Hamilton Lane Incorporated - Investor Presentation Spring 2017 A - - PowerPoint PPT Presentation

Hamilton Lane Incorporated - Investor Presentation

Spring 2017

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A Compelling Growth Story

Value Drivers Our Franchise Established and leading market position Continued growth Proven record of growth over many years Scalable Strong industry tailwinds Industry leader Signifjcant locked-in and recurring revenue Predictable Strong and steady margins Profjtable Signifjcant employee ownership Aligned Our strengths and unique market positioning translate into a successful growth company

• perating in a fast-growing industry with meaningful barriers to entry

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• Founded in 1991, we are one of the largest allocators of capital to private markets worldwide with over $330B of

AUM / AUA

• ~300 professionals dedicated to the private markets (nearly all are shareholders)
• 12 offjces in key markets globally
• ~350 sophisticated clients globally (in 35 countries)
• Signifjcant proprietary databases and suite of analytical tools
• $41B of discretionary commitments since 2000

Leading, Global Private Markets Solutions Provider

We operate at the epicenter of a large, fast-growing and highly desirable asset class, helping a wide array of investors around the world navigate, access and succeed in the private markets

1 As of 12/31/2016

~$40B

• f AUM1

~$292B

• f AUA1

B u y

• u

t G r

• w

t h E q u i t y R e a l E s t a t e I n f r a s t r u c t u r e C r e d i t V e n t u r e C a p i t a l C

• I

n v e s t m e n t S e c

• n

d a r y N a t . R e s

• u

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• I

n v e s t m e n t s S e c

• n

d a r y T r a n s a c t i

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s P r i m a r y F u n d s

Private Markets Funds Private Companies Investors/Limited Partners (LPs)

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Customized Separate Accounts Tailored solutions through managed investment accounts Specialized Funds Primaries, secondaries, direct/co-investments, fund-

• f-funds and white-label

products Advisory Services Partnering with large institutions with in-house resources to assist across the complex landscape Reporting, Monitoring, Data and Analytics Customized, technology- driven reporting, monitoring & analytics services Distribution Management Active portfolio management of private markets distribution

Our value proposition

What We Do for Our Clients

42% of Revenue1 42% of Revenue1 2% of Revenue1 14% of Revenue1

1 Based on FYTD 3Q17 revenue

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Our global client base includes institutional investors of all sizes and with different needs...

Who We Work For

Public Pensions

Some of the largest pension funds in the U.S. and globally

Taft Hartley

A leading provider to U.S. labor union pension plans

Sovereign Wealth Funds

Some of the world’s largest SWFs

Financial Institutions

Banks, insurance companies and other fjnancial fjrms that are global in nature

Endowment Funds

Wide range of colleges, universities and foundations

Corporate Pension Funds

Recognizable brands across a variety of industries Sample clients include...

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Diversifjed revenue stream with no single client representing more than approximately 4% of management and advisory fee revenues

Highly Diversifjed Client Mix

Sticky Client Base

• ~12 year average term for specialized products
• 7 year average age of separate account client

relationship

• No customized separate account clients lost in the last

four fjscal years

• 80% re-up rate for clients whose fjrst investment period

has expired

• 60% of new customized separate account management

fees over the last three fjscal years have come from our existing client base Multiple Layers of Diversifjcation

• 40% of our clients have multiple products and/or services

with us

• 90% of our top 20 clients have multiple products and/or

serivces with us Top 20 clients contributed 42% to FY2016 net revenue 2016 Clients & Investors by Type

Public Pension 15% Endowment/ Foundation 10% Financial/ Insurance 21% Sovereign Wealth Fund 2% Top 10 Clients 28% Clients 11-20 14% Other 58% Labor Union Pension Plans 26% Corporate/ Private Pension 12% HNW/ Family Office 14%

2016 Management & Advisory Fees by Client

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We are not a one size fjts all provider

Where We Fit in the Asset Management Ecosystem

Private markets allocator Traditional asset managers Alternative asset managers Financial solutions / Investor & business services Global consultants

Partners Group Federated OM Asset Management

• T. Rowe Price

Waddell & Reed Ares MSCI Factset Morningstar Willis Towers Watson AON Marsh & McLennan Companies Envestnet Moody’s Financial Engines Thomson Reuters Markit McGraw Hill Financial SEI SS&C The Carlyle Group Blackstone Oaktree Apollo KKR Janus Capital Group Franklin Templeton Artisan Partners Eaton Vance BlackRock Invesco Legg Mason Cohen & Steers

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Hamilton Lane is a market leader in a growing asset class with a model that lends itself to stability and predictability

Industry Tailwinds and Preferred Business Model

Blackstone KKR Apollo Ares Carlyle Oaktree Partners Group BlackRock Franklin

• T. Rowe

Invesco Eaton Vance Legg Mason Janus Capital Federated Artisan Partners Cohen & Steers Old Mutual Waddell & Reed

• 10%
• 5%

0% 5% 10% 15% 20% 30% 40% 50% 60% 70% 80% 90% 100% 4 Year AUM CAGR Management & Advisory Fees as a % of Revenue (LFY) Alternative Managers Traditional Managers Asset Growth Stability & Predictability

Note: Represents peers identifjed by research analysts where the relevant information is available; based on the most recent fjscal year data (most as of 12/31/16) Source: Capital IQ and public fjlings

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Growing Asset Footprint & Infmuence

$36 $51 $77 $79 $95 $81 $129 $147 $147 $189 $205 $292 $6 $7 $11 $13 $16 $19 $22 $24 $30 $32 $35 $40 $0 $50 $100 $150 $200 $250 $300 $350 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total AUA Total AUM

Total Assets Under Management/Advisement ($B)1

Note: Data as of calendar year end 12/31. Numbers may not tie due to rounding

CAGR: 21% $333B AUM & AUA

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Fee-earning AUM drives the bulk of our revenue

Fee-Earning AUM Driving Revenue

...and fee rates are stable

$11 $14 $16 $17 $18 $5 $5 $6 $7 $8 $16 $19 $22 $24 $26 $0 $5 $10 $15 $20 $25 $30 $35 $40 Mar-13 Mar-14 Mar-15 Mar-16 Dec-16 Customized Separate Accounts Specialized Funds

1 Data as of fiscal year end 3/31 unless noted otherwise

C A G R : 1 4 % 0.58% 0.55% 0.56% 0.57%

Total Management Fee Revenue as a % of Average FEAUM

Total-Fee Earning Assets Under Management ($B)1

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Data as of fjscal year ending March 31 unless noted otherwise1

Growing and Stable Revenue and Earnings Profjle

Note: Numbers may not tie due to rounding. Data as of fjscal year end 3/31

1 Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP fjnancial measures. For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to Comparable GAAP measure of Net Income,

please see Appendix, page 18.

2016 Adjusted EBITDA includes $20.3M of compensation expenses related to incentive fee revenue that was not recognized in 2016 but is expected to be recognized in future periods

$81 $87 $119 $76 $0 $25 $50 $75 $100 $125 $150 2014 2015 2016 FYTD 3Q17 USD in Millions $130 $146 $158 $126 $9 $10 $23 $7 $140 $155 $181 $133 $0 $40 $80 $120 $160 $200 $240 2014 2015 2016 FYTD 3Q17 USD in Millions 46% 47% 37% 47% 0% 25% 50% 75% 2014 2015 2016 FYTD 3Q17 $64 $74 $68 $62 $0 $20 $40 $60 $80 $100 $120 $140 2014 2015 2016 FYTD 3Q17 USD in Millions

Total Revenue Total Expenses ($M) Adjusted EBITDA ($M) Adjusted EBITDA Margin (%)1

C A G R : 1 4 %

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Signifjcant Growth Visibility

Investor Re-Ups and Maintaining Allocations Addressable Market New Products New Distribution Channels Client Base Diversifjcation Global Expansion Data Advantage Defjned Contribution Opportunity

+ + + + + + = +

Multiple Avenues

• f Profjtable

Growth Ahead

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Robust Data Advantage Informs Our Investment Decisions

Hamilton Lane Proprietary

40

Vintage Years

~$3T

Total Fund Commitments

3,200+

Funds

~50,000

Portfolio Companies Advantages for Our Clients Benchmarks Market Intelligence Manager Selection Industry Insights Asset Level Insights Attribution Analysis Partnerships with leading-edge technology providers Data collection and reporting Investment workfmow management Allocation software Benchmarking and analytics Aggregation of Industry & Fund-Level Data Creates Our Wealth of Proprietary Information + Hamilton Lane Analytical & Research Capabilities

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Deep Bench of Talent and Award-Winning Culture

Key Stats

• ~300 employees globally
• ~70% of the team is less than 40 years of age
• Women compose ~40% of the employee base and ~30% of

all senior roles

Beyond the Business

• HL in Action – Volunteerism and Matching Gifts Program
• HL Wellness Committee
• Hamilton Lane matching gifts program
• HL Women’s Exchange
• HL Diversity & Inclusion Council

Awards

Widespread employee ownership

Source: Company data. Employee fjgures as of 1/31/2017

Executive Management (7)

IT (20) Client Services (80) Legal & Compliance (20) HR / Admin (15) Finance (20) Investment Team (95) Business Development (20) Product Management (20)

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The Hamilton Lane Story

Growing asset base Expanding private markets allocations Desire to consolidate service partners Increasingly complex offering set

Industry Tailwinds

Market leading footprint Global, blue-chip client base Deep, talented, aligned team Solution focused

Our Approach

+

Continued AUM Growth Stable and Growing Margins Expected Earnings Growth

x =

Appendix

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¹ Includes $20.3 million of compensation expenses related to incentive fee revenue that has not been recognized in FY2016, but is expected to be recognized in future periods; 2 Computed as FY 9M17 fjnancials plus the difference between FY 2016 and FY 9M16 fjnancials

Historical Income Statement

(in thousands of dollars) Fiscal Year Ended March 31, Nine months ending December 31, Estimated 2014A 2015A 2016A 2015A 2016A CY162 Revenues Management and advisory fees 130,455 145,876 157,630 118,303 126,273 165,600 Incentive fees 9,309 9,509 23, 167 21,151 6,868 8,884 Total revenues 139,764 155,385 180,797 139,454 133,141 174,484 Expenses Compensation and benefits 55,950 60,157 92,065 77,193 53,161 68,033 General, administrative and other 24,760 26,865 26,898 19,273 22,925 30,550 Total Expenses 80,710 87,022 118,963 96,466 76,086 98,583 Other Income (expense) Equity in income of affiliates 16,905 10,474 1,518 1,165 8,882 9,235 Interest expense (8,503) (5,883) (12,641) (9,703) (8,780) (11,718) Interest income 142 87 194 79 159 274 Other non-operating income (loss) (699) (1,056) 5,816 5,866 232 182 Total other income (expense) 7,845 3,622 (5,113) (2,593) 493 (2,027) Income before provision (benefit) for foreign income taxes 66,899 71,985 56,721 40,395 57,548 73,874 Less: (benefit) provision for foreign income taxes (128) 483 869 213 (264) 392 Net income 67,027 71,502 55,852 40,182 57,812 73,482 Less: Income (loss) attributable to non-controlling interests 4,565 2,242 (1,255) (852) 1,024 621 Net income attributable to HLA 62,462 69,260 57,1071 41,0341 56,788 72,861

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¹ Includes $20.3 million of compensation expenses related to incentive fee revenue that has not been recognized in FY2016, but is expected to be recognized in future periods; 2 Computed as FY 9M17 fjnancials plus the difference between FY 2016 and FY 9M16 fjnancials

GAAP Reconciliation

(in thousands of dollars) Fiscal Year Ended March 31, Nine months ending December 31, Estimated 2014A 2015A 2016A 2015A 2016A CY162 Net Income Attributable to HLA 62,462 69,260 57,107 41,034 56,788 72,861 Income (loss) attributable to non-controlling interests 4,565 2,242 (1,255) (852) 1,024 621 Interest expense 8,503 5,883 12,641 9,703 8,780 11,718 Provision (benefit) for income taxes (128) 483 869 213 (264) 392 Depreciation and amortization 1,853 1,867 2,027 1,526 1,440 1,941 Equity in (income) of affiliates (16,905) (10,474) (1,518) (1,165) (8,882) (9,235) Equity-based compensation 3,070 3,390 3,730 2,819 3,506 4,417 Other non-operating (income) loss 699 1,056 (5,816) (5,866) (232) (182) Adjusted EBITDA 64,119 73,707 67,7851 47,4121 62,160 82,533 Total revenue 139,764 155,385 180,797 139,454 133,141 174,484 Adjusted EBITDA Margin 46% 47% 37% 34% 47% 47%

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Historical Balance Sheet

(in thousands of dollars) As of Fiscal Year March 31, As of December 31, 2016 2014A 2015A 2016A Assets Cash and cash equivalents 75,818 67,089 68,584 54,441 Investments 92,123 103,360 102,749 118,437 Total Assets 195,231 201,500 196,636 201,991 Liabilities & member’s equity (deficit) Deferred incentive fee revenue – 1,960 45,166 45,166 Senior secured term loan payable, net 122,426 107,719 243,317 241,417 Total liabilities 138,119 127,810 308,574 326,221 Non-controlling interests 18,502 17,452 11,368 10,509 Members’ equity (deficit) 38,610 56,238 (123,306) (134,739) Total liabilities & members’ equity (deficit) 195,231 201,500 196,636 201,991

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1 See page 36 for reconciliation of non-GAAP metrics 2 Includes $20.3 million of compensation expenses related to incentive fee revenue that has not been recognized in 2016, but is expected to be recognized in future periods 3 Adjusted EBITDA margin computed as Adjusted EBITDA divided by Total Revenu 4 Computed as FY 9M17 fjnancials plus the difference between FY 2016 and FY 9M16 fjnancials

Key Performance Indicators

(in thousands of dollars) Fiscal Year Ended March 31, Nine months ending December 31, Estimated 2014A 2015A 2016A 2015A 2016A CY164 Revenue Customized separate accounts 54,248 63,275 67,879 50,433 52,794 70,230 Specialized funds 47,111 51,315 62,340 46,821 53,407 68,926 Advisory and reporting 22,840 22,388 22,536 16,732 17,680 23,484 Distribution management 6,256 8,898 4,875 4,307 2,392 2,960 Total management and advisory fees 130,455 145,876 157,630 118,303 126,273 165,600 Incentive fees 9,309 9,509 23,167 21,151 6,868 8,884 Total revenues 139,764 155,385 180,797 139,454 133,141 174,484 Management and advisory fee % 93% 94% 87% 85% 95% 95% Adjusted EBITDA¹ 64,119 73,707 67,7852 47,4122 62,160 82,534 Adjusted EBITDA margin3 46% 47% 37% 34% 47% 47%

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Disclosures

As of June 1, 2017 Some of the statements in this presentation may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expects,” “believes” and similar expressions are used to identify these forward-looking statements. Forward-looking statements discuss management’s current expectations and projections relating to our fjnancial 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, risk, 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 us; our ability to comply with investment guidelines set by our clients; the time, expense and effort associated with being a newly public company; and our ability to receive distributions from Hamilton Lane Advisors, L.L.C. 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” section of our Registration Statement on Form S-1, as amended, and in our subsequent reports fjled from time to time with the SEC. The forward-looking statements included in this presentation are made only as of the date presented. 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. The S&P 500 Total Return Index is a capitalization-weighted index of 500 U.S. large cap stocks that assumes all dividends and distributions are reinvested. The MSCI World Index is a free fmoat-adjusted market capitalization weighted index that is designed to measure the equity performance of developed markets.