10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2022

or

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

For the transition period from _______________________ to ___________________________

Commission file number 001-38021

HAMILTON LANE INCORPORATED

(Exact name of Registrant as specified in its charter)

Delaware		26-2482738
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
110 Washington Street,	Suite 1300
Conshohocken,	PA	19428
(Address of principal executive offices)		(Zip Code)

(610) 934-2222

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.001 par value per share	HLNE	The Nasdaq Stock Market LLC

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of February 3, 2023, there were 37,868,486 shares of the registrant’s Class A common stock, par value $0.001, and 15,948,744 shares of the registrant’s Class B common stock, par value $0.001, outstanding.

Table of Contents

	Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of December 31, 2022 and March 31, 2022	3
Condensed Consolidated Statements of Income for the three and nine months ended December 31, 2022 and 2021	4
Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended December 31, 2022 and 2021	5
Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2022 and 2021	7
Notes to Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	45
Item 4. Controls and Procedures	47
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	48
Item 1A. Risk Factors	48
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6. Exhibits	49
Signatures	50

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

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

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

Unless otherwise indicated, information contained in this Form 10-Q concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third-party sources (including industry publications, surveys and forecasts), and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third-party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets that we believe to be reasonable. Although we believe the data from these third-party sources is reliable, we have not independently verified any third-party information.

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

Cautionary Note Regarding Forward-Looking Information

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

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

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Hamilton Lane Incorporated

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share amounts)

	December 31,		March 31,
	2022		2022
Assets
Cash and cash equivalents	$	146,070	$	72,138
Restricted cash	3,116		4,023
Fees receivable	52,074		51,869
Prepaid expenses	7,078		6,858
Due from related parties	7,784		1,872
Furniture, fixtures and equipment, net	28,348		28,842
Lease right-of-use assets, net	63,152		65,636
Investments	514,332		503,789
Deferred income taxes	230,154		245,046
Other assets	30,755		28,162
Assets of consolidated variable interest entities:
Cash and cash equivalents	3,909		36
Investments held in trust	—		276,016
Investments	37,360		10,036
Other assets	229		623
Total assets	$	1,124,361	$	1,294,946
Liabilities, redeemable non-controlling interests and equity
Accounts payable	$	2,045	$	2,827
Accrued compensation and benefits	65,761		20,117
Accrued members’ distributions	19,161		27,119
Accrued dividend	14,810		12,947
Debt	199,126		171,326
Payable to related parties pursuant to tax receivable agreement	179,431		180,536
Lease liabilities	79,549		82,244
Other liabilities (includes $13,954 and $13,818 at fair value)	34,503		47,669
Liabilities of consolidated variable interest entities:
Other liabilities	17		12,675
Total liabilities	594,403		557,460
Commitments and contingencies (Note 16)
Redeemable non-controlling interests	—		276,000
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	—		—
Class A common stock, $0.001 par value, 300,000,000 authorized; 37,868,691 and 37,280,697 issued and outstanding as of December 31, 2022 and March 31, 2022, respectively	38		37
Class B common stock, $0.001 par value, 50,000,000 authorized; 15,953,682 and 16,033,359 issued and outstanding as of December 31, 2022 and March 31, 2022, respectively	16		16
Additional paid-in-capital	166,821		161,676
Retained earnings	227,786		185,149
Total Hamilton Lane Incorporated stockholders’ equity	394,661		346,878
Non-controlling interests in general partnerships	3,653		3,423
Non-controlling interests in Hamilton Lane Advisors, L.L.C.	131,644		111,185
Total equity	529,958		461,486
Total liabilities, redeemable non-controlling interests and equity	$	1,124,361	$	1,294,946

See accompanying notes to the condensed consolidated financial statements.

3

Hamilton Lane Incorporated

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Revenues
Management and advisory fees	$	97,355	$	79,836	$	276,182	$	229,653
Incentive fees	24,075		10,490		132,835		34,217
Consolidated variable interest entities related:
Incentive fees	5,644		1,378		6,948		3,149
Total revenues	127,074		91,704		415,965		267,019
Expenses
Compensation and benefits	45,676		34,004		158,235		94,028
General, administrative and other	22,717		16,332		66,066		48,742
Consolidated variable interest entities related:
General, administrative and other	309		322		941		952
Total expenses	68,702		50,658		225,242		143,722
Other income (expense)
Equity in income (loss) of investees	650		12,924		(7,493)		60,181
Interest expense	(2,419)		(1,157)		(6,027)		(3,488)
Interest income	442		26		839		488
Non-operating (expense) income	(27,960)		37,043		(11,878)		65,500
Consolidated variable interest entities related:
Equity in income (loss) of investees	389		(298)		1,030		170
Unrealized income	2,087		2,135		4,333		1,067
Interest expense	—		(4)		—		(4)
Interest income	2,111		—		2,989		—
Total other income (expense)	(24,700)		50,669		(16,207)		123,914
Income before income taxes	33,672		91,715		174,516		247,211
Income tax expense	11,788		11,519		38,766		37,515
Net income	21,884		80,196		135,750		209,696
Less: Income (loss) attributable to non-controlling interests in general partnerships	422		(119)		773		167
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	9,146		26,181		51,326		76,849
Less: Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	2,647		2,285		5,617		519
Net income attributable to Hamilton Lane Incorporated	$	9,669	$	51,849	$	78,034	$	132,161
Basic earnings per share of Class A common stock	$	0.32	$	1.44	$	2.21	$	3.64
Diluted earnings per share of Class A common stock	$	0.31	$	1.40	$	2.19	$	3.59
Dividends declared per share of Class A common stock	$	0.40	$	0.35	$	1.20	$	1.05

See accompanying notes to the condensed consolidated financial statements.

4

Hamilton Lane Incorporated

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands)

	Class A Common Stock		Class B Common Stock		Additional Paid in Capital		Retained Earnings		Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.		Total Equity
Balance at March 31, 2022	$	37	$	16	$	161,676	$	185,149	$	3,423	$	111,185	$	461,486
Net income	—		—		—		78,034		773		51,326		130,133
Equity-based compensation	—		—		4,702		—		—		2,114		6,816
Repurchase of Class A shares for employee tax withholding	—		—		(112)		—		—		(50)		(162)
Dividends declared	—		—		—		(44,413)		—		—		(44,413)
Capital contributions to non-controlling interests, net	—		—		—		—		(543)		—		(543)
Member distributions	—		—		—		—		—		(37,871)		(37,871)
Employee Share Purchase Plan share issuance	1		—		993		—		—		447		1,441
Adjustment of redeemable non-controlling interest to redemption value	—		—		—		9,016		—		4,055		13,071
Equity reallocation between controlling and non-controlling interests	—		—		(438)		—		—		438		—
Balance at December 31, 2022	$	38	$	16	$	166,821	$	227,786	$	3,653	$	131,644	$	529,958

	Class A Common Stock		Class B Common Stock		Additional Paid in Capital		Retained Earnings		Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.		Total Equity
Balance at March 31, 2021	$	36	$	17	$	150,564	$	87,512	$	2,211	$	73,861	$	314,201
Net income	—		—		—		132,161		167		76,849		209,177
Equity-based compensation	—		—		3,870		—		—		1,836		5,706
Repurchase of Class A shares for employee tax withholding	—		—		(220)		—		—		(385)		(605)
Deferred tax adjustment	—		—		2,722		—		—		—		2,722
Dividends declared	—		—		—		(38,429)		—		—		(38,429)
Capital contributions from non-controlling interests, net	—		—		—		—		563		—		563
Member distributions	—		—		—		—		—		(32,361)		(32,361)
Secondary offerings	1		(1)		4,097		—		—		(4,098)		(1)
Employee Share Purchase Plan share issuance	—		—		936		—		—		446		1,382
Adjustment of redeemable non-controlling interest to redemption value	—		—		—		393		—		127		520
Equity reallocation between controlling and non-controlling interests	—		—		98		—		—		(98)		—
Balance at December 31, 2021	$	37	$	16	$	162,067	$	181,637	$	2,941	$	116,177	$	462,875

See accompanying notes to the condensed consolidated financial statements.

5

Hamilton Lane Incorporated

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands)

	Class A Common Stock		Class B Common Stock		Additional Paid in Capital		Retained Earnings		Non-Controlling Interests in General Partnerships		Non-Controlling Interests in Hamilton Lane Advisors, L.L.C.		Total Equity
Balance at September 30, 2022	$	38	$	16	$	164,763	$	225,957	$	3,820	$	130,384	$	524,978
Net income	—		—		—		9,669		422		9,146		19,237
Equity-based compensation	—		—		1,956		—		—		879		2,835
Repurchase of Class A shares for employee tax withholding	—		—		(48)		—		—		(22)		(70)
Dividends declared	—		—		—		(14,810)		—		—		(14,810)
Capital contributions to non-controlling interests, net	—		—		—		—		(589)		—		(589)
Member distributions	—		—		—		—		—		(12,164)		(12,164)
Employee Share Purchase Plan share issuance	—		—		303		—		—		136		439
Adjustment of redeemable non-controlling interest to redemption value	—		—		—		6,970		—		3,132		10,102
Equity reallocation between controlling and non-controlling interests	—		—		(153)		—		—		153		—
Balance at December 31, 2022	$	38	$	16	$	166,821	$	227,786	$	3,653	$	131,644	$	529,958

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

See accompanying notes to the condensed consolidated financial statements.

6

Hamilton Lane Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended December 31,
	2022		2021
Operating activities:
Net income	$	135,750	$	209,696
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,600		3,744
Change in deferred income taxes	14,892		19,941
Change in payable to related parties pursuant to tax receivable agreement	(1,105)		(6,202)
Equity-based compensation	6,816		5,706
Equity in loss (income) of investees	7,493		(60,181)
Gain on sale of investment	(9,783)		(11,936)
Fair value adjustment of other investments	(18,578)		(47,774)
Proceeds received from partnerships	11,877		38,945
Non-cash lease expense	5,370		7,210
Gain on sale of intangible asset	2,771		—
Impairment of other investment	43,289		—
Other	(2,864)		43
Changes in operating assets and liabilities:
Fees receivable	(205)		(17,883)
Prepaid expenses	(220)		263
Due from related parties	(5,911)		479
Other assets	(5,309)		256
Accounts payable	(782)		17
Accrued compensation and benefits	45,644		18,867
Lease liability	(5,581)		(1,410)
Other liabilities	(11,548)		(6,457)
Consolidated variable interest entities related:
Change in warrant liability measured at fair value	(2,883)		(1,067)
Equity in income of investees	(1,030)		(170)
Other assets and liabilities	(332)		425
Net cash provided by operating activities	213,371		152,512
Investing activities:
Purchase of furniture, fixtures and equipment	(3,261)		(7,788)
Cash paid for acquisition of business	(1,500)		(10,096)
Loans to investees	(2,535)		—
Purchase of other investments	(34,125)		(18,798)
Proceeds from sale of investments	10,000		12,623
Distributions from investments	1,406		12,739
Distributions received from Partnerships	15,990		12,088
Contributions to Partnerships	(63,364)		(56,432)
Consolidated variable interest entities related:
Sale of investments held in trust	278,954		—
Net cash provided by (used in) investing activities	201,565		(55,664)

7

Hamilton Lane Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended December 31,
	2022		2021
Financing activities:
Proceeds from offerings	—		73,833
Purchase of membership interests	—		(73,833)
Borrowings of debt	31,682		—
Repayments of debt	(3,873)		(1,382)
Draw-down on revolver	25,000		—
Repayment of revolver	(25,000)		(15,000)
Repurchase of Class B common stock	—		(1)
Repurchase of Class A shares for employee tax withholding	(162)		(605)
Proceeds received from issuance of shares under Employee Share Purchase Plan	1,441		1,382
Payments to related parties, pursuant to tax receivable agreement	—		(15,584)
Dividends paid	(42,550)		(36,714)
Members’ distributions paid	(45,828)		(37,469)
Other	—		(75)
Consolidated variable interest entities related:
Contributions from non-controlling interest in general partnerships	687		1,053
Distributions to non-controlling interest in general partnerships	(1,230)		(490)
Redemption of Class A common shares of Hamilton Lane Alliance Holdings I, Inc.	(278,205)		—
Net cash used in financing activities	(338,038)		(104,885)
Increase (decrease) in cash, cash equivalents, and restricted cash	76,898		(8,037)
Cash, cash equivalents, and restricted cash at beginning of the period	76,197		90,377
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period	$	153,095	$	82,340

Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Variable Interest Entities to the Condensed Consolidated Balance Sheets:
	As of December 31,
	2022		2021
Cash and cash equivalents	$	146,070	$	78,838
Restricted cash	3,116		3,315
Cash and cash equivalents held at consolidated variable interest entities	3,909		187
Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities	$	153,095	$	82,340

See accompanying notes to the condensed consolidated financial statements.

8

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

1. Organization

Hamilton Lane Incorporated (“HLI”) is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payable to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of December 31, 2022 and March 31, 2022, HLI held approximately 69.0% and 68.9%, respectively, of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement in place with HLA’s members, the economic interest in HLA held by HLI will increase.

HLA is a registered investment advisor with the United States Securities and Exchange Commission (“SEC”), providing asset management and advisory services, primarily to institutional investors, to design, build and manage private markets portfolios. HLA generates revenues primarily from management fees, by managing assets on behalf of customized separate accounts, specialized fund products and distribution management accounts, and advisory fees, by providing asset supervisory and reporting services. HLA sponsors the formation, and 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.

2. Summary of Significant Accounting Policies

Basis of Presentation

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

9

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Accounting for Differing Fiscal Periods

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

Fair Value of Financial Instruments

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

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

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

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

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

Recent Accounting Pronouncements

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

Reclassifications

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

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:

10

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended December 31,				Nine Months Ended December 31,
Management and advisory fees	2022		2021		2022		2021
Specialized funds	$	53,299	$	38,233	$	144,099	$	107,935
Customized separate accounts	29,571		25,982		87,329		75,416
Advisory	6,613		6,119		19,073		18,781
Reporting and other	6,720		5,992		19,170		16,983
Distribution management	596		3,170		1,863		9,313
Fund reimbursement revenue	556		340		4,648		1,225
Total management and advisory fees	$	97,355	$	79,836	$	276,182	$	229,653

	Three Months Ended December 31,				Nine Months Ended December 31,
Incentive fees	2022		2021		2022		2021
Specialized funds	$	8,679	$	6,765	$	102,815	$	23,903
Customized separate accounts	15,396		3,725		30,020		10,314
Consolidated variable interest related:
Specialized funds	5,644		1,378		6,948		3,149
Total incentive fees	$	29,719	$	11,868	$	139,783	$	37,366

4. Investments

Investments consist of the following:

	December 31,		March 31,
	2022		2022
Equity method investments in Partnerships	$	328,311	$	326,296
Other equity method investments	—		1,573
Other investments	20,189		19,820
Investments valued under the measurement alternative	165,832		156,100
Total Investments	$	514,332	$	503,789

Equity method investments

The Company’s equity method investments in Partnerships represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments within the Partnerships vary by fund. The Company has a 1% interest in substantially all of the Partnerships.

During the quarter ended September 30, 2022, the Company sold its ownership interests in its joint venture that automates the collection of fund and underlying portfolio company data from general partners, Private Markets Connect, for $10,000 and recognized a gain of $9,783 which is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. Immediately preceding the sale, the Company received a distribution from the joint venture of $1,406.

11

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Other investments

The Company’s other 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 direct credit investments are debt securities classified as trading securities. Other 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 other investments delivered as collateral which are estimated using Level 3 inputs with the significant inputs as shown in Note 5 below.

The Company recognized a gain on other investments held as collateral of $821 and $915 during the three and nine months ended December 31, 2022, respectively, and a gain of $2,288 and $3,239 during the three and nine months ended December 31, 2021, respectively, that are recorded in non-operating (expense) income. The Company recognized a loss on the secured financing liability of $821 and $915 during the three and nine months ended December 31, 2022, respectively, and a loss of $2,288 and $3,239 during the three and nine months ended December 31, 2021, respectively, that are recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

Investments valued under the measurement alternative

During the quarter ended June 30, 2022, the Company made investments in two private companies. The Company invested $3,000 in a technology driven platform that provides a digitized token for investors that improves the efficiency of capital raises. Additionally, the Company invested $12,000 in an online financial services platform. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company values the investments under the measurement alternative.

During the quarter ended June 30, 2022, the Company made an additional investment of $5,236 in a company that maintains a platform of solutions designed to aid individual investors and various wealth management platforms with their wealth management needs. As a result of the transaction, the Company marked its original investment to fair value based upon the transaction price, which resulted in total unrealized gain of $6,687 during the three months ended June 30, 2022, that is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. Due to the lack of readily determinable fair value for this investment, over which the Company does not have significant influence, the Company will continue to value the investment under the measurement alternative.

During the quarter ended September 30, 2022, the Company made investments in two private companies. The Company invested $3,000 in a digital platform that offers financial planning and portfolio management tools to retail and accredited investors. The Company invested $4,000 in a cloud-based treasury and liquidity solution for investment management firms. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company will value the investments under the measurement alternative.

12

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

During the quarter ended December 31, 2022, the Company made additional investments in three private companies in which it previously invested. The Company invested an additional $1,228 in a cloud-based treasury and liquidity solution for investment management firms. The Company invested an additional $5,061 in a company that provides environmental, social and governance (“ESG”) reporting metrics and analysis to private market firms and private companies. As a result of the transaction, the Company marked its original investment to fair value based upon the transaction price, which resulted in a total unrealized gain of $11,521 during the three months ended December 31, 2022 that is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. The Company invested an additional $600 in a technology company that has developed software to automate manual data entry tasks associated with alternative investment reporting. As part of that funding round, a convertible note issued by the investee to the Company converted into additional shares of the investee with a value of $550. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company will continue to value these investments under the measurement alternative.

The Company performs qualitative impairment assessments at each quarter end on its investments recorded under the measurement alternative. As a result of this assessment as of December 31, 2022, the Company determined that a quantitative assessment was required to be performed for one of its investments given a significant decrease in earnings performance and overall economic and market conditions. The assessment indicated that the fair value was less than the carrying value at December 31, 2022. Prior to the impairment recorded, the carrying value of the investment was $74,189. The impairment amount was $43,289 and is included in non-operating (expense) income in the Condensed Consolidated Statements of Income. The fair value was estimated using Level 3 inputs with the significant input as shown in Note 5 below.

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 December 31, 2022
	Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:
Other investments	$	6,235	$	—	$	13,954	$	20,189	$	10,703
Total financial assets	$	6,235	$	—	$	13,954	$	20,189	$	10,703
Financial liabilities:
Secured financing(1)	—		—		13,954		13,954
Total financial liabilities	$	—	$	—	$	13,954	$	13,954

13

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

	As of March 31, 2022
	Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:
Other investments	$	6,002	$	—	$	13,818	$	19,820	$	10,853
Investments held in trust	276,016		—		—		276,016		276,000
Total financial assets	$	282,018	$	—	$	13,818	$	295,836	$	286,853
Financial liabilities:
Warrant liability(2)	$	2,484	$	399	$	—	$	2,883
Secured financing(1)	—		—		13,818		13,818
Total financial liabilities	$	2,484	$	399	$	13,818	$	16,701

(1) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheets.

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

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 September 30, 2022	$	6,252	$	768	$	6,060	$	13,080
Contributions	91		—		—		91
Distributions	(38)		—		—		(38)
Net gain	417		18		386		821
Balance as of December 31, 2022	$	6,722	$	786	$	6,446	$	13,954
Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	114		—		—		114
Distributions	(893)		—		—		(893)
Net gain	477		12		426		915
Balance as of December 31, 2022	$	6,722	$	786	$	6,446	$	13,954

	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments
Balance as of September 30, 2021	$	7,159	$	783	$	6,068	$	6,122	$	20,132
Contributions	204		—		—		—		204
Distributions	(25)		—		—		—		(25)
Net gain (loss)	1,464		(1)		825		168		2,456
Transfer out	—		—		—		(6,290)		(6,290)
Balance as of December 31, 2021	$	8,802	$	782	$	6,893	$	—	$	16,477

14

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments
Balance as of March 31, 2021	$	6,254	$	985	$	6,059	$	—	$	13,298
Contributions	293		—		28		—		321
Distributions	(179)		(202)		—		—		(381)
Net gain (loss)	2,434		(1)		806		(165)		3,074
Transfer in	—		—		—		6,455		6,455
Transfer out	—		—		—		(6,290)		(6,290)
Balance as of December 31, 2021	$	8,802	$	782	$	6,893	$	—	$	16,477

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

				Significant
	Fair		Valuation	Unobservable				Weighted
	Value		Methodology	Inputs	Range			Average
Other investments:
Private equity funds	$	6,722	Adjusted net asset value	Selected market return	2.3%	-	6.3%	3.2%
Direct credit investments	$	786	Discounted cash flow	Market yield	12.9%	-	12.9%	12.9%
Direct equity investments	$	6,446	Market approach	EBITDA multiple	8.25	-	14.25x	11.61x
			Market approach	Equity multiple	1.8x			1.8x

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 non-recurring Level 3 fair value measurements of financial assets were as follows, as of December 31, 2022:

				Significant
	Fair		Valuation	Unobservable		Weighted
	Value		Methodology	Inputs	Range	Average
Investment valued under the measurement alternative	$	30,900	Market approach	Revenue Multiple	3.5x	3.5x

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, respectively; (2) a significant increase or decrease in the market yield would result in a significantly lower or higher fair value measurement, respectively; and (3) a significant increase or decrease in the selected multiple would result in a significantly higher or lower fair value measurement, respectively.

15

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

6. Acquisitions

On April 1, 2021, the Company acquired substantially all the assets of 361 Capital, LLC for a total aggregate cash amount of $13,096, of which $10,096 was paid on the closing date of the acquisition. The remaining $3,000 will be paid in two equal installments on the first and second anniversaries of the closing. On April 1, 2022, the Company paid the first of the two equal installments. The purchase price based upon the fair value of consideration transferred at the date of acquisition is $12,946. The Company recorded $7,145 of definite lived intangible assets related primarily to the acquired investment management contracts, which will be amortized over seven years, and $5,623 of goodwill, which are both recorded in other assets in the Condensed Consolidated Balance Sheets. The remaining assets acquired and liabilities assumed are not material to the condensed consolidated financial statements. Revenue and net income attributable to the acquisition of 361 Capital, LLC were not material for the three and nine months ended December 31, 2022 and 2021, and therefore, pro forma information related to this acquisition is not presented.

In December 2022, the Company finalized the transfer of the advisory arrangement to a third party for an agreed upon percentage of the respective funds’ management fees over two calendar years. The Company recognized a gain of $2,771 on the sale of the advisory agreements that is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

7. Variable Interest Entities

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

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships and a Partnership in which it is currently the primary beneficiary, which are not wholly-owned by the Company. The total assets of these consolidated VIEs are $41,498 and $10,036 as of December 31, 2022 and March 31, 2022, respectively. The consolidated VIEs had no liabilities as of December 31, 2022 and March 31, 2022. 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 Partnership VIE 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.

The Company previously sponsored and consolidated Hamilton Lane Alliance Holdings I, Inc. (“HLAH”) through HL Alliance Holdings Sponsor LLC, an indirect wholly-owned subsidiary of the Company. On January 15, 2021, HLAH completed an IPO raising total gross proceeds of $276,000, which were placed in a trust and could only be utilized for funding a business combination or the redemption of Class A shares of HLAH. In a private placement concurrent with the IPO, HLAH sold warrants to HL Alliance Holdings Sponsor LLC for gross proceeds of $7,520, which were used by HLAH to pay the offering costs and also to provide working capital. On December 15, 2022, HLAH was liquidated, as it was determined that HLAH would be unable to consummate an initial business combination within the time period required by its governing documents. In connection with the liquidation, HLAH redeemed all of the outstanding shares of Class A common stock, cancelled all of the outstanding public and private warrants and settled all other outstanding liabilities.

16

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary based upon the Company’s equity interest percentage in each of the VIEs. Certain Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by simple majority vote (i.e. do not have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of December 31, 2022, the total remaining unfunded commitments from the Company’s general partner entities to the nonconsolidated VIEs was $140,691. 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 Sheet 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:

	December 31,		March 31,
	2022		2022
Investments	$	190,735	$	191,378
Fees receivable	16,418		9,754
Due from related parties	1,901		778
Total VIE Assets	209,054		201,910
Less: Non-controlling interests	(1,534)		(1,873)
Maximum exposure to loss	$	207,520	$	200,037

8. Debt

The Company’s debt consisted of the following:

	As of December 31, 2022						As of March 31, 2022
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	100,000	$	99,578	6.25	%	$	71,754	$	71,574	2.25	%
2020 Multi-Draw Facility	100,000		99,548		3.50	%	100,000		99,752		3.50	%
Total Debt	$	200,000	$	199,126			$	171,754	$	171,326

In October 2022, the Company modified its existing credit facility with its lender. The modifications took the form of a new 2022 Multi-Draw Term Loan and Security Agreement, as well as amendments to the existing Revolving Loan and Security Agreement, Term Loan and Security Agreement and 2020 Multi-Draw Term Loan and Security Agreement (collectively, the “Loan Agreements”).

17

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

The modifications extended maturity dates of the Loan Agreements, increased the principal outstanding under the term loan to $100,000 and added borrowing capacity across the Loan Agreements, subject to an overall cap of $325,000 of loan principal outstanding. The facility is secured by substantially all of HLA’s personal property assets, subject to certain excluded assets. The Loan Agreements contain financial and operational covenants, events of default and remedies that the Company believes to be customary.

The carrying value of the Company’s outstanding debt as of December 31, 2022 and March 31, 2022 approximated fair value except for the 2020 multi-draw facility which had an estimated fair value of $86,782 as of December 31, 2022. The estimated fair value of debt is based on then-current market rates for similar debt instruments and is classified as Level 2 within the fair value hierarchy.

9. Equity

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

	Class A Common Stock	Class B Common Stock
March 31, 2022	37,280,697	16,033,359
Forfeitures	(5,899)	(79,677)
Shares repurchased for employee tax withholdings	(2,311)	—
Awards granted	569,442	—
Shares issued pursuant to Employee Share Purchase Plan	26,762	—
December 31, 2022	37,868,691	15,953,682

10. Equity Based Compensation

Restricted Stock Awards

A summary of restricted stock activity for the nine months ended December 31, 2022 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2022	281,307	$	67.50
Granted	41,160	$	66.97
Vested	(11,485)	$	77.38
Forfeited	(5,899)	$	70.15
December 31, 2022	305,083	$	67.00

As of December 31, 2022, total unrecognized compensation expense related to restricted stock was $14,950.

18

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

Performance Awards

The Company granted performance stock awards to certain employees that are subject to both a market-based vesting and a service-based vesting condition (“Performance Awards”). The Performance Awards will vest based upon (i) the market price of HLI Class A common stock achieving certain price thresholds from $150 per share to $230 per share and (ii) continued employment through the date the price target is met (with a minimum of five years of service required after the grant date for vesting). If the price target is met prior to the fifth anniversary of the grant date, the vesting date will be the fifth anniversary of the grant date. Holders of the Performance Awards do not participate in dividends until such awards have met both their market-based and service-based vesting requirements.

Due to the existence of the service requirement, the vesting period for these awards will vary with each respective tranche as the employees must be employed with the Company at the point in which the market requirement is met with a minimum of five years of service required after the grant date for vesting. As such, compensation expense will be recognized ratably for each vesting tranche from the grant date to the end for the employee’s service period. The fair value of the awards granted are based on a Monte-Carlo simulation valuation model.

A summary of Performance Award activity for the nine months ended December 31, 2022 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2022	—	$	—
Granted	528,282	$	29.79
Vested	—	$	—
Forfeited	—	$	—
December 31, 2022	528,282	$	29.79

Below is a summary of the grant date fair value based on the Monte Carlo simulation valuation model and the significant assumptions used to estimate the grant date fair value of the Performance Awards granted September 16, 2022:

Grant Date Fair Value	$	29.79
Closing share price as of grant date	$	69.67
Risk Free Rate	3.6%
Volatility	37.0%
Dividend Yield	2.3%

As of December 31, 2022, total estimated unrecognized expense related to the unvested Performance Awards was $14,815, and none of the Performance Awards have met their market price based vesting condition.

19

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

11. Compensation and Benefits

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Base compensation and benefits	$	35,473	$	29,340	$	116,549	$	79,014
Incentive fee compensation	7,368		2,953		34,870		9,308
Equity-based compensation	2,835		1,711		6,816		5,706
Total compensation and benefits	$	45,676	$	34,004	$	158,235	$	94,028

12. 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 35.0% and 22.2% for the three and nine months ended December 31, 2022, respectively, and 12.6% and 15.2% for the three and nine months ended December 31, 2021, respectively. The effective tax rates were different from the statutory tax rates due to the portion of income allocated to non-controlling interests, valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.

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

13. Earnings per Share

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

20

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

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

	Three Months Ended December 31, 2022					Three Months Ended December 31, 2021
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	9,669				$	51,849
Impact of changes in carrying amount of redeemable NCI	2,095					1,308
Basic EPS of Class A common stock	$	11,764	37,025,416	$	0.32	$	53,157	36,902,741	$	1.44
Adjustment to net income:
Assumed vesting of employee awards	5					66
Assumed conversion of Class B and Class C Units	5,058					21,946
Effect of dilutive securities:
Assumed vesting of employee awards			68,129					165,569
Assumed conversion of Class B and Class C Units			16,675,834					16,675,834
Diluted EPS of Class A common stock	$	16,827	53,769,379	$	0.31	$	75,169	53,744,144	$	1.40
	Nine Months Ended December 31, 2022					Nine Months Ended December 31, 2021
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	78,034				$	132,161
Impact of changes in carrying amount of redeemable NCI	3,809					358
Basic EPS of Class A common stock	$	81,843	37,004,657	$	2.21	$	132,519	36,375,797	$	3.64
Adjustment to net income:
Assumed vesting of employee awards	34					156
Assumed conversion of Class B and Class C Units	35,968					60,083
Effect of dilutive securities:
Assumed vesting of employee awards			53,030					138,902
Assumed conversion of Class B and Class C Units			16,675,834					17,192,702
Diluted EPS of Class A common stock	$	117,845	53,733,521	$	2.19	$	192,758	53,707,401	$	3.59

21

Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

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 528,282 Performance Awards for the three and nine months ended December 31, 2022 as the market condition was not achieved as of December 31, 2022.

14. Related Party Transactions

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

Revenue and Receivables

The Company has investment management agreements with various specialized funds and customized separate accounts that it manages. The Company earned management and advisory fees from Partnerships of $70,929 and $198,973 for the three and nine months ended December 31, 2022, respectively, and $53,701 and $150,955 for the three and nine months ended December 31, 2021, respectively. The Company earned incentive fees from Partnerships of $28,652 and $137,545 for the three and nine months ended December 31, 2022, respectively, and $10,335 and $34,669 for the three and nine months ended December 31, 2021, respectively.

Fees receivable from the Partnerships were $35,263 and $27,728 as of December 31, 2022 and March 31, 2022, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets.

15. Supplemental Cash Flow

	Nine Months Ended December 31,
	2022		2021
Establishment of lease liability in exchange for right of use asset	$	5,401	$	7,950
Non-cash investing activities:
Establishment of receivable for intangible assets sold	$	6,776	$	—
Non-cash financing activities:
Dividends declared but not paid	$	14,810	$	12,916
Member distributions declared but not paid	$	19,161	$	11,769
Establishment of net deferred tax assets related to offerings	$	—	$	19,783

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

16. Commitments and Contigencies

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 $952,188 and $1,191,066, net of amounts attributable to non-controlling interests, at December 31, 2022 and March 31, 2022, respectively.

If the Company ultimately receives the unrecognized carried interest, a total of $238,047 and $297,766 as of December 31, 2022 and March 31, 2022, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable.

Commitments

The Company serves as the investment manager of the Partnerships. The general partner or managing member of each Partnership is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Partnerships was $212,895 and $186,164 as of December 31, 2022 and March 31, 2022, respectively.

The Company has an unrealized net gain on its investments valued under the measurement alternative of $29,004 as of December 31, 2022, of which up to 15% may be paid as a discretionary bonus as those gains are realized.

Leases

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

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Hamilton Lane Incorporated

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(In thousands, except share and per share amounts)

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022			2021
Operating lease costs	$	2,095	$	2,011	$	6,199		$	7,610
Variable lease costs	$	395	$	416	$	1,067		$	980
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,997	$	1,657	$	5,858		$	4,794
Weighted average remaining lease term (in years)					14.0			14.7
Weighted average discount rate					3.3		%	3.2		%

As of December 31, 2022, the maturities of operating lease liabilities were as follows:

Remainder of FY2023	$	2,092
FY2024	7,645
FY2025	7,233
FY2026	6,623
FY2027	6,623
Thereafter	70,210
Total lease payments	100,426
Less: imputed interest	(20,877)
Total operating lease liabilities	$	79,549

17. Subsequent Events

On February 7, 2023, the Company declared a quarterly dividend of $0.40 per share of Class A common stock to record holders at the close of business on March 15, 2023. The payment date will be April 6, 2023.

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

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

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

Business Overview

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

•Customized Separate Accounts: We design and build customized portfolios of private markets funds and direct investments to meet our clients’ specific portfolio objectives with regard to return, risk tolerance, diversification and liquidity. We generally have discretionary investment authority over our customized separate accounts, which comprised approximately $81 billion of our assets under management (“AUM”) as of December 31, 2022.

•Specialized Funds: We organize, invest and manage specialized primary, secondary and direct investment funds. Our specialized funds invest across a variety of private markets and include equity, equity-linked and credit funds offered on standard terms as well as shorter duration, opportunistically oriented funds. We launched our first specialized fund in 1997. Since then, our product offerings have grown steadily and now include evergreen offerings that invest primarily in secondaries and direct investments in equity and credit and are available to certain high-net-worth individuals. Specialized funds comprised approximately $27 billion of our AUM as of December 31, 2022.

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

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

•Reporting, Monitoring, Data and Analytics: We provide our clients with comprehensive reporting and investment monitoring services, usually bundled into our broader investment solutions offerings, but also on a stand-alone, fee-for-service basis. We also provide comprehensive research and analytical services as part of our investment solutions, leveraging our large, global, proprietary and high-quality database for transparency and powerful analytics. Our data, as well as our benchmarking and forecasting models, are accessible through our proprietary technology solution, Cobalt LP, on a stand-alone, subscription basis.

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

Key Financial and Operating Measures

Our key financial measures are discussed below.

Revenues

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

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

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

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

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

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

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

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

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

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

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

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Expenses

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

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

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

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

Other Income (Expense)

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

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

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

Interest income is income earned on cash and cash equivalents.

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

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

Income Tax Expense

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

Non-controlling interests

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

Fee-Earning AUM

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

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

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Consolidated Results of Operations

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

	Three Months Ended December 31,				Nine Months Ended December 31,
($ in thousands)	2022		2021		2022		2021
Revenues
Management and advisory fees	$	97,355	$	79,836	$	276,182	$	229,653
Incentive fees	24,075		10,490		132,835		34,217
Consolidated variable interest entities related:
Incentive fees	5,644		1,378		6,948		3,149
Total revenues	127,074		91,704		415,965		267,019
Expenses
Compensation and benefits	45,676		34,004		158,235		94,028
General, administrative and other	22,717		16,332		66,066		48,742
Consolidated variable interest entities related:
General, administrative and other	309		322		941		952
Total expenses	68,702		50,658		225,242		143,722
Other income (expense)
Equity in income (loss) of investees	650		12,924		(7,493)		60,181
Interest expense	(2,419)		(1,157)		(6,027)		(3,488)
Interest income	442		26		839		488
Non-operating (expense) income	(27,960)		37,043		(11,879)		65,500
Consolidated variable interest entities related:
Equity in income (loss) of investees	389		(298)		1,030		170
Unrealized income	2,087		2,135		4,333		1,067
Interest expense	—		(4)		—		(4)
Interest income	2,111		—		2,989		—
Total other income (expense)	(24,700)		50,669		(16,207)		123,914
Income before income taxes	33,672		91,715		174,516		247,211
Income tax expense	11,788		11,519		38,766		37,515
Net income	21,884		80,196		135,750		209,696
Less: Income (loss) attributable to non-controlling interests in general partnerships	422		(119)		773		167
Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	9,146		26,181		51,326		76,849
Less: Income attributable to redeemable non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	2,647		2,285		5,617		519
Net income attributable to Hamilton Lane Incorporated	$	9,669	$	51,849	$	78,034	$	132,161

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Revenues    

The following table shows total revenues of the Company and its consolidated VIEs:

	Three Months Ended December 31,				Nine Months Ended December 31,
($ in thousands)	2022		2021		2022		2021
Management and advisory fees
Specialized funds	$	53,299	$	38,233	$	144,099	$	107,935
Customized separate accounts	29,571		25,982		87,329		75,416
Advisory	6,613		6,119		19,073		18,781
Reporting and other	6,720		5,992		19,170		16,983
Distribution management	596		3,170		1,863		9,313
Fund reimbursement revenue	556		340		4,648		1,225
Total management and advisory fees	97,355		79,836		276,182		229,653
Incentive fees	29,719		11,868		139,783		37,366
Total revenues	$	127,074	$	91,704	$	415,965	$	267,019

Three months ended December 31, 2022 compared to three months ended December 31, 2021

Total revenues increased $35.4 million, or 39%, to $127.1 million, for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due to increases in both management and advisory fees and incentive fees.

Management and advisory fees increased $17.5 million, or 22%, to $97.4 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. Specialized funds revenue increased $15.1 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due primarily to a $5.3 million increase in revenue from our latest secondary fund, a $3.9 million increase in revenue from our evergreen funds, and a $3.5 million increase in revenue from our latest direct equity fund, which added $1.6 billion, $1.1 billion, and $0.9 billion, respectively, in fee-earning AUM between periods. Revenue from our latest secondary and direct equity funds included $2.0 million and $1.8 million, respectively, in retroactive fees for the three months ended December 31, 2022. Retroactive fees are management fees earned in the current period from investors that commit to a specialized fund towards the end of the fundraising period and are required to pay a catch-up management fee as if they had committed to the fund at the first closing in a prior period. Customized separate accounts revenue increased $3.6 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021 due to the addition of several new accounts and additional allocations from existing accounts. Distribution management revenue decreased $2.6 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021 due to decreased distribution activity.

Incentive fees increased $17.9 million to $29.7 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due to increases in incentive fees from our specialized funds and customized separate accounts.

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Nine months ended December 31, 2022 compared to nine months ended December 31, 2021

Total revenues increased $148.9 million, or 56%, to $416.0 million, for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due to increases in both management and advisory fees and incentive fees.

Management and advisory fees increased $46.5 million, or 20%, to $276.2 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021. Specialized funds revenue increased $36.2 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due primarily to a $15.2 million increase in revenue from our evergreen funds, a $9.1 million increase in revenue from our latest secondary fund, and an $8.6 million increase in revenue from our latest direct equity fund, which added $1.1 billion, $1.6 billion, and $0.9 billion, respectively, in fee-earning AUM between periods. Revenue from our latest direct equity fund included $2.4 million in retroactive fees for the nine months ended December 31, 2022. Customized separate accounts revenue increased $11.9 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021 due to the addition of several new accounts and additional allocations from existing accounts. Distribution management revenue decreased $7.4 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021 due to decreased distribution activity. Fund reimbursement revenue increased $3.4 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due primarily to the recognition of fund reimbursements from our latest secondary fund in the current year period.

Incentive fees increased $102.4 million to $139.8 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due primarily to increases in incentive fees from our specialized funds.

Expenses

Three months ended December 31, 2022 compared to three months ended December 31, 2021

Total expenses increased $18.0 million, or 36%, to $68.7 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021 due to increases in both compensation and benefits expenses and general, administrative and other expenses.

Compensation and benefits expenses increased $11.7 million, or 34%, to $45.7 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due to increases in base compensation and benefits and incentive fee compensation. Base compensation and benefits increased $6.1 million, or 21%, for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due to an increase in our bonus plan accrual related to the increase in incentive fee revenue and an increase in salary expense from additional headcount in the current year period compared to the prior year period. Incentive fee compensation increased $4.4 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due to the increase in incentive fee revenue.

General, administrative and other expenses increased $6.4 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. This change consisted primarily of a $2.4 million increase in third-party commissions, a $1.0 million increase in travel expense, and a $0.8 million increase in depreciation expense.

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Nine months ended December 31, 2022 compared to nine months ended December 31, 2021

Total expenses increased $81.5 million, or 57%, to $225.2 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021 due to increases in both compensation and benefits expenses and general, administrative and other expenses.

Compensation and benefits expenses increased $64.2 million, or 68%, to $158.2 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due to increases in base compensation and benefits and incentive fee compensation. Base compensation and benefits increased $37.5 million, or 48%, for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due primarily to an increase in our bonus plan accrual related to the increase in incentive fee revenue. Incentive fee compensation increased $25.6 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due to the increase in incentive fee revenue.

General, administrative and other expenses increased $17.3 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021. This change consisted primarily of a $3.7 million increase in third-party commissions, $2.9 million increase in travel expense, a $2.6 million increase in fund reimbursement expenses, a $2.6 million increase in consulting and professional fees, a $1.9 million increase in depreciation expense, and a $1.5 million increase in conferences and marketing.

Other Income (Expense)

The following table shows the equity in income (loss) of investees of the Company and its consolidated VIEs included in other income (expense):

	Three Months Ended December 31,				Nine Months Ended December 31,
($ in thousands)	2022		2021		2022		2021
Equity in income (loss) of investees
Primary funds	$	(537)	$	1,129	$	(210)	$	7,124
Direct investment funds	(305)		867		(5,496)		15,375
Secondary funds	234		4,074		(546)		11,824
Customized separate accounts	(1,350)		5,042		(3,502)		20,201
Other equity method investments	2,997		1,514		3,291		5,827
Total equity in income (loss) of investees	$	1,039	$	12,626	$	(6,463)	$	60,351

Three months ended December 31, 2022 compared to three months ended December 31, 2021

Other income decreased $75.4 million to a $24.7 million loss for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due primarily to a decrease in other non-operating income and equity in income of investees.

Non-operating income decreased $65.1 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due to the recognition of a $43.3 million loss on an investment in the current year period and $31.7 million in gains on two investments in the prior year period.

Equity in income of investees decreased $11.6 million to a $1.0 million gain for the three months ended December 31, 2022 compared to the three months ended December 31, 2021. This was due primarily to the gains of public market valuations during the quarter ended September 30, 2021.

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Other income of consolidated VIEs increased $2.8 million for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, due primarily to interest income of investments held in trust of our sponsored SPAC.

Nine months ended December 31, 2022 compared to nine months ended December 31, 2021

Other income decreased $140.1 million to a $16.2 million loss for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due primarily to a decrease in other non-operating income and equity in income of investees.

Non-operating income decreased $74.1 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due to the recognition of $15.0 million in losses on investments in the current year period compared to $59.7 million in gains on investments in the prior year period.

Equity in income of investees decreased $66.8 million to a $6.5 million loss for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021. This was due primarily to the prior year gains from increases in public market valuations during the period ended September 30, 2021 compared to losses for the period ended September 30, 2022.

Other income of consolidated VIEs increased $7.1 million for the nine months ended December 31, 2022 compared to the nine months ended December 31, 2021, due primarily to interest income of investments held in trust of our sponsored SPAC.

Income Tax Expense

Our effective tax rate was 35.0% and 12.6% for the three months ended December 31, 2022 and 2021, respectively, and 22.2% and 15.2% for the nine months ended December 31, 2022 and 2021, respectively. These 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. The effective tax rates for the three and nine months ended December 31, 2022 were more than the three and nine months ended December 31, 2021 due primarily to a valuation allowance for deferred tax assets not expected to be realized and discrete tax adjustments, which were higher in the three and nine months ended December 31, 2022 than the three and nine months ended December 31, 2021.

Fee-Earning AUM

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

	Three Months Ended December 31,						Nine Months Ended December 31,
($ in millions)	2022						2022
	Customized Separate Accounts		Specialized Funds		Total		Customized Separate Accounts		Specialized Funds		Total
Balance, beginning of period	$	32,333	$	20,354	$	52,687	$	30,938	$	18,193	$	49,131
Contributions (1)	1,432		1,472		2,904		4,598		4,137		8,735
Distributions (2)	(576)		(213)		(789)		(2,305)		(716)		(3,021)
Foreign exchange, market value and other (3)	(100)		163		63		(142)		162		20
Balance, end of period	$	33,089	$	21,776	$	54,865	$	33,089	$	21,776	$	54,865

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

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

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

Three months ended December 31, 2022

Fee-earning AUM increased $2.2 billion to $54.9 billion during the three months ended December 31, 2022, due to contributions from customized separate accounts and specialized funds.

Customized separate accounts fee-earning AUM increased $0.8 billion, or 2%, to $33.1 billion for the three months ended December 31, 2022. Customized separate accounts contributions were $1.4 billion for the three months ended December 31, 2022, due to new allocations from existing clients and the addition of new clients. Distributions were $0.6 billion for the three months ended December 31, 2022 due to $0.3 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, $0.2 billion from accounts reaching the end of their fund term, and $0.1 billion from accounts moving from a committed to net invested capital fee base.

Specialized funds fee-earning AUM increased $1.4 billion, or 7%, to $21.8 billion for the three months ended December 31, 2022. Specialized fund contributions were $1.5 billion for the three months ended December 31, 2022, due to $0.6 billion from our latest secondary fund. Distributions were $0.2 billion for the three months ended December 31, 2022, due to returns of capital in funds earning fees on a net invested capital or NAV fee base.

Nine months ended December 31, 2022

Fee-earning AUM increased $5.7 billion to $54.9 billion during the nine months ended December 31, 2022, due to contributions from customized separate accounts and specialized funds.

Customized separate accounts fee-earning AUM increased $2.2 billion, or 7%, to $33.1 billion for the nine months ended December 31, 2022. Customized separate accounts contributions were $4.6 billion for the nine months ended December 31, 2022, due to new allocations from existing clients and the addition of new clients. Distributions were $2.3 billion for the nine months ended December 31, 2022 due to $0.8 billion from accounts moving from a committed to net invested capital fee base, $0.8 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, and $0.7 billion from accounts reaching the end of their fund term.

Specialized funds fee-earning AUM increased $3.6 billion, or 20%, to $21.8 billion for the nine months ended December 31, 2022. Specialized fund contributions were $4.1 billion for the nine months ended December 31, 2022, due primarily to $1.6 billion from our latest secondary fund and $0.8 billion from our evergreen funds. Distributions were $0.7 billion for the nine months ended December 31, 2022, due to $0.6 billion from returns of capital in funds earning fees on a net invested capital or NAV fee base and $0.1 billion from accounts reaching the end of their fund term.

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Non-GAAP Financial Measures

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

Fee Related Earnings

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

Adjusted EBITDA

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

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

	Three Months Ended December 31,				Nine Months Ended December 31,
($ in thousands)	2022		2021		2022		2021
Net income attributable to Hamilton Lane Incorporated	$	9,669	$	51,849	$	78,034	$	132,161
Income (loss) attributable to non-controlling interests in general partnerships	422		(119)		773		167
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	9,146		26,181		51,326		76,849
Income attributable to non-controlling interests in Hamilton Lane Alliance Holdings I, Inc.	2,647		2,285		5,617		519
Incentive fees	(29,719)		(11,868)		(139,783)		(37,366)
Incentive fee related compensation (1)	14,001		5,609		66,254		17,685
SPAC related general, administrative and other expenses	278		309		846		868
Non-operating income related compensation	(1,413)		1,790		54		1,790
Interest income	(2,553)		(26)		(3,829)		(488)
Interest expense	2,419		1,161		6,027		3,492
Income tax expense	11,788		11,519		38,766		37,515
Equity in (income) loss of investees	(1,039)		(12,626)		6,463		(60,351)
Non-operating expense (income)	25,873		(39,178)		7,546		(66,567)
Fee Related Earnings	$	41,519	$	36,886	$	118,094	$	106,274
Depreciation and amortization	2,022		1,292		5,600		3,744
Equity-based compensation	2,834		1,711		6,816		5,706
Incentive fees	29,719		11,868		139,783		37,366
Incentive fees attributable to non-controlling interests	(243)		(59)		(302)		(134)
Incentive fee related compensation (1)	(14,001)		(5,609)		(66,254)		(17,685)
Non-operating income related compensation	1,413		(1,790)		(54)		(1,790)
Interest income	442		26		839		488
Adjusted EBITDA	$	63,705	$	44,325	$	204,522	$	133,969

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

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Non-GAAP Earnings Per Share

Non-GAAP earnings per share measures our per-share earnings excluding certain significant items that we believe are not indicative of our core performance and assuming all Class B and Class C units in HLA were exchanged for Class A common stock in HLI. Non-GAAP earnings per share is calculated as adjusted net income divided by adjusted shares outstanding. Adjusted net income is income before taxes fully taxed at our estimated statutory tax rate and excludes any impact of changes in carrying amount of our redeemable non-controlling interest. Adjusted shares outstanding for the three and nine months ended December 31, 2022 and 2021 are equal to the weighted-average shares of Class A common stock outstanding - diluted. We believe adjusted net income and non-GAAP earnings per share are useful to investors because they enable them to better evaluate total and per-share operating performance across reporting periods.

The following table shows a reconciliation of adjusted net income to net income attributable to Hamilton Lane Incorporated for the three and nine months ended December 31, 2022 and 2021:

	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands, except share and per-share amounts)	2022		2021		2022		2021
Net income attributable to Hamilton Lane Incorporated	$	9,669	$	51,849	$	78,034	$	132,161
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C.	9,146		26,181		51,326		76,849
Income tax expense	11,788		11,519		38,766		37,515
Adjusted pre-tax net income	30,603		89,549		168,126		246,525
Adjusted income taxes (1)	(7,314)		(21,312)		(40,182)		(58,673)
Adjusted net income	$	23,289	$	68,237	$	127,944	$	187,852
Adjusted shares outstanding	53,769,379		53,744,144		53,733,521		53,707,401
Non-GAAP earnings per share	$	0.43	$	1.27	$	2.38	$	3.50

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

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Investment Performance

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

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

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

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

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

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

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

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

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

Specialized Fund Performance

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

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Fund	Vintage year	Fund size ($M)	Capital invested ($M)	Gross multiple	Net Multiple	Gross IRR (%)	Net IRR (%)	Gross Spread vs. S&P 500 PME	Net Spread vs. S&P 500 PME	Gross Spread vs. MSCI World PME	Net Spread vs. MSCI World PME
Primaries (Diversified)
PEF I	1998	122	117	1.3	1.2	5.4%	2.5%	378 bps	76 bps	322 bps	16 bps
PEF IV	2000	250	238	1.7	1.5	16.2%	11.2%	1,302 bps	828 bps	1,170 bps	708 bps
PEF V	2003	135	133	1.7	1.6	14.2%	9.6%	841 bps	363 bps	950 bps	466 bps
PEF VI	2007	494	514	1.7	1.6	11.8%	8.9%	83 bps	(157) bps	422 bps	178 bps
PEF VII	2010	262	288	1.6	1.6	12.8%	8.9%	(60) bps	(431) bps	349 bps	(28) bps
PEF VIII	2012	427	423	1.5	1.5	10.4%	7.9%	(113) bps	(351) bps	249 bps	6 bps
PEF IX	2015	517	504	1.9	1.9	20.8%	18.9%	896 bps	733 bps	1,254 bps	1,088 bps
PEF X	2018	278	223	1.4	1.4	20.9%	17.2%	1,539 bps	1,095 bps	1,932 bps	1,473 bps
Secondaries
Pre-Fund	-	-	362	1.5	N/A	17.1%	N/A	1,330 bps	N/A	1,172 bps	N/A
Secondary Fund I	2005	360	353	1.2	1.2	5.2%	3.8%	113 bps	(63) bps	341 bps	157 bps
Secondary Fund II	2008	591	596	1.5	1.4	19.9%	13.5%	459 bps	(188) bps	876 bps	218 bps
Secondary Fund III	2012	909	838	1.4	1.4	13.9%	11.6%	92 bps	(160) bps	487 bps	240 bps
Secondary Fund IV	2016	1,916	2,046	1.7	1.6	19.2%	19.8%	762 bps	738 bps	1,131 bps	1,108 bps
Secondary Fund V	2019	3,929	3,363	1.4	1.5	33.8%	34.9%	3,778 bps	3,982 bps	4,182 bps	4,381 bps
Direct/Co-investments
Pre-Fund	-	-	244	1.9	N/A	21.3%	N/A	1,655 bps	N/A	1,600 bps	N/A
Co-Investment Fund	2005	604	577	1.0	0.9	0.2%	(1.3)%	(570) bps	(745) bps	(319) bps	(500) bps
Co-Investment Fund II	2008	1,195	1,157	2.1	1.8	17.9%	14.2%	580 bps	196 bps	967 bps	578 bps
Co-Investment Fund III	2014	1,243	1,276	1.9	1.7	17.1%	14.0%	393 bps	85 bps	747 bps	435 bps
Co-Investment Fund IV	2018	1,698	1,480	1.9	1.8	26.3%	24.6%	1,589 bps	1,435 bps	1,949 bps	1,796 bps
Equity Opportunities Fund V	2021	1,731	1,204	1.1	1.1	10.5%	8.6%	3,042 bps	3,288 bps	3,378 bps	3,597 bps
Fund	Vintage year	Fund size ($M)	Capital invested ($M)	Gross multiple	Net Multiple	Gross IRR (%)	Net IRR (%)	Gross Spread vs. CS HY II PME	Net Spread vs. CS HY II PME	Gross Spread vs. CS LL PME	Net Spread vs. CS LL PME
Strategic Opportunities (Tail-end secondaries and credit)
Strat Opps 2015	2015	71	68	1.3	1.2	14.1%	10.6%	561 bps	222 bps	862 bps	518 bps
Strat Opps 2016	2016	214	216	1.2	1.2	9.8%	7.4%	403 bps	172 bps	526 bps	296 bps
Strat Opps 2017	2017	435	448	1.3	1.2	11.5%	9.1%	816 bps	560 bps	801 bps	562 bps
Strat Opps 2018	2018	889	862	1.2	1.2	9.7%	7.6%	726 bps	501 bps	728 bps	492 bps
Stat Opps 2019	2019	762	699	1.2	1.1	11.4%	8.9%	1,161 bps	811 bps	847 bps	482 bps
Stat Opps 2020	2021	898	838	1.0	1.0	1.5%	0.6%	1,242 bps	1,103 bps	321 bps	209 bps
Strat Opps 2021	2022	953	193	1.0	1.0	7.5%	6.4%	3,120 bps	2,935 bps	1,293 bps	1,819 bps

Performance Methodology

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

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available on a weekly basis. The CS LL Index is an index designed to mirror the investable universe of the U.S. dollar denominated leveraged loan market. Loans must be rated 5B or lower and the index frequency is monthly.

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

“Capital Invested” refers to the total amount of all investments made by a fund, including commitment-reducing and non-commitment-reducing capital calls. “Multiple” represents total distributions from underlying investments to the fund plus the fund’s market value divided by total contributed capital. “Gross Multiple” is presented net of management fees, carried interest and expenses charged by the fund managers of the underlying investments.

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

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

Liquidity and Capital Resources

Historical Liquidity and Capital Resources

We have managed our historical liquidity and capital requirements primarily through the receipt of management and advisory fee revenues. Our primary cash flow activities involve: (1) generating cash flow from operations, which largely includes management and advisory fees; (2) realizations generated from our investment activities; (3) funding capital commitments that we have made to certain of our specialized funds and customized separate accounts; (4) making dividend payments to our stockholders and distributions to holders of HLA units; and (5) borrowings, interest payments and repayments under our outstanding debt. As of December 31, 2022 and March 31, 2022, our cash and cash equivalents were $146.1 million and $72.1 million, respectively.

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

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

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

Loan Agreements

On October 20, 2022, we entered into a new Multi-Draw Term Loan and Security Agreement (the “2022 Multi-Draw Term Loan Agreement”) and amended our existing Term Loan and Security Agreement (as amended, the “Term Loan Agreement”), Revolving Loan and Security Agreement (as amended, the “Revolving Loan Agreement”) and Multi-Draw Term Loan and Security Agreement (as amended, the “2020 Multi-Draw Term Loan Agreement” and, together with the 2022 Multi-Draw Term Loan Agreement, Term Loan Agreement and Revolving Loan Agreement, the “Loan Agreements”), with First Republic Bank (“First Republic”). The Loan Agreements are cross-collateralized and cross-defaulted and the aggregate principal amount of loans that may be outstanding under all of the Loan Agreements is subject to an aggregate cap of $325 million (the “Cap”).

The 2022 Multi-Draw Term Loan Agreement has a maturity date of October 1, 2029 and the interest rate is a floating per annum rate equal to the prime rate minus 1.25% subject to a floor of 3.00%. As of December 31, 2022, we had no outstanding balance under the 2022 Multi-Draw Term Loan Agreement. We are entitled to request term loans not to exceed $75 million in the aggregate, subject to the Cap, through September 30, 2025.

The Term Loan Agreement has a maturity date of January 1, 2030 and the interest rate is a floating per annum rate equal to the prime rate minus 1.25% subject to a floor of 3.00%. As of December 31, 2022, we had an outstanding balance of $100 million under the Term Loan Agreement. We are entitled to request additional uncommitted term advances not to exceed $25 million in the aggregate, subject to the Cap, through December 31, 2023.

The Revolving Loan Agreement provides that the aggregate outstanding balance will not exceed $50 million, subject to the Cap, and has a maturity date of March 24, 2025. The interest rate is a floating per annum rate equal to the prime rate minus 1.50% subject to a floor of 2.25%. As of December 31, 2022, we did not have an outstanding balance under the Revolving Loan Agreement.

The 2020 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $100 million with a maturity date of July 1, 2030. Advances could be drawn through March 31, 2022 and the interest rate is a fixed per annum rate of 3.50%. As of December 31, 2022, we had an outstanding balance of $100 million under the 2020 Multi-Draw Term Loan Agreement.

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The Loan Agreements contain covenants that, among other things, limit HLA’s ability to incur indebtedness, transfer or dispose of assets, merge with other companies, create, incur or allow liens, make investments, pay dividends or make distributions, engage in transactions with affiliates and take certain actions with respect to management fees. The Loan Agreements also require HLA to maintain, among other requirements, (i) a specified amount of management fees, (ii) a specified amount of adjusted EBITDA, as defined in the Loan Agreements, and (iii) a specified minimum tangible net worth, during the term of each of the Loan Agreements. The obligations under the Loan Agreements are secured by substantially all the assets of HLA. As of December 31, 2022 and March 31, 2022, the principal amount of debt outstanding equaled $200 million and $171.8 million, respectively.

Future Sources and Uses of Liquidity

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

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

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

In November 2018, we authorized a program to repurchase up to 6% of the outstanding shares of our Class A common stock, not to exceed $50 million (the “Stock Repurchase Program”). The Stock Repurchase Program does not include specific price targets or timetables and may be suspended or terminated by us at any time. We intend to finance the purchases using available working capital and/or external financing. The Stock Repurchase Program expires 12 months after the date of the first acquisition under the authorization. We have not repurchased any of our Class A common stock under the Stock Repurchase Program, and therefore the full purchase authority remains available. Our board of directors periodically reviews the Stock Repurchase Program and most recently re-approved it in December 2022.

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

We are required to maintain minimum net capital balances for regulatory purposes for certain of our foreign subsidiaries and our broker-dealer subsidiary. These net capital requirements are met by retaining cash. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of December 31, 2022 and March 31, 2022, we were required to maintain approximately $3.1 million and $4.0 million, respectively, in liquid net assets within these subsidiaries to

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meet regulatory net capital and capital adequacy requirements. We are in compliance with these regulatory requirements.

Dividend Policy

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

Tax Receivable Agreement

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

Cash Flows

Nine Months Ended December 31, 2022 and 2021

	Nine Months Ended December 31,
($ in thousands)	2022		2021
Net cash provided by operating activities	$	213,371	$	152,512
Net cash provided by (used in) investing activities	$	201,565	$	(55,664)
Net cash used in financing activities	$	(338,038)	$	(104,885)

Operating Activities

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

Investing Activities

Our investing activities generally reflect cash used for acquisitions, fixed asset purchases and contributions to and distributions from our investments. For the nine months ended December 31, 2022 and 2021, our net cash used in investing activities was driven primarily by purchases of furniture, fixtures

44

and equipment and net contributions to our funds. Additionally, during the nine months ended December 31, 2022, we received sale proceeds from and made purchases of non-fund investments.

Financing Activities

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

Off-Balance Sheet Arrangements

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

Contractual Obligations, Commitments and Contingencies 

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

Critical Accounting Policies

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

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

Recent Accounting Pronouncements

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

45

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

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

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

•Management fees from our specialized funds and customized separate accounts are not significantly affected by changes in fair value as the management fees are not generally based on the value of the specialized funds or customized separate accounts, but rather on the amount of capital committed or invested in the specialized funds or customized separate accounts, as applicable.

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

Exchange Rate Risk

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

Interest Rate Risk

 As of December 31, 2022, we had $200.0 million in borrowings outstanding under our Loan Agreements. The annual interest rate on the Term Loan Agreement, which is at the prime rate minus 1.25%, subject to a floor of 3.00%, was 6.25% as of December 31, 2022. The annual interest rate on the Revolving Loan Agreement, which is at the prime rate minus 1.50%, subject to a floor of 2.25%, was 6.00% as of December 31, 2022.

Based on the floating rate component of our Loan Agreements payable as of December 31, 2022, we estimate that a 100 basis point increase in interest rates would result in increased interest expense of $1.0 million over the next 12 months.

46

Credit Risk

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

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022. Our disclosure controls and procedures are intended to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

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

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

Changes in Internal Control over Financial Reporting

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

47

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

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

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

Issuer Purchases of Equity Securities

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

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)
October 1-31, 2022	—	$	—	—	$	50,000,000
November 1-30, 2022	—	$	—	—	$	50,000,000
December 1-31, 2022	991	$	72.27	—	$	50,000,000
Total	991	$	72.27	—	$	50,000,000

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

(2) On November 6, 2018, we announced that our board of directors authorized a program to repurchase, in the aggregate, up to 6% of the outstanding shares of our Class A common stock as of the date of the authorization, not to exceed $50 million (the “Stock Repurchase Program”). The authorization provides us the flexibility to repurchase shares in the open market or in privately negotiated transactions from time to time, based on market conditions and other factors. We have not repurchased any of our Class A common stock under the Stock Repurchase Program, so the full purchase authority remains available under this program, which expires 12 months after the date of the first acquisition under the authorization. Our board of directors most recently re-approved the Stock Repurchase Program in December 2022.

48

Item 6. Exhibits

		Incorporated By Reference				Filed Herewith
Exhibit No.	Description of Exhibit	Form	Exhibit	Filing Date	File No.
3.1	Amended and Restated Certificate of Incorporation of Hamilton Lane Incorporated	8-K	3.1	3/10/17	001-38021
3.2	Amended and Restated Bylaws of Hamilton Lane Incorporated	10-K	3.2	6/27/17	001-38021
10.1º	Multi-Draw Term Loan and Security Agreement, dated October 20, 2022, by and between First Republic Bank and Hamilton Lane Advisors, L.L.C.	8-K	10.1	10/26/22	001-38021
10.2º	Third Amendment to Revolving Loan and Security Agreement, dated October 20, 2022, by and between First Republic Bank and Hamilton Lane Advisors, L.L.C.	8-K	10.2	10/26/22	001-38021
10.3º	Fourth Amendment to Term Loan and Security Agreement, dated October 20, 2022, by and between First Republic Bank and Hamilton Lane Advisors, L.L.C.	8-K	10.3	10/26/22	001-38021
10.4	Third Amendment to Multi-Draw Term Loan and Security Agreement, dated October 20, 2022, by and between First Republic Bank and Hamilton Lane Advisors, L.L.C.	8-K	10.4	10/26/22	001-38021
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
32‡	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from our Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 formatted in Inline XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Income; (iii) the Condensed Consolidated Statements of Stockholders’ Equity; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements.					X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)					X

º Confidential information in this exhibit has been omitted.

‡ Furnished herewith.

49

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 7th day of February 2023.

HAMILTON LANE INCORPORATED
By:	/s/ Atul Varma
	Name: Atul Varma
	Title: Chief Financial Officer and Treasurer
By:	/s/ Michael Donohue
	Name: Michael Donohue
	Title: Managing Director and Controller

EX-31.1

EXHIBIT 31.1

CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mario L. Giannini, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Hamilton Lane Incorporated;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 7, 2023
/s/ Mario L. Giannini
Mario L. Giannini
Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Atul Varma, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Hamilton Lane Incorporated;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 7, 2023
/s/ Atul Varma
Atul Varma
Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Mario L. Giannini, Chief Executive Officer, and I, Atul Varma, Chief Financial Officer, of Hamilton Lane Incorporated, hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.The Quarterly Report on Form 10-Q for the quarter ended December 31, 2022 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Hamilton Lane Incorporated.

Date: February 7, 2023

 /s/ Mario L. Giannini

Mario L. Giannini

Chief Executive Officer

Date: February 7, 2023

 /s/Atul Varma

Atul Varma

Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Dec. 31, 2022	Feb. 03, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2022
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	2023
Document Fiscal Period Focus	Q3
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)		37,868,486
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		15,948,744

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2022	Mar. 31, 2022
Assets
Fees receivable	$ 52,074,000	$ 51,869,000
Prepaid expenses	7,078,000	6,858,000
Due from related parties	7,784,000	1,872,000
Furniture, fixtures and equipment, net	28,348,000	28,842,000
Lease right-of-use assets, net	63,152,000	65,636,000
Investments	514,332,000	503,789,000
Deferred income taxes	230,154,000	245,046,000
Assets of consolidated variable interest entities:
Investments	514,332,000	503,789,000
Total assets	1,124,361,000	1,294,946,000
Liabilities, redeemable non-controlling interests and equity
Accounts payable	2,045,000	2,827,000
Accrued compensation and benefits	65,761,000	20,117,000
Accrued members’ distributions	19,161,000	27,119,000
Accrued dividend	14,810,000	12,947,000
Debt	199,126,000	171,326,000
Payable to related parties pursuant to tax receivable agreement	179,431,000	180,536,000
Lease liabilities	79,549,000	82,244,000
Liabilities of consolidated variable interest entities:
Total liabilities	594,403,000	557,460,000
Commitments and contingencies (Note 16)
Redeemable non-controlling interests	0	276,000,000
Preferred stock, $0.001 par value, 10,000,000 authorized, none issued	0	0
Additional paid-in-capital	166,821,000	161,676,000
Total Hamilton Lane Incorporated stockholders’ equity	394,661,000	346,878,000
Total equity	529,958,000	461,486,000
Total liabilities, redeemable non-controlling interests and equity	1,124,361,000	1,294,946,000
Class A Common Stock
Liabilities of consolidated variable interest entities:
Common stock	38,000	37,000
Class B Common Stock
Liabilities of consolidated variable interest entities:
Common stock	16,000	16,000
Consolidated Entity Excluding Variable Interest Entities (VIE)
Assets
Cash and cash equivalents	146,070,000	72,138,000
Restricted cash	3,116,000	4,023,000
Investments	514,332,000	503,789,000
Other assets	30,755,000	28,162,000
Assets of consolidated variable interest entities:
Cash and cash equivalents	146,070,000	72,138,000
Investments held in trust	3,116,000	4,023,000
Investments	514,332,000	503,789,000
Other assets	30,755,000	28,162,000
Liabilities, redeemable non-controlling interests and equity
Other liabilities (includes $13,954 and $13,818 at fair value)	34,503,000	47,669,000
Liabilities of consolidated variable interest entities:
Other liabilities	34,503,000	47,669,000
Primary Beneficiary
Assets
Cash and cash equivalents	3,909,000	36,000
Restricted cash	0	276,016,000
Investments	37,360,000	10,036,000
Other assets	229,000	623,000
Assets of consolidated variable interest entities:
Cash and cash equivalents	3,909,000	36,000
Investments held in trust	0	276,016,000
Investments	37,360,000	10,036,000
Other assets	229,000	623,000
Liabilities, redeemable non-controlling interests and equity
Other liabilities (includes $13,954 and $13,818 at fair value)	17,000	12,675,000
Liabilities of consolidated variable interest entities:
Other liabilities	17,000	12,675,000
Total liabilities	0	0
General Partnerships
Liabilities of consolidated variable interest entities:
Stockholders' equity attributable to noncontrolling interest	3,653,000	3,423,000
Hamilton Lane Advisors, L.L.C.
Liabilities of consolidated variable interest entities:
Retained earnings	227,786,000	185,149,000
Stockholders' equity attributable to noncontrolling interest	$ 131,644,000	$ 111,185,000

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2022	Mar. 31, 2022
Class of Stock [Line Items]
Other liabilities, fair value	$ 13,954	$ 13,818
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)	37,868,691	37,280,697
Common stock, shares outstanding (in shares)	37,868,691	37,280,697
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)	15,953,682	16,033,359
Common stock, shares outstanding (in shares)	15,953,682	16,033,359

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Revenues
Total revenues	$ 127,074	$ 91,704	$ 415,965	$ 267,019
Consolidated variable interest entities related:
Total revenues	127,074	91,704	415,965	267,019
Expenses
Compensation and benefits	45,676	34,004	158,235	94,028
Consolidated variable interest entities related:
Total expenses	68,702	50,658	225,242	143,722
Other income (expense)
Equity in income (loss) of investees	650	12,924	(7,493)	60,181
Interest income	442	26	839	488
Non-operating (expense) income	(27,960)	37,043	(11,878)	65,500
Consolidated variable interest entities related:
Unrealized income			18,578	47,774
Total other income (expense)	(24,700)	50,669	(16,207)	123,914
Income before income taxes	33,672	91,715	174,516	247,211
Income tax expense	11,788	11,519	38,766	37,515
Net income	21,884	80,196	135,750	209,696
Net income attributable to Hamilton Lane Incorporated	9,669	51,849	78,034	132,161
Class A Common Stock
Consolidated variable interest entities related:
Net income attributable to Hamilton Lane Incorporated	$ 9,669	$ 51,849	$ 78,034	$ 132,161
Basic earnings per share of Class A common stock (in dollars per share)	$ 0.32	$ 1.44	$ 2.21	$ 3.64
Diluted earnings per share of Class A common stock (in dollars per share)	0.31	1.40	2.19	3.59
Dividends declared per share of Class A common stock (in dollars per share)	$ 0.40	$ 0.35	$ 1.20	$ 1.05
Consolidated Entity Excluding Variable Interest Entities (VIE)
Expenses
General, administrative and other	$ 22,717	$ 16,332	$ 66,066	$ 48,742
Consolidated variable interest entities related:
General, administrative and other	22,717	16,332	66,066	48,742
Other income (expense)
Interest expense	(2,419)	(1,157)	(6,027)	(3,488)
Primary Beneficiary
Expenses
General, administrative and other	309	322	941	952
Consolidated variable interest entities related:
General, administrative and other	309	322	941	952
Other income (expense)
Interest expense	0	(4)	0	(4)
Interest income	2,111	0	2,989	0
Consolidated variable interest entities related:
Equity in income (loss) of investees	389	(298)	1,030	170
Unrealized income	2,087	2,135	4,333	1,067
General Partnerships
Consolidated variable interest entities related:
Less: (loss) Income attributable to non-controlling interests	422	(119)	773	167
Hamilton Lane Advisors, L.L.C.
Consolidated variable interest entities related:
Less: (loss) Income attributable to non-controlling interests	9,146	26,181	51,326	76,849
Hamilton Lane Alliance Holdings I, Inc.
Consolidated variable interest entities related:
Less: (loss) Income attributable to non-controlling interests	2,647	2,285	5,617	519
Management and advisory fees
Revenues
Total revenues	97,355	79,836	276,182	229,653
Consolidated variable interest entities related:
Total revenues	97,355	79,836	276,182	229,653
Incentive fees
Revenues
Total revenues	29,719	11,868	139,783	37,366
Consolidated variable interest entities related:
Total revenues	29,719	11,868	139,783	37,366
Incentive fees | Consolidated Entity Excluding Variable Interest Entities (VIE)
Revenues
Total revenues	24,075	10,490	132,835	34,217
Consolidated variable interest entities related:
Total revenues	24,075	10,490	132,835	34,217
Incentive fees | Primary Beneficiary
Revenues
Total revenues	5,644	1,378	6,948	3,149
Consolidated variable interest entities related:
Total revenues	$ 5,644	$ 1,378	$ 6,948	$ 3,149

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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	General Partnerships Noncontrolling Interests	Hamilton Lane Advisors, L.L.C. Noncontrolling Interests
Beginning balance at Mar. 31, 2021	$ 314,201	$ 36	$ 17	$ 150,564	$ 87,512	$ 2,211	$ 73,861
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	209,177				132,161	167	76,849
Equity-based compensation	5,706			3,870			1,836
Repurchase of Class A shares for employee tax withholding	(605)			(220)			(385)
Deferred tax adjustment	2,722			2,722
Dividends declared	(38,429)				(38,429)
Capital contributions from non-controlling interests, net	563					563
Member distributions	(32,361)						(32,361)
Secondary offerings	(1)	1	(1)	4,097			(4,098)
Employee Share Purchase Plan share issuance	1,382			936			446
Adjustment of redeemable non-controlling interest to redemption value	520				393		127
Equity reallocation between controlling and non-controlling interests	0			98			(98)
Ending balance at Dec. 31, 2021	462,875	37	16	162,067	181,637	2,941	116,177
Beginning balance at Sep. 30, 2021	404,252	37	16	161,000	141,130	2,904	99,165
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	77,911				51,849	(119)	26,181
Equity-based compensation	1,711			1,179			532
Repurchase of Class A shares for employee tax withholding	0
Deferred tax adjustment	2			2			0
Dividends declared	(12,916)				(12,916)
Capital contributions from non-controlling interests, net	156					156
Member distributions	(11,024)						(11,024)
Secondary offerings	0	0	0				0
Employee Share Purchase Plan share issuance	498			340			158
Adjustment of redeemable non-controlling interest to redemption value	2,285			0	1,574		711
Equity reallocation between controlling and non-controlling interests	0			(454)			454
Ending balance at Dec. 31, 2021	462,875	37	16	162,067	181,637	2,941	116,177
Beginning balance at Mar. 31, 2022	461,486	37	16	161,676	185,149	3,423	111,185
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	130,133				78,034	773	51,326
Equity-based compensation	6,816			4,702			2,114
Repurchase of Class A shares for employee tax withholding	(162)			(112)			(50)
Dividends declared	(44,413)				(44,413)
Capital contributions to non-controlling interests, net	(543)					(543)
Member distributions	(37,871)						(37,871)
Employee Share Purchase Plan share issuance	1,441	1		993			447
Adjustment of redeemable non-controlling interest to redemption value	13,071				9,016		4,055
Equity reallocation between controlling and non-controlling interests	0			(438)			438
Ending balance at Dec. 31, 2022	529,958	38	16	166,821	227,786	3,653	131,644
Beginning balance at Sep. 30, 2022	524,978	38	16	164,763	225,957	3,820	130,384
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	19,237				9,669	422	9,146
Equity-based compensation	2,835			1,956			879
Repurchase of Class A shares for employee tax withholding	(70)			(48)			(22)
Dividends declared	(14,810)				(14,810)
Capital contributions to non-controlling interests, net	(589)					(589)
Member distributions	(12,164)						(12,164)
Employee Share Purchase Plan share issuance	439	0		303			136
Adjustment of redeemable non-controlling interest to redemption value	10,102				6,970		3,132
Equity reallocation between controlling and non-controlling interests	0			(153)			153
Ending balance at Dec. 31, 2022	$ 529,958	$ 38	$ 16	$ 166,821	$ 227,786	$ 3,653	$ 131,644

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating activities:
Net income	$ 135,750	$ 209,696
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,600	3,744
Change in deferred income taxes	14,892	19,941
Change in payable to related parties pursuant to tax receivable agreement	(1,105)	(6,202)
Equity-based compensation	6,816	5,706
Equity in loss (income) of investees	7,493	(60,181)
Gain on sale of investment	(9,783)	(11,936)
Fair value adjustment of other investments	(18,578)	(47,774)
Proceeds received from partnerships	11,877	38,945
Non-cash lease expense	5,370	7,210
Gain on sale of intangible asset	2,771	0
Impairment of other investment	43,289	0
Other	(2,864)	43
Changes in operating assets and liabilities:
Fees receivable	(205)	(17,883)
Prepaid expenses	(220)	263
Due from related parties	(5,911)	479
Other assets	(5,309)	256
Accounts payable	(782)	17
Accrued compensation and benefits	45,644	18,867
Lease liability	(5,581)	(1,410)
Other liabilities	(11,548)	(6,457)
Consolidated variable interest entities related:
Net cash provided by operating activities	213,371	152,512
Investing activities:
Purchase of furniture, fixtures and equipment	(3,261)	(7,788)
Cash paid for acquisition of business	(1,500)	(10,096)
Loans to investees	(2,535)	0
Purchase of other investments	(34,125)	(18,798)
Proceeds from sale of investments	10,000	12,623
Distributions from investments	1,406	12,739
Distributions received from Partnerships	15,990	12,088
Contributions to Partnerships	(63,364)	(56,432)
Sale of investments held in trust	278,954	0
Net cash provided by (used in) investing activities	201,565	(55,664)
Financing activities:
Proceeds from offerings	0	73,833
Purchase of membership interests	0	(73,833)
Borrowings of debt	31,682	0
Repayments of debt	(3,873)	(1,382)
Draw-down on revolver	25,000	0
Repayment of revolver	(25,000)	(15,000)
Repurchase of Class A shares for employee tax withholding	(162)	(605)
Proceeds received from issuance of shares under Employee Share Purchase Plan	1,441	1,382
Payments to related parties, pursuant to tax receivable agreement	0	(15,584)
Dividends paid	(42,550)	(36,714)
Members’ distributions paid	(45,828)	(37,469)
Other	0	(75)
Consolidated variable interest entities related:
Net cash used in financing activities	(338,038)	(104,885)
Increase (decrease) in cash, cash equivalents, and restricted cash	76,898	(8,037)
Cash, cash equivalents, and restricted cash at beginning of the period	76,197	90,377
Cash and cash equivalents, restricted cash, and cash and cash equivalents held at consolidated variable interest entities at end of the period	153,095	82,340
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	153,095	82,340
Class B Common Stock
Financing activities:
Repurchase of common stock	0	(1)
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	146,070	78,838
Restricted cash	3,116	3,315
Primary Beneficiary
Adjustments to reconcile net income to net cash provided by operating activities:
Fair value adjustment of other investments	(4,333)	(1,067)
Consolidated variable interest entities related:
Change in warrant liability measured at fair value	(2,883)	(1,067)
Equity in income of investees	(1,030)	(170)
Other assets and liabilities	(332)	425
Consolidated variable interest entities related:
Contributions from non-controlling interest in general partnerships	687	1,053
Distributions to non-controlling interest in general partnerships	(1,230)	(490)
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	3,909	187
Restricted cash	0
Primary Beneficiary | Class A Common Stock
Financing activities:
Repurchase of common stock	$ (278,205)	$ 0

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Organization

9 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. Organization

Hamilton Lane Incorporated (“HLI”) is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payable to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of December 31, 2022 and March 31, 2022, HLI held approximately 69.0% and 68.9%, respectively, of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement in place with HLA’s members, the economic interest in HLA held by HLI will increase.

HLA is a registered investment advisor with the United States Securities and Exchange Commission (“SEC”), providing asset management and advisory services, primarily to institutional investors, to design, build and manage private markets portfolios. HLA generates revenues primarily from management fees, by managing assets on behalf of customized separate accounts, specialized fund products and distribution management accounts, and advisory fees, by providing asset supervisory and reporting services. HLA sponsors the formation, and 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.

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Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2022

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 and nine months ended December 31, 2022 are not necessarily indicative of the results that may be expected for the year ending March 31, 2023. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

Accounting for Differing Fiscal Periods

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

Fair Value of Financial Instruments

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

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

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

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

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

Recent Accounting Pronouncements

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

Reclassifications

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

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Revenue

9 Months Ended

Dec. 31, 2022

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 December 31,				Nine Months Ended December 31,
Management and advisory fees	2022		2021		2022		2021
Specialized funds	$	53,299	$	38,233	$	144,099	$	107,935
Customized separate accounts	29,571		25,982		87,329		75,416
Advisory	6,613		6,119		19,073		18,781
Reporting and other	6,720		5,992		19,170		16,983
Distribution management	596		3,170		1,863		9,313
Fund reimbursement revenue	556		340		4,648		1,225
Total management and advisory fees	$	97,355	$	79,836	$	276,182	$	229,653

	Three Months Ended December 31,				Nine Months Ended December 31,
Incentive fees	2022		2021		2022		2021
Specialized funds	$	8,679	$	6,765	$	102,815	$	23,903
Customized separate accounts	15,396		3,725		30,020		10,314
Consolidated variable interest related:
Specialized funds	5,644		1,378		6,948		3,149
Total incentive fees	$	29,719	$	11,868	$	139,783	$	37,366

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Investments

9 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Investments

4. Investments

Investments consist of the following:

	December 31,		March 31,
	2022		2022
Equity method investments in Partnerships	$	328,311	$	326,296
Other equity method investments	—		1,573
Other investments	20,189		19,820
Investments valued under the measurement alternative	165,832		156,100
Total Investments	$	514,332	$	503,789

Equity method investments

The Company’s equity method investments in Partnerships represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments within the Partnerships vary by fund. The Company has a 1% interest in substantially all of the Partnerships.

During the quarter ended September 30, 2022, the Company sold its ownership interests in its joint venture that automates the collection of fund and underlying portfolio company data from general partners, Private Markets Connect, for $10,000 and recognized a gain of $9,783 which is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. Immediately preceding the sale, the Company received a distribution from the joint venture of $1,406.

Other investments

The Company’s other 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 direct credit investments are debt securities classified as trading securities. Other 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 other investments delivered as collateral which are estimated using Level 3 inputs with the significant inputs as shown in Note 5 below.

The Company recognized a gain on other investments held as collateral of $821 and $915 during the three and nine months ended December 31, 2022, respectively, and a gain of $2,288 and $3,239 during the three and nine months ended December 31, 2021, respectively, that are recorded in non-operating (expense) income. The Company recognized a loss on the secured financing liability of $821 and $915 during the three and nine months ended December 31, 2022, respectively, and a loss of $2,288 and $3,239 during the three and nine months ended December 31, 2021, respectively, that are recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

Investments valued under the measurement alternative

During the quarter ended June 30, 2022, the Company made investments in two private companies. The Company invested $3,000 in a technology driven platform that provides a digitized token for investors that improves the efficiency of capital raises. Additionally, the Company invested $12,000 in an online financial services platform. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company values the investments under the measurement alternative.

During the quarter ended June 30, 2022, the Company made an additional investment of $5,236 in a company that maintains a platform of solutions designed to aid individual investors and various wealth management platforms with their wealth management needs. As a result of the transaction, the Company marked its original investment to fair value based upon the transaction price, which resulted in total unrealized gain of $6,687 during the three months ended June 30, 2022, that is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. Due to the lack of readily determinable fair value for this investment, over which the Company does not have significant influence, the Company will continue to value the investment under the measurement alternative.

During the quarter ended September 30, 2022, the Company made investments in two private companies. The Company invested $3,000 in a digital platform that offers financial planning and portfolio management tools to retail and accredited investors. The Company invested $4,000 in a cloud-based treasury and liquidity solution for investment management firms. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company will value the investments under the measurement alternative.

During the quarter ended December 31, 2022, the Company made additional investments in three private companies in which it previously invested. The Company invested an additional $1,228 in a cloud-based treasury and liquidity solution for investment management firms. The Company invested an additional $5,061 in a company that provides environmental, social and governance (“ESG”) reporting metrics and analysis to private market firms and private companies. As a result of the transaction, the Company marked its original investment to fair value based upon the transaction price, which resulted in a total unrealized gain of $11,521 during the three months ended December 31, 2022 that is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income. The Company invested an additional $600 in a technology company that has developed software to automate manual data entry tasks associated with alternative investment reporting. As part of that funding round, a convertible note issued by the investee to the Company converted into additional shares of the investee with a value of $550. Due to the lack of readily determinable fair values for these investments, over which the Company does not have significant influence, the Company will continue to value these investments under the measurement alternative.

The Company performs qualitative impairment assessments at each quarter end on its investments recorded under the measurement alternative. As a result of this assessment as of December 31, 2022, the Company determined that a quantitative assessment was required to be performed for one of its investments given a significant decrease in earnings performance and overall economic and market conditions. The assessment indicated that the fair value was less than the carrying value at December 31, 2022. Prior to the impairment recorded, the carrying value of the investment was $74,189. The impairment amount was $43,289 and is included in non-operating (expense) income in the Condensed Consolidated Statements of Income. The fair value was estimated using Level 3 inputs with the significant input as shown in Note 5 below.

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Fair Value Measurements

9 Months Ended

Dec. 31, 2022

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 December 31, 2022
	Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:
Other investments	$	6,235	$	—	$	13,954	$	20,189	$	10,703
Total financial assets	$	6,235	$	—	$	13,954	$	20,189	$	10,703
Financial liabilities:
Secured financing(1)	—		—		13,954		13,954
Total financial liabilities	$	—	$	—	$	13,954	$	13,954

	As of March 31, 2022
	Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:
Other investments	$	6,002	$	—	$	13,818	$	19,820	$	10,853
Investments held in trust	276,016		—		—		276,016		276,000
Total financial assets	$	282,018	$	—	$	13,818	$	295,836	$	286,853
Financial liabilities:
Warrant liability(2)	$	2,484	$	399	$	—	$	2,883
Secured financing(1)	—		—		13,818		13,818
Total financial liabilities	$	2,484	$	399	$	13,818	$	16,701

(1) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheets.

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

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 September 30, 2022	$	6,252	$	768	$	6,060	$	13,080
Contributions	91		—		—		91
Distributions	(38)		—		—		(38)
Net gain	417		18		386		821
Balance as of December 31, 2022	$	6,722	$	786	$	6,446	$	13,954
Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	114		—		—		114
Distributions	(893)		—		—		(893)
Net gain	477		12		426		915
Balance as of December 31, 2022	$	6,722	$	786	$	6,446	$	13,954

	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments
Balance as of September 30, 2021	$	7,159	$	783	$	6,068	$	6,122	$	20,132
Contributions	204		—		—		—		204
Distributions	(25)		—		—		—		(25)
Net gain (loss)	1,464		(1)		825		168		2,456
Transfer out	—		—		—		(6,290)		(6,290)
Balance as of December 31, 2021	$	8,802	$	782	$	6,893	$	—	$	16,477

	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments
Balance as of March 31, 2021	$	6,254	$	985	$	6,059	$	—	$	13,298
Contributions	293		—		28		—		321
Distributions	(179)		(202)		—		—		(381)
Net gain (loss)	2,434		(1)		806		(165)		3,074
Transfer in	—		—		—		6,455		6,455
Transfer out	—		—		—		(6,290)		(6,290)
Balance as of December 31, 2021	$	8,802	$	782	$	6,893	$	—	$	16,477

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

				Significant
	Fair		Valuation	Unobservable				Weighted
	Value		Methodology	Inputs	Range			Average
Other investments:
Private equity funds	$	6,722	Adjusted net asset value	Selected market return	2.3%	-	6.3%	3.2%
Direct credit investments	$	786	Discounted cash flow	Market yield	12.9%	-	12.9%	12.9%
Direct equity investments	$	6,446	Market approach	EBITDA multiple	8.25	-	14.25x	11.61x
			Market approach	Equity multiple	1.8x			1.8x

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 non-recurring Level 3 fair value measurements of financial assets were as follows, as of December 31, 2022:

				Significant
	Fair		Valuation	Unobservable		Weighted
	Value		Methodology	Inputs	Range	Average
Investment valued under the measurement alternative	$	30,900	Market approach	Revenue Multiple	3.5x	3.5x

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, respectively; (2) a significant increase or decrease in the market yield would result in a significantly lower or higher fair value measurement, respectively; and (3) a significant increase or decrease in the selected multiple would result in a significantly higher or lower fair value measurement, respectively.

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Acquisitions

9 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

6. Acquisitions

On April 1, 2021, the Company acquired substantially all the assets of 361 Capital, LLC for a total aggregate cash amount of $13,096, of which $10,096 was paid on the closing date of the acquisition. The remaining $3,000 will be paid in two equal installments on the first and second anniversaries of the closing. On April 1, 2022, the Company paid the first of the two equal installments. The purchase price based upon the fair value of consideration transferred at the date of acquisition is $12,946. The Company recorded $7,145 of definite lived intangible assets related primarily to the acquired investment management contracts, which will be amortized over seven years, and $5,623 of goodwill, which are both recorded in other assets in the Condensed Consolidated Balance Sheets. The remaining assets acquired and liabilities assumed are not material to the condensed consolidated financial statements. Revenue and net income attributable to the acquisition of 361 Capital, LLC were not material for the three and nine months ended December 31, 2022 and 2021, and therefore, pro forma information related to this acquisition is not presented.

In December 2022, the Company finalized the transfer of the advisory arrangement to a third party for an agreed upon percentage of the respective funds’ management fees over two calendar years. The Company recognized a gain of $2,771 on the sale of the advisory agreements that is recorded in non-operating (expense) income in the Condensed Consolidated Statements of Income.

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Variable Interest Entities

9 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

7. Variable Interest Entities

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

Consolidated Variable Interest Entities

The Company consolidates general partner entities of certain Partnerships and a Partnership in which it is currently the primary beneficiary, which are not wholly-owned by the Company. The total assets of these consolidated VIEs are $41,498 and $10,036 as of December 31, 2022 and March 31, 2022, respectively. The consolidated VIEs had no liabilities as of December 31, 2022 and March 31, 2022. 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 Partnership VIE 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.

The Company previously sponsored and consolidated Hamilton Lane Alliance Holdings I, Inc. (“HLAH”) through HL Alliance Holdings Sponsor LLC, an indirect wholly-owned subsidiary of the Company. On January 15, 2021, HLAH completed an IPO raising total gross proceeds of $276,000, which were placed in a trust and could only be utilized for funding a business combination or the redemption of Class A shares of HLAH. In a private placement concurrent with the IPO, HLAH sold warrants to HL Alliance Holdings Sponsor LLC for gross proceeds of $7,520, which were used by HLAH to pay the offering costs and also to provide working capital. On December 15, 2022, HLAH was liquidated, as it was determined that HLAH would be unable to consummate an initial business combination within the time period required by its governing documents. In connection with the liquidation, HLAH redeemed all of the outstanding shares of Class A common stock, cancelled all of the outstanding public and private warrants and settled all other outstanding liabilities.

Nonconsolidated Variable Interest Entities

The Company holds variable interests in certain Partnerships that are VIEs, which are not consolidated, as it is determined that the Company is not the primary beneficiary based upon the Company’s equity interest percentage in each of the VIEs. Certain Partnerships are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause, by simple majority vote (i.e. do not have substantive “kick out” or “liquidation” rights). The Company’s involvement with such entities is in the form of direct equity interests in, and fee arrangements with, the Partnerships in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Partnership and makes all investment and operating decisions. As of December 31, 2022, the total remaining unfunded commitments from the Company’s general partner entities to the nonconsolidated VIEs was $140,691. 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 Sheet 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:

	December 31,		March 31,
	2022		2022
Investments	$	190,735	$	191,378
Fees receivable	16,418		9,754
Due from related parties	1,901		778
Total VIE Assets	209,054		201,910
Less: Non-controlling interests	(1,534)		(1,873)
Maximum exposure to loss	$	207,520	$	200,037

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Debt

9 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

8. Debt

The Company’s debt consisted of the following:

	As of December 31, 2022						As of March 31, 2022
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	100,000	$	99,578	6.25	%	$	71,754	$	71,574	2.25	%
2020 Multi-Draw Facility	100,000		99,548		3.50	%	100,000		99,752		3.50	%
Total Debt	$	200,000	$	199,126			$	171,754	$	171,326

In October 2022, the Company modified its existing credit facility with its lender. The modifications took the form of a new 2022 Multi-Draw Term Loan and Security Agreement, as well as amendments to the existing Revolving Loan and Security Agreement, Term Loan and Security Agreement and 2020 Multi-Draw Term Loan and Security Agreement (collectively, the “Loan Agreements”).

The modifications extended maturity dates of the Loan Agreements, increased the principal outstanding under the term loan to $100,000 and added borrowing capacity across the Loan Agreements, subject to an overall cap of $325,000 of loan principal outstanding. The facility is secured by substantially all of HLA’s personal property assets, subject to certain excluded assets. The Loan Agreements contain financial and operational covenants, events of default and remedies that the Company believes to be customary. The carrying value of the Company’s outstanding debt as of December 31, 2022 and March 31, 2022 approximated fair value except for the 2020 multi-draw facility which had an estimated fair value of $86,782 as of December 31, 2022. The estimated fair value of debt is based on then-current market rates for similar debt instruments and is classified as Level 2 within the fair value hierarchy.

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Equity

9 Months Ended

Dec. 31, 2022

Equity [Abstract]

Equity

9. Equity

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

	Class A Common Stock	Class B Common Stock
March 31, 2022	37,280,697	16,033,359
Forfeitures	(5,899)	(79,677)
Shares repurchased for employee tax withholdings	(2,311)	—
Awards granted	569,442	—
Shares issued pursuant to Employee Share Purchase Plan	26,762	—
December 31, 2022	37,868,691	15,953,682

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Equity-Based Compensation

9 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

10. Equity Based Compensation

Restricted Stock Awards

A summary of restricted stock activity for the nine months ended December 31, 2022 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2022	281,307	$	67.50
Granted	41,160	$	66.97
Vested	(11,485)	$	77.38
Forfeited	(5,899)	$	70.15
December 31, 2022	305,083	$	67.00

As of December 31, 2022, total unrecognized compensation expense related to restricted stock was $14,950.

Performance Awards

The Company granted performance stock awards to certain employees that are subject to both a market-based vesting and a service-based vesting condition (“Performance Awards”). The Performance Awards will vest based upon (i) the market price of HLI Class A common stock achieving certain price thresholds from $150 per share to $230 per share and (ii) continued employment through the date the price target is met (with a minimum of five years of service required after the grant date for vesting). If the price target is met prior to the fifth anniversary of the grant date, the vesting date will be the fifth anniversary of the grant date. Holders of the Performance Awards do not participate in dividends until such awards have met both their market-based and service-based vesting requirements.

Due to the existence of the service requirement, the vesting period for these awards will vary with each respective tranche as the employees must be employed with the Company at the point in which the market requirement is met with a minimum of five years of service required after the grant date for vesting. As such, compensation expense will be recognized ratably for each vesting tranche from the grant date to the end for the employee’s service period. The fair value of the awards granted are based on a Monte-Carlo simulation valuation model.

A summary of Performance Award activity for the nine months ended December 31, 2022 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2022	—	$	—
Granted	528,282	$	29.79
Vested	—	$	—
Forfeited	—	$	—
December 31, 2022	528,282	$	29.79

Below is a summary of the grant date fair value based on the Monte Carlo simulation valuation model and the significant assumptions used to estimate the grant date fair value of the Performance Awards granted September 16, 2022:

Grant Date Fair Value	$	29.79
Closing share price as of grant date	$	69.67
Risk Free Rate	3.6%
Volatility	37.0%
Dividend Yield	2.3%

As of December 31, 2022, total estimated unrecognized expense related to the unvested Performance Awards was $14,815, and none of the Performance Awards have met their market price based vesting condition.

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Compensation and Benefits

9 Months Ended

Dec. 31, 2022

Compensation Related Costs [Abstract]

Compensation and Benefits

11. Compensation and Benefits

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Base compensation and benefits	$	35,473	$	29,340	$	116,549	$	79,014
Incentive fee compensation	7,368		2,953		34,870		9,308
Equity-based compensation	2,835		1,711		6,816		5,706
Total compensation and benefits	$	45,676	$	34,004	$	158,235	$	94,028

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Income Tax

9 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

12. 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 35.0% and 22.2% for the three and nine months ended December 31, 2022, respectively, and 12.6% and 15.2% for the three and nine months ended December 31, 2021, respectively. The effective tax rates were different from the statutory tax rates due to the portion of income allocated to non-controlling interests, valuation allowance recorded against deferred tax assets and discrete tax adjustments recorded in the periods.

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

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Earnings per Share

9 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Earnings per Share

13. Earnings per Share

Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to HLI, and, therefore, are not participating securities. As a result, a separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been included. Shares of the Company’s Class B common stock are, however, considered potentially dilutive to the Class A common stock because the Class B units to which the Class B common stock corresponds are exchangeable for shares of Class A common stock on a 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 December 31, 2022					Three Months Ended December 31, 2021
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	9,669				$	51,849
Impact of changes in carrying amount of redeemable NCI	2,095					1,308
Basic EPS of Class A common stock	$	11,764	37,025,416	$	0.32	$	53,157	36,902,741	$	1.44
Adjustment to net income:
Assumed vesting of employee awards	5					66
Assumed conversion of Class B and Class C Units	5,058					21,946
Effect of dilutive securities:
Assumed vesting of employee awards			68,129					165,569
Assumed conversion of Class B and Class C Units			16,675,834					16,675,834
Diluted EPS of Class A common stock	$	16,827	53,769,379	$	0.31	$	75,169	53,744,144	$	1.40
	Nine Months Ended December 31, 2022					Nine Months Ended December 31, 2021
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	78,034				$	132,161
Impact of changes in carrying amount of redeemable NCI	3,809					358
Basic EPS of Class A common stock	$	81,843	37,004,657	$	2.21	$	132,519	36,375,797	$	3.64
Adjustment to net income:
Assumed vesting of employee awards	34					156
Assumed conversion of Class B and Class C Units	35,968					60,083
Effect of dilutive securities:
Assumed vesting of employee awards			53,030					138,902
Assumed conversion of Class B and Class C Units			16,675,834					17,192,702
Diluted EPS of Class A common stock	$	117,845	53,733,521	$	2.19	$	192,758	53,707,401	$	3.59

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 528,282 Performance Awards for the three and nine months ended December 31, 2022 as the market condition was not achieved as of December 31, 2022.

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Related-Party Transactions

9 Months Ended

Dec. 31, 2022

Related Party Transactions [Abstract]

Related-Party Transactions

14. Related Party Transactions

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

Revenue and Receivables

The Company has investment management agreements with various specialized funds and customized separate accounts that it manages. The Company earned management and advisory fees from Partnerships of $70,929 and $198,973 for the three and nine months ended December 31, 2022, respectively, and $53,701 and $150,955 for the three and nine months ended December 31, 2021, respectively. The Company earned incentive fees from Partnerships of $28,652 and $137,545 for the three and nine months ended December 31, 2022, respectively, and $10,335 and $34,669 for the three and nine months ended December 31, 2021, respectively.

Fees receivable from the Partnerships were $35,263 and $27,728 as of December 31, 2022 and March 31, 2022, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets.

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Supplemental Cash Flow Information

9 Months Ended

Dec. 31, 2022

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

15. Supplemental Cash Flow

	Nine Months Ended December 31,
	2022		2021
Establishment of lease liability in exchange for right of use asset	$	5,401	$	7,950
Non-cash investing activities:
Establishment of receivable for intangible assets sold	$	6,776	$	—
Non-cash financing activities:
Dividends declared but not paid	$	14,810	$	12,916
Member distributions declared but not paid	$	19,161	$	11,769
Establishment of net deferred tax assets related to offerings	$	—	$	19,783

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Commitments and Contingencies

9 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

16. Commitments and Contigencies

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 $952,188 and $1,191,066, net of amounts attributable to non-controlling interests, at December 31, 2022 and March 31, 2022, respectively.

If the Company ultimately receives the unrecognized carried interest, a total of $238,047 and $297,766 as of December 31, 2022 and March 31, 2022, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable.

Commitments

The Company serves as the investment manager of the Partnerships. The general partner or managing member of each Partnership is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Partnerships was $212,895 and $186,164 as of December 31, 2022 and March 31, 2022, respectively.

The Company has an unrealized net gain on its investments valued under the measurement alternative of $29,004 as of December 31, 2022, of which up to 15% may be paid as a discretionary bonus as those gains are realized.

Leases

The Company’s leases consist primarily of operating leases for office space and office equipment in various locations around the world. 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 December 31,				Nine Months Ended December 31,
	2022		2021		2022			2021
Operating lease costs	$	2,095	$	2,011	$	6,199		$	7,610
Variable lease costs	$	395	$	416	$	1,067		$	980
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,997	$	1,657	$	5,858		$	4,794
Weighted average remaining lease term (in years)					14.0			14.7
Weighted average discount rate					3.3		%	3.2		%

As of December 31, 2022, the maturities of operating lease liabilities were as follows:

Remainder of FY2023	$	2,092
FY2024	7,645
FY2025	7,233
FY2026	6,623
FY2027	6,623
Thereafter	70,210
Total lease payments	100,426
Less: imputed interest	(20,877)
Total operating lease liabilities	$	79,549

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Subsequent Events

9 Months Ended

Dec. 31, 2022

Subsequent Events [Abstract]

Subsequent Events

17. Subsequent Events

On February 7, 2023, the Company declared a quarterly dividend of $0.40 per share of Class A common stock to record holders at the close of business on March 15, 2023. The payment date will be April 6, 2023.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2022

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 and nine months ended December 31, 2022 are not necessarily indicative of the results that may be expected for the year ending March 31, 2023. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in HLI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

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

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

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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

Reclassifications

Reclassifications

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

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Revenue (Tables)

9 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

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 December 31,				Nine Months Ended December 31,
Management and advisory fees	2022		2021		2022		2021
Specialized funds	$	53,299	$	38,233	$	144,099	$	107,935
Customized separate accounts	29,571		25,982		87,329		75,416
Advisory	6,613		6,119		19,073		18,781
Reporting and other	6,720		5,992		19,170		16,983
Distribution management	596		3,170		1,863		9,313
Fund reimbursement revenue	556		340		4,648		1,225
Total management and advisory fees	$	97,355	$	79,836	$	276,182	$	229,653

	Three Months Ended December 31,				Nine Months Ended December 31,
Incentive fees	2022		2021		2022		2021
Specialized funds	$	8,679	$	6,765	$	102,815	$	23,903
Customized separate accounts	15,396		3,725		30,020		10,314
Consolidated variable interest related:
Specialized funds	5,644		1,378		6,948		3,149
Total incentive fees	$	29,719	$	11,868	$	139,783	$	37,366

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Investments (Tables)

9 Months Ended

Dec. 31, 2022

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Investments

Investments consist of the following:

	December 31,		March 31,
	2022		2022
Equity method investments in Partnerships	$	328,311	$	326,296
Other equity method investments	—		1,573
Other investments	20,189		19,820
Investments valued under the measurement alternative	165,832		156,100
Total Investments	$	514,332	$	503,789

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Fair Value Measurement (Tables)

9 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Summary 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 December 31, 2022
	Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:
Other investments	$	6,235	$	—	$	13,954	$	20,189	$	10,703
Total financial assets	$	6,235	$	—	$	13,954	$	20,189	$	10,703
Financial liabilities:
Secured financing(1)	—		—		13,954		13,954
Total financial liabilities	$	—	$	—	$	13,954	$	13,954

	As of March 31, 2022
	Level 1		Level 2		Level 3		Total		Amortized Cost
Financial assets:
Other investments	$	6,002	$	—	$	13,818	$	19,820	$	10,853
Investments held in trust	276,016		—		—		276,016		276,000
Total financial assets	$	282,018	$	—	$	13,818	$	295,836	$	286,853
Financial liabilities:
Warrant liability(2)	$	2,484	$	399	$	—	$	2,883
Secured financing(1)	—		—		13,818		13,818
Total financial liabilities	$	2,484	$	399	$	13,818	$	16,701

(1) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheets.

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

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 September 30, 2022	$	6,252	$	768	$	6,060	$	13,080
Contributions	91		—		—		91
Distributions	(38)		—		—		(38)
Net gain	417		18		386		821
Balance as of December 31, 2022	$	6,722	$	786	$	6,446	$	13,954
Balance as of March 31, 2022	$	7,024	$	774	$	6,020	$	13,818
Contributions	114		—		—		114
Distributions	(893)		—		—		(893)
Net gain	477		12		426		915
Balance as of December 31, 2022	$	6,722	$	786	$	6,446	$	13,954

	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments
Balance as of September 30, 2021	$	7,159	$	783	$	6,068	$	6,122	$	20,132
Contributions	204		—		—		—		204
Distributions	(25)		—		—		—		(25)
Net gain (loss)	1,464		(1)		825		168		2,456
Transfer out	—		—		—		(6,290)		(6,290)
Balance as of December 31, 2021	$	8,802	$	782	$	6,893	$	—	$	16,477

	Private equity funds		Direct credit investments		Direct equity investments		Publicly traded equity security		Total other investments
Balance as of March 31, 2021	$	6,254	$	985	$	6,059	$	—	$	13,298
Contributions	293		—		28		—		321
Distributions	(179)		(202)		—		—		(381)
Net gain (loss)	2,434		(1)		806		(165)		3,074
Transfer in	—		—		—		6,455		6,455
Transfer out	—		—		—		(6,290)		(6,290)
Balance as of December 31, 2021	$	8,802	$	782	$	6,893	$	—	$	16,477

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 December 31, 2022:

				Significant
	Fair		Valuation	Unobservable				Weighted
	Value		Methodology	Inputs	Range			Average
Other investments:
Private equity funds	$	6,722	Adjusted net asset value	Selected market return	2.3%	-	6.3%	3.2%
Direct credit investments	$	786	Discounted cash flow	Market yield	12.9%	-	12.9%	12.9%
Direct equity investments	$	6,446	Market approach	EBITDA multiple	8.25	-	14.25x	11.61x
			Market approach	Equity multiple	1.8x			1.8x

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 non-recurring Level 3 fair value measurements of financial assets were as follows, as of December 31, 2022:

				Significant
	Fair		Valuation	Unobservable		Weighted
	Value		Methodology	Inputs	Range	Average
Investment valued under the measurement alternative	$	30,900	Market approach	Revenue Multiple	3.5x	3.5x

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Variable Interest Entities (Tables)

9 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

The carrying value of assets and liabilities recognized in the Condensed Consolidated Balance Sheet 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:

	December 31,		March 31,
	2022		2022
Investments	$	190,735	$	191,378
Fees receivable	16,418		9,754
Due from related parties	1,901		778
Total VIE Assets	209,054		201,910
Less: Non-controlling interests	(1,534)		(1,873)
Maximum exposure to loss	$	207,520	$	200,037

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Debt (Tables)

9 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Schedule of Debt

The Company’s debt consisted of the following:

	As of December 31, 2022						As of March 31, 2022
	Principal Outstanding		Carrying Value		Interest Rate		Principal Outstanding		Carrying Value		Interest Rate
Term Loan	$	100,000	$	99,578	6.25	%	$	71,754	$	71,574	2.25	%
2020 Multi-Draw Facility	100,000		99,548		3.50	%	100,000		99,752		3.50	%
Total Debt	$	200,000	$	199,126			$	171,754	$	171,326

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Equity (Tables)

9 Months Ended

Dec. 31, 2022

Equity [Abstract]

Rollforward of Common Stock

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

	Class A Common Stock	Class B Common Stock
March 31, 2022	37,280,697	16,033,359
Forfeitures	(5,899)	(79,677)
Shares repurchased for employee tax withholdings	(2,311)	—
Awards granted	569,442	—
Shares issued pursuant to Employee Share Purchase Plan	26,762	—
December 31, 2022	37,868,691	15,953,682

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Equity-Based Compensation (Tables)

9 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Summary of Restricted Stock Activity

A summary of restricted stock activity for the nine months ended December 31, 2022 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2022	281,307	$	67.50
Granted	41,160	$	66.97
Vested	(11,485)	$	77.38
Forfeited	(5,899)	$	70.15
December 31, 2022	305,083	$	67.00

Schedule of Performance Units Activity

A summary of Performance Award activity for the nine months ended December 31, 2022 is presented below:

	Total Unvested	Weighted- Average Grant-Date Fair Value of Award
March 31, 2022	—	$	—
Granted	528,282	$	29.79
Vested	—	$	—
Forfeited	—	$	—
December 31, 2022	528,282	$	29.79

Schedule of Valuation Assumptions

Below is a summary of the grant date fair value based on the Monte Carlo simulation valuation model and the significant assumptions used to estimate the grant date fair value of the Performance Awards granted September 16, 2022:

Grant Date Fair Value	$	29.79
Closing share price as of grant date	$	69.67
Risk Free Rate	3.6%
Volatility	37.0%
Dividend Yield	2.3%

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Compensation and Benefits (Tables)

9 Months Ended

Dec. 31, 2022

Compensation Related Costs [Abstract]

Schedule of Compensation and Benefits

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2022		2021		2022		2021
Base compensation and benefits	$	35,473	$	29,340	$	116,549	$	79,014
Incentive fee compensation	7,368		2,953		34,870		9,308
Equity-based compensation	2,835		1,711		6,816		5,706
Total compensation and benefits	$	45,676	$	34,004	$	158,235	$	94,028

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Earnings per Share (Tables)

9 Months Ended

Dec. 31, 2022

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 December 31, 2022					Three Months Ended December 31, 2021
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	9,669				$	51,849
Impact of changes in carrying amount of redeemable NCI	2,095					1,308
Basic EPS of Class A common stock	$	11,764	37,025,416	$	0.32	$	53,157	36,902,741	$	1.44
Adjustment to net income:
Assumed vesting of employee awards	5					66
Assumed conversion of Class B and Class C Units	5,058					21,946
Effect of dilutive securities:
Assumed vesting of employee awards			68,129					165,569
Assumed conversion of Class B and Class C Units			16,675,834					16,675,834
Diluted EPS of Class A common stock	$	16,827	53,769,379	$	0.31	$	75,169	53,744,144	$	1.40
	Nine Months Ended December 31, 2022					Nine Months Ended December 31, 2021
	Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount		Net income attributable to Class A Stockholders		Weighted-Average Shares	Per share amount
Net income attributable to HLI	$	78,034				$	132,161
Impact of changes in carrying amount of redeemable NCI	3,809					358
Basic EPS of Class A common stock	$	81,843	37,004,657	$	2.21	$	132,519	36,375,797	$	3.64
Adjustment to net income:
Assumed vesting of employee awards	34					156
Assumed conversion of Class B and Class C Units	35,968					60,083
Effect of dilutive securities:
Assumed vesting of employee awards			53,030					138,902
Assumed conversion of Class B and Class C Units			16,675,834					17,192,702
Diluted EPS of Class A common stock	$	117,845	53,733,521	$	2.19	$	192,758	53,707,401	$	3.59

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Dec. 31, 2022

Supplemental Cash Flow Information [Abstract]

Schedule of Supplemental Cash Flow Disclosures

	Nine Months Ended December 31,
	2022		2021
Establishment of lease liability in exchange for right of use asset	$	5,401	$	7,950
Non-cash investing activities:
Establishment of receivable for intangible assets sold	$	6,776	$	—
Non-cash financing activities:
Dividends declared but not paid	$	14,810	$	12,916
Member distributions declared but not paid	$	19,161	$	11,769
Establishment of net deferred tax assets related to offerings	$	—	$	19,783

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Commitments and Contingencies (Tables)

9 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

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 December 31,				Nine Months Ended December 31,
	2022		2021		2022			2021
Operating lease costs	$	2,095	$	2,011	$	6,199		$	7,610
Variable lease costs	$	395	$	416	$	1,067		$	980
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,997	$	1,657	$	5,858		$	4,794
Weighted average remaining lease term (in years)					14.0			14.7
Weighted average discount rate					3.3		%	3.2		%

Maturity of Operating Lease Liabilities

As of December 31, 2022, the maturities of operating lease liabilities were as follows:

Remainder of FY2023	$	2,092
FY2024	7,645
FY2025	7,233
FY2026	6,623
FY2027	6,623
Thereafter	70,210
Total lease payments	100,426
Less: imputed interest	(20,877)
Total operating lease liabilities	$	79,549

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Organization - Narrative (Details)	Dec. 31, 2022	Mar. 31, 2022
HLA
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Percent of economic interest held	69.00%	68.90%

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 127,074	$ 91,704	$ 415,965	$ 267,019
Management and advisory fees
Disaggregation of Revenue [Line Items]
Revenues	97,355	79,836	276,182	229,653
Specialized funds
Disaggregation of Revenue [Line Items]
Revenues	53,299	38,233	144,099	107,935
Customized separate accounts
Disaggregation of Revenue [Line Items]
Revenues	29,571	25,982	87,329	75,416
Advisory
Disaggregation of Revenue [Line Items]
Revenues	6,613	6,119	19,073	18,781
Reporting and other
Disaggregation of Revenue [Line Items]
Revenues	6,720	5,992	19,170	16,983
Distribution management
Disaggregation of Revenue [Line Items]
Revenues	596	3,170	1,863	9,313
Fund reimbursement revenue
Disaggregation of Revenue [Line Items]
Revenues	556	340	4,648	1,225
Incentive fees
Disaggregation of Revenue [Line Items]
Revenues	29,719	11,868	139,783	37,366
Incentive fees | Consolidated Entity Excluding Variable Interest Entities (VIE)
Disaggregation of Revenue [Line Items]
Revenues	24,075	10,490	132,835	34,217
Incentive fees | Primary Beneficiary
Disaggregation of Revenue [Line Items]
Revenues	5,644	1,378	6,948	3,149
Specialized funds | Consolidated Entity Excluding Variable Interest Entities (VIE)
Disaggregation of Revenue [Line Items]
Revenues	8,679	6,765	102,815	23,903
Specialized funds | Primary Beneficiary
Disaggregation of Revenue [Line Items]
Revenues	5,644	1,378	6,948	3,149
Customized separate accounts
Disaggregation of Revenue [Line Items]
Revenues	$ 15,396	$ 3,725	$ 30,020	$ 10,314

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Investments - Schedule of Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Other investments	$ 20,189	$ 19,820
Investments valued under the measurement alternative	165,832	156,100
Total Investments	514,332	503,789
Equity method investments in Partnerships
Schedule of Equity Method Investments [Line Items]
Equity method investments	328,311	326,296
Other equity method investments
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 0	$ 1,573

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Investments - Narrative (Details) $ in Thousands	3 Months Ended				9 Months Ended
	Dec. 31, 2022 USD ($) investment	Sep. 30, 2022 USD ($) investment	Jun. 30, 2022 USD ($) investment	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Mar. 31, 2022 USD ($)
Schedule of Equity Method Investments [Line Items]
Proceeds from sale of equity method investments		$ 10,000
Gain on sale of investment		9,783
Distributions from investments		$ 1,406			$ 1,406	$ 12,739
Net gain (loss)					18,578	47,774
Unrealized gain (loss) on secured borrowings, fair value adjustment	$ 821			$ (2,288)	915	(3,239)
Investments held | investment	3
Investments valued under the measurement alternative	$ 165,832				165,832		$ 156,100
Convertible note converted to equity securities	550				550
Impairment of other investment					43,289	0
Private equity funds
Schedule of Equity Method Investments [Line Items]
Investments held | investment		2	2
Technology Drive Platform
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative			$ 3,000
Online Financial Services Platform
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative			12,000
Individual Investors And Wealth Management Platform
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative			5,236
Digital Platform
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative		$ 3,000
Cloud-based Treasury And Liquidity Solution For Investment Management Firms
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative	1,228	4,000			1,228
ESG Reporting Metrics, Private Market Firms And Private Companies
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative	5,061				5,061
Technology Company
Schedule of Equity Method Investments [Line Items]
Investments valued under the measurement alternative	$ 600				$ 600
Equity method investments in Partnerships
Schedule of Equity Method Investments [Line Items]
Percent interest in partnerships	1.00%				1.00%
Investment, Held As Collateral
Schedule of Equity Method Investments [Line Items]
Net gain (loss)	$ 821			$ 2,288	$ 915	$ 3,239
Investment, Measurement Alternative
Schedule of Equity Method Investments [Line Items]
Net gain (loss)	11,521		$ 6,687
Investments valued under the measurement alternative		$ 74,189
Impairment of other investment	$ 43,289

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Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Mar. 31, 2021
Reported Value Measurement
Financial assets:
Other investments	$ 10,703		$ 10,853
Investments held in trust			276,000
Total financial assets	10,703		286,853
Other investments	20,189		19,820
Investments held in trust			276,016
Total financial assets	20,189		295,836
Financial liabilities:
Warrant liability			2,883
Secured financing	13,954		13,818
Total financial liabilities	13,954		16,701
Level 1
Financial assets:
Other investments	6,235		6,002
Investments held in trust			276,016
Total financial assets	6,235		282,018
Financial liabilities:
Warrant liability			2,484
Secured financing	0		0
Total financial liabilities	0		2,484
Level 2
Financial assets:
Other investments	0		0
Investments held in trust			0
Total financial assets	0		0
Financial liabilities:
Warrant liability			399
Secured financing	0		0
Total financial liabilities	0		399
Level 3
Financial assets:
Other investments	13,954	$ 13,080	13,818	$ 16,477	$ 20,132	$ 13,298
Investments held in trust			0
Total financial assets	13,954		13,818
Financial liabilities:
Warrant liability			0
Secured financing	13,954		13,818
Total financial liabilities	$ 13,954		$ 13,818

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Fair Value Measurements - Reconciliation of Other Investments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance			$ 19,820
Net gain (loss)			18,578	$ 47,774
Other investments, ending balance	$ 20,189		20,189
Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	13,080	$ 20,132	13,818	13,298
Contributions	91	204	114	321
Distributions	(38)	(25)	(893)	(381)
Net gain (loss)	821	2,456	915	3,074
Transfer out		(6,290)		(6,290)
Transfer in				6,455
Other investments, ending balance	13,954	16,477	13,954	16,477
Private equity funds
Reconciliation Of Other Investments [Roll Forward]
Other investments, ending balance	6,722		6,722
Private equity funds | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	6,252	7,159	7,024	6,254
Contributions	91	204	114	293
Distributions	(38)	(25)	(893)	(179)
Net gain (loss)	417	1,464	477	2,434
Transfer out		0		0
Transfer in				0
Other investments, ending balance	6,722	8,802	6,722	8,802
Direct credit investments
Reconciliation Of Other Investments [Roll Forward]
Other investments, ending balance	786		786
Direct credit investments | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	768	783	774	985
Contributions	0	0	0	0
Distributions	0	0	0	(202)
Net gain (loss)	18	(1)	12	(1)
Transfer out		0		0
Transfer in				0
Other investments, ending balance	786	782	786	782
Direct equity investments
Reconciliation Of Other Investments [Roll Forward]
Other investments, ending balance	6,446		6,446
Direct equity investments | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance	6,060	6,068	6,020	6,059
Contributions	0	0	0	28
Distributions	0	0	0	0
Net gain (loss)	386	825	426	806
Transfer out		0		0
Transfer in				0
Other investments, ending balance	$ 6,446	6,893	$ 6,446	6,893
Publicly traded equity security | Level 3
Reconciliation Of Other Investments [Roll Forward]
Other investments, beginning balance		6,122		0
Contributions		0		0
Distributions		0		0
Net gain (loss)		168		(165)
Transfer out		(6,290)		(6,290)
Transfer in				6,455
Other investments, ending balance		$ 0		$ 0

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Fair Value Measurements - Valuation Methodologies (Details) $ in Thousands	Dec. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)
Schedule of Equity Method Investments [Line Items]
Fair Value	$ 20,189	$ 19,820
Investment valued under the measurement alternative	30,900
Private equity funds
Schedule of Equity Method Investments [Line Items]
Fair Value	6,722
Direct credit investments
Schedule of Equity Method Investments [Line Items]
Fair Value	786
Direct equity investments
Schedule of Equity Method Investments [Line Items]
Fair Value	$ 6,446
Selected market return | Adjusted net asset value | Minimum | Private equity funds
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.023
Selected market return | Adjusted net asset value | Maximum | Private equity funds
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.063
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	0.032
Market yield | Discounted cash flow | Minimum | Direct credit investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.129
Market yield | Discounted cash flow | Maximum | Direct credit investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.129
Market yield | Discounted cash flow | Weighted Average | Direct credit investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	0.129
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	14.25
EBITDA multiple | Market approach | Weighted Average | Direct equity investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	11.61
Equity multiple | Market approach | Weighted Average | Direct equity investments
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	1.8
Revenue Multiple | Market approach | Weighted Average
Schedule of Equity Method Investments [Line Items]
Range of and weighted-average inputs	3.5

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Acquisitions (Details) $ in Thousands		9 Months Ended	12 Months Ended
	Apr. 01, 2021 USD ($) installment	Dec. 31, 2022 USD ($)	Apr. 01, 2023 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Recognized a gain on the sale of the advisory agreements		$ 2,771
361 Capital, LLC
Acquired Finite-Lived Intangible Assets [Line Items]
Aggregate purchase price	$ 13,096
Cash paid for acquisition of business	$ 10,096
Number of installments | installment	2
Preliminary purchase price	$ 12,946
Goodwill	5,623
Scenario, Forecast | 361 Capital, LLC
Acquired Finite-Lived Intangible Assets [Line Items]
Cash paid for acquisition of business			$ 3,000
Customer Contracts | 361 Capital, LLC
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 7,145
Finite-lived intangible asset useful life	7 years

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Variable Interest Entities - Consolidated VIEs (Details) - USD ($)	Jan. 15, 2021	Dec. 31, 2022	Mar. 31, 2022
Variable Interest Entity [Line Items]
Total VIE Assets		$ 1,124,361,000	$ 1,294,946,000
Total liabilities of consolidated VIEs		594,403,000	557,460,000
Remaining unfunded commitments from the limited partners and general partners to the unconsolidated VIE		140,691,000
Hamilton Lane Alliance Holdings I, Inc.
Variable Interest Entity [Line Items]
Proceeds from offering	$ 276,000,000
Primary Beneficiary
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs		0	0
Primary Beneficiary | Investments
Variable Interest Entity [Line Items]
Total VIE Assets		$ 41,498,000	$ 10,036,000
Hamilton Lane Advisors, L.L.C. | Hamilton Lane Alliance Holdings I, Inc.
Variable Interest Entity [Line Items]
Proceeds from offering	$ 7,520,000

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Variable Interest Entities - Unconsolidated VIEs (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Mar. 31, 2022
Variable Interest Entity [Line Items]
Remaining unfunded commitments from the limited partners and general partners to the unconsolidated VIE	$ 140,691
Statement of Financial Position [Abstract]
Investments	514,332	$ 503,789
Fees receivable	52,074	51,869
Due from related parties	7,784	1,872
Total assets	1,124,361	1,294,946
Not Primary Beneficiary
Statement of Financial Position [Abstract]
Investments	190,735	191,378
Fees receivable	16,418	9,754
Due from related parties	1,901	778
Total assets	209,054	201,910
Less: Non-controlling interests	(1,534)	(1,873)
Maximum exposure to loss	$ 207,520	$ 200,037

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Debt (Details) - USD ($)	Dec. 31, 2022	Mar. 31, 2022
Debt Instrument [Line Items]
Principal Outstanding	$ 200,000,000	$ 171,754,000
Carrying Value	199,126,000	171,326,000
Line of Credit
Debt Instrument [Line Items]
Credit facility, borrowing capacity	325,000,000
Line of Credit | Term Loan
Debt Instrument [Line Items]
Principal Outstanding	100,000,000	71,754,000
Carrying Value	$ 99,578,000	$ 71,574,000
Interest Rate	6.25%	2.25%
Credit facility, borrowing capacity	$ 100,000,000
Line of Credit | 2020 Multi-Draw Facility
Debt Instrument [Line Items]
Principal Outstanding	100,000,000	$ 100,000,000
Carrying Value	$ 99,548,000	$ 99,752,000
Interest Rate	3.50%	3.50%
Debt, fair value	$ 86,782,000

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Equity - Shares of Common Stock Outstanding (Details)	9 Months Ended
	Dec. 31, 2022 shares
Class A Common Stock
Common Stock, Shares Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	37,280,697
Forfeitures (in shares)	(5,899)
Shares repurchased for employee tax withholdings (in shares)	(2,311)
Restricted stock granted (in shares)	569,442
Employee Share Purchase Plan share issuance (in shares)	26,762
Outstanding, end of period (in shares)	37,868,691
Class B Common Stock
Common Stock, Shares Outstanding [Roll Forward]
Outstanding, beginning of period (in shares)	16,033,359
Forfeitures (in shares)	(79,677)
Shares repurchased for employee tax withholdings (in shares)	0
Restricted stock granted (in shares)	0
Employee Share Purchase Plan share issuance (in shares)	0
Outstanding, end of period (in shares)	15,953,682

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Equity-Based Compensation - Summary of Restricted Stock (Details) - $ / shares		9 Months Ended
	Sep. 16, 2022	Dec. 31, 2022
Restricted Stock
Total Unvested
Unvested at beginning of period (in shares)		281,307
Granted (in shares)		41,160
Vested (in shares)		(11,485)
Forfeited (in shares)		(5,899)
Unvested at end of period (in shares)		305,083
Weighted- Average Grant-Date Fair Value of Award
Unvested at beginning of period (in dollars per share)		$ 67.50
Granted (in dollars per share)		66.97
Vested (in dollars per share)		77.38
Forfeited (in dollars per share)		70.15
Unvested at end of period (in dollars per share)		$ 67.00
Performance Shares
Total Unvested
Unvested at beginning of period (in shares)		0
Granted (in shares)		528,282
Vested (in shares)		0
Forfeited (in shares)		0
Unvested at end of period (in shares)		528,282
Weighted- Average Grant-Date Fair Value of Award
Unvested at beginning of period (in dollars per share)		$ 0
Granted (in dollars per share)	$ 29.79	29.79
Vested (in dollars per share)		0
Forfeited (in dollars per share)		0
Unvested at end of period (in dollars per share)		$ 29.79

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Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Dec. 31, 2022	Sep. 16, 2022
Restricted Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total unrecognized compensation expense	$ 14,950
Performance Shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total unrecognized compensation expense	$ 14,815
Share price (in USD per share)		$ 69.67
Performance Shares | Senior Leadership
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Requisite service period (in years)	5 years
Performance Shares | Senior Leadership | Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share price (in USD per share)	$ 150
Performance Shares | Senior Leadership | Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share price (in USD per share)	$ 230

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Equity-Based Compensation - Summary of the Grant Date Fair Value Based on the Monte Carlo simulation Valuation Model (Details) - Performance Shares - $ / shares		9 Months Ended
	Sep. 16, 2022	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Granted (in dollars per share)	$ 29.79	$ 29.79
Closing share price as of valuation date (in USD per share)	$ 69.67
Risk Free Rate	3.60%
Volatility	37.00%
Dividend Yield	2.30%

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Compensation and Benefits - Schedule of Compensation and Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Compensation Related Costs [Abstract]
Base compensation and benefits	$ 35,473	$ 29,340	$ 116,549	$ 79,014
Incentive fee compensation	7,368	2,953	34,870	9,308
Equity-based compensation	2,835	1,711	6,816	5,706
Total compensation and benefits	$ 45,676	$ 34,004	$ 158,235	$ 94,028

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Income Tax (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Effective tax rate	35.00%	12.60%	22.20%	15.20%
Unrecognized tax positions	$ 0		$ 0

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Earnings per Share - Narrative (Details)	3 Months Ended	9 Months Ended
	Dec. 31, 2022 shares	Dec. 31, 2022 shares
Performance Shares
Class of Stock [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	528,282	528,282
Class B Common Stock
Class of Stock [Line Items]
Common stock, conversion ratio	1	1

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Earnings per Share - Schedule of Earnings Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Net income attributable to Class A Stockholders
Net income attributable to HLI	$ 9,669	$ 51,849	$ 78,034	$ 132,161
Class A Common Stock
Net income attributable to Class A Stockholders
Net income attributable to HLI	9,669	51,849	78,034	132,161
Impact of changes in carrying amount of redeemable NCI	2,095	1,308	3,809	358
Basic EPS of Class A common stock	11,764	53,157	81,843	132,519
Assumed vesting of employee awards	5	66	34	156
Assumed conversion of Class B and Class C Units	5,058	21,946	35,968	60,083
Diluted EPS of Class A common stock	$ 16,827	$ 75,169	$ 117,845	$ 192,758
Weighted-Average Shares
Weighted-average basic EPS of Class A common stock (in shares)	37,025,416	36,902,741	37,004,657	36,375,797
Weighted-average assumed vesting of employee awards (in shares)	68,129	165,569	53,030	138,902
Weighted-average assumed conversion of Class B and Class C units (in shares)	16,675,834	16,675,834	16,675,834	17,192,702
Weighted-average diluted EPS of Class A common stock (in shares)	53,769,379	53,744,144	53,733,521	53,707,401
Per share amount
Basic EPS of Class A common stock (in dollars per share)	$ 0.32	$ 1.44	$ 2.21	$ 3.64
Diluted EPS of Class A common stock (in dollars per share)	$ 0.31	$ 1.40	$ 2.19	$ 3.59

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Related-Party Transactions - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Mar. 31, 2022
Related Party Transaction [Line Items]
Revenues	$ 127,074	$ 91,704	$ 415,965	$ 267,019
Fees receivable	52,074		52,074		$ 51,869
General Partnerships
Related Party Transaction [Line Items]
Fees receivable	35,263		35,263		$ 27,728
Management and advisory fees
Related Party Transaction [Line Items]
Revenues	97,355	79,836	276,182	229,653
Management and advisory fees | General Partnerships
Related Party Transaction [Line Items]
Revenues	70,929	53,701	198,973	150,955
Incentive fees
Related Party Transaction [Line Items]
Revenues	29,719	11,868	139,783	37,366
Incentive fees | General Partnerships
Related Party Transaction [Line Items]
Revenues	$ 28,652	$ 10,335	$ 137,545	$ 34,669

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Mar. 31, 2022
Supplemental Cash Flow Information [Abstract]
Establishment of lease liability in exchange for right of use asset	$ 5,401	$ 7,950
Establishment of receivable for intangible assets sold	6,776	0
Non-cash financing activities:
Dividends Payable	14,810	12,916	$ 12,947
Member Distribution Declared	19,161	11,769
Establishment of net deferred tax assets related to offerings	$ 0	$ 19,783

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Commitments and Contingencies - Incentive Fees (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Carried interest still subject to contingencies	$ 952,188	$ 1,191,066
Incentive fees, unrecorded estimate	$ 238,047	$ 297,766

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Commitments and Contingencies - Commitments (Details) - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Other commitment	$ 212,895		$ 186,164
Loss Contingencies [Line Items]
Other commitment	212,895		$ 186,164
Net gain (loss)	18,578	$ 47,774
Valued Under Measurement Alternative
Loss Contingencies [Line Items]
Net gain (loss)	$ 29,004
Maximum
Loss Contingencies [Line Items]
Accrued discretionary bonus	15.00%

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Commitments and Contingencies - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Operating lease costs	$ 2,095	$ 2,011	$ 6,199	$ 7,610
Variable lease costs	395	416	1,067	980
Cash paid for amounts included in the measurement of operating lease liabilities	$ 1,997	$ 1,657	$ 5,858	$ 4,794
Weighted average remaining lease term (in years)	14 years	14 years 8 months 12 days	14 years	14 years 8 months 12 days
Weighted average discount rate	3.30%	3.20%	3.30%	3.20%

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Commitments and Contingencies - Operating Lease Maturities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Remainder of FY2023	$ 2,092
FY2024	7,645
FY2025	7,233
FY2026	6,623
FY2027	6,623
Thereafter	70,210
Total lease payments	100,426
Less: imputed interest	(20,877)
Total operating lease liabilities	$ 79,549	$ 82,244

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Subsequent Events (Details) - Class A Common Stock - $ / shares		3 Months Ended		9 Months Ended
	Feb. 07, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021
Subsequent Event [Line Items]
Dividends declared per share of Class A common stock (in dollars per share)		$ 0.40	$ 0.35	$ 1.20	$ 1.05
Subsequent Event
Subsequent Event [Line Items]
Dividends declared per share of Class A common stock (in dollars per share)	$ 0.40