in Partnerships $ 12,984 $ 12,292 Fair value investments 75,276 44,752 Total Investments of Consolidated VIEs $ 88,260 $ 57,044 The carrying value of assets and liabilities recognized in the Condensed Consolidated Balance Sheets related to the Company’s interests in these nonconsolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows: June 30, March 31, 2023 2023 Investments $ 204,504 $ 199,858 Fees receivable 23,986 15,829 Due from related parties 3,344 1,960 Total VIE Assets 231,834 217,647 Less: Non-controlling interests (1,570) (1,665) Maximum exposure to loss $ 230,264 $ 215,982 |
Schedule of Equity Securities without Readily Determinable Fair Value | Three Months Ended June 30, 2023 2022 Carrying amount beginning of the year $ 168,732 $ 156,100 Adjustments related to equity investments Purchases 1,177 20,236 Sales / return of capital (178) — Net unrealized gain 1 1,177 6,687 Net realized (loss) gain (522) — Carrying amount, end of year $ 170,386 $ 183,023 (1) Net unrealized gain consists of fair value adjustments for observable price changes of identical or similar investments. |
Schedule of Unrealized Gain (Loss) on Investments | The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses related to the Company’s investments under the measurement alternative: June 30, March 31, 2023 2023 Cumulative gross unrealized gains $ 70,235 $ 69,058 Cumulative gross unrealized losses $ (43,289) $ (43,289) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | The following tables summarize the Company’s financial assets and financial liabilities recorded at fair value by fair value hierarchy level: As of June 30, 2023 Level 1 Level 2 Level 3 NAV (2) Total Financial assets: Fair value investments $ 6,005 $ — $ 14,149 $ — $ 20,154 Consolidated VIEs Fair value investments — — 54,625 20,651 75,276 Total financial assets $ 6,005 $ — $ 68,774 $ 20,651 $ 95,430 Financial liabilities: Secured financing (1) $ — $ — $ 14,149 $ — $ 14,149 Total financial liabilities $ — $ — $ 14,149 $ — $ 14,149 As of March 31, 2023 Level 1 Level 2 Level 3 NAV (2) Total Financial assets: Fair value investments $ 7,358 $ — $ 14,228 $ — $ 21,586 Consolidated VIEs Fair value investments — — 21,163 23,589 $ 44,752 Total financial assets $ 7,358 $ — $ 35,391 $ 23,589 $ 66,338 Financial liabilities: Secured financing (1) $ — $ — $ 14,228 $ — $ 14,228 Total financial liabilities $ — $ — $ 14,228 $ — $ 14,228 (1) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheets. (2) Investments are recorded at estimated fair value based upon the net asset value of the fund utilizing the practical expedient under Accounting Standards Codification ASC 820, “Fair Value Measurement.” The fair value amounts presented in this column are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Note 4. |
Schedule of Reconciliation of Other Investments | 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 investments Direct equity investments Total other investments Balance as of March 31, 2023 $ 6,664 $ 790 $ 6,774 $ 14,228 Contributions — — — — Distributions (50) — — (50) Net (loss) gain (184) (5) 160 (29) Balance as of June 30, 2023 $ 6,430 $ 785 $ 6,934 $ 14,149 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 |
Schedule of Reconciliation of Investments Held by Consolidated Funds | The following is a reconciliation of investments held by our consolidated VIEs for which significant unobservable inputs (Level 3) were used in determining value: Direct credit investments Balance as of March 31, 2023 $ 21,163 Contributions 14,056 Distributions (40) Net loss 82 Transfer in 19,364 Balance as of June 30, 2023 $ 54,625 |
Schedule of Assumptions Used | 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 June 30, 2023: Significant Fair Valuation Unobservable Weighted Value Methodology Inputs Range Average Other investments: Private equity funds $ 6,430 Adjusted net asset value Selected market return 4.8% - 7.9% 7.3% Direct credit investments $ 785 Discounted cash flow Market yield 13.2% - 13.2% 13.2% Direct equity investments $ 6,934 Market approach EBITDA multiple 8.25x - 14.75x 12.62x Market approach Equity multiple 1.65x 1.65x Investments of consolidated VIE: Direct credit investments $ 16,853 Discounted cash flow Market yield 8.6% - 10.2% 9.7% Direct credit investments $ 37,772 Recent precedent For the significant unobservable inputs listed in the tables above: (1) a significant increase or decrease in the selected market return would result in a significantly higher or lower fair value measurement, |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | Investments of consolidated variable interest entities (“VIEs”) consist of the following: June 30, March 31, 2023 2023 Equity method investments in Partnerships $ 12,984 $ 12,292 Fair value investments 75,276 44,752 Total Investments of Consolidated VIEs $ 88,260 $ 57,044 The carrying value of assets and liabilities recognized in the Condensed Consolidated Balance Sheets related to the Company’s interests in these nonconsolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows: June 30, March 31, 2023 2023 Investments $ 204,504 $ 199,858 Fees receivable 23,986 15,829 Due from related parties 3,344 1,960 Total VIE Assets 231,834 217,647 Less: Non-controlling interests (1,570) (1,665) Maximum exposure to loss $ 230,264 $ 215,982 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt consisted of the following: As of June 30, 2023 As of March 31, 2023 Principal Outstanding Carrying Value Interest Rate Principal Outstanding Carrying Value Interest Rate Term Loan $ 98,750 $ 98,359 7.00 % $ 99,375 $ 98,969 6.75 % 2020 Multi-Draw Facility 100,000 99,580 3.50 % 100,000 99,564 3.50 % Revolver — — 15,000 15,000 6.50 % Total Debt $ 198,750 $ 197,939 $ 214,375 $ 213,533 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Rollforward of Common Stock | The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2023: Class A Common Stock Class B Common Stock March 31, 2023 38,611,919 15,409,507 Forfeitures (30,697) — Shares repurchased for employee tax withholdings (25) — Shares issued pursuant to Employee Share Purchase Plan 8,101 — June 30, 2023 38,589,298 15,409,507 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Activity | A summary of restricted stock activity for the three months ended June 30, 2023 is presented below: Total Weighted- March 31, 2023 377,668 $ 65.70 Granted — $ — Vested (2,101) $ 74.68 Forfeited (11,131) $ 66.63 June 30, 2023 364,436 $ 65.62 |
Schedule of Performance Units Activity | A summary of performance award activity for the three months ended June 30, 2023 is presented below: Total Weighted- March 31, 2023 528,282 $ 29.79 Granted — $ — Vested — $ — Forfeited (19,566) $ 29.79 June 30, 2023 508,716 $ 29.79 |
Compensation and Benefits (Tabl
Compensation and Benefits (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Compensation Related Costs [Abstract] | |
Schedule of Compensation and Benefits | The Company has recorded the following amounts related to compensation and benefits: Three Months Ended June 30, 2023 2022 Base compensation and benefits $ 36,350 $ 37,907 Incentive fee compensation 4,907 12,390 Equity-based compensation 2,846 1,897 Total compensation and benefits $ 44,103 $ 52,194 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | 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 Three Months Ended 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 $ 30,998 $ 33,484 Impact of changes in carrying amount of redeemable NCI — 380 Basic EPS of Class A common stock $ 30,998 37,707,809 $ 0.82 $ 33,864 36,999,561 $ 0.92 Adjustment to net income: Assumed vesting of employee awards 14 9 Assumed conversion of Class B and Class C Units 12,602 15,179 Effect of dilutive securities: Assumed vesting of employee awards 58,845 31,546 Assumed conversion of Class B and Class C Units 16,089,097 16,675,834 Diluted EPS of Class A common stock $ 43,614 53,855,751 $ 0.81 $ 49,052 53,706,941 $ 0.91 |
Supplemental Cash Flow (Tables)
Supplemental Cash Flow (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Disclosures | Three Months Ended June 30, 2023 2022 Establishment of lease liability in exchange for right of use asset $ 3,116 $ — Non-cash investing activities: Other equity method investment $ 2,000 $ — Non-cash financing activities: Dividends declared but not paid $ 16,780 $ 14,800 Member distributions declared but not paid $ 11,464 $ 10,754 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Cost, Cash Flows, and Other Supplemental Cash Flow Information Regarding Leases | The following table shows lease costs and other supplemental information related to the Company’s operating leases: Three Months Ended June 30, 2023 2022 Operating lease costs $ 2,200 $ 2,059 Variable lease costs $ 399 $ 237 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,088 $ 194 Weighted average remaining lease term (in years) 13.4 14.4 Weighted average discount rate 3.4 % 3.2 % |
Schedule of Maturity of Operating Lease Liabilities | As of June 30, 2023, the maturities of operating lease liabilities were as follows: Remainder of FY2024 $ 6,223 FY2025 8,204 FY2026 7,650 FY2027 7,397 FY2028 6,929 Thereafter 65,141 Total lease payments 101,544 Less: imputed interest (20,550) Total operating lease liabilities $ 80,994 |
Organization - Narrative (Detai
Organization - Narrative (Details) | Jun. 30, 2023 | Mar. 31, 2023 |
HLA | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Percent of economic interest held | 70.10% | 70.10% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 125,037 | $ 135,509 |
Management and advisory fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 105,407 | 85,946 |
Specialized funds | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 57,716 | 43,649 |
Customized separate accounts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 31,719 | 28,375 |
Advisory | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,293 | 6,248 |
Reporting and other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,557 | 6,318 |
Distribution management | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,213 | 496 |
Fund reimbursement revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,909 | 860 |
Incentive fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 19,630 | 49,563 |
Incentive fees | Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 19,630 | 49,524 |
Incentive fees | Consolidated VIEs | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 39 |
Specialized funds | Consolidated Entity Excluding Variable Interest Entities (VIE) | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 18,386 | 42,209 |
Specialized funds | Consolidated VIEs | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 39 |
Customized separate accounts | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,244 | $ 7,315 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 |
Schedule of Equity Method Investments [Line Items] | ||||
Fair value investments | $ 20,154 | $ 21,586 | ||
Investments valued under the measurement alternative | 170,386 | 168,732 | $ 183,023 | $ 156,100 |
Total Investments | 546,080 | 530,921 | ||
Equity method investments in Partnerships | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments | 353,540 | 340,603 | ||
Other equity method investments | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments | $ 2,000 | $ 0 |
Investments - Schedule of Inv_2
Investments - Schedule of Investments of Consolidated VIEs (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Schedule of Equity Method Investments [Line Items] | ||
Fair value investments | $ 20,154 | $ 21,586 |
Equity method investments in Partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments in Partnerships | 353,540 | 340,603 |
Consolidated VIEs | ||
Schedule of Equity Method Investments [Line Items] | ||
Fair value investments | 75,276 | 44,752 |
Total Investments of Consolidated VIEs | 88,260 | 57,044 |
Consolidated VIEs | Equity method investments in Partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments in Partnerships | $ 12,984 | $ 12,292 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
Net gain (loss) | $ 757 | $ 4,344 | |
Unrealized gain/(loss) on secured borrowings, fair value adjustment | 29 | 723 | |
Reported Value Measurement | |||
Schedule of Equity Method Investments [Line Items] | |||
Fair value investments | $ 7,388 | $ 7,429 | |
Equity method investments in Partnerships | |||
Schedule of Equity Method Investments [Line Items] | |||
Percent interest in partnerships | 1% | ||
Investment, Held As Collateral | |||
Schedule of Equity Method Investments [Line Items] | |||
Net gain (loss) | $ (29) | $ (723) |
Investments - Equity Method Inv
Investments - Equity Method Investments Roll forward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Carrying amount beginning of the year | $ 168,732 | $ 156,100 |
Purchases | 1,177 | 20,236 |
Sales / return of capital | (178) | 0 |
Net unrealized loss gain | 1,177 | 6,687 |
Net realized (loss) gain | (522) | 0 |
Carrying amount, end of year | $ 170,386 | $ 183,023 |
Investments - Schedule Cumulati
Investments - Schedule Cumulative Gross Unrealized Gains (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Mar. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | ||
Cumulative gross unrealized gains | $ 70,235 | $ 69,058 |
Cumulative gross unrealized losses | $ (43,289) | $ (43,289) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Financial assets: | ||
Fair value investments | $ 20,154 | $ 21,586 |
Total financial assets | 95,430 | 66,338 |
Financial liabilities: | ||
Secured financing | 14,149 | 14,228 |
Total financial liabilities | 14,149 | 14,228 |
Consolidated VIEs | ||
Financial assets: | ||
Fair value investments | 75,276 | 44,752 |
Level 1 | ||
Financial assets: | ||
Fair value investments | 6,005 | 7,358 |
Total financial assets | 6,005 | 7,358 |
Financial liabilities: | ||
Secured financing | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 1 | Consolidated VIEs | ||
Financial assets: | ||
Fair value investments | 0 | 0 |
Level 2 | ||
Financial assets: | ||
Fair value investments | 0 | 0 |
Total financial assets | 0 | 0 |
Financial liabilities: | ||
Secured financing | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 2 | Consolidated VIEs | ||
Financial assets: | ||
Fair value investments | 0 | 0 |
Level 3 | ||
Financial assets: | ||
Fair value investments | 14,149 | 14,228 |
Total financial assets | 68,774 | 35,391 |
Financial liabilities: | ||
Secured financing | 14,149 | 14,228 |
Total financial liabilities | 14,149 | 14,228 |
Level 3 | Consolidated VIEs | ||
Financial assets: | ||
Fair value investments | 54,625 | 21,163 |
NAV | ||
Financial assets: | ||
Fair value investments | 0 | 0 |
Total financial assets | 20,651 | 23,589 |
Financial liabilities: | ||
Secured financing | 0 | 0 |
Total financial liabilities | 0 | 0 |
NAV | Consolidated VIEs | ||
Financial assets: | ||
Fair value investments | $ 20,651 | $ 23,589 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Reconciliation Of Other Investments [Roll Forward] | ||
Net gain (loss) | $ 757 | $ 4,344 |
Level 3 | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 14,228 | 13,818 |
Contributions | 0 | 0 |
Distributions | (50) | (164) |
Net gain (loss) | (29) | (723) |
Other investments, ending balance | 14,149 | 12,931 |
Private equity funds | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, ending balance | 6,430 | |
Private equity funds | Level 3 | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 6,664 | 7,024 |
Contributions | 0 | 0 |
Distributions | (50) | (164) |
Net gain (loss) | (184) | (456) |
Other investments, ending balance | 6,430 | 6,404 |
Direct credit investments | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, ending balance | 785 | |
Direct credit investments | Level 3 | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 790 | 774 |
Contributions | 0 | 0 |
Distributions | 0 | 0 |
Net gain (loss) | (5) | (1) |
Other investments, ending balance | 785 | 773 |
Direct credit investments | Level 3 | Consolidated Funds | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 21,163 | |
Contributions | 14,056 | |
Distributions | (40) | |
Net gain (loss) | 82 | |
Transfer in | 19,364 | |
Other investments, ending balance | 54,625 | |
Direct equity investments | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, ending balance | 6,934 | |
Direct equity investments | Level 3 | ||
Reconciliation Of Other Investments [Roll Forward] | ||
Other investments, beginning balance | 6,774 | 6,020 |
Contributions | 0 | 0 |
Distributions | 0 | 0 |
Net gain (loss) | 160 | (266) |
Other investments, ending balance | $ 6,934 | $ 5,754 |
Fair Value Measurements - Valua
Fair Value Measurements - Valuation Methodologies (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Private equity funds | |
Schedule of Equity Method Investments [Line Items] | |
Fair Value | $ 6,430 |
Direct credit investments | |
Schedule of Equity Method Investments [Line Items] | |
Fair Value | 785 |
Direct equity investments | |
Schedule of Equity Method Investments [Line Items] | |
Fair Value | 6,934 |
Discounted cash flow | Direct credit investments | VIE | |
Schedule of Equity Method Investments [Line Items] | |
Investments | 16,853 |
Recent precedent transactions | Direct credit investments | VIE | |
Schedule of Equity Method Investments [Line Items] | |
Investments | $ 37,772 |
Selected market return | Adjusted net asset value | Minimum | Private equity funds | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.048 |
Selected market return | Adjusted net asset value | Maximum | Private equity funds | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.079 |
Selected market return | Adjusted net asset value | Weighted Average | Private equity funds | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.073 |
Market yield | Discounted cash flow | Minimum | Direct credit investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.132 |
Market yield | Discounted cash flow | Minimum | Direct credit investments | VIE | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.086 |
Market yield | Discounted cash flow | Maximum | Direct credit investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.132 |
Market yield | Discounted cash flow | Maximum | Direct credit investments | VIE | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.102 |
Market yield | Discounted cash flow | Weighted Average | Direct credit investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.132 |
Market yield | Discounted cash flow | Weighted Average | Direct credit investments | VIE | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 0.097 |
EBITDA multiple | Market approach | Minimum | Direct equity investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 8.25 |
EBITDA multiple | Market approach | Maximum | Direct equity investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 14.75 |
EBITDA multiple | Market approach | Weighted Average | Direct equity investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 12.62 |
Equity multiple | Market approach | Weighted Average | Direct equity investments | |
Schedule of Equity Method Investments [Line Items] | |
Range of and weighted-average inputs | 1.65 |
Variable Interest Entities - Un
Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Variable Interest Entity [Line Items] | ||
Remaining unfunded commitments from the limited partners and general partners to the unconsolidated VIE | $ 142,665 | |
Statement of Financial Position [Abstract] | ||
Investments | 546,080 | $ 530,921 |
Fees receivable | 65,864 | 47,140 |
Due from related parties | 7,963 | 7,186 |
Total assets | 1,200,094 | 1,140,543 |
Not Primary Beneficiary | ||
Statement of Financial Position [Abstract] | ||
Investments | 204,504 | 199,858 |
Fees receivable | 23,986 | 15,829 |
Due from related parties | 3,344 | 1,960 |
Total assets | 231,834 | 217,647 |
Less: Non-controlling interests | (1,570) | (1,665) |
Maximum exposure to loss | $ 230,264 | $ 215,982 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Mar. 31, 2022 |
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 198,750 | $ 214,375 | |
Carrying Value | 197,939 | $ 213,533 | 213,533 |
Line of Credit | Term Loan | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | 98,750 | 99,375 | |
Carrying Value | $ 98,359 | $ 98,969 | |
Interest Rate | 7% | 6.75% | |
Line of Credit | 2020 Multi-Draw Facility | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | $ 100,000 | $ 100,000 | |
Carrying Value | $ 99,580 | $ 99,564 | |
Interest Rate | 3.50% | 3.50% | |
Debt, fair value | $ 86,792 | $ 88,136 | |
Line of Credit | Revolver | |||
Debt Instrument [Line Items] | |||
Principal Outstanding | 0 | $ 15,000 | |
Carrying Value | $ 0 | $ 15,000 | |
Interest Rate | 6.50% |
Equity - Shares of Common Stock
Equity - Shares of Common Stock Outstanding (Details) | 3 Months Ended |
Jun. 30, 2023 shares | |
Class A Common Stock | |
Common Stock, Shares Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | 38,611,919 |
Forfeitures (in shares) | (30,697) |
Shares repurchased for employee tax withholdings (in shares) | (25) |
Shares issued pursuant to Employee Share Purchase Plan (in shares) | 8,101 |
Outstanding, end of period (in shares) | 38,589,298 |
Class B Common Stock | |
Common Stock, Shares Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | 15,409,507 |
Forfeitures (in shares) | 0 |
Shares repurchased for employee tax withholdings (in shares) | 0 |
Shares issued pursuant to Employee Share Purchase Plan (in shares) | 0 |
Outstanding, end of period (in shares) | 15,409,507 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Restricted Stock (Details) | 3 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Restricted Stock | |
Total Unvested | |
Unvested at beginning of period (in shares) | shares | 377,668 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (2,101) |
Forfeited (in shares) | shares | (11,131) |
Unvested at end of period (in shares) | shares | 364,436 |
Weighted- Average Grant-Date Fair Value of Award | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 65.70 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 74.68 |
Forfeited (in dollars per share) | $ / shares | 66.63 |
Unvested at end of period (in dollars per share) | $ / shares | $ 65.62 |
Performance Shares | |
Total Unvested | |
Unvested at beginning of period (in shares) | shares | 528,282 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (19,566) |
Unvested at end of period (in shares) | shares | 508,716 |
Weighted- Average Grant-Date Fair Value of Award | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 29.79 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 29.79 |
Unvested at end of period (in dollars per share) | $ / shares | $ 29.79 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Restricted Stock | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Total unrecognized compensation expense | $ 20,894 |
Performance Shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Total unrecognized compensation expense | $ 12,764 |
Compensation and Benefits - Sch
Compensation and Benefits - Schedule of Compensation and Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Compensation Related Costs [Abstract] | ||
Base compensation and benefits | $ 36,350 | $ 37,907 |
Incentive fee compensation | 4,907 | 12,390 |
Equity-based compensation | 2,846 | 1,897 |
Total compensation and benefits | $ 44,103 | $ 52,194 |
Income Tax (Details)
Income Tax (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 24.20% | 17% |
Unrecognized tax positions | $ 0 |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) | 3 Months Ended |
Jun. 30, 2023 shares | |
Performance Shares | |
Class of Stock [Line Items] | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 508,716 |
Class B Common Stock | |
Class of Stock [Line Items] | |
Common stock, conversion ratio | 1 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Net income attributable to Class A Stockholders | ||
Net income attributable to HLI | $ 30,998 | $ 33,484 |
Class A Common Stock | ||
Net income attributable to Class A Stockholders | ||
Net income attributable to HLI | 30,998 | 33,484 |
Impact of changes in carrying amount of redeemable NCI | 0 | 380 |
Basic EPS of Class A common stock | 30,998 | 33,864 |
Assumed vesting of employee awards | 14 | 9 |
Assumed conversion of Class B and Class C Units | 12,602 | 15,179 |
Diluted EPS of Class A common stock | $ 43,614 | $ 49,052 |
Weighted-Average Shares | ||
Weighted-average basic EPS of Class A common stock (in shares) | 37,707,809 | 36,999,561 |
Weighted-average assumed vesting of employee awards (in shares) | 58,845 | 31,546 |
Weighted-average assumed conversion of Class B and Class C units (in shares) | 16,089,097 | 16,675,834 |
Weighted-average diluted EPS of Class A common stock (in shares) | 53,855,751 | 53,706,941 |
Per share amount | ||
Basic EPS of Class A common stock (in dollars per share) | $ 0.82 | $ 0.92 |
Diluted EPS of Class A common stock (in dollars per share) | $ 0.81 | $ 0.91 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | |||
Revenues | $ 125,037 | $ 135,509 | |
Fees receivable | 65,864 | $ 47,140 | |
General Partnerships | |||
Related Party Transaction [Line Items] | |||
Fees receivable | 46,916 | $ 31,684 | |
Management and advisory fees | |||
Related Party Transaction [Line Items] | |||
Revenues | 105,407 | 85,946 | |
Management and advisory fees | General Partnerships | |||
Related Party Transaction [Line Items] | |||
Revenues | 80,303 | 60,711 | |
Incentive fees | |||
Related Party Transaction [Line Items] | |||
Revenues | 19,630 | 49,563 | |
Incentive fees | General Partnerships | |||
Related Party Transaction [Line Items] | |||
Revenues | $ 18,625 | $ 49,178 |
Supplemental Cash Flow (Details
Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Supplemental Cash Flow Information [Abstract] | |||
Establishment of lease liability in exchange for right of use asset | $ 3,116 | $ 0 | |
Non-cash investing activities: | |||
Other equity method investment | 2,000 | 0 | |
Non-cash financing activities: | |||
Dividends declared but not paid | 16,780 | 14,800 | $ 15,049 |
Member distributions declared but not paid | $ 11,464 | $ 10,754 |
Commitments and Contingencies -
Commitments and Contingencies - Incentive Fees (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Carried interest still subject to contingencies | $ 1,100,591 | $ 1,022,250 |
Incentive fees, unrecorded estimate | $ 275,148 | $ 255,562 |
Commitments and Contingencies_2
Commitments and Contingencies - Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Other commitment | $ 218,356 | $ 211,556 | |
Loss Contingencies [Line Items] | |||
Other commitment | 218,356 | $ 211,556 | |
Net gain (loss) | 757 | $ 4,344 | |
Employee loans outstanding | 647 | ||
Valued Under Measurement Alternative | |||
Loss Contingencies [Line Items] | |||
Net gain (loss) | $ 31,231 | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Accrued discretionary bonus | 15% |
Commitments and Contingencies_3
Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease costs | $ 2,200 | $ 2,059 |
Variable lease costs | 399 | 237 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 2,088 | $ 194 |
Weighted average remaining lease term (in years) | 13 years 4 months 24 days | 14 years 4 months 24 days |
Weighted average discount rate | 3.40% | 3.20% |
Commitments and Contingencies_4
Commitments and Contingencies - Operating Lease Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of FY2024 | $ 6,223 | |
FY2025 | 8,204 | |
FY2026 | 7,650 | |
FY2027 | 7,397 | |
FY2028 | 6,929 | |
Thereafter | 65,141 | |
Total lease payments | 101,544 | |
Less: imputed interest | (20,550) | |
Total operating lease liabilities | $ 80,994 | $ 78,817 |
Subsequent Events (Details)
Subsequent Events (Details) - Class A Common Stock - $ / shares | 3 Months Ended | ||
Aug. 01, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Subsequent Event [Line Items] | |||
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.45 | $ 0.40 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared per share of Class A common stock (in dollars per share) | $ 0.445 |