Hamilton Lane eyes SWFs, retail as potential LPs in first earnings call

Hamilton Lane is tracking sovereign-wealth funds, high-net-worth individuals and “inevitably” retail investors as areas in which it could pick up new advisory or separate-account clients moving forward, the firm said in its first official earnings call on Monday.

Expanding the firm’s LP base comes on top of robust re-ups from its existing investors, according to the firm. For the past four fiscal years, Hamilton Lane didn’t lose a single LP in its separate-account business, Vice Chairman and Head of Strategic Initiatives Erik Hirsch said during the earnings call.

“Our view is that so long as the market stays at this level, we think our fundraising pipeline will be strong and compelling,” he later added.

Hamilton Lane advised or managed a little more than $340 billion of assets as of March 31. Of that, Hamilton Lane collects management fees and carried interest on just $26.8 billion, a 12 percent increase from what it held in fee-generating assets as of March 31, 2016.

Over the past year, Hamilton Lane’s separate-account business has grown to $18 billion from roughly $17 billion. Its portfolio of specialized funds, which includes its secondary and co-investment vehicles, grew to $8.5 billion from $7 billion in that period.

Hamilton Lane closed its fourth secondary fund on $1.9 billion in June, surpassing its $1.25 billion target by 52 percent. The fund included commitments from more than 110 investors.

The firm collected $172.7 million in management and advisory fees for the year ended March 31. That’s a 10 percent improvement from what it earned in fiscal 2016.

Hamilton Lane also generated more than $7.1 million in incentive compensation, less than a third of the $23.2 million it earned in fiscal 2016. The 2016 fiscal year had been a record year for incentive fees, the firm said on its earnings call.

The firm raised $218.5 million in its March initial public offering. Hamilton Lane shares were trading at a little more than $20 on Nasdaq as of midday, June 12, a 26 percent improvement over its $16 IPO price.

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Erik Hirsch, chief investment officer of Hamilton Lane. Photo courtesy of Hamilton Lane.